JUDGMENT T. Nanda Kumar Singh, J. 1. The two main prayers sought for in the present writ petition are (1) to treat the promotion of the petitioner to the post of Director on regular basis w.e.f. the date on which respondent Nos.8 and 9 were promoted and to re-fix seniority of the petitioner so as to place him above respondent Nos. 8 and 9 in the seniority list of Directors; and (2) modify/amend the impugned order of promotion issued under No.IWAI/Estt/2/2001 dated 26.4.2001 in so far as it described the promotion of the petitioner on ad hoc basis and to treat the promotion of the petitioner as regular at par with that of respondent Nos.8 and 9 with all consequential benefits, if necessary by holding review DPC after construction of ACR for the years 1998-1999 and 1999-2000 from the appropriate competent authority. Heard Mr. B.C. Das, learned senior counsel assisted by Mr. M.Chanda, learned counsel and Mr. S. K. Ghosh, learned counsel for the petitioner and Mr. N.Choudhury, learned CGC appearing for the respondents. 2. The fact sufficient for deciding the matter in issue in the present writ petition is briefly noted : The Inland Waterways Authority of India (for short 'IWAI') is a Central Government Organisation constituted under the Inland Waterways Authority of India Act, 1985 enacted by the Parliament. The IWAI is a 'State' under Article 12 of the Constitution of India, In the first Board meeting of IWAI held on 12.11.1986, decision was taken by the Board to continue with all the Rules and Regulations of the Central Government relating to the recruitment and other terms and conditions of their officers and employees. This decision was notified by the Central Government in the Gazette on 29.10.1991. The Inland Waterways Authority of India (Adoption of Rules) Regulations, 1991 was made effective w.e.f. 27.10.1986. The Rules and other subsequent amendments were made applicable with regard to the maters contained in Section 8 (service matter) of IWAI Act, 1985 till the specific regulations were framed and notified under Section 35 of the IWAI Act. It implies that all the Central Government Rules and Regulations would prevail till the Government notifies any Regulations under Section 35 on service matters as per Section 8 of the IWAI Act. It implies that all the Central Government Rules and Regulations would prevail till the Government notifies any Regulations under Section 35 on service matters as per Section 8 of the IWAI Act. Since then, IWAI has been following all the Central Government Rules in respect of service matters for its employees and has also implemented the recommendations of the 4th and 5th Central Pay Commission in respect of their employees. 3. The petitioner was initially appointed as Deputy Director in the respondent Organisation i.e. IWAI in 1987 in the scale of Rs. 3000.00-4500.00 (revised 10,000.00 to 15,200.00). Along with the petitioner, there were four other persons in the cadre of Deputy Director in the IWAI and their respective positions in the seniority list as shown on 1.9.1991 are as follows : 1. Shri S.Bhattacharjee, 2. Shri Arun Roy (petitioner) 3. Shri R. P. Khare (respondent No.8) & 4. Shri M.K. Saha. As per the said seniority list as on 01.09.1991 petitioner was the second seniormost Deputy Director. Respondent No.9, Shri S.Dandapat, joined IWAI on 27.10.1987 as Deputy Director on deputation and remained on deputation till he was repatriated to the Ministry of Surface Transport (MOST) on 31.05.1989. Later on transferred to the surplus staff establishment cell of MOST vide office order No.269/91 dated 01.11.1989 for his deployment elsewhere. Subsequently on his request vide application dated 18.08.1990, respondent No.9, Shri Dandapat was allowed to join the IWAI again on deputation initially for two years w.e.f 01.10.1990 and thereafter he was permanently absorbed w.e.f. 01.01.1993. 4. It is the case of the petitioner that since respondent No.9, Shri Dandapat, was repatriated from IWAI on 31.05.1989 on his own request and again deputed to IWAI w.e.f. 01.10.1990 and ultimately absorbed in IWAI w.e.f. 01.01.1993, his seniority cannot be counted w.e.f. 01.08.1984 i.e. from the date of initial deputation and name of respondent No.9, Shri Dandapat, did not even appear in the original seniority list of Deputy Directors published on 21.02.1992. But arbitrarily, name of respondent No.9, Shri Dandapat, had been subsequently incorporated in the seniority list of the Deputy Directors published on 25.05.1998 by placing him at Sl.No.1. But arbitrarily, name of respondent No.9, Shri Dandapat, had been subsequently incorporated in the seniority list of the Deputy Directors published on 25.05.1998 by placing him at Sl.No.1. It is further case of the petitioner that respondent No.9, Shri Dandapat would not be entitled for the benefit of the past service rendered in the previous organisation for the purpose of his seniority in the new organisation; and as such in all fitness of things, seniority of respondent No.9 ought to have been counted from 01.01.1993 only i.e. the date of his permanent absorption in IWAI. It is also the case of the petitioner that the petitioner is senior to both respondents No.8, Shri R.P. Khare and No.9, Mr. S.Dandapat, in the cadre of Deputy Director. 