Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 15
PETITIONER:
S. G. JAISINGHANI
Vs.
RESPONDENT:
UNION OF INDIA AND ORS.(With Connected Writ Petition)
DATE OF JUDGMENT:
22/02/1967
BENCH:
RAMASWAMI, V.
BENCH:
RAMASWAMI, V.
RAO, K. SUBBA (CJ)
SHELAT, J.M.
SIKRI, S.M.
VAIDYIALINGAM, C.A.
CITATION:
1967 AIR 1427 1967 SCR (2) 703
CITATOR INFO :
F 1968 SC 507 (8)
RF 1968 SC 938 (23)
E&D 1970 SC 470 (1,6,12,15,35,36)
RF 1972 SC2516 (15)
E 1972 SC2627 (1,5,12,13,18,21,23)
D 1973 SC1146 (9,10)
RF 1973 SC1168 (6)
RF 1973 SC1425 (14)
RF 1974 SC1618 (1,10)
D 1974 SC1806 (6)
RF 1975 SC2299 (340)
F 1976 SC 490 (57,58,106,208,212)
RF 1976 SC1207 (185)
D 1977 SC 251 (33,36)
RF 1977 SC 757 (33,38,40)
RF 1979 SC1073 (4,13)
R 1980 SC 452 (50)
RF 1980 SC1246 (8)
RF 1980 SC1561 (36)
RF 1980 SC2056 (73)
F 1982 SC 101 (31)
D 1983 SC 769 (21,22,31,38)
D 1984 SC1595 (24,63)
R 1985 SC 617 (4)
D 1985 SC1019 (24)
D 1985 SC1495 (133)
RF 1985 SC1558 (26)
RF 1987 SC2359 (9)
D 1988 SC 268 (26)
RF 1988 SC 654 (7)
RF 1990 SC1106 (5,28)
RF 1990 SC1607 (19)
R 1991 SC 101 (66,276)
RF 1991 SC 212 (2)
RF 1991 SC 537 (37,28,43)
ACT:
Income-tax Service-Seniority Rules, 1952, r. 1(f)(iii) and
(iv)Seniority between direct recruits and promotees-If
violative of Arts. 14 and 16 of Constitution-Promotion
Rules, r. 4-Promotion from Class 1, Grade II to Grade I-
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 15
Different periods of service for direct recruits and
Promotees-lf discriminatory-Income-tax Officers (Class 1,
Grade II) Service Recruitment Rules, r. 4-Fixation of quota-
Duty to follow, it mandatory.
HEADNOTE:
In 1944, the Government of India created two classes of
Income-tax Service, namely, Class I service with Grades 1
and 11, and Class 11 service with Grade II. Recruitment to
Class I, Grade II was to be made : (a) by direct recruitment
through a competitive examination, and (b) by pro. motion
from Class 11, Grade III. A Class 11 officer is considered
by the Departmental Promotion Committee for promotion to
Class 1, Grade II, after 5 years’ service in Class 11 (2
years of probation and 3 years as Income tax Officer). In
1951, the ratio between direct recruits and promotees was
fixed at 2 : 1, presumably under r. 4 of the Income-tax
Officers (Class I,, Grade 11) Service Recruitment Rules.
Under r. 1 (f) (iii) of the Seniority Rules, 1952, dealing
with seniority between direct recruits, and promotees, a
promotee becomes senior to a direct recruit who has com-
pleted the probationary period of two years in the very year
in which the Department Promotion Committee recommends the
officers in Class II far promotion to Class 1. Rule 1 (f)
(iv) deals with a special situation in which an officer
initially appointed to Class 11 service is given seniority
in the same manner as a departmental promotee, if subsequent
to his passing the departmental examination he is appointed
in Class I on the results of the competitive examination.
Rule 4 of the Rules of Promotion of the Central Board of
Revenue Office Procedure Manual, states, that the prescribed
minimum service for an office of Class 1, Grade 11 for
promotion to Grade 1 is 5 years gazetted service including 1
year in class I, Grade II for promotion to Grade 1 is 5
years gazetted 11, the minimum period of service for
promotion to class I, Grade I, would be actually 4 years
service in class II and 1 year service in Class I Grade II.
Respondents 4, 5 and 6 were appointed in Class II, Grade III
Service in 1947. They and the appellant (who was a direct
recruit) were appointed in Class 1, Grade 11 service in 1951
after having successfully completed in the 1950 competitive
examination. The three respondents were however shown as
seniors to the appellant as "deemed promotees" under r. 1
(f) (iV)
The appellant filed a writ petition in the High Court and
contended that (1) r.- 1 (f) (iii) and (iv) of the Seniority
Rules and r. 4 of the Promotion Rules were discriminatory
and violative of Arts. 14 and 16 of the,
704
Constitution, and (2) that during 1951-56 there was
excessive recruitment of promotees, in violation of the
quota rule prescribing the ratio of 2 : 1.
The High Court rejected the petition.
In appeal to this Court,
HELD : (1) (a). Rule 1 (f) (iii) of the Seniority Rules,
1952, does not violate the guarantee under Arts. 14 and 16.
