Supreme Court Orders Disclosure of APAR Entries for Promotion Consideration: Pankaj Prakash vs. United India Insurance Co Ltd (2019)

Introduction

Date of the Judgment: July 10, 2019
Citation: Civil Appeal Nos 5340-5341 of 2019 (Arising out of SLP(C) Nos 33462-33463 of 2018 )
Judges: Dr. Dhananjaya Y Chandrachud, J and Indira Banerjee, J

Can an employer deny promotion to an employee based on performance reviews that were never disclosed to them? The Supreme Court of India addressed this crucial question in a case concerning promotion within United India Insurance Co Ltd. The court examined whether the non-communication of Annual Performance Appraisal Report (APAR) entries to an employee is a violation of their rights, especially when these entries are used to assess their eligibility for promotion.

The core issue revolved around the non-disclosure of APAR entries for the years 2010-11 and 2011-12 to the appellant, Pankaj Prakash, and whether this failure impacted his chances for promotion from Scale III to Scale IV. The Supreme Court, in this judgment, reaffirmed the importance of transparency and communication in performance appraisals, emphasizing that every entry in an APAR, whether good or bad, must be communicated to the employee. The judgment was delivered by a two-judge bench comprising Justice Dr. Dhananjaya Y Chandrachud and Justice Indira Banerjee, with the opinion authored by Justice Dr. Dhananjaya Y Chandrachud.

Case Background

Pankaj Prakash, an employee of United India Insurance Co Ltd, was seeking promotion from Scale III to Scale IV for the year 2014-2015. His claim was based on his performance and seniority. However, he was not promoted, and he contended that the non-disclosure of his Annual Performance Appraisal Reports (APARs) for the years 2010-11 and 2011-12 prejudiced his chances.

The appellant had received the following gradings in his APARs:

• 2010-2011: “C”
• 2011-2012: “B”
• 2012-2013: “A”
• 2013-2014: “A”

The appellant argued that the non-communication of the APAR entries for 2010-11 and 2011-12 prevented him from making a representation to improve his scores, which ultimately affected his promotion. The respondents, on the other hand, contended that they had started disclosing APARs from 2013-14 onwards, and therefore, there was no need to disclose the APARs for the earlier years. They also argued that the appellant did not meet the cut-off marks for promotion.

Timeline

Course of Proceedings

The appellant initially approached the High Court of Judicature at Allahabad under Article 226 of the Constitution of India, challenging the non-communication of his APAR entries and the subsequent denial of promotion. The High Court dismissed his writ petition on 6 October 2016, stating that the failure to communicate APAR entries did not result in an actionable grievance unless there was an adverse entry or an entry below the benchmark. The High Court also dismissed the review petition on 17 January 2017. Aggrieved by the decision of the High Court, the appellant filed an appeal before the Supreme Court of India.

Legal Framework

The Supreme Court relied on its previous judgments in Dev Dutt v. Union of India [(2008) 8 SCC 725] and Sukhdev Singh v. Union of India [(2013) 9 SCC 566]. These cases established that every entry in the Annual Confidential Report (ACR), now known as APAR, of a public servant must be communicated to them within a reasonable period.

The Court noted that the Union of India, through the Ministry of Personnel, Public Grievances and Pensions (Department of Personnel and Training), had issued Office Memoranda on 14 May 2009 and 13 April 2010, directing all Ministries and Departments to implement the decision in Dev Dutt (supra). Furthermore, on 19 October 2012, the Ministry of Finance (Department of Financial Services) specifically instructed public sector insurance companies to comply with these directions.

The court emphasized that the judgment in Dev Dutt (supra) was declaratory in nature, meaning it clarified the existing legal position and was not creating a new law. Therefore, the respondent was duty-bound to comply with the law laid down by the Supreme Court, regardless of whether they had implemented it from 2013-14.

Arguments

Appellant’s Submissions:

• The appellant argued that the non-communication of APAR entries for 2010-11 and 2011-12 was a violation of the principles laid down in Dev Dutt v. Union of India [(2008) 8 SCC 725] and Sukhdev Singh v. Union of India [(2013) 9 SCC 566].
• He contended that the uncommunicated entries had negatively impacted his work record score, which was 40.15 out of 45, as indicated in the communication dated 9 September 2014.
• The appellant emphasized that the communication of APAR entries is essential for transparency and allows employees to make representations for upgradation of remarks.
• He submitted that the failure to communicate the entries prevented him from making a representation at the material time, which prejudiced his chances of promotion.

Respondent’s Submissions:

• The respondents submitted that they had started disclosing APARs from the appraisal year 2013-14 onwards, as per a circular dated 18 March 2014.
• They argued that there was no necessity to disclose the APARs to the appellant for the years 2010-11 and 2011-12.
• The respondents contended that promotions from Scale III to Scale IV were based on a written test, work record, and seniority, as per the Promotion Policy for Officers – 2006.
• They stated that the appellant failed to meet the cut-off of 68.98 marks for promotion, as disclosed to him on 9 September 2014.
• The respondents argued that even if the APAR entries were communicated, it would not have changed the outcome since the promotion for 2014-15 depended on the APARs for 2011-12, 2012-13, and 2013-14.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was:

1. Whether the non-communication of APAR entries for the years 2010-11 and 2011-12 to the appellant was in violation of the law laid down by the Supreme Court.

