The Supreme Court has held that failure to communicate Annual Confidential Report (ACR) entries, destruction of service records during pending litigation, and unexplained evaluation methods in promotion assessment can seriously prejudice an employee’s promotional prospects. 

The bench of Justice J. K. Maheshwari  and Justice Atul S. Chandurkar granted notional promotion and pensionary benefits to a retired Indian Railway Medical Service (IRMS) officer after finding that she had not been treated fairly during the promotion process. 

The dispute arose from the denial of promotion to Dr. Indira Saranath to the post of Chief Medical Director (CMD) in the Higher Administrative Grade (HAG) of the Indian Railway Medical Service. Dr. Saranath contended that despite her eligibility, she was overlooked while officers junior to her were promoted. Her challenge before the Central Administrative Tribunal and later before the Delhi High Court was unsuccessful, prompting her to approach the Supreme Court. 

The appellant argued that an incorrect benchmark had been applied while evaluating her for promotion. According to her, an Office Memorandum of the Department of Personnel and Training (DoPT) had prescribed the benchmark of “Very Good” for promotions, but the Railway authorities instead used a stricter “Very Good Plus (VG+)” standard, thereby adversely affecting her candidature. She also contended that adverse or relevant entries in her ACRs had not been communicated to her, preventing her from challenging or seeking correction of those remarks. 

The Union of India defended the process by asserting that Railways possess independent authority to frame service rules and are not automatically governed by DoPT circulars. It was argued that the Railway Board had independently prescribed the VG+ benchmark and that the Selection Committee had acted strictly in accordance with those rules. The government further stated that prior to judicial developments in Dev Dutt, all ACR entries were not routinely communicated unless they contained “Average” or “Below Average” assessments. 

The Supreme Court first examined whether the benchmark itself had been wrongly applied. The Court rejected the appellant’s challenge on this point and observed that the Railway Board had specifically prescribed VG+ as the benchmark for promotion to HAG posts. Relying on earlier precedent concerning the autonomy of Railway service rules, the Court held that the Railways were competent to frame their own service conditions and therefore the Selection Committee had not erred in applying the VG+ standard. 

However, the Court found substantial merit in the appellant’s challenge regarding communication of ACRs. It noted that Dr. Saranath had repeatedly sought copies of her confidential reports even before the Selection Committee considered her candidature. She had raised this grievance before the departmental authorities, the Tribunal and subsequently the High Court. Despite these efforts, the reports were never supplied to her. 

The Court relied heavily on earlier decisions including Dev Dutt and Sukhdev Singh, reiterating that every entry in an ACR could potentially affect an employee’s future prospects and therefore had civil consequences. The Court emphasised that the nomenclature of an entry was not decisive; rather, its impact on promotional opportunities was what mattered. A grading appearing favourable on paper could still adversely affect promotion if it failed to satisfy prescribed benchmarks. 

Another aspect that weighed heavily with the Court was the destruction of the appellant’s service records. During the proceedings, the Railway authorities admitted that the relevant records had been “inadvertently weeded out” despite litigation on the issue already being pending before courts. The authorities themselves acknowledged that records should ordinarily be retained during ongoing judicial proceedings. 

The Court also questioned the manner in which marks had been awarded by the Selection Committee. It observed that while the Railway policy assigned four points for each “Very Good” performance rating, Dr. Saranath was awarded 19.5 points instead of 20 despite receiving “Very Good” gradings for all five years under consideration. The authorities attempted to justify the fractional marking system, but the Court found no supporting provision in the governing policy or explanation for such computation. 

Taking these circumstances together, the Court concluded that prejudice had indeed been caused to the appellant. It held that non-supply of ACRs despite requests, destruction of relevant records during ongoing litigation and unexplained fractional assessment collectively demonstrated unfair treatment. 

While the Court recognised the prejudice suffered by the appellant, it also noted practical limitations. Since the original service records had been destroyed and direct reassessment was no longer possible, the Court declined to grant salary arrears for the period from the notional date of promotion until retirement. However, considering the unfairness in the process, it directed grant of notional promotion in the Higher Administrative Grade with consequential refixation of pension and related retiral benefits. 

Allowing the appeal, the Supreme Court set aside the decisions of both the Central Administrative Tribunal and the Delhi High Court and directed that arrears arising out of pensionary benefits be paid within two months. 

Case Details

Case Title: Dr. Indira Saranath Versus Union Of India And Another 

Citation: Jurishour-1412-SC-2026

Case No.: CIVIL APPEAL NO.2536 OF 2011

Date: 26/05/2026

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