5. The petitioner attained eligibility for promotion to the next higher post i.e., Director as early as 1992 under of the Recruitment Rules (R.R) for the post of Director. The post of Director is a selection post and categorised as Grade 'A' post, is to be filled up on the basis of merit under the R.R. as per the professed norms of the Government. There are five posts of Directors in the IWAI. As per the R.R, 1/3rd of the posts is to be filled up by direct recruitment and the balance 2/3rd by promotion from amongst the eligible Deputy Directors. Actions were initiated for filling up the vacant posts of Directors, DPC meeting was held in March, 2001 i.e. 13.03.2001. The ACR of the petitioner was manipulated in an adverse manner just before holding the DPC meeting in 2001, i.e. 13.03.2001. While the petitioner was working at Regional Office, IWAI, Patna, during the period 1998-1999 and 1999-2000, his controlling officers were respectively, Shri S.K. Dhawan and Shri Bijoy Kant, under whose supervision the petitioner worked. But before holding the DPC in March 2001, deliberately got the ACRs of the petitioner for the period 1998-1999 and 1999-2000 constructed by one A.Sarkar, who was never Controlling Officer of the petitioner for the period stated above and never supervised his work whatsoever. As such, he (A.Sarkar) was not authorised to write ACR of the petitioner for the aforesaid period as Reporting Officer. As such, he (A.Sarkar) was not authorised to write ACR of the petitioner for the aforesaid period as Reporting Officer. It is also learnt that the aforesaid Shri A.Sarkar had not only fabricated the ACRs of the petitioner for the year 1998-1999 and 1999-2000 with criminal conspiracy but also attached a false and ill motivated adverse inspection report in the column of 'integrity' of the petitioner without any clear comment and also without providing any opportunity of show cause to the petitioner with the intention of prejudicing the promotional aspects. But during the last long 14 years of his service there was no communication to the petitioner about any of his lapses and shortcomings whatsoever at any point of time nor any adverse entries in the ACR were communicated to the petitioner nor there was any warning/proceeding initiated against him. In the case of respondent No.9, Shri S.Dandapat, he was asked to submit explanation for certain irregularities of the works for the said period i.e. 1998-1999 and 1999-2000; but surprisingly petitioner later on learnt that for such irregularities for which explanations had been called for from respondent No.9, Shri S. Dandapat, nothing was reflected in the ACR of respondent No.9. Again in the case of respondent No.8, Mr. RP Khare, a special report was called for, for certain lapses and the said lapses on the part of respondent No.8 was cleared just before the said DPC held on 13.03.2001. Over and above, in the case of petitioner, his ACR had been deliberately down graded by the Reviewing Officer, Shri R.P. Nair by ignoring Very good' report of the Reporting Officer. The said DPC held on 13.03.2001 had acted on the un-communicated adverse entries/report attached to the 'integrity' column of the ACR of the petitioner and downgraded ACR of the petitioner and not recommended the petitioner for promotion to the post of Director. As stated above, as nothing had been shown in the 'integrity' column of respondent No.9, Shri S.Dandapat, who had have the alleged lapses or/irregularities like those of the petitioner and also as on the basis of special report, shortcomings or lapses of respondent No.8, R.P.Khare had been cleared just before the DPC, i.e. 13.03.2001, respondent Nos.8 and 9 had been recommended by the said DPC held on 13.03.2001 for promotion to the post of Director. 6. 6. It is the case of the respondents in their joint affidavit that the petitioner had submitted his appraisal to the administration for the years 1998-1999 and 1999-2000 on 08.01.2001 and the then Chief Engineer, Shri S.K. Dhawan and Shri N.Bijoy Kant had left IWAI after completion of tenure of deputation on 02.11.1998 and 31.03.2000 respectively and reporting of the ACR was done by A.Sarkar, who was, at that time posted as Director, a post senior to the Deputy Director (the petitioner). To expedite the process of selection as early as possible, Shri A.Sarkar, as Director reported upon the ACRs of the petitioner for the years, 1998-1999 and 1999-2000 which were reviewed by the members (technical) otherwise there would be inordinate delay in completion of the ACRs of the candidates in consideration zone, had they been sent to those Chief Engineers who had already completed their tenure and left office. The DPC held on 13.03.2001 had acted on the adverse secret note attached to the 'integrity' column of the ACR of the petitioner for the year 1999-2000 i.e. secret noting, containing the finding of the committee constituted to examine the irregularities in execution of the bundling works i.e., N.W. 1 during 1998-1999 working season. The DPC on such consideration had not recommended the petitioner. The DPC had also considered five preceding ACRs of respondent Nos.8 and 9 and recommended respondent Nos.8 and 9 for promotion to the post of Director. Relevant portion of the joint affidavit in opposition of the respondents read as follows : With regard to the column of integrity in the ACR of the petitioner for the year 99-2000 is concerned it is admitted that the column of integrity was kept blank and a secret note containing findings of the Committee constituted to examine the irregularities