Ideally seniority should not be the only factor for promotion, merit i.e. performance in the current post must not be overlooked if IRlys want to grow and change for good.
But keeping in view the past trends of methodology adopted for evaluation of merit (pick & choose) in Indian Rlys, the seniority approach for promotion appears OK. Although there may not be much motivation for high performers to do further betterment, at least there will not be de-motivation of getting superseded amongst the top notch Rly officials.