Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 16
PETITIONER:
BISHAN SARUP GUPTA ETC. ETC.
Vs.
RESPONDENT:
UNION OF INDIA & ORS. ETC. ETC.
DATE OF JUDGMENT16/04/1974
BENCH:
PALEKAR, D.G.
BENCH:
PALEKAR, D.G.
RAY, A.N. (CJ)
MATHEW, KUTTYIL KURIEN
ALAGIRISWAMI, A.
BHAGWATI, P.N.
CITATION:
1974 AIR 1618 1975 SCR (1) 104
1975 SCC (3) 116
CITATOR INFO :
E 1977 SC 251 (34,36,38,39)
RF 1977 SC 757 (4,38,40,56)
D 1977 SC2051 (41)
R 1980 SC 452 (48)
RF 1980 SC2056 (73)
R 1982 SC 101 (32)
F 1982 SC1244 (13)
D 1983 SC 769 (22,31,38)
R 1984 SC1291 (13,19)
E 1984 SC1527 (12)
R 1984 SC1595 (24)
D 1985 SC1019 (24)
RF 1985 SC1558 (26)
D 1988 SC 268 (26)
RF 1990 SC1106 (8)
D 1990 SC1607 (26)
E&F 1991 SC 212 (1,2,3)
ACT:
Income-tax Officers (Class I) Service (Regulation of
Seniority Rules 1973--Whether violative of Art. 16 of the
Constitution--if the Rules are just and fair.
HEADNOTE:
The above appeals were disposed of by this Court on 16-8-72.
The court set aside the seniority list prepared by the
Department on 15-7-68 and save directions as to how the same
was to be prepared. This Court held that the Government’s
decision to promote a large number of Income Tax Officers
from Class II to Class I infringed the quota rule which save
66-1/2 of the posts to the direct recruits and 331% of the
posts to the promoters and therefore, the quota rule
collapsed and it was for the Government to devise a just and
fair seniority rule as between the direct recruits and the
promoters for being given effect to from 16-1-1959. It
followed from the judgment that the Government will prepare
the seniority list from 1951 to 15-1-1959 in accordance with
the quota rule of 1952 r/w the seniority rule 1(f) (iii).
The seniority list from 16-1-1959 will be prepared in
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 16
accordance with the rule to be freshly made by the
Government in that behalf.
Accordingly on February 9, 1973 the President under the
proviso to Art. 309 of the Constitution, made rules called
the Income-tax Officers (Class 1) Service (Regulation of
Seniority) Rules 1973, which were to come into force from
16-1-1959. Rule 3 which provided for seniority of officers
was that seniority among the promoters Inter se shall be
determined In the order of selection for such promotion.
The seniority among the direct recruits inter se shall be
determined by the order of merit in which they are selected
and the relative seniority among the promoters and the
direct recruits shall be in the ratio 1 : 1 and shall be
regulated in accordance with a roster maintained for the
purpose etc.
When the present seniority list was prepared Government had
on its hands 73 promotees (Spill-over) who, though appointed
earlier between 1956-1958, had no quota posts for their
absorption. Therefore, the Government had to Prepare a new
seniority list not only as regards the officers who were
absorbed in the service before 15-1-1959 but all officers
including these spill-overs, appointed after 15-1-1959. The
seniority list from serial No. 1 to serial No. 485 (who were
appointed prior to 15-1-1959) has been prepared in
accordance with the quota system and serial No. 486 to 1717
related to officers who have to be accommodated from 16-1-
1959 in accordance with the new Seniority Rule. Since under
Rule 3(iii), the promotee must come first, and then the
direct recruit, serial No. 486 went to the promotee and
serial No. 487 went to a direct recruit and so on.
The contention of 73 spill-over promotees of 16-1-1959 was
that since this Court had directed that they should be
absorbed on a "priority basis", all of them should have been
shown in the Seniority List, as having been appointed on 16-
1-1959 in a block and thereafter the direct recruits for
that year should have been shown.
It was further contended that as the quota rule expired on
16-1-1959, the promotees must be deemed to have been validly
appointed in accordance with rule 4 of the Income-tax
Officers (Class I) Grade 11 Service Recruitment Rules 1945
and since there remained in existence, no seniority or quota
rule determining their seniority vis-a-vis the direct
recruits, their natural seniority of earlier appointment
cannot retrospectively be altered to their detriment, and to
do so would be violative of Article 16 of the Constitution.
Dismissing the petitions and holding that the new seniority
list is the correct seniority list.
105
HELD : (1) It is true that this Court had directed that the
aforesaid 73 promotees should be absorbed on a "priority
basis". That only meant that their position as seniors
should not be prejudiced by any possible claim by later pro-
motees, on the ground that being recruited outside the
quota, they had higher rights than these 73 promotees who
had no posts. It was not intended that these 73 promotees
should not be governed by any seniority rule. They were to
be governed by a rule which covered all those who came or
were deemed to have come into the cadre after 15-1-1959.
[109D-E]
(2) The new Rules are not violative of Art. 16 of the
Constitution. When the 73 spill-over appointments were
made, there were no allocated posts to which the
appointments could have been validly made. On 16-1-1959,
there were no posts earmarked for them, the ordinary
consequence of which would be to revert them to their
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 16
original class II posts unless class I posts were regularly
found for them. When the quota rule was no longer in
existence there was no possibility of regularizing the
appointments. It is, therefore, clear that the infir city
in the appointments continued on 16-1-1959 and that
infirmity could not be overcome except by a new rule. It is
not correct to say that this infirmity disappeared with the
disappearance of the quota rule. The spill-over promotees
claim seniority from 16-1-1959 and the other promotees claim
from some date between 1959 and 1962, when they were
promoted, but this claim is untenable because all these
officers were told when promoted that their appointments
were on an officiating or ad hoc basis and the question of
their seniority had not been determined. Therefore, they
cannot contend that their dates of appointment in class I
will not be altered for the purposes of determining
seniority. There is no question in this case of any
discrimination being made in a service after officers from
two sources have been brought and absorbed in one cadre.