in the execution of the bundling of work NW-1 during 1998-99 working season was enclosed with the ACR. The DPC have taken note of the secret notes attached to the ACR and performance of Shri Arun Roy for the preceding five years, was evaluated and on evaluation of the ACR along with the attached Secret Note the DPC had placed him after Shri R.P. Khare. Further, it is to be reiterated that decision of DPC was based on the assessment of the entire ACR records of the officers and not one or two ACRs. 7. Further, it is to be reiterated that decision of DPC was based on the assessment of the entire ACR records of the officers and not one or two ACRs. 7. After the DPC was over, i.e. DPC dated 13.03.2001, in order to justify the un-communicated adverse note attached to the 'integrity' column of ACR of the petitioner, which had already been acted upon by the DPC held on 13.03.2001, the department issued a confidential show cause notice vide letter No.IWAI/R.R/1/20/98 Part-Ill dated 07.01.2002 to the petitioner as well as respondent No.9, Shri S.Dandapat. As stated above, in the case of respondent No.9, S.Dandapat, nothing had been indicated in the 'integrity' column of his ACR. This, according to the petitioner, was done with a deliberate attempt to justify the inclusion of secret note against the 'integrity' column of the petitioner and save the administrative decision to deprive the petitioner of his regular promotion. The petitioner had submitted clarification and explanation vide his letter dated 21.02.2002 to the Department. The Department accepted the explanation and justifications and exonerated vide order No.IWAI/R.R./1/20/98 Pt-III dated 11.12.2003 issued by the Secretary and CVO. 8. It is also stated that on the order of the competent authority, a review DPC was held on 16.04.2011 on the strength of a special report called for in respect of the petitioner, but the review DPC did not consider the comparative merit of the petitioner and respondent Nos.8 and 9. The review DPC recommended the petitioner for promotion against the resultant vacant post of Director arisen due to appointment of Shri A.R.Ghatak on ad hoc basis as Hydrographic Chief. On the recommendation of the said DPC held on 13.03.2001 respondent Nos.8 and 9 i.e. Shri RP Khare and S.Dandapat were promoted to the post of Directors regularly but the petitioner was promoted to the post of Director only on ad hoc basis until further order vide Office order No.3-IWAT/Estt/two-third/2001 dated 26.04.2001. 9. On the recommendation of the said DPC held on 13.03.2001 respondent Nos.8 and 9 i.e. Shri RP Khare and S.Dandapat were promoted to the post of Directors regularly but the petitioner was promoted to the post of Director only on ad hoc basis until further order vide Office order No.3-IWAT/Estt/two-third/2001 dated 26.04.2001. 9. It is further case of the petitioner, which is substantiated by the record, that the DPC deliberately acted upon the incomplete and downgraded ACR of the petitioner for the year 1998-1999 and 1999-2000 and also that the DPC had acted upon the said adverse entry/adverse un-communicated note attached to the ACR of the petitioner and also the respondents had admitted in their joint affidavit that DPC held on 13.03.2001 had acted upon the said un-communicated adverse note attached to the ACR of the petitioner and also that said A.Sarkar the then Director, who had placed the Secret Note before the DPC in respect of the petitioner was also a member of the DPC held on 13.03.2001 and review DPC held on 16.04.2001. 10. It is now well settled dictum in service jurisprudence that an un-communicated adverse report should not form the foundation and also that any adverse entry need to be communicated to the incumbent i.e. to the government servant. Any adverse entry which would have civil consequences should be communicated to the concerned employee and non communication of the adverse entries, not only deprive the employee of the opportunity of making a representation against it but also would ailed all his chance of being promoted. Hence, such non communication is arbitrary and violative of Article 14 of the Constitution. [Ref: Vilay Kumar Vs State of Maharashtra : 1998 Supp SCC 674]. 11. The Apex Court in Gurdial Singh Fiji Vs State of Punjab & Ors: (1979) 2 SCC 368 (para 17 of the SCC) held that : 17. The principle is well settled that in accordance with the rules of natural justice, an adverse report in a confidential roll cannot be acted upon to deny promotional opportunities unless it is communicated to the person concerned so that he has an opportunity to improve his work and conduct or to explain the circumstances leading to the report. The principle is well settled that in accordance with the rules of natural justice, an adverse report in a confidential roll cannot be acted upon to deny promotional opportunities unless it is communicated to the person concerned so that he has an opportunity to improve his work and conduct or to explain the circumstances leading to the report. Such an opportunity is not an empty formality, its object, partially, being to enable the superior authorities to decide on a consideration of the explanation offered by the person concerned, whether the adverse report is justified. Unfortunately, for one reason or another, not arising out of any fault on the part of the appellant, though the adverse report was communicated to him, the