Supreme Court Upholds Accepting Authority’s Power in Performance Appraisals: State of Haryana vs. Ashok Khemka (2024)

Introduction

Date of the Judgment: 11 March 2024

Citation: 2024 INSC 190

Judges: Hon’ble Mr. Justice Vikram Nath and Hon’ble Mr. Justice Satish Chandra Sharma

Can the Accepting Authority in the performance appraisal process of an Indian Administrative Service (IAS) officer revise the grades given by the Reviewing Authority, even if it is done after the timeline specified in the schedule, but within the overall time limit prescribed by the rules? This question was at the heart of a recent case before the Supreme Court of India. The case involved a dispute over the performance appraisal of an IAS officer, where the Accepting Authority downgraded the officer’s grade after the schedule’s deadline but within the overall time limit. The Supreme Court, in its judgment, addressed this issue, clarifying the extent of the Accepting Authority’s powers.

The Supreme Court bench comprised Justice Vikram Nath and Justice Satish Chandra Sharma, who delivered the judgment.

Case Background

The case revolves around the performance appraisal report (PAR) of Mr. Ashok Khemka, an IAS officer from the 1991 batch, for the period of April 8, 2016, to March 31, 2017. Mr. Khemka submitted his self-appraisal form on June 7, 2017.

The Reporting Authority, the Chief Secretary of Haryana, assessed Mr. Khemka on June 8, 2017, and gave him an overall grade of 8.22. The Reviewing Authority, the Health Minister of Haryana, upgraded this to 9.92 on June 27, 2017. However, on December 31, 2017, the Accepting Authority, the Chief Minister of Haryana, downgraded the grade to 9.

Mr. Khemka, aggrieved by this, filed a representation on January 12, 2018, seeking the restoration of the grade given by the Reviewing Authority. The Reporting and Reviewing Authorities submitted additional remarks on February 5, 2018, and February 12, 2018, respectively. However, the Accepting Authority did not make a decision on the representation.

Subsequently, Mr. Khemka approached the Central Administrative Tribunal (CAT), which dismissed his plea on December 3, 2018, stating that the Accepting Authority had acted within the prescribed time limit. The High Court of Punjab and Haryana then set aside the CAT’s order, leading to the current appeal before the Supreme Court.

Timeline

Course of Proceedings

The Central Administrative Tribunal (CAT) dismissed Mr. Khemka’s application, relying on Rule 5(1) of the All India Services (Performance Appraisal Report) Rules, 2007 (PAR Rules) and the guidelines which stipulate that the Accepting Authority can record remarks until December 31 of the year in which the financial year ended. The CAT held that the Accepting Authority’s action was within the prescribed time limit.

The High Court of Punjab and Haryana, however, set aside the CAT’s order, observing that the Accepting Authority had not considered the practical constraints faced by Mr. Khemka. The High Court restored the grade awarded by the Reviewing Authority, leading to the State of Haryana’s appeal to the Supreme Court.

Legal Framework

The case primarily involves the interpretation of the All India Services (Performance Appraisal Report) Rules, 2007, specifically Rule 5(1), which states:

“Rule 5(1): Performance Appraisal Reports : – (1) A performance appraisal report assessing the performance, character, conduct and qualities of every member of the Service shall be written for each financial year or as may be specified by the Government in the Schedule 2. Provided that performance appraisal report may not be written in such cases as may be specified by the Central Government, by general or special order. Provided further that if a PAR relating to a financial year is not recorded by the 31st December of the year in which the financial year ended, no remarks shall be recorded thereafter. And the officer may be assessed on the basis of the overall record and self-assessment for the year, if he has submitted his self-assessment on time.”

The judgment also refers to the ‘General Guidelines for Filing-Up the PAR Form for IAS Officers’ and the timelines prescribed in Schedule 2 of the guidelines. The core issue is the interplay between the timelines specified in Schedule 2 and the overall time limit provided in Rule 5(1) of the PAR Rules.

Arguments

Appellant (State of Haryana) Arguments:

• ✓ The State argued that the Accepting Authority had met the timeline prescribed under Rule 5(1) of the PAR Rules, as the remarks were recorded by December 31st of the relevant year.
• ✓ It was submitted that the timelines in Schedule 2 are merely guidelines and any delay does not invalidate the appraisal process, as long as the overall deadline under Rule 5(1) is met.
• ✓ The State contended that the Accepting Authority, being the Chief Minister, is well-aware of the performance of senior IAS officers and made an objective assessment.
• ✓ The State argued that a grade of 9 is still considered ‘outstanding’ and sufficient for empanelment and promotion, hence no prejudice was caused to the officer.
• ✓ The State also pointed out that the officer’s representation was still pending, and the High Court should not have interfered with the process.