The problem here is of integrating officers from two sources
into one service by adjusting their seniority inter se.
[111G-112B, E; 113A-G; 114B-D; 115A-C]
Mervyn Coutinho & Ors. V. Collector of Customs Bombay &
Ors. [1966] (3) SCR 600 Roshan Lal. v. Union of India [1968]
1 S.C.R. 185 and S. M. Pandit & Ors. v. State of Gujarat
A.I.R. 1972 S.C. 252 discussed and distinguished.
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 2060 of
1971, 67, 139 and 393 of 1972.
From the Judgment and Order dated the 22nd September, 1970
and 25th March, 1971 of the Delhi High Court at New Delhi in
Civil Writ Nos. 196 and 550 of 1970 respectively and
WRIT PETITION No. 287 of 1973.
Under Article 32 of the Constitution of India for the
enforcement of fundamental rights.
V. M. Tarkunde, K. K. Singhvi, Yogeshwar Prasad, S. K.
Bagga and S. Bagga for the appellant (In CA 2060/71).
Niren De, Attorney General of India, F. S. Nariman,
Additional Solicitor General of India R. H. Dhebar. R. M.
Mehta and S. P. Navar for the appellants (In CA 67/72) and
for Respondent Nos. 1-3. (In CA 2060/71) and for
Respondents Nos. 1-2 (In CA 139/72) and for Respondents Nos.
2-5 (In CA 393/72) and for Respondents Nos. 1-1 (IN WP
287/73).
106
G. L. Sanghi, Bishambar Lal, P. V. Kapur and S. C. Patel
for the appellant (in CA 139/72).
K. K. Singhvi, Yogeshwar Prasad, S. K. Bagga and S. Bagga
for the Appellants (In CA 393/72) and for Respondents Nos.
18, 20, 29, 43, 46. and 58 (In CA 67/72) and for Respondents
Nos. 22, 30, 47, 50 and 62 (In CA 139/72).
M. C. Setalvad, G. L. Sanghi, Bishamber Lal, P. V. Kapurand
S. C. Patel for Respondents Nos. 25, 28, 29, 43, 50, 57
and 74 (In CA 2060/71).
R. K. Garg, S. C. Agarwal and V. J. Francis for Respondent
No. 86 (In CA 2060/71).
S. K. Acharya and Somnath Chatterjee, J. N. Haldar, B. P.
Maheshwari and Suresh Sethi for the Petitioner in (WP
287/73).
Y. S. Desai, G. L. Sanghi, Bishamber Lal, P. V. Kapur and
S. C. Patel for Respondent No. 1 (In CA 67/72).
B. R. Agarwala for Respondent No. 13 (In-CA 67/72) and
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 16
for Respondent No. 17 (In CA 393/72).
J. R. Nanavati, S. K. Dholakia and R. C. Bhatia Advocates
for Intervener Nos. 1, 4 & 5.
S. K. Bagga and S. Bagga for Intervener No. 2. Intervener
No. 3 appeared in person.
The Judgment of the Court was delivered by-
PALEKAR, J.-The above appeals were disposed of by this Court
on 16-8-1972. The court set aside the seniority list
prepared by the Department on 15-7-1968 and gave directions
as to how the same was to be prepared. The principal point
which was decided in these appeals related to the validity
of the quota rule and the seniority rule in their operation
after 15-1-1959. This Court held that on Government’s
decision to Promote a large number of Income-tax Officers
from Class 11 to Class 1, the quota rule which gave 66-1/2%
of the posts to the direct recruits and 33-1/2% of the posts
to the promoters collapsed and with the collapse of that
quota rule, the sonority rule which gave weighty to the
promotees of 2 to 3 years also broke down- The court
observed, "Since the old seniority rule has ceased to
operate by reason of the infringement of the quota rule it
will be for the Government to devise, if necessary in
consultation with the Union Public Service Commission, a
just and fair seniority rule as between the direct recruits
and the promotees for being given effect to from 16-1-1959.
It follows, therefore, that the seniority list of 15-7 1968
will have to be get aside and the department will have to
prepare a fresh seniority list in the light of the
observations made in this judgment. Broadly sneaking the
seniority list from 1951 to 15-1-1959 will be prepared in
accordance with the quota rule of 1951 r/w the seniority
rule 1(f)(iii). The seniority list from
107
16-1-1959 will be prepared in accordance with the rule to be
freshly made by the Government in that behalf." It was
further directed as follows :
As already shown, these proceedings before us arise out of
the mandamus issued by this Court in Jaisinghani’s case.
The seniority list was prepared by the Government in
pursuance of the mandamus. We have found that the seniority
list is not correct and will have to be prepared afresh in
accordance with the directions and observations made in this
judgment. The demand made by the officers for the imple-
mentation of the mandamus is still unfulfilled and it can be
achieved only after the Government files a proper list of
seniority. These proceedings, therefore, will have to be
kept pending till such a seniority list is prepared and
filed in court. The respondents namely the Union of India,
the Ministry of Finance and the Central Board of Direct
Taxes are, therefore, directed to prepare a fresh seniority
list and file it in court. It will be appreciated that this
dispute regarding seniority is pending before, the court for
several years and it is very essential that it should be
resolved without further delay. We are, therefore, of the
view that the respondents charged with the preparation of
the fresh list shall prepare it and file it in court within
six months from the date of this order. After the same is
filed, liberty to apply is given to the parties to the
proceedings."