Government has not been able to consider his explanation and decide whether the report was justified. In these circumstances, it is difficult to support the non-issuance of the integrity certificate to the appellant. The chain of reaction began with the adverse report and the infirmity in the link of causation is that no one has yet decided whether that report was justified. We cannot speculate, in the absence of a proper pleading, whether the appellant was not found suitable otherwise, that is to say, for reasons other than those connected with the non-issuance of an integrity certificate to him. 12. The Rules of natural justice are not codified nor there is straight jacket formula, however, principles of natural justice is clear that one should not be condemned unheard. The authority concerned is required to act fairly and justly. The Apex Court in A. K. Kraipak Vs. Union of India: (1969) 2 SCC 262 (para 20 of the SCC) held that : 20.".... The concept of natural justice has undergone a great deal of change in recent years. In the past it was thought that it included just two rules, namely,: (1) no one shall be a judge in his own case (nemo debet esse judex propria causa) and (2) no decision shall be given against a party without affording him a reasonable hearing (audi alteram partem). Very soon thereafter a third rule was envisaged and that is that quasi-judicial enquiries must be held in good faith, without bias and not arbitrarily or unreasonably. But in the course of years many more subsidiary rules came to be added to the rules of natural justice. 13. Very soon thereafter a third rule was envisaged and that is that quasi-judicial enquiries must be held in good faith, without bias and not arbitrarily or unreasonably. But in the course of years many more subsidiary rules came to be added to the rules of natural justice. 13. The Apex Court in K.I. Shepheard Vs. Union of India: (1987) 4 SCC 431 held that even administrative decisions have to be in accordance with the natural justice if they have civil consequences. It was also held that natural justice has various facets and acting fairly is one of them. The Apex Court in U.P. Jalnigam & Ors. Vs. Prabhat Chandra Jain & Ors: (1996) 2 SCC 363 held that down grading of ACR in violation of natural justice cannot be sustained. Para 3 of the SCC in U.P. Jalnigam & Ors's case (supra) read as follows : 3. We need to explain these observations of the High Court. The Nigam has rules, whereunder an adverse entry is required to be communicated to the employee concerned, but not downgrading of an entry. It has been urged on behalf of the Nigam that when the nature of the entry does not reflect any adverseness that is not required to be communicated. As we view it the extreme illustration given by the High Court may reflect an adverse element compulsorily communicable but if the graded entry is of going a step down, like falling from 'very good' to 'good' that may not ordinarily be an adverse entry since both are a positive grading. All that is required by the authority recording confidential in the situation is to record reasons for such downgrading on the personal file of the officer concerned, and inform him of the change in the form of an advice. If the variation warranted be not permissible, then the very purpose of writing annual confidential reports would be frustrated. Having achieved an optimum level the employee on his part may slacken in his work, relaxing secure by his onetime achievement. This would be an undesirable situation. All the same the sting of adverseness must, in all events, not be reflected in such variations, as otherwise they shall be communicated as such. Having achieved an optimum level the employee on his part may slacken in his work, relaxing secure by his onetime achievement. This would be an undesirable situation. All the same the sting of adverseness must, in all events, not be reflected in such variations, as otherwise they shall be communicated as such. It may be emphasised that even a positive confidential entry in a given case can perilously be adverse and to say that an adverse entry should always be qualitatively damaging may not be true. In the instant case we have seen the service record of the first respondent. No reason for the change is mentioned. The downgrading is reflected by comparison. This cannot sustain. Having explained in this manner the case of the first respondent and the system that should prevail in the Jal Nigam, we do not find any difficulty in accepting the ultimate result arrived at by the High Court. (emphasis supplied) 14. This Court (Division Bench) in Hemam Bihari Singh Vs. State of Manipur & Ors. : 2004(1) GLT 1 held that downgrading of ACR independently by the Selection Committee is not permitted. Officer graded 'outstanding' cannot be graded as 'very good' nor bring him at par with others. Para 14 and 15 of the GLT in Hemam Bihari Singh's case (supra) read as follows : 14. We have considered the decisions in Kuldip Chand Vs State of H.P. & Ors: AIR 1997 SC 2606 and Union of India & Ors Vs Major General U.S. Sidhu, 1996 (III) GLT 80. The judgments have been relied upon by Mr. Nemaichand, learned State Counsel in order to appraise the Court about the limitation while exercising the powers of judicial review. For the reasons stated above, we are of the opinion that the ratio available in the aforesaid two judgments are not applicable in