The procedure is as under:
If there is vacancy in 1AC, Confirmed passengers from 2AC may be upgraded. The vacancies thus caused by upgradation to 1AC will now become for confirmed ticket holders for 3AC. The vacancies caused by upgraded passengers to 2AC will be filled by confirmed passengers in 2SL. Vacancies caused by 2SL passengers upgraded to 3AC will be allocated to RAC passengers first in 2SL. The waiting list passengers will then come into RAC. All depends upon the numbers of people upgraded in various classes. Good wishes.