Accordingly on February 9, 1973 the President under the
proviso to Article 309 of the Constitution made rules called
the Income-tax Officers (Class I) Service (Regulation of
Seniority) Rules, 1973 to come into force from 16-1-1959.
Rule 3 which is referred to hereinafter as the new seniority
rule is as follows
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 16
"3, Seniority of officers-The seniority of the Income-tax
Officers in the Class I service shall be regulated as from
the date of commencement of these rules in accordance with
the provisions hereinafter contained namely
(i) the seniority among the promotees inter
se shall be determined in the order of
selection for such promotion and the officers
promoted as a result of any earlier selection
shall rank, senior to those selected as a
result of any subsequent selection;
(ii) the seniority among the direct recruits
inter se shall be determined by the order of
merit in which they are selected for such
appointment by the Union Public Service
Commission and any person appointed as a
result of an earlier selection shall rank
senior to all other persons appointed as a
result of any subsequent selection; and
(iii) the relative seniority among the
promotees and the direct recruits hall be in
the ratio of 1 : 1 and the same shall be so
determined and regulated in accordance with a
roster maintained for the purpose, which shall
follow the following sequence, namely :-
108
(a) promotee;
(b) direct recruit;
(c) promotee;
(d) direct recruits; and so on."
Having framed the above rule to regulate the seniority of
the officers, in supersession of any other rule which was in
force for the time being, the department prepared the
seniority list in accordance with the directions given in
the judgment and filed it in court on February 15, 1973. It
is not disputed that the directions given in the judgment
have been followed with regard to the fixation of seniority
till 15-1-1959. It is also not disputed that if the new
seniority rule referred to above is a valid rule, then the
rest of the seniority list which comes down to serial No.
1717 is also correct. The principal objection is to the
validity of the new rule. It is challenged not only as
unjust and unfair but also as violative of the promotees’
fundamental right under Article 16 of the Constitution.
It is necessary to recall that in the 1950’s there were
several years when the promotees were appointed to posts
which were in excess of their quota. Though the
appointments were irregular when made, they were regularised
in later years when posts from their quota became available
for them. But when this Court held on 16-8-1972 that the
old quota Rule had collapsed on 16-1-1959, a new situation
arose rendering further regularization impossible, in the
absence of any quota rule allocating the posts between the
direct recruits and the, promotees. Therefore when the
present seniority, list was prepared, Government had on its
hands 73 promotees who, though appointed earlier between
19561958, had no quota posts for their absorption. On 16-1-
1959 the 73 promotees, who are described as ’spill-overs’ on
16-1-1959, as also subsequent promotees had to be absorbed
in the service and this could only be done by a special rule
framed in this behalf..
Since it was anticipated that there would be a spillover
like this, the department had been directed that these
officers must be absorbed on a ’priority basis’. The
Government, therefore prepared a new seniority list not only
as regards the officers who were absorbed in the service
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 16
before 15-1-1959, but all officers, including these spill-
overs, appointed after 15-1-1959. The method adopted is
simple enough. The seniority list from serial No. 1 to
serial No. 485 relating to the period prior to 16-1-1959
i.e. to say, from 1951 onwards, has been prepared in
accordance with the quota rule r/w the seniority rule which
prevailed till then. Serial Nos. 486 to 1717 relate to
officers who have to be accommodated from 16-1-1959 in
accordance with the new seniority rule. Since under rule
3(iii) the promotee must come first and then the direct
recruit, serial No. 486 goes to a promotes and serial No.
487 goes to a direct recruit and so on. All the promotees
who come below serial No. 485 are either out of the
109
spillovers of 16-1-1959 or those who have been appointed by
promotion later. That is how the, new seniority list is
prepared. The Government had been directed to make a new
rule. The seniority rule referred to is the new rule. Its
wording is not happy. But by mentioning a ratio of 1 : 1
and directing that the seniority would be in accordance with
the roster maintained in a particular sequence of promotees
and direct recruits, the Government has notionally allocated
the posts bearing even serial numbers to the promotees and
odd serial numbers to the direct recruits. In other words,
the new seniority rule not only permits, the absorption of
all promotees from 16-1-1959 into posts allocated to them
but also determines their seniority not only between them-
selves but also in relation to the direct recruits appointed
from 1959 onwards.
The contention on behalf of the 73 spillover promotees of
16-1-1959 is that since this Court had directed that they
should be absorbed on a "priority basis", all of them should
have been shown in the seniority list as having been
appointed on 16-1-1959 in a block and thereafter the direct
recruits for that year should have been shown. It is true
that this Court had directed that these promotees should be
absorbed on a "priority basis". That only meant that their
position as senior should not be prejudiced by any possible
claim by later promotees, on the ground, that being
recruited outside the quota, they had higher rights than
those 73 promotees who had no posts, It was not intended
that these 73 should not be governed by any seniority rule.
They were to be governed by a rule which covered all those
who came or were deemed to have come into the cadre after
15-1-1959.
It was faintly argued that at least 10 out of these 73
spill-overs should have been accommodated in the period
prior to 16-1-1959 on the ground that this would have
amounted, in the language of the judgment, to a "slight
deviation" from the quota rule. It is true that this Court
had observed that the Government was entitled between 1956
and 16th January, 1959 to follow the quota rule as a rouogh
guideline and that a slight deviation from the quota would
not be material. That observation, however, applied to a
situation when the Government deliberately made an
appointment in a stray post intending it to be allocated to
a promotee, in spite of its being not strictly consistent
with the guideline of the quota rule. That is not the
position in the present case. Government went on making
appointments knowing that the promotees had no posts out of
their quota and it only hoped to regularize them when posts
were available. Therefore, when the department was directed
to prepare the seniority list from 1956 to January 15, 1959
in accordance with the quota rule of 1951 r/w the seniority
Rule I (f) (iii), the Government could not possibly say that
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 16
10 promotees out of these 73 had been. deliberately
appointed by it to these posts intending the same to go to
the promotees in spite of their falling outside the quota.