the instant case. It is because, the procedure adopted by the DPC in the instant case has been held to be contrary to the provisions of law and beyond the powers of the DPC. Downgrading may be permissible in cases for good reason solely for the purpose of evaluation of merit. An officer consistently graded 'Outstanding' cannot be downgraded as 'Very God' in orders to bring him at par with others, particularly when two of his seniors are mere diploma holders. Downgrading may be permissible in cases for good reason solely for the purpose of evaluation of merit. An officer consistently graded 'Outstanding' cannot be downgraded as 'Very God' in orders to bring him at par with others, particularly when two of his seniors are mere diploma holders. Downgrading of the remarks in the ACR of the appellant is the crux of the decision making process and the same, when unfair and unjust, vitiates the selection process. 15. We, therefore, allow the appeal, set aside the judgment and order dated two-third.8.2000 passed by the learned Single Judge in W.P (C) No.548/2000 and direct the respondent authority to take steps for review of the proceedings of the DPC dated 20.12.99 (Annexure-X/10) within a period of four months from today. The decision of this Court in Hemam Bihari Singh's case (supra) had also been affirmed by the Apex Court. 15. The Apex Court in Dev Dutt Vs. Union of India & Ors.: (2008) 8 SCC 725 held that adverse entry or/remark should be communicated to the employee inasmuch as communication of entries and giving opportunity to represent against them is particularly important on higher posts which are in a pyramidical structure where often principle of elimination is followed in selection for promotion and even a single entry can destroy career of an officer which has otherwise been outstanding throughout. Para-33, 34, 35, 36, 37, 38, 39 and 40 of the SCC in Dev Dutt's case (supra) read as follows : 33. In our opinion, fair play required that the respondent should have communicated the 'good' entry of 1993-1994 to the appellant so that he could have an opportunity of making a representation praying for upgrading the same so that he could be eligible for promotion. Non-communication of the said entry, in our opinion, was hence unfair on the part of the respondent and hence violative of natural justice. 34. Originally there were said to be only two principles of natural justice: (1) the rule against bias and (two-third) the right to be heard (audi alteram partem). However, subsequently, as noted in A.K. Kraipak case: (1969) 2 SCC 262 and K.I.Shephard case: (1987) 4 SCC 431 , some more rules came to be added to the rules of natural justice, e.g. the requirement to give reasons vide S.N. Mukherjee V Union of India: (1990) 4 SCC 594 . However, subsequently, as noted in A.K. Kraipak case: (1969) 2 SCC 262 and K.I.Shephard case: (1987) 4 SCC 431 , some more rules came to be added to the rules of natural justice, e.g. the requirement to give reasons vide S.N. Mukherjee V Union of India: (1990) 4 SCC 594 . In Maneka Gandhi Vs Union of India : (1978) 1 SCC 248 (vide paras 56 to 61) it was held that natural justice is part of Article 14 of the Constitution). 35. Thus natural justice has an expanding content and is not stagnant. It is therefore open to the court to develop new principles of natural justice in appropriate cases. 36. In the present case, we are developing the principles of natural justice by holding that fairness and transparency in public administration requires that all entries (whether poor, fair, average, good or very good) in the annual confidential report of a public servant, whether in civil, judicial, police or any other State service (except the military), must be communicated to him within a reasonable period so that he can make a representation for its upgradation. This in our opinion is the correct legal position even though there may be no rule/G.0 requiring communication of the entry, or even if there is a rule/G.O prohibiting it, because the principle of non-arbitrariness in State action as envisaged by Article 14 of the Constitution in our opinion requires such communication. Article 14 will override all rules or requires such communication. Article 14 will override all rules or government orders. 37. We further hold that when the entry is communicated to him the public servant should have a right to make a representation against the entry to the authority concerned, and the authority concerned must decide the representation in a fair manner and within a reasonable period. We also hold that the representation must be decided by an authority higher than the one who gave the entry, otherwise the likelihood is that the representation will be summarily rejected without adequate consideration as it would be an appeal from Caesar to Caesar. All this would be conducive to fairness and transparency in public administration, and would result in fairness to public servants. The State must be a model employer, and must act fairly towards its employees. Only then would good governance be possible. 38. All this would be conducive to fairness and transparency in public administration, and would result in fairness to public servants. The State must be a model employer, and must act fairly towards its employees. Only then would good governance be possible. 