Respondent (Ashok Khemka) Arguments:

• ✓ The Respondent argued that the timelines in Schedule 2 are mandatory and the Accepting Authority could not have revised the grades after the prescribed cut-off date in the schedule.
• ✓ It was submitted that the Accepting Authority acted arbitrarily and without appreciating the material on record, downgrading the grade from 9.92 to 9.
• ✓ The Respondent relied on the case of Dev Dutt v. Union of India, (2008) 8 SCC 725, arguing that the downgrading of the grade, even if not adverse, has caused prejudice.
• ✓ It was submitted that the non-decision on the representation has caused prejudice, especially given the officer’s impending superannuation.

Issues Framed by the Supreme Court

The Supreme Court framed the following key issues:

1. Whether the Accepting Authority could revise the overall grade of the officer after the cut-off date as per the Schedule but within the time limit prescribed in Rule 5(1) of the PAR Rules?
2. Whether the High Court was right in interfering with the order of the CAT under Article 226 of the Constitution of India?

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Judgment

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the interpretation of Rule 5(1) of the PAR Rules, which sets the overall deadline for recording remarks as December 31. The Court emphasized that the timelines in Schedule 2 are not mandatory and are meant to be guidelines. The Court also considered the fact that the Accepting Authority, being the Chief Minister, is competent to assess the performance of senior IAS officers. The Court also noted that the officer was given an outstanding grade, and no prejudice was caused. The Court also emphasized the need for judicial restraint in administrative matters.

The Court considered alternative interpretations but rejected the argument that the Schedule 2 timelines are mandatory. The Court emphasized that the overall deadline in Rule 5(1) is the governing factor. The Court also highlighted the need for judicial restraint in administrative matters and the competence of the Accepting Authority.

The Supreme Court held that the Accepting Authority’s decision to downgrade the grade was valid as it was within the time limit prescribed under Rule 5(1) of the PAR Rules. The Court also held that the High Court should not have interfered with the CAT’s order, as the matter involved administrative expertise, and there was no mala fide or prejudice shown.

The Court stated that “the timelines prescribed under the Schedule have been contravened”, but clarified that “a contravention of the said timelines, neither render the underlying PAR invalid, nor would be met with any identified immediate consequence.” The court also observed that “the High Court entered into a specialised domain i.e., evaluating the competency of an IAS officer…without the requisite domain expertise and administrative experience to conduct such an evaluation.”

The majority opinion was delivered by Justice Satish Chandra Sharma, with Justice Vikram Nath concurring.

Key Takeaways

• ✓ The Accepting Authority in the performance appraisal process of IAS officers has the power to revise grades within the overall time limit specified in Rule 5(1) of the PAR Rules, even if it is beyond the timelines specified in Schedule 2 of the guidelines.
• ✓ The timelines in Schedule 2 are not mandatory but are merely guidelines.
• ✓ Courts should exercise restraint in interfering with administrative decisions, especially those involving specialized expertise.
• ✓ An overall grade of 9 is considered ‘outstanding’ and is sufficient for empanelment and promotion.
• ✓ The Accepting Authority is competent to assess the performance of senior IAS officers.

Directions

The Supreme Court directed the Accepting Authority to take a decision on the pending representation of Mr. Khemka under Rule 9(7B) of the PAR Rules within 60 days from the date of the judgment. Mr. Khemka was granted liberty to take recourse to remedies as may be available under law thereafter.

Development of Law

The ratio decidendi of this case is that the timelines prescribed in Schedule 2 of the ‘General Guidelines for Filing-Up the PAR Form for IAS Officers’ are directory and not mandatory. The Accepting Authority can revise the performance appraisal of an IAS officer within the overall time limit prescribed in Rule 5(1) of the All India Services (Performance Appraisal Report) Rules, 2007. This clarifies the powers of the Accepting Authority and the interpretation of the timelines in the PAR Rules. There is no change in the previous position of law, but this judgment clarifies the interpretation of existing rules and guidelines and reiterates the principle of judicial restraint in administrative matters.

Conclusion

In conclusion, the Supreme Court allowed the appeal by the State of Haryana, setting aside the High Court’s judgment. The Court upheld the Accepting Authority’s power to revise performance appraisal grades within the overall time limit prescribed by the PAR Rules, emphasizing that the timelines in the schedule are not mandatory. The Court also reiterated the principle of judicial restraint in administrative matters. The Accepting Authority was directed to decide on the pending representation of the officer within 60 days.