It is not corrected to say that all officers appointed to
Class 1, Grade 11 service formed one class and that after
the officers have been one once recruited there could be no
distinction between direct recruits and promotees. It is
really a case of recruitment to the service from two
different sources and the adjustment of seniority between
them. The concept of equality in- the matter of promotion
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 15
can be predicated only when the promotees are drawn from the
same source. If the preferential treatment of one source in
relation to the other is based on the differences between
the two sources, and the said differences have a reasonable
relation to the nature of the office it can legitimately 1
be sustained on the basis of a valid classification. The
reason for the classification in the present case was that
the higher echelons of the service should. be filled by
experienced officers possessing not only a high degree of
ability but also first-rate experience. A rule which gives
seniority to outstanding officers with considerable
experience, and selected on merit and limiting the promotion
to a percentage not exceeding the prescribed limit cannot
per se be regarded as unreasonable. The net effect of the
rule is that 3 years of outstanding work in Class II is
equated to 2 years of probation in Class I, ’Grade II
service, and on a consideration of this aspect of the
matter, the promotee Is given seniority over a direct
recruit completing the period of probation in the same year.
[711 E-H; 712 B, E, G-H]
The General Manager, Southern Railway v. Rangachari,, [1962]
2 S.C.R. 586, 596 followed.
(b) Rule 1(f)(iv) is also based on a reasonable
classification and do-not offend the guarantee under Art. 14
or Art. 16(1) of the Constitution. [715 D]
The "deemed promotees" we’re appointed in Class II, Grade,
IIl service in 1947 and completed 5 years service in that
clam by the year 1952 and if the Departmental Promotion
Committee had then recommended their,promotion to Class 1,
Grade II, each one of them would have become senior to the
appellant by the operation of r. 1(f) (iii).Further, if
cl. (iv) did not exist there would be no incentive to a
promotee of this type to sit for the competitive
examination. Also, if the service of the promotees in
Class II. Grade III was entirely ignored and if they join
Class I, Grade II service as direct recruits, they might
become junior to others by the operation of r. 1 (f)
(iii).[715 B-D]
(c) Once it is held that r. 1 (f) (iii) of the Seniority
Rules is legally valid, the rule of promotion cannot be held
to lead to any discrimination as between direct recruits and
promotees. The object of the rule of promotion is really to
carry out the policy of r. 1-(f) (iii) and not allow it to
be defeated by the requirement of 5 years service in Class
I, Grade 11 itself, before consideration for promotion to
Class 1, Grade 1. Otherwise, a promotee certified fit by the
Departemental Promotion Committee in 1952-will be senior to
the direct recruits who completed their probation in that
year, but the seniority Would be an empty formality For, if
the
705
promotee-officer is not allowed to count his period of
service in Class 11 for the purpose of promotion to Grade I.
Class 1, he will have to wait till 1957 or 1958 to go to
Grade 1, Class I, while direct ’recruits who completed their
probation in 1952 or 1953 could go to Grade I, Class I in
1955 or 1956 counting the 5 years, period from the date on
which they were placed on probation, [714 A-D, E-G]
(2) The appellant was entitled to a Writ in the nature of
mandamus commanding respondents 1 to 3 to adjust the
seniority of the appellant and other officers similarly
situated and to prepare a fresh seniority list in accordance
with law after adjusting the recruitment for, the period
1951 to 1956 and onwards in accordance with the quota rule.
[718-D-E]
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 15
Rule 4 of the Income4ax Officers (Class I, Grade II) Service
Recruitment Rules is a statutory rule and there is a
statutory duty cast on the Government under this rule to
determine the method to be employed for the purpose of
filling the vacancies and the number of candidates to be
recruited. Having fixed the quota under the rule, there is
no discretion left with the Government to alter it according
to the exigencies of the situation or to deviate from it, in
any particular year, at its own will and pleasure. The
absence of arbitrary power is the first essential of the
rule of law and discretion, when conferred upon executive
authorities, must be confined within clearly defined limits,
and their decisions should be made by the application of
known principles and rules. The quota rule is linked up
with the seniority rule and unless the quota ’rule is
strictly observed in practice, it will be difficult to hold
that the seniority rule, that is, rule 1(f)(iii) and (iv) of
the Seniority Rules, is not unreasonable and does not offend
Art. 16. Therefore, the promotees from Class 11, Grade III
to Class 1, Grade 11 service, in excess of the prescribed
quotas for each of the years 1951 to 1956 and onwards should
be held to have been illegally promoted. [717 H; 718 A-D, G-
H]
The order will not affect such Class 11 officers who have
been appointed permanently as Assistant Commissioners of
Income-tax. [718 F]
For the future years Government should adopt the roster
system, by framing an appropriate rule for working out the
quota between the direct recruits and the promotees and the
roster should be maintained indicating the order in which
appointment are made by direct recruitment and by promotion,
in accordance with the percentage :fixed under the statutory
rules [719 F]
JUDGMENT:
CIVIL APPELLATE/ORIGINAL JURISDICTION : Civil Appeal No.
1038 of 1965.
Appeal from the judgment and order dated the