38. In Canara Bank V V.K.Awasthy : (2005) 6 SCC 321 this Court held that the concept of natural justice has undergone a great deal of change in recent years. As observed in para 8 of the said judgment (SCC p.329) 8. Natural justice is another name for common-sense justice. Rules of natural justice are not codified canons. But they are principles ingrained into the conscience of man. Natural justice is the administration of justice in a common-sense liberal way. Justice is based substantially on natural ideals and human values." In para 12 of the said judgment it was observed: (SCC p.330) 12. What is meant by the term 'principles of natural justice' is not easy to determine. Lord Summer (then Hamilton, L.J.) in R v Loc, Govt Board: (1914) 1 KB 160 described the phrase as sadly lacking in precision. In General Medical Council v Spackeman: 1943 According to the petitioner 627, Lord Wright observed that it was not desirable to attempt 'to force it into any Procrustean bed'. 40. In State of Maharashtra V Public Concern for Governance Trust: (2007) 3 SCC 587 it was observed (vide para 39): (SCC p.606) 39.... In our opinion, when an authority takes a decision which may have civil consequences and affects the rights of a person, the principles of natural justice would at once come into play. 16. The ratio laid down in Dev Dutt's case (supra) had been later on followed by the Apex Court (3 Judges) in Abhijit Ghosh Dastidar Vs. Union of India & Ors.: (2009) 16 SCC 146 and reiterated that non communication of the entries in the annual confidential report of a public servant whether he is in civil, judicial, police or any other service (other than armed force), it has civil consequences because it may affect his chance of promotion or getting other benefits. Para 8 of the SCC in Abhijit Ghosh Dastidar's case read as follows : 8. Coming to the second aspect, that though the benchmark "very good" is required for being considered for promotion, admittedly the entry of "good" was not communicated to the appellant. Para 8 of the SCC in Abhijit Ghosh Dastidar's case read as follows : 8. Coming to the second aspect, that though the benchmark "very good" is required for being considered for promotion, admittedly the entry of "good" was not communicated to the appellant. The entry of "good" should have been communicated to him as he was having "very good" in the previous year. In those circumstances, in our opinion, non-communication of entries in the annual confidential report of a public servant whether he is in civil, judicial, police or any other service (other than the armed forces), it has civil consequences because it may affect his chances of promotion or getting other benefits. Hence, such non-communication would be arbitrary, and as such violative of 'Article 14 of the Constitution. The same view has been reiterated in the above referred decision (Dev Dutt case: (2008) 8 SCC 725 )) SCC p.738, para 41) relied on by the appellant. Therefore, the entries "good" if at all granted to the appellant, the same should not have been taken into consideration for being considered for promotion to the higher grade. The respondent has no case that the appellant had ever been informed of the nature of the grading given to him. 17. Now the core question falls for consideration in the present case is "is the action of the Department treating the petitioner unequally in reflecting his alleged lapses which had been exonerated later on, on the explanation made by the petitioner, with the respondent Nos.8 and 9, who had similar alleged lapses, in the given case, arbitrary, capricious and discriminatory and malafide?" Unbridled power cannot be conferred on the administrative authority; there should be guidelines and principles for exercising the power. In the absence of such guidelines, it must be hold that it confers an unbridled power and is violative of Article 14 of the Constitution. The Apex Court in Uttar Pradesh Cooperative Sugar Factories Federation Ltd. Vs. P. P. Gautam & Ors.: (2008) 17 SCC 365 (para 2 of the SCC) held that : 2. The High Court has come to the conclusion that the aforesaid proviso confers an unbridled power on the employer to require an employee to retire on his attaining the age of 55 years and conferment of such unbridled power is violative of Article 14 of the Constitution. The High Court has come to the conclusion that the aforesaid proviso confers an unbridled power on the employer to require an employee to retire on his attaining the age of 55 years and conferment of such unbridled power is violative of Article 14 of the Constitution. It is no doubt true that the order of compulsory retirement is not penal in nature, and every employer has a right to require the employee to compulsorily retire in accordance with the relevant service regulation, provided the non-continuance of service of the employee is held to be in public interest. The impugned regulation, however, dies not indicate that the power under the second proviso could be exercised in public interest. To our query as to whether the employer has issued any guidelines for the exercise of power under the second proviso, and has indicated that such power could be exercised only in public interest, the answer was in the negative. In the absence of any such guidelines, and in the absence of such provision in the proviso itself, the conclusion of the High Court that it confers a unbridled power and is violative of Article 14 is unassailable. In fact, a decision of this Court on somewhat similar provisions in Srnior Supdt of Post offices V Izhar Husain: (1989) 4 SCC 318 fully supports the conclusion of the High Court. We, therefore, do not find any merits in territorial constituencies his appeal requiring our interference. The appeal accordingly fails and is dismissed. 