The 10 promotees besides the remaining 63 became spill-overs
on 16-1-1959, as they could not be absorbed in any quota
posts available to them till 15-1-1959.
110
it was next contended that as the quota rule expired on
16-1-1959, the promotees who comprised this spill-over as
also those who were promoted thereafter must be deemed to
have been validly appointed in accordance with rule 4 of the
income-tax Officers (Class 1) Grade if Service Recruitment
Rules, 1945, and since there remained in existence no
seniority or quota rule determining their seniority vis-a-
vis. the direct recruits,’ their natural seniority of
earlier appointment cannot retrospectively be altered to
their detriment, and to do so would be violative of Article
16 of the Constitution. That is the principal contention on
behalf of the promotees in this case.
It is necessary to clearly understand the implications of
our decision in which we had held that both the quota rule
and the seniority rule had broken down on 16-1-1959. The
cadre from the very beginning (1945) was a cadre,
recruitment to which was prescribed from two sources. The
vacant posts were directed to be allotted to direct recruits
and promotees in a ’particular ratio and seniority was
regulated inter se by rules framed later. Some principle of
allocating posts and some principle of determining relative
seniority were inevitable in the context of the constitution
of the cadre, and Government did not and could not have
abandoned these principles in the matter of recruitment.
The quota rule allocated the posts. between the two sources
and the seniority rule regulated the seniority vis-a-vis the
direct recruits and the promotees. Indeed there was nothing
special about it. In any service where recruitment from
several sources, there is bound to be some method of
allocation ,of posts between the several sources coupled
with a rule to determine seniority amongst the candidates
recruited from those sources. In fact a rule for regulating
allocation of posts and to determine seniority amongst the
officers in a sine-qua-non of every well-regulated service
to which direct recruits and promotees are appointed. The
Government was fully aware of this binding nature of the
principles in the matter of recruitment and, therefore, when
it made promotee appointments knowingly in excess of the
quota available to them, it calculated that these
appointments were liable to be regularized in subsequent
years when quota vacancies were available to the promotees.
That is why when promotee appointments were made from 1957
onwards, they were made on an officiating basis, and every
promotee was informed that the question as to how his
seniority amongst the officers would ultimately be decided
was still under consideration. In the meantime, however,
our decision, which held that both the quota, rule and the
seniority rule had collapsed on 16.1.1959, left a void in
which neither promotees nor direct recruits could identify
any posts as having been allocated to them. The 73 spill-
over had no allocated posts. We do not mean to say that
there were no posts at all. The point is that these 73
promotees bad no allocated posts. Since, as already pointed
out, the service was constituted on the principle that
vacancies have to be allocated between the two sources and
seniority fixed thereafter, the void created by our decision
had necessarily to be filled right from 16-1-1959 by making
a rule which not merely allocated posts between the direct
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 16
recruits and the promotees but also ,determined inter se
seniority. As a matter of fact this was envisaged
111
by all parties to this litigation as is clear from the
following passage in para 25 of the judgment
"Several suggestions were made with a view to persuade us
that some fair and just seniority rule may be evolved. One
of them was that the quota rule may still hold the field and
that. those who came in by promotion to the upgraded posts
may be ranked lower in seniority to the direct recruit who
had finished his probation in that year. A second
suggestion was the one put forward by the Government in the
letter dated 17-2-1960 to the Union Public Service
Commission wherein a package deal was suggested. The
seniority rule, as it stood, was to go and in its place the
seniority rule should be that promoted officers in any
calendar year should be senior to the direct recruits
appointed that year only. Having made that concession in
favour of the direct recruits in response to their demand,
it was suggested that the quota of departmental promotees
should be raised from 33-1/3 to 50%. In other words, there
was a package deal whereby every year the appointments
should be divided equally between direct recruits and
promotees and the promotees being already in the department
should be given seniority over the new direct recruits."
Although the parties had made these suggestions, this Court
declined to accept the responsibility and observed : "We do
not think that we shall be justified in expressing our
opinion as to how inter se seniority is to be fixed after
15-1-1959. Since the old seniority rule has ceased to
operate by reason of the infringement of the quota rule it
will be for the Government to devise, if necessary in
consultation with the Union Public Service Commission, a
just and fair seniority rule as between the direct recruits
and the promotees for being given effect to form 16-1-1959."
The new seniority rule is the direct outcome of not only our
judgment but also of the very principles on which the
service had been constituted. The new seniority rule,
therefore, was a substitute rule very necessary from the
point of view of the constitution of the service for
maintaining its continuity as a well-regulated cadre. When
the old quota rule and the seniority rule broke down on
16-1-1959, their place was taken by the new rule which while
regulating seniority between the promotees and the direct
recruits also nationally allocated alternate posts in
accordance with the roster.
