Supreme Court Upholds AFT Decision on ACR Grading: Commodore P.K. Banerjee vs. Union of India (2018)

Date of the Judgment: February 12, 2018
Citation: Civil Appeal No. 1843 of 2018 (@ Diary No. 36081 of 2017)
Judges: A.K. Sikri, J. and Ashok Bhushan, J.

Can a single adverse remark in an Annual Confidential Report (ACR) unfairly impact an officer’s entire career trajectory? The Supreme Court of India recently addressed this question in a case involving a naval officer who challenged his ACR gradings. This case examines the extent to which a Reviewing Officer’s comments can affect subsequent evaluations and promotion prospects, even when those comments are later expunged. The judgment was delivered by a two-judge bench comprising Justice A.K. Sikri and Justice Ashok Bhushan.

Case Background

Commodore P.K. Banerjee, the appellant, had a distinguished career in the Indian Navy. He consistently ranked among the top officers in his batch, receiving commendations throughout his service. A key highlight was his command of premium warships, including INS Tabar, where he led anti-piracy operations in the Gulf of Aden in 2008. Despite his outstanding performance, an adverse remark in his 2009 ACR, which was not communicated to him as per Navy rules, became a major point of contention. This remark, made by his Reviewing Officer (RO), contradicted the positive assessment of his Initiating Officer (IO) and negatively impacted his promotion prospects.

Timeline:

Course of Proceedings

After facing denial of promotion, Commodore Banerjee sought departmental redressal, which proved unsuccessful. He then approached the Armed Forces Tribunal (AFT) in O.A. No. 392 of 2014. The AFT expunged the adverse remarks from the 2009 ACR, acknowledging that they were not communicated to the appellant as per the rules. However, the AFT did not grant relief regarding the numerical grading given to the appellant for subsequent periods, stating that the adverse remarks did not affect these gradings. Aggrieved by this, the appellant filed an appeal before the Supreme Court.

Legal Framework

The case was primarily governed by the Armed Forces Tribunal Act, 2007, under which the appeal was filed. The main contention revolved around the violation of Navy Order (Special) 05/2005, specifically para 0410(d), which mandates the communication of adverse remarks to the officer being assessed. The court also considered the Regulations for the Navy, 1965 Part-I, particularly Chapter 25, which outlines the Performance Appraisal Review Board (PARB) system.

The relevant legal provisions as mentioned in the judgment are:

• Section 32 of the Armed Forces Tribunal Act, 2007: This section provides for appeals to the Supreme Court against the decisions of the Armed Forces Tribunal.
• Para 0410(d) of Navy Order (Special) 05/2005: This provision requires that any adverse remarks in an Annual Confidential Report (ACR) must be communicated to the officer being assessed.
• Chapter 25 of the Regulations for the Navy, 1965 Part-I: This chapter contains the rules regarding the Performance Appraisal Review Board (PARB).
• Navy Instructions 20/90: This instruction outlines the procedure for the Performance Appraisal Review Board (PARB), which analyses instances of wide deviation from previous overall career profiles.

The Navy Order (Special) 05/2005 states:
“0405. Performance in Appointment . An officer is to be assessed in the appointment actually held by him/her during the period under report and, as far as possible, in comparison with other officers of same rank and seniority. The assessment should not be influenced by any incident prior to the period of the report .”

The Navy Instructions 20/90 regarding PARB reads:
“Performance Appraisal Review – (1) All reports on Noval Officers of the rank of Lt. Cdr. and Cdr. will undergo a ‘Performance Appraisal Review Board’ (PARB) with a view to analyse instances of wide deviation from their previous overall career profile. The reporting/reviewing officers will be required to support very high/low marking in the remarks column. While reviewing the reports at Naval Headquarters, numerical grades may be suitably moderated on the recommendations of the PARB with the approval of the Chief of the Naval Staff so as to bring them in tune with officers’ demonstrated past performance. CNS will lay down detailed guidelines to be followed for this purpose.
(2) A similar review of the records of all naval officers of the rank of Capt. And above will be undertaken and gradings suitably moderated by the Chief of the Naval Staff as Senior Reviewing Officer/Next Senior Reviewing Officer.”

Arguments

The appellant, Commodore P.K. Banerjee, argued that the adverse remarks in his 2009 ACR had a cascading effect, influencing subsequent ACRs and hindering his promotion to Rear Admiral. He highlighted that:

• The Reviewing Officer (RO) inserted severe adverse remarks in his ACR of 2009, which were not communicated to him as per Navy Rules.
• These remarks contradicted the outstanding report given by the Initiating Officer (IO).
• The Senior Reviewing Officer (SRO) and Next Senior Reviewing Officer (NSRO) downgraded his numerical gradings in subsequent ACRs, despite positive assessments by IOs, because of the adverse remarks in the 2009 ACR.
• The NSRO moderated the grading by stating that it “has been moderated keeping the profile in perspective,” which was not a valid excuse.
• He was ranked at number 1 in the merit list of 2007 but slipped down to the position at No. 22 due to the lowering of his numerical grading.