18. What is "arbitrariness" is discussed and demonstrated by the Apex Court in Asha Sharma Vs. Chandigarh Administration & Ors. : (2011) 10 SCC 86 . Para 12, 13 and 14 of the SCC in Asha Sharma's case (supra) read as follows : 12. Arbitrariness in State action can be demonstrated by existence of different circumstances. Whenever both the decisions-making process and the decision taken are based on irrelevant facts, while ignoring relevant considerations, such an action can normally be termed as "arbitrary". Where the process of decision making is followed but proper reasoning is not recorded for arriving at a conclusion, the action may still fall in the category of arbitrariness. Of course, sufficiency or otherwise of the reasoning may not be a valid ground for consideration within the scope of judicial review. Rationality, reasonableness, objectivity and application of mind are some of the prerequisites of proper decision making. Of course, sufficiency or otherwise of the reasoning may not be a valid ground for consideration within the scope of judicial review. Rationality, reasonableness, objectivity and application of mind are some of the prerequisites of proper decision making. The concept of transparency in the decision-making process of the State has also become an essential part of our administrative law. 13. The Government is entitled to make pragmatic adjustments and policy decisions, which may be necessary or called for under the prevalent peculiar circumstances. The Court may not strike down a policy decision taken by the Government merely because it feels that another decision would have been more fair or wise, scientific or logical. The principle of reasonableness and non-arbitrariness in governmental action is the core of our constitutional scheme and structure. Its interpretation will always depend upon the facts and circumstances of a given case. Reference in this regard can also be made to Netai Bag v State of W.B. : (2000) 8 SCC 262 . 14. Action by the State, whether administrative or executive, has to be fair and in consonance with the statutory provisions and rules. Even if no rules are in force to govern executive action still such action, especially if it could potentially affect the rights of the parties, should be just, fair and transparent. Arbitrariness in State action, even where the rules vest discretion in an authority, has to be impermissible. The exercise of discretion, in line with principles of fairness and good governance, is an implied obligation upon the authorities, when vested with the powers to pass orders of determinative nature. The standard of fairness is also dependent upon certainty in State action, that is, the class of persons, subject to regulation by the Allotment Rules, must be able to reasonably anticipate the order for the action that the State is likely to take in a given situation. Arbitrariness and discrimination have inbuilt elements of uncertainty as the decisions of the State would then differ from person to person and from situation to situation, even if the determinative factors of the situations in question were identical. This uncertainty must be avoided. 19. The Apex Court had discussed the meaning of "Arbitrariness" in Sanchit Bansal &Anr. Vs. Joint Admission Board & Anr.: (2012) I SCC 157 (in para 27, 28 and 29 of the SCC) and held that : 27. This uncertainty must be avoided. 19. The Apex Court had discussed the meaning of "Arbitrariness" in Sanchit Bansal &Anr. Vs. Joint Admission Board & Anr.: (2012) I SCC 157 (in para 27, 28 and 29 of the SCC) and held that : 27. Thus, the process of evaluation, the process of ranking and selection of candidates for admission with reference to their performance, the process of achieving the objective of selecting candidates who will be better equipped to suit the specialised courses, are all technical matters in academic field and the courts will not interfere in such processes. The courts will interfere only if they find all or any of the following: (i) violation of any enactment, statutory rules and regulations; (ii) mala fides or ulterior motives to assist or enable private gain to someone or cause prejudice to anyone; or where the procedure adopted is arbitrary and capricious. 28. An action is said to be arbitrary and capricious, where a person, in particular, a person in authority does any action based on individual discretion by ignoring prescribed rules, procedure or law and the action or decision is founded on prejudice or preference rather than reason or fact. To be termed as arbitrary and capricious, the action must be illogical and whimsical, something without any reasonable explanation. When an action or procedure seeks to achieve a specific objective in furtherance of education in a bona fide manner, by adopting a process which is uniform and non-discriminatory, it canoe be described as arbitrary or capricious or mala fide. 29. The appellants in this case have alleged mala fides on the part of the Chairman of the Board and the Chairman of the Organising Committee. The allegation is that on account of personal enmity, rivalry and hostility harboured by them towards the second appellant, who happens to be a Professor at IIT, Kharagpur, they manipulated the ranking and selection process and deliberately set the cut-off marks to deny admission to the second appellants' son, a seat in an IIT. The appellants have not made it out, even remotely, any such motive, in regard to the procedure for arriving at the cutoff marks. The appellants have not made it out, even remotely, any such motive, in regard to the procedure for arriving at the cutoff marks. The claim that to deny admission to one student from among more than 2,87,000 students, they manipulated the process of fixing the cut-off marks is too far-fetched and difficult to accept, apart from the fact that there is no iota of material to support such a claim. 