Treatment of the Issue by the Court

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

Authorities

The Supreme Court relied on the following authorities:

• Dev Dutt v. Union of India [(2008) 8 SCC 725] – Supreme Court of India: This case established that every entry in the Annual Confidential Report (ACR) of a public servant must be communicated to them within a reasonable period. The ratio of this case is that non-communication of ACR entries is a violation of the principles of natural justice and fair play.
• Sukhdev Singh v. Union of India [(2013) 9 SCC 566] – Supreme Court of India: This three-judge bench reaffirmed the decision in Dev Dutt, emphasizing that communication of every entry in the ACR is essential for transparency and allows employees to make representations. The ratio of this case is that every entry in ACR—poor, fair, average, good or very good—must be communicated to him/her within a reasonable period.

The Court also considered the following legal provisions:

• Office Memoranda issued by the Union of India on 14 May 2009 and 13 April 2010 – These directions sought compliance by all Ministries and Departments with the decision in Dev Dutt (supra).
• Communication from the Ministry of Finance (Department of Financial Services) on 19 October 2012 – This communication specifically directed public sector insurance companies to comply with the earlier Office Memorandum dated 14 May 2009.

Judgment

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

How each authority was viewed by the Court?

The Supreme Court relied on and followed the principles laid down in Dev Dutt v. Union of India [(2008) 8 SCC 725]* and Sukhdev Singh v. Union of India [(2013) 9 SCC 566]*. These cases were used to support the conclusion that every entry in the APAR must be communicated to the employee. The court emphasized that these judgments were declaratory in nature and had to be followed by all departments and organizations.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the principles of natural justice and transparency. The Court emphasized that employees have a right to know their performance evaluations, as this allows them to improve their work and make representations if they disagree with the assessment. The Court also noted that the non-communication of APAR entries could lead to arbitrary decisions and bias in promotion processes.

Fact:Law Ratio

The court’s reasoning was based on the following logical steps:

The Court considered alternative arguments, such as the respondent’s claim that the appellant did not meet the cut-off for promotion and that the non-communication did not affect the outcome. However, the Court rejected these arguments, emphasizing that the non-communication of APAR entries was a fundamental procedural flaw that violated the principles of natural justice. The court held that the non-communication of the entries was a matter in respect of which a legitimate grievance could be made by the appellant.

The court stated, “The non-communication of the entries is, therefore, a matter in respect of which a legitimate grievance can be made by the appellant, particularly having regard to the position in law laid down in Dev Dutt (supra) and Sukhdev Singh (supra).”

The Court also noted, “The judgment of this Court is declaratory in nature.”

Further, the court observed, “Even independent of these communications, the respondent was duty bound to comply with the law laid down by this Court. They cannot urge that the decision having been implemented from 2013-14, it has no application for the earlier years.”

The decision was unanimous, with both judges agreeing on the need to ensure transparency and adherence to established legal principles.

Key Takeaways

• Every entry in the APAR, whether good or bad, must be communicated to the employee within a reasonable period.
• Non-communication of APAR entries can be a ground for legal challenge, especially in matters of promotion and career advancement.
• Organizations must ensure transparency in their performance appraisal processes.
• The judgments in Dev Dutt (supra) and Sukhdev Singh (supra) are declaratory in nature and must be followed by all departments and organizations.

Directions

The Supreme Court issued the following directions:

1. The respondent was directed to communicate the uncommunicated APAR entries for the years considered for the promotional exercise of 2014-15 to the appellant within one month.
2. The appellant was given two months to submit his objections and representation to the respondent.
3. The respondent was directed to consider the representation within three months.
4. The competent authority shall take a decision on whether any modification in the decision for promotion from Scale III to Scale IV for 2014-15 in respect of the appellant is warranted.
5. The representation submitted by the appellant should be placed before an authority at a sufficiently senior level to obviate any bias or injustice.

Development of Law

The ratio decidendi of this case is that every entry in the APAR of a public servant must be communicated to them within a reasonable period, regardless of whether the entry is good or bad. This judgment reaffirms the principles laid down in Dev Dutt (supra) and Sukhdev Singh (supra), ensuring that transparency and fairness are maintained in performance appraisal processes. This case does not introduce a new position of law but reinforces the existing legal position.

Conclusion

The Supreme Court’s judgment in Pankaj Prakash vs. United India Insurance Co Ltd & Anr underscores the importance of transparency and fairness in performance appraisals. By ordering the disclosure of uncommunicated APAR entries and directing a reconsideration of the appellant’s promotion, the Court upheld the principles of natural justice and reaffirmed the legal position that every entry in an APAR must be communicated to the employee. This decision ensures that employees have the opportunity to address any concerns regarding their performance evaluations, promoting a more equitable and transparent work environment.