The contention of the promotees is that their appointments
having been liberated from the limitation of the quota rule
must be regarded as validly made under rule 4 of the
Recruitment Rules and consequently the dates of their
appointments should be regarded as determining their
seniority vis-a-vis the direct recruits. This submission
does not bear scrutiny. When the 73 spill-over appointments
had been made, there were no allocated posts to which the
appointments could have been validly made. On 16-1-1959
there were no posts earmarked for them, the ordinary
consequence of which would be that they would have had to
revert to their original class II posts unless class I posts
were regularly found for them. When the quota rule was in
existence, these appointments, though invalid when made,
were liable to be regularised in subsequent years when posts
were found for them as a consequence of the quota rule. But
once the quota rule ceased to exist on 16-1-1959,
112
there was no possibility of regularising the appointments
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 16
unless a new rule was framed to make such posts available to
them. It is, therefore, clear that the, infirmity in the
appointments continued on 16-1-1959 and that infirmity could
not be overcome except by a new rule which made some posts
available. It is not correct to think that this infirmity
disappeared with the disappearance of the quota rule. The
disappearance of the quota rule did not automatically
regularise an appointment which was initially invalid. The
promotees continued in the cadre because it was thought by
Government that their appointments may be regularised under
the quota rule which, in its opinion, was operative.. The
214 officers also who were promoted from 1959 to 1962 after
upgrading an equal number of class 11 posts could not
possibly claim better treatment than the 73 spill-overs who
were their seniors. At one time an attempt had been made by
the officers of the department to rationalize these
appointments as appointments ’outside the quota’. But that
was a misconception. The cadres was one regulated by rules
and there could be no valid appointments outside the quota
as shown in Jaisinghani’s case. (See : [1967] (2) S.C.R. 703
at 718). This was soon realised and hence in an endeavour
to maintain the quota ratio the department decided not to
make any promotions in the years 1963, 1965 and 1967 to 1970
so that the officers who had been already promoted could be
absorbed in their quota. But since this Court held in 1972
that the quota rule had ceased to exist on 16-11959 it must
follow that the appointments were continued irregularly in
the absence of a regularising Rule. The rule now challenged
in just the rule which makes posts available right from
16-1-1959. Apart from the fact that all the promotees from
16-1-1959 onwards had been appointed on an officiating or ad
hoc basis with notice that the question of their seniority
was still undecided, the appointments carried their own
infirmity as irregular appointments, and hence in the
absence of clear allocation of posts, they could hardly lay
claim to any seniority and object that their natural
seniority had undergone an unwarranted change in violation
of Article 16.
It is true that this Court held that quota rule had ceased
to exist but that does not mean that having regard to its
constitution, the service could continue to function without
a substitute rule in its place. The constitution of the
service required allocation of posts to direct recruits and
promotees. The Government was throughout making appoint-
ments from both sources trying as far as it could to
maintain a certain ratio between the two sources. Such
allocation was implicit in the constitution of the service
itself. When Government decided to recruit promotees on a
very large scale on 16-1-1959 it was unconscious of the
consequences of its action. Had it known then, as it does
now, that the quota rule would cease to exist it would have,
of necessity; framed a substitute rule for allocating posts
between the two sources because the constitution of the
service coupled with its own decision to continue to recruit
from both sources would not have tolerated a void in the
allocation of posts. By framing the new seniority rule,
following the direction of this Court, it is doing no more
than what it would have itself done on 16-1-1959 to preserve
continuity in the allocation of posts to the two sources so
that irregularities, if any, in the
113
prior appointments could be regularised. And since it is.
clear that the new rule must be read as if it was made on
16-1-1959 in substitution of the old rules, the appointees
after that date e.g. the 214 promotees would be governed by
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 16
the rule. The 73 spill-over promotees would have at least
some excuse for complaint because their actual appointments
had been made prior to 16-1-1959. But, as already noticed,
it is the new seniority rule which saves them from reversion
and, therefore, they are as much bound by it as the
promotees appointed after 16-1-1959. The present rule, it
may be repeated, is a composite rule which besides
nationally allocating posts between the two sources
determines seniority in accordance with the roster. After
all but 73 spill-over promotees were given available posts
_prior to 16-1-1959, the unallocated posts from serial no.
486 onwards were allocated to promotees and direct recruits
alternately. The spill-over of 73 promotees was thus
absorbed against even serial numbers alternately with the
direct recruits who were allotted odd serial numbers. That
is how the whole list of seniority stands today. In these
circumstances we don’t see on what grounds the promotees
before us can challenge the new seniority rule as violative
of Article 16.
The argument based on Article 16 proceeded on the assumption
that the spill-over promotees of 16-1-1959 and the officers
promoted thereafter were entitled to claim seniority from
the date of their appointment. The spill-over promotees
claim 16-1-1959 as the date of appointment and the other
promotees claim some date between 1959 and 1962 when they
were promoted. It is on this assumption that they are
entitled to get these dates as the dates to determine their
seniority that the whole submission under Article 16 is
based.
It is necessary to remember, however, in this connection
that all these officers hail been told when promoted that
their appointments were on an officiating or ad hoc basis
and the question of their seniority had not been determined.
It was thereby implied that orders about seniority could
only be passed after the department was in a position to
take a decision with regard to the inter se seniority
between the promotees and the direct recruits. That being
the situation of all these officers they could hardly
contend that the dates of appointment will not be altered
for the purposes of determining seniority. Where
recruitment is made from one source, there is some ground
for the contention that an officer promoted earlier should
be regarded as senior to an officer recruited later. But
other considerations come in when recruitment is made from
several sources and it may become necessary in the public
interest to frame a Rule of seniority to adjust inter se
seniority on a basis other than the normal. In such cases,
dates other than the dates of appointment may determine the
seniority inter se. As a matter of fact, we have found in
the case of these Income-tax officers themselves that since
the very beginning when the cadre was constituted the dates
of appointment did not determine seniority. Promotees were
given seniority not only over the direct recruits appointed
in that year but also over those who had been appointed in
the two ’previous years. This led to discontent between the
two wings of the Income-tax Service and the Government was
seriously thinking how best to remove it since about 1957.
