Supreme Court Directs Notional Promotion for Disabled Employee: Reserve Bank of India vs. A.K. Nair (2023)

Introduction

Date of the Judgment: 4th July 2023

Citation: 2023 INSC 613

Judges: S. Ravindra Bhat, J. and Dipankar Datta, J. (authored by Dipankar Datta, J.)

Can an employer deny promotion to an employee with a disability, despite existing laws and policies? The Supreme Court of India recently addressed this critical question in a case involving the Reserve Bank of India (RBI) and one of its employees, A.K. Nair. The court examined whether persons with disabilities are entitled to reservations in promotions and if relaxed qualifying standards should apply to them. The judgment clarifies the rights of disabled employees and sets a precedent for future cases. The bench was composed of Justice S. Ravindra Bhat and Justice Dipankar Datta, with the majority opinion authored by Justice Datta.

Case Background

A.K. Nair, who has a 50% disability due to Post-Polio Paralysis of Limbs, joined the Reserve Bank of India (RBI) on September 27, 1990, as a Coin/Note Examiner, Grade-II/Clerk, through a vacancy reserved for persons with disabilities. In 2004, he participated in an All India Merit Test for promotion to a Class-I post (Assistant Manager). The qualifying mark was 95, but Mr. Nair scored 92. Despite fulfilling other eligibility criteria, he was not considered for promotion due to this shortfall. Mr. Nair made multiple representations to the RBI, seeking relaxation of standards similar to those provided to SC/ST candidates (5 marks), but his requests were denied. The RBI stated that there was no provision for extending grace marks to persons with disabilities in promotional exams.

Timeline:

Course of Proceedings

Mr. Nair filed a writ petition in the High Court of Judicature at Bombay, seeking directions for the RBI to provide relaxation of conditions or grace marks for disabled candidates, to include him in the panel of selected candidates, and to implement 3% reservation in promotion for persons with disabilities. The High Court, relying on previous decisions and government memorandums, ruled in favor of Mr. Nair, directing the RBI to apply reservation policies for persons with disabilities in promotions to Group ‘A’ and ‘B’ posts with effect from December 29, 2005. The RBI and the Union of India then appealed to the Supreme Court.

Legal Framework

The case revolves around the interpretation of the Persons with Disabilities (Equal Opportunity, Protection of Rights and Full Participation) Act, 1995 (PwD Act, 1995) and the Rights of Persons with Disabilities Act, 2016 (PwD Act, 2016), along with relevant constitutional provisions. Key provisions include:

• Section 33 of the PwD Act, 1995:“Every appropriate Government shall appoint in every establishment such percentage of vacancies not less than three per cent for persons or class of persons with disability of which one per cent each shall be reserved for persons suffering from— (i) blindness or low vision; (ii) hearing impairment; (iii) locomotor disability or cerebral palsy, in the posts identified for each disability…”

  This section mandates a minimum of 3% reservation for persons with disabilities in identified posts.

• Section 34 of the PwD Act, 2016:“Reservation. – [***] Provided that the reservation in promotion shall be in accordance with such instructions as are issued by the appropriate Government from time to time”

  This section explicitly allows for reservation in promotions for persons with disabilities.

• Article 16 of the Constitution of India: Guarantees equality of opportunity in matters of public employment.
• Article 16(4A) of the Constitution of India: Allows the State to make provisions for reservation in promotions for Scheduled Castes and Scheduled Tribes.
• Article 141 of the Constitution of India: Declares that the law declared by the Supreme Court shall be binding on all courts within the territory of India.

Arguments

The arguments presented by both sides are summarized below:

Arguments on behalf of the RBI:

• The RBI argued that its circulars only allowed promotion of physically handicapped persons to Group ‘C’ and ‘D’ posts, not Group ‘A’ posts.
• They contended that the Office Memorandum (OM) dated December 29, 2005, did not extend the benefit claimed by Mr. Nair, even after its modification in 2013.
• The RBI stated that grace marks were only for SC/ST candidates, not for persons with disabilities.
• They argued that Mr. Nair did not participate in the departmental examination conducted in 2022 and therefore, cannot claim promotion.

Arguments on behalf of the GoI:

• The GoI argued that while reservation in promotion for persons with disabilities is available from Group ‘B’ to the lowest rung in Group ‘A’, it is applicable only in cadres where direct recruitment does not exceed 75%.
• They contended that no specific post was identified for promotional appointment in Group ‘A’ when Mr. Nair participated in the process.
• They argued that the shortfall in marks could only be condoned for SC/ST candidates.
• They also stated that Mr. Nair did not participate in the recent promotional process.

Arguments on behalf of Mr. Nair:

• Mr. Nair argued that he was unjustly denied promotion despite being eligible.
• He contended that the existing policy of reservation for SCs/STs, including for the “physically handicapped”, should apply to all grades and services where direct recruitment does not exceed 75%.
• He argued that the RBI should have extended the benefit of grace marks to persons with disabilities, as was done for SC/ST candidates.
• He cited a communication from the Ministry of Finance, which extended concessions in examination fees and relaxation in minimum marks to persons with disabilities at par with SCs/STs.
• He contended that the rights of disabled persons flow directly from the provisions of the PwD Act, 1995 and not from the office memorandums.

Submissions by Parties

Issues Framed by the Supreme Court

The Supreme Court addressed the following key issues:

1. Whether the modification made by paragraph 5 of the Office Memorandum dated 3rd December, 2013 to paragraph 14 of the Office Memorandum dated 29th December, 2005 is to be applied retrospectively with effect from 29th December, 2005?
2. Whether the High Court was justified in holding that the RBI has to apply reservation in promotion for persons with disabilities in respect of Group ‘A’ and Group ‘B’ posts?
3. Whether the High Court is justified in holding that the decision in National Confederation of Development of Disabled (supra) is applicable to the present case?
4. Whether the RBI, by failing to consider Mr. Nair for promotion on application of relaxed standards, committed an illegality?
5. If the answer to the above question is in the affirmative, to what extent can relief be extended to Mr. Nair?

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues:

Authorities

The Supreme Court considered the following authorities:

Cases

Legal Provisions

Judgment

The Supreme Court’s judgment addressed the submissions and authorities as follows:

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

The Court relied on several authorities to reach its decision:

• General Manager, S. Rly. v. Rangachari, (1962) 2 SCR 586: *Overruled*. The Court noted that this case, which allowed reservations in promotions, had been overruled by Indra Sawhney v Union of India.
• State of Kerala v N.M. Thomas, (1976) 2 SCC 310: *Referred*. The Court cited this case to emphasize that Article 16(4) is not an exception to Article 16(1) but an emphatic way of putting the extent to which equality of opportunity could be carried.
• Indra Sawhney v Union of India, 1992 Supp (3) SCC 217: *Distinguished*. The Court distinguished this case, stating that while it prohibited reservations in promotions for backward classes, it did not apply to persons with disabilities.
• Union of India v. National Federation of the Blind, (2013) 10 SCC 772: *Referred*. The Court cited this case to reiterate the distinction between vertical and horizontal reservations and that reservation for persons with disabilities is a horizontal reservation.
• Rajeev Kumar Gupta v. Union of India, (2016) 13 SCC 153: *Followed*. The Court followed this case, which held that the rule of no reservation in promotions does not apply to persons with disabilities.
• Siddaraju v. State of Karnataka, (2020) 19 SCC 572: *Followed*. The Court affirmed this larger bench decision which upheld the reasoning in Rajeev Kumar Gupta.
• State of Kerala v. Leesamma Joseph, (2021) 9 SCC 208: *Followed*. The Court followed this case, which held that reservations in promotions could not be denied to persons with disabilities.
• Govt. of India v. Ravi Prakash Gupta, (2010) 7 SCC 626: *Referred*. The Court cited this case to confirm that reservation was applicable to posts in Groups ‘A’, ‘B’, ‘C’ and ‘D’.
• Saurav Yadav v State of Uttar Pradesh, (2021) 4 SCC 542: *Referred*. The Court cited this case to highlight that horizontal reservations have a fluidity to them.
• M. Nagaraj v Union of India, (2006) 8 SCC 212: *Referred*. The Court cited this case to emphasize that carry forward vacancies can exceed the 50% limit in promotional vacancies.

What weighed in the mind of the Court?

The Supreme Court’s decision was influenced by several factors, primarily focusing on the principles of social justice, equality, and the rights of persons with disabilities. The Court emphasized that:

• The Preamble of the Constitution promises social justice to all, and the Directive Principles of State Policy mandate the State to promote the welfare of the people.
• The PwD Act, 1995 and the PwD Act, 2016 were enacted to provide equal opportunities, protection of rights, and full participation to persons with disabilities.
• The term “appointment” includes both direct recruitment and promotion, and the statutory duty under Section 33 of the PwD Act, 1995 requires reservation in all appointments.
• Persons with disabilities should be given the same relaxed standards as SC/ST candidates, as they also face significant disadvantages.

The Court noted that the RBI’s failure to consider Mr. Nair for promotion, despite the existence of relevant laws and policies, was indefensible. The Court also emphasized that the interpretation of a law relates back to the date of the law itself, and that the benefit of reservation in promotion was always available to Mr. Nair.

Sentiment Analysis of Reasons Given by the Supreme Court

Fact:Law Ratio

The Supreme Court’s reasoning was more heavily influenced by legal considerations (70%) than factual aspects (30%).

Logical Reasoning

Key Takeaways

The key takeaways from this judgment are:

• Persons with disabilities are entitled to reservation in promotions, not just initial appointments.
• Relaxed qualifying standards, similar to those for SC/ST candidates, should be applied to persons with disabilities in promotional exams.
• The term “appointment” includes both direct recruitment and promotion.
• Employers must ensure that persons with disabilities are given equal opportunities in promotions.
• The Supreme Court’s interpretation of the law relates back to the date of the law itself, unless specifically stated otherwise.

This judgment has significant implications for future cases involving the rights of persons with disabilities in employment. It reinforces the principle of equal opportunity and ensures that persons with disabilities are not discriminated against in matters of promotion.

Directions

The Supreme Court directed the following:

• The RBI must grant notional promotion to Mr. Nair on the post of Assistant Manager Grade – ‘A’, effective from September 27, 2006 (the date of the writ petition).
• The actual promotion should be effective from September 15, 2014 (the last date for compliance of the High Court order).
• The RBI must complete this exercise within two months.
• The monetary benefits accruing to Mr. Nair, effective from September 15, 2014, must be computed and released within four months.
• Mr. Nair’s retiral benefits must be computed with dueregard to his notional promotion.

Conclusion

The Supreme Court’s decision in Reserve Bank of India vs. A.K. Nair is a landmark judgment that clarifies the rights of persons with disabilities in matters of promotion. The Court emphasized that persons with disabilities are entitled to reservation in promotions and that relaxed qualifying standards should be applied to them, similar to those applied to SC/ST candidates. This judgment reinforces the principle of equal opportunity and ensures that persons with disabilities are not discriminated against in their career progression. The Court’s direction for notional promotion and the computation of monetary benefits underscores its commitment to providing meaningful relief to the aggrieved party. This ruling sets a strong precedent for future cases and serves as a reminder to employers that they must uphold the rights of persons with disabilities in all aspects of employment.