20. For the foregoing discussions, in the given case, the said action of the respondents are arbitrary, discriminatory and malafide. On perusal of the records, it is clear that that incomplete ACR of the petitioner had been acted upon by the DPC. For the incomplete ACR, DPC may refer to the G.I. Dept of Per. & Trg. P.M. No.22011/5/86-Estt. (D), dated the 20th June, 1989 and Corrigendum, dated the 13th July, 1989, which is reproduced in Swamy's Establishment and Administration Compilation, as under: If two alternative eligibility conditions are prescribed and the officers satisfying these conditions are considered simultaneously instead of under a "failing which" clause, the DPC may consider the service record of all officers with particular reference to the ACRs (including ACRs in respect of service in the lower grade, if necessary) for the lesser number of years as between the two alternative periods of eligibility service or five years, whichever is longer. To cite an instance, if for promotion to a post in the scale of Rs.5,900-6,700, it is prescribed in the Rules & Regulations that officers with 8 years' service in the scale of Rs.3,700-5,000 or those with 17 years service in Group 'A' including four years service in the scale of Rs.3,700-5,000 are eligible, the DPC may consider the service record of all officers with particular reference to the ACRs for 8 years (including Annual Confidential Report for service in the lower grade, if necessary.'" (c) Where one or more CRs have not been written for any reason during the relevant period, the DPC should consider the CRs of the years preceding the period in question and if in any case even these are not available, the DPC should take the CRs of the lower grade into account to complete the number of CRs required to be considered as per (b) above. If this is also not possible, all the available CRs should be taken into account. If this is also not possible, all the available CRs should be taken into account. (d) Where an officer is officiating in the next higher grade and has earned CRs in that grade, his CRs in that grade may be considered by the DPC in order to assess his work, conduct and performance, but no extra weightage may be given merely on the ground that he has been officiating in the higher grade. (e) The DPC should not be guided merely by the overall grading, if any, that may be recorded in the CRs but should make its own assessment on the basis of the entries in the CRs, because it has been noticed that sometimes the overall grading in a CR may be inconsistent with the grading under various parameters or attributes. (f) If the Reviewing Authority or the Accepting Authority, as the case may be, has overruled the Reporting Officer or the Reviewing Authority, as the case may be, the remarks of the latter authority should be taken as the final remarks for the purposes of assessment, provided it is apparent from the relevant entries that the higher authority has come to a different assessment consciously after due application of mind. If the remarks of the Reporting Officer, Reviewing Authority and Accepting Authority are complementary to each other and one does not have the effect of overruling the other, then the remarks should be read together and the final assessment made by the DPC. For the foregoing reasons, the impugned order dated 26.04.2001 is hereby set aside and the respondent authority is directed to take up steps for review of the proceedings of the DPC held on 13.03.2001 and 16.04.2011 for the post of Director. It is made clear that the said un-communicated adverse entries in the ACR of the petitioner, which had been exonerated later on and incomplete ACR of the petitioner should not be acted upon by the review DPC, however, incomplete ACR of the petitioner for the relevant period should be completed in the mariner prescribed by relevant rules. It is made clear that the said un-communicated adverse entries in the ACR of the petitioner, which had been exonerated later on and incomplete ACR of the petitioner should not be acted upon by the review DPC, however, incomplete ACR of the petitioner for the relevant period should be completed in the mariner prescribed by relevant rules. It is further made clear that till the review DPC is completed and acted upon, the present status of the petitioner and respondent Nos.8 and 9 should not be disturbed and there shall be no further DPC for further promotion of the petitioner and respondent Nos.8 and 9 to the higher post, i.e., post higher to the post of Director, till the review DPC is completed. Writ petition is allowed to the extent indicated above. Petition allowed.