In 1960 the Government suggested to the Union Public Service
Commission that it would
9-131 Sup-CI/75
114
like to suggest a package deal by which the ratio of
recruitment be increased to 50 : 50 in favour of the
promotees in consideration of which the weightage given to
them in seniority as against direct recruits, may be
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 16
abolished. The Public Service Commission did not agree to
this and hence the problem remained unsolved. That was the
reason why all promotee appointments had been made on an
officiating basis with a warning that the promotees’
seniority in the promoted cadre was undetermined. The
promotees, therefore, were not entitled to assume that their
date of appointment in class I would be the date for
counting seniority.
There is no question in this case of any discrimination
being made in a service after officers from two sources have
been brought in one cadre. It is true that seniority is a
vital element in the matter of promotion but that does not
mean that allotment of seniority by rule, relative to
circuitment, involves any classification for the purposes of
promotion. The argument that the promotees and direct
recruits became one class immediately on entry and,
thereafter, there could be no classification between them
does not disclose the correct approach to the problem of
fixing inter se seniority between them. When recruits from
two sources have come into a service it is essential to fix
inter se seniority for a proper integration of the cadre.
Therefore, it is really a case of adjustment of seniority
between the recruits and does not amount to making a
classification after their absorption in one service. The
cases on which reliance was placed on behalf of the
promotees are quite inapplicable. In Mervyn Coutinho & Ors.
v. Collector of Customs, Bombay & Ors(1) the point was
whether Appraisers promoted to the grade of Principal
Appraisers could be discriminated in the matter of seniority
in the grade of Principal Appraisers on the ground that they
had entered the grade of Appraisers as either promotees or
direct recruits. The Customs department sought to carry
their birth marks into the grade of the Principal Appraisers
and determine their seniority accordingly. This Court
disallowed it pointing out that once officers from two
sources came into one integrated grade, viz. the grade of
Appraisers, their seniority in the grade of Principal
Appraisers was to be governed by their length of service in
that grade, and was not liable to be altered with reference
to their original position in the Appraisers’ grade. In
other words, the court held that all the Appraisers lost
their birth marks after they were integrated in the cadre of
Appraisers and they could not be revived after promotion to
the higher grade of Principal Appraisers. In the case
before us, in the absence of a rule determining inter se
seniority between the two classes of Income-tax Officers,
there is really no integration of the service which is
unavoidably necessary for the purpose of effective
promotions.’ One cannot speak of promotions from a cadre
unless it is fully integrated. If promotions are made
before it is fully integrated, they can be only on an ad hoc
basis to be reviewed after seniority of the officers is
finally fixed-as has happened in our case. Mervyn Co
untinho’s case would have been applicable if, after
integration of all these Income-tax Officers in class 1,
their seniority as promoted Assistant Commissioners were
again to be altered with reference to their birth mark as
direct recruits and promotees. That question, however, does
not arise in the present case. In Roshan Lal v.
(1) [1966] 3 S.C.R. 600.
115
Union of India,(1) the decision in Marvyn Coutinho’s case
referred to, above was relied upon and reaffirmed. The case
does not shed any light on the question with which we are
concerned. Similar is the case in S. M. Pandit and Anr. v.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 16
State of Gujarat.(2) In this case Mamlatdars were recruited
from two sources-directly and by promotion. They had the
same designation, same pay scales, same functions and their
posts were also interchangeable. it was, therefore, held
that Government could not discriminate between them in the
matter of their further promotion to the post of Deputy
Collector.
As said earlier, the problem before us is not of making
discrimination in the matter of promotion from an integrated
service constituted from two sources. The problem is of
integrating two sources in one service by adjusting
seniority inter se. The cases referred to above relate to
the debunking of the established seniority of officers in a
cadre in the matter of promotion.
It was next contended on behalf of the promotees that this
Court had directed that the rule to be framed by the
Government should, be just and fair but in their submission,
it was not so. The promotees contended that having regard
to their age at the time of promotion, their experience, and
their diminished chances of promotions to grades higher than
those of the Assistant Commissioners, Govt. ought to have
given them due weightage in the matter of seniority and
since this was not done the new seniority rule was neither
just not fair.
When considering this point it must be clearly understood
that this Court is not concerned with Govt.’s policy in
recruiting officers to any service. Government runs the
service and if it is presumed that it knows what is best in
the public interest. Government knows the caliber of
candidates available and it is for the Government to
determine how a particular service is to be manned-whether
by direct recruits or by promotees or both and, if by both,
what should be the ratio between the two sources having
regard to the age factor, experience and other exigencies of
service. Commissions and Committees appointed by the
Government may indeed give useful advice but ultimately it
is for the Government to decide for itself. In the
particular service with which we are concerned, viz. that of
class I Income-tax Officers, Government bad known for many
years that there was a lot of discontent amongst the
officers. The promotees were clamoring for a higher
proportion of posts in the cadre while the direct recruits
were chafing against the seniority rule which gave promotees
2 to 3 years’ seniority over the direct recruits. To begin
with the promotees had been given only 20% of the vacancies
but that was raised later on to 33-1/3%. the department was
fast expanding and more officers in class I who could
immediately take up assessment work were required. Senior
class II officers who had the necessary experience were
always available. On the other hand, class I officers,
directly recruited, did not obtain this experience for about
2 to 3 years. Therefore, though direct recruitment was made
from year to year, the department had to promote more
officers from class If to class 1; and this was the reason
why there was a spill-over of 73 promotee officers on 16-1-
1959. In the
(1) [1968] 1 S.C.R. 185.
