Appraisals recorded during periods of career ineligibility cannot determine merit for the grant of Permanent Commission.

The Appellants, a group of approximately 25 Short Service Commission Officers (SSCOs), primarily women, sought the grant of Permanent Commission (PC) in the Indian Navy

Historically, women were ineligible for PC under Section 9(2) of the Navy Act, 1957, until a 1991 notification permitted their induction into select branches

Following the Supreme Court’s decision in Union of India v. Annie Nagaraja (2020), which mandated gender-neutral consideration for PC for all SSCOs, the Navy convened Selection Boards in December 2020 and September 2022

These Boards utilized a "Dynamic Vacancy Model" and an evaluation system where Annual Confidential Reports (ACRs) constituted 90% of the merit

Many Appellants were not selected due to "low inter se merit" and approached the Armed Forces Tribunal (AFT)

The AFT set aside the results and directed a fresh Special Selection Board with prior disclosure of criteria

The Appellants challenged this direction before the Supreme Court, arguing that a fresh Board would be futile as their ACRs were historically biased and "casually graded" during the period they were legally ineligible for PC

Whether the ACRs of the Appellants were graded casually without adjudging their suitability for promotion, thereby adversely impacting their inter se merit?

Whether the ‘Dynamic Vacancy Model’ created for the conduct of the Selection Board in December 2020 was arbitrary or violated judicial directions?

Whether the Respondents erred in failing to disclose the evaluation criteria and available vacancies prior to the conduct of the Selection Board?

Regulation 203 of the Regulations for the Navy Part III (1963), which governs the grant of PC subject to vacancies in the stabilized cadre

Union of India v. Annie Nagaraja (2020) to affirm the right of SSCOs to be considered for PC regardless of gender

Doctrine of indirect discrimination established in Lt. Col. Nitisha v. Union of India (2021), recognizing that performance appraisals are skewed when conducted under an assumption of ineligibility for career progression

Amit Kumar Sharma v. Union of India (2023), which mandates the disclosure of selection criteria to ensure natural justice

Shankarsan Dash v. Union of India to hold that candidates have no absolute right to be appointed against every existing vacancy

The Court found that the Navy's appraisal system suffered from a foundational defect: because the Appellants were historically ineligible for PC, their Initiating Officers (IOs) graded them on a "bell-curve" that prioritized officers with long-term prospects, resulting in "middling" grades for SSCOs

The PC recommendation column in ACRs was often marked "Not Recommended" as a mechanical administrative default rather than a merit-based evaluation

The Court held this created an uneven playing field, as these historically skewed ACRs formed 90% of the selection marks in 2020

Regarding the "Dynamic Vacancy Model," the Court upheld its validity, finding that distributing vacancies over a 15-year horizon was a rational policy to maintain the Navy's lean pyramidal structure and operational agility

The Court affirmed the AFT’s finding that the Navy’s failure to disclose evaluation criteria and vacancy data prior to the Boards violated transparency norms, unlike the practices adopted by the Army and Air Force

Recognizing that a fresh Selection Board would be futile due to the inherently biased ACRs and to prevent a fourth round of litigation, the Court modified the AFT's directions

The Court ordered the direct grant of PC (subject to medical and disciplinary clearance) for: (a) SSCWOs inducted prior to January 2009; (b) SSCWOs in branches excluding Law, Education, and Naval Architecture inducted after 2009; and (c) Male SSCOs previously barred by entry terms

For officers already released from service, the Court directed a "one-time measure" deeming them to have completed 20 years of qualifying service for pensionary benefits effective from January 1, 2025

The Navy was further directed to issue General Instructions disclosing vacancies and criteria for all future Selection Boards