The respondents, the Union of India and others, defended the AFT’s order, arguing that:

• The AFT had correctly assessed the records and found no evidence that the adverse remarks in the 2009 ACR had affected subsequent reports.
• The appellant’s ACRs prior to 2007 were not outstanding, and his claim of always being at the top of the merit list was incorrect.
• The IO for the period 02.01.2009 to 01.06.2009 could not have been influenced by the appellant’s dossier, as per Navy rules.
• The NSRO moderated the grading based on the Performance Appraisal Review Board (PARB) system, which aims to align gradings with an officer’s overall career profile.
• The appellant’s case for promotion was considered multiple times, but he was not empanelled due to lower comparative merit.

Here’s a breakdown of the arguments in a table:

The innovativeness of the argument by the appellant was that he was able to demonstrate that the adverse remarks in his 2009 ACR had a cascading effect on his subsequent ACRs, which was not considered by the AFT.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issues that the court addressed were:

• Whether the adverse remarks in the appellant’s 2009 ACR had a cascading effect on his subsequent ACRs.
• Whether the numerical grading given to the appellant for the subsequent period was justified.
• Whether the AFT’s decision was correct in holding that the expunged adverse remarks had no bearing on the subsequent ACRs.

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 in its judgment:

Judgment

The Supreme Court upheld the decision of the Armed Forces Tribunal (AFT), stating that the AFT’s order was without blemish and there was no justification to interfere with it. The Court agreed with the AFT’s conclusion that the expunged adverse remarks in the 2009 ACR did not affect the subsequent reports.

Here’s how the Court treated the submissions made by the parties:

Here’s how the Court viewed the authorities:

• The Court cited Dev Dutt v. Union of India and Others [(2009) 8 SCC 725]*, Abhijit Ghosh Dastidar v. Union of India and others [(2009) 16 SCC 146]* and Prabhu Dayal Khandelwal v. Chairman, U.P.S.C. & Ors. [(2015) 14 SCC 427]* to reiterate the settled position of law regarding communication of adverse remarks.
• The Court considered Section 32 of the Armed Forces Tribunal Act, 2007* as the legal basis for the appeal before the Supreme Court.
• The Court considered Para 0410(d) of Navy Order (Special) 05/2005* as the provision mandating communication of adverse remarks to the officer being assessed.
• The Court considered Chapter 25 of the Regulations for the Navy, 1965 Part-I* as the chapter outlining the Performance Appraisal Review Board (PARB) system.
• The Court considered Navy Instructions 20/90* as the instruction outlining the procedure for the Performance Appraisal Review Board (PARB).

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• The Court found that the Performance Appraisal Review Board (PARB) system, which is unique to the Navy, was properly followed. The NSRO, who was the Chief of the Naval Staff, was competent to moderate the gradings based on the overall profile of the appellant.
• The Court noted that the ACRs of the disputed period recorded by NSRO were in tune with the appellant’s ACRs recorded in the previous years. The Court also observed that the appellant was on deputation during the period in question, which may have led to higher grading by the IOs.
• The Court emphasized that the appellant’s claim of always being at the top of the merit list was not factually correct, as evidenced by the documents produced by the respondents.
• The Court also pointed out that all those who were promoted were senior to the appellant, and it was not a case of any junior superseding him.
• The Court acknowledged that the appellant was a good officer with a commendable work record.

Here’s a sentiment analysis of the reasons given by the Supreme Court:

Here’s the ratio of Fact:Law that influenced the court’s decision:

The court’s reasoning can be summarized in the following flowchart:

The Court did not consider any alternative interpretations. The Court’s decision was based on the factual records, the PARB system, and the competence of the NSRO.

The Supreme Court’s decision was clear and accessible: the adverse remarks were expunged, but the subsequent grading was valid due to the Navy’s established appraisal system.

The reasons for the decision were:

• The Performance Appraisal Review Board (PARB) system is unique to the Navy and was properly followed.
• The Chief of the Naval Staff, in his capacity as SRO/NSRO, is competent to undertake review of Confidential Report gradings for moderation of grades.
• The ACRs of the disputed period recorded by NSRO were in tune with the appellant’s ACRs recorded in the previous years.
• The appellant’s claim of always being at the top of the merit list was not factually correct.
• All those who were promoted were senior to the appellant.

The Court did not have any majority or minority opinions.

The Supreme Court’s analysis was based on the factual records, the PARB system, and the competence of the NSRO. The Court applied the relevant rules and regulations to the facts of the case.

The potential implications for future cases are that the court has upheld the Navy’s Performance Appraisal Review Board (PARB) system, which allows for moderation of grades based on an officer’s overall profile. This will likely be a precedent for future cases involving appraisal and promotion in the Navy.

The Court did not introduce any new doctrines or legal principles.

Key Takeaways

The key takeaways from this judgment are:

• While adverse remarks in an ACR must be communicated to the officer, their expungement does not automatically invalidate subsequent ACR gradings.
• The Performance Appraisal Review Board (PARB) system in the Navy allows for moderation of gradings to align with an officer’s overall career profile.
• The Chief of the Naval Staff, as SRO/NSRO, has the authority to moderate gradings based on the PARB system.
• Officers must ensure that their claims of merit and performance are factually supported by their records.

The potential future impact of this judgment is that it reinforces the validity of the Navy’s appraisal system and provides clarity on the extent to which adverse remarks can affect an officer’s career.

Directions

The Supreme Court directed that the respondents should keep in mind the appellant’s commendable work record and give him the promotion in his turn without delaying the same, so that his promising career would not be put in jeopardy.

Development of Law

The ratio decidendi of this case is that while adverse remarks in an ACR must be communicated, their expungement does not automatically invalidate subsequent ACR gradings if the Navy’s Performance Appraisal Review Board (PARB) system is followed and the moderation is done by a competent authority. There is no change in the previous position of law.

Conclusion

In conclusion, the Supreme Court upheld the AFT’s decision, stating that the expunged adverse remarks did not affect the subsequent ACR gradings. The Court emphasized the validity of the Navy’s Performance Appraisal Review Board (PARB) system and the authority of the Chief of the Naval Staff to moderate gradings. While acknowledging the appellant’s commendable work record, the Court found no reason to interfere with the AFT’s order.

Category:

• Service Law
  • Annual Confidential Reports
  • Promotion
  • Armed Forces Tribunal Act, 2007
  • Navy Order (Special) 05/2005
  • Regulations for the Navy, 1965 Part-I
• Armed Forces Tribunal Act, 2007
  • Section 32, Armed Forces Tribunal Act, 2007

FAQ

Q: What was the main issue in the Commodore P.K. Banerjee case?
A: The main issue was whether adverse remarks in an Annual Confidential Report (ACR) could unfairly impact an officer’s subsequent ACR gradings and promotion prospects, even after the remarks were expunged.

Q: What did the Supreme Court decide?
A: The Supreme Court upheld the Armed Forces Tribunal’s (AFT) decision, stating that the expunged adverse remarks did not affect the subsequent ACR gradings.

Q: What is the Performance Appraisal Review Board (PARB)?
A: The PARB is a system unique to the Navy that allows for the review and moderation of ACR gradings to align with an officer’s overall career profile.

Q: Can adverse remarks affect my promotion?
A: Yes, adverse remarks can affect promotion. However, the Navy has a system to ensure that theappraisal is fair and consistent.

Q: What is the significance of this case?
A: This case reinforces the validity of the Navy’s appraisal system and provides clarity on the extent to which adverse remarks can affect an officer’s career.

Q: What is the ratio decidendi of the case?
A: The ratio decidendi of this case is that while adverse remarks in an ACR must be communicated, their expungement does not automatically invalidate subsequent ACR gradings if the Navy’s Performance Appraisal Review Board (PARB) system is followed and the moderation is done by a competent authority.

Q: What is the meaning of the term “cascading effect” in the context of ACR?
A: In the context of ACRs, the term “cascading effect” refers to a situation where an adverse remark in one ACR negatively influences subsequent ACRs, thereby creating a chain reaction of negative evaluations that can harm an officer’s career prospects.

Q: What is the legal basis for the appeal to the Supreme Court in this case?
A: The legal basis for the appeal to the Supreme Court was Section 32 of the Armed Forces Tribunal Act, 2007, which allows for appeals against the decisions of the Armed Forces Tribunal.

Q: What was the role of the Chief of the Naval Staff in this case?
A: The Chief of the Naval Staff, in his capacity as the Next Senior Reviewing Officer (NSRO), had the authority to moderate the appellant’s ACR gradings based on the Performance Appraisal Review Board (PARB) system.

Q: What was the court’s direction to the respondents?
A: The court directed the respondents to keep in mind the appellant’s commendable work record and give him the promotion in his turn without delaying the same, so that his promising career would not be put in jeopardy.