(2) A.I.R. 1972 S.C. 252.
116
course of next 3 years 214 promotees had to be appointed
after upgrading a similar number of posts. Promotion of
officers in such large numbers naturally frightened the
direct recruits because though they were younger in age,
they became very much junior to the promotee officers by
reason of the seniority rule and to that extent their pro-
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 16
motions to higher grades had become retarded by the enormous
block of nearly 300 promotees. The discontent amongst the
direct recruits had been noted by the Government even as far
back as 1957 and the Government’s anxiety in this respect is
reflected in the letter No. 24/2/60 Ad. VI dt. 17-2-1960 to
the Union Public Service Commission. In order to allay the
discontent in the service and having regard to the expansion
of the-department, Government suggested that the quota for
the promotees should be raised from 33-1/3 % to 50%, on the
one hand, and the weightage given to them under the old
seniority rule should be removed, on the other. That letter
gives a clear indication of the thinking of the Ministry in
this respect. But unfortunately the suggestion was not
accepted by the U.P.S.C. then and the whole problem was
allowed to drift.
In the next place, we have to remember that it would be
wrong to pronounce adversely upon the new seniority rule
merely because of its impact on the fortunes of any
particular individual officer. Nor will it be correct to
point that an individual officer ’A’ would have fared better
if the old quota rule and weightage rule had been restored.
One thing that the section of promotees, who are now before
us, cannot possibly ignore is that they had all been
promoted at a time when there were no posts earmarked for
them. Secondly, being promoted in very large numbers in a
brief period from 1959 to 1962, they made further recruit-
ment by promotion impossible in the years-1963, 1965, 1967
to 1970 because those who were promoted had to wait for
their absorption under the quota rule for several succeeding
years. We don’t want to suggest that when these promotions
were made on a mass scale, merit took the second place, but
it cannot be ignored that those class 11 officers who, on
merit, would have been normally considered for selection in
1963, 1965, and 1967 to 1970 could not be so considered
because of the backlog of these unabsorbed promotees.
In the counter-affidavit filed by Mr. Mehra, Deputy
Secretary to the Government, Ministry of Finance, dated
August 31, 1973, the department has given a detailed account
as to how, in pursuance of the direction of the court to
frame a rule, it proceeded to frame the rule after
consulting all interests and concerned authorities. The
Government came to the conclusion on a just assessment of
the situation that there could be only 4 alternatives before
it which could form the basis of the new rule. Those four
alternatives were as follows :
(i) The seniority of both the direct
recruits and the promotees to be based on
their length of service in class 1;
(ii) To link the seniority to the proportion
of actual intake of direct recruits and the
promotees each year from 16-1-1959 onwards;
117
(iii) To apply the 1959 principles of
seniority laid down by the Home Ministry which
would employ ratio of vacancies between the
direct recruits and promotees based on the
quota of vacancies reserved for direct re-
cruitment on promotion as may be fixed
retrospectively from 16-1-1959;
(iv) To fix the seniority by alternating, on
a roster system, the actual intake, the
vacancies being equally divided between the
promotees and the direct recruits for the
entire period from 1959 to day.
The Government considered all these four alternatives and
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 14 of 16
having seen the inconvenience and disadvantages in following
the first three alternatives decided in favour of the fourth
alternative as fair and just. Detailed reasons have been
given in the affidavit why the three alternatives were
rejected in favour of the last alternative and on a
consideration of the same, we do not think that the
Government came to an arbitrary or unreasonable decision.
It was contended on behalf of the promotees that a fairer
way would have been to fix seniority in accordance with the
dates of appointment, the 73 spill-overs being all deemed to
have been appointed, on 16.1.1959 and the rest on-the dates
of appointment. It is not as if the point was not
considered by the Government. In fact it was the first
alternative. It was rejected because if that principle were
followed it would have resulted in blocking of vacancies by
direct recruits or promotees to the department of both. The
promotees and the direct recruits had, during the various
years, joined en bloc in particular months. For example, in
1959, 1960 and 1961 all the promotees for that year came in
one block in the month of April. In the year 1962 they came
in December,, in 1964 in May, in 1966 in January and 1971
again in May. The direct recruits, on the other hand,
normally joined duty around July and since both promotees
and direct recruits joined in block of large ’numbers it was
inevitable that these blocks would operate disadvantageously
in the matter of promotion, because instead of ensuring a
fairer proportion of both promotees and direct recruits for
the purposes of promotion as Assistant Commissioners, the
blocks would have operated to do just the opposite. The
whole situation is clearly illustrated in the affidavit
filed by the department and we don’t think that the,
department was wrong in not acceding to this contention of
the promotees.
The seniority rule allocates 50% of the appointments to
direct recruits and 50% to the promotees. That is
undoubtedly a gain for the promotees. Learned counsel for
the direct recruits have complained against the erosion of
their own ration in the service. At one time they manned
80% of the posts. Later the ratio was brought down to 66-
1/2% and now by this rule it was brought down to 50%. They
contended that recruitment of 50% promotees is quite un-
usual, and, therefore, Government, should have fixed a lower
proportion for the promotees as it has done in other All
India Services. We do not think we can entertain this
complaint. Direct recruits can have a grievance if after
recruitment they are not properly treated. They cannot
complain as if they are representatives of any particular
section
118
of the general public which is the source of recruitment.
On the other hand, class 11 officers in the service are
vitally interested in their promotion and they can
legitimately have a grievance if they are not properly
represented in the higher grade of class I. So far as the
direct recruits are concerned they come into the service
directly after passing a competitive test, Indeed their
complaint can only be based on public interest and public
policy viz. that it is better to have more direct recruits
in a service of this kind. But the question of public
interest and policy had better be left to the Government and
authorities like the Public Service Commission. It is their
function to decide after considering all the aspects of the
question as to what should be the respective percentages.
