Chairman & Managing Director, Central Bank of India & Ors. v. Central Bank of India SC/ST Employees Welfare Association & Ors.
Background
Public sector banks (Central Bank of India and UCO Bank) were following a reservation policy for SC/ST employees at recruitment and for promotion from clerical grade into the officer cadre, but did not apply any reservation when promoting officers from one officer scale to the next (e.g., Scale-I to Scale-II). SC/ST employees' associations challenged this before the Madras High Court, arguing that a 1997 Central Government office memorandum required reservation at these higher promotion stages too; the High Court's Division Bench agreed and ruled in their favour, prompting the banks to appeal.
Decision Breakdown
The Supreme Court held that the 1997 office memorandum did not create any new reservation for promotions within Group-A/Class-I posts: it only continued pre-existing arrangements, and a 1990 memorandum had made clear that promotions within Class-I posts carrying a salary above a certain ceiling attracted only a "concession" (preference if senior enough and not unfit), not reservation. However, the Court noted that this "no reservation" rule, by its own terms, applied only from the salary ceiling corresponding to Scale-VII and above. Consequently, it partly allowed the appeals: it set aside the High Court's finding that the 1997 memorandum itself mandated reservation, but held that reservation must still be applied for all promotions from Scale-I up to Scale-VI, directing the banks to implement promotions accordingly.
Lesson Learnt
Reservation in government or public-sector employment exists only where a specific rule or circular actually provides for it, courts will not read reservation into a general circular that merely continues an existing scheme, but employees can still succeed if a careful reading of the applicable salary/scale thresholds shows reservation was already due at their particular level.