It is not as if there is no other service in which direct
recruitment is limited to only 50% of the appointments. It
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 15 of 16
is true that the Direct Taxes Enquiry Committee (Wanchoo
Committee) had recommended in 1971 a ratio of 2 : 1 and the
Administrative Reforms Commission had recommended two years
earlier a ratio of 3 : 2. But as already pointed out at
least from 1960, Government, having regard to (i) that the
class 11 service is enormously expanded and (ii) that the
main burden of assessment work fell on members of class 11
service, thought that it was absolutely essential that there
should be an adequate promotional outlet to members of class
It service. In this context we have to remember that direct
recruits for about 2 or 3 years after appointment are
incapable of doing assessment work independently, and
consequently promotees who could straight way do the work
had to be appointed in large numbers. And, hence if, in the
Govt.’s opinion, 50% of the posts in class I service should
be earmarked for promotees, there can be really no
objection, especially, when we know that the Union Public
Service Commission which had not given its consent in 1960
has now agreed to the proportion of promotees being
increased from 331% to 50%.
Nor indeed can the promotees, after obtaining the benefit of
a higher percentage of recruitment to class I service,
legitimately object to the abolition of weightage enjoyed
formerly in the matter of seniority. The direct recruits
had always regarded as offensive that their date, of joining
the services should not count for seniority in spite of
their being members of an All India Service but that they
should yield their seniority to persons promoted 2/3 years
after they had joined the service. This discontent amongst
the direct recruits was known to the Government. In the
package deal suggested in the letter referred to above,
Government had asked for the removal of this weightage.
This element of weightage in the old seniority rule had
given offence to the direct recruits, and it is obvious that
in the interest of harmonious relations between the two
wings of the service, Government, while increasing,, the
proportion of promotees in the service, abolished weightage
in their favour.
On account of haphazard promotions, especially, from 1959
onwards, it has happened that a direct recruit or promotee
gains or loses several places in the new seniority list on a
comparison with a list in
119
which seniority is based on the date of joining service.
But we think this cannot be helped. If hereafter care is
taken in proper time to determine the vacancies to be filled
in any particular year and lists of an equal number of
direct recruits and promotees are kept ready, there will
survive no serious ground for complaint, because all those
in the lists will be appointed in the course of the year and
will not face the situation with which the officers are
faced at present. The spill-over of 73 promotees on 16-1-
1959 besides 240 promotees from 1959 to 1962 have been
alternatively adjusted with direct recruits during these
years and this may well result in a promotee of 1962
becoming junior to a direct recruit of 1966. See for
example serial nos. 1109 and 1110 of the new seniority list.
But that is inevitable because of the massive promotions
over several years prior to 1963. Though as pointed out
above, the direct recruit of 1966 would become senior to a
promotee of 1962, that is not worse than what would have
happened to these promotees if the 2 : 1 quota rule had
continued to be in force. In the latter case, the last few
1962 promotees would have been pushed down to 1970 instead
of 1966 as at present. Indeed some promotees have gained
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 16 of 16
some places and some others lost some places in the mutual
adjustment. But the fairness or justness of the rule should
not be judged, as already noticed, by its impact on any
particular individual’s fortunes.
Though the promotees submitted that the present rule was not
fair to them, they themselves could not put forward any
rational alternative. They are indeed pleased with the
increase in the promotional chances. But they are sore that
the artificial rule of seniority which gave them weightage,
has been removed. They do not dispute that by the increase
in their ratio in class I service, a larger number of class
II officers will, in course of time get a chance to be
appointed by promotion as Assistant Commissioners. But they
are sorry that their chances to be promoted to posts higher
than that of the Assistant Commissioner are now retarded by
the removal of the weightage. They submit, that at the time
of promotion to class 1, the age factor had already become
unfavourable to them and, therefore, weightage in some form
should have been given to them so that in the matter of
competing for the highest posts, they would have had an
equal chance with the direct recruits. On behalf of the
department it is contended that on an analysis of the
vacancies which may occur in the higher echelons of the
service in future and the present ages of the promotees,
there is really no ground for despondency. But one thing
cannot be ignored in this respect. Direct recruits are
recruited on an All India basis after a competitive
examination. They belong to a certain age group and are
bound to be younger than the promotees. In practically all
India Services, promotees don’t always have an equal chance
with the direct recruits in the matter of appointments to
the highest posts. Those who are young may indeed reach the
top. Promotees who belong to a higher age group have
necessarily to pay the price and that is so in all services.
On the other hand, however, we must remember that in all
higher services, appointments are generally by selection and
not merely on the basis of seniority in which case promotees
with the necessary merit may
120
well reach the top. In this connection it may be necessary
to point out here that though the promotees of the 1960’s
lose some places to direct recruits, class II officers who
were not promoted in the years 1963, 1965 and 1967 to 1970
but got their chances of promotion for the first time in
1971 will" now get posts reserved for them in 1969. See for
example serial no. 1354 of the new seniority list and
onwards. All this is the result of haphazard promotions
which were made in order to meet the demands of a suddenly
expanding department without sufficient attention to the
Rules in force. We have to take an overall view to
determine whether the rule now framed by the Government to
determine seniority is just and fair. We, think it is.
Since the seniority list Annexure B filed on 15-2-1973 is in
accordance with the directions given by this Court in its
judgment dated 16-8-1972, we accept it as the correct
seniority list.
There shall be no order as to costs.
S.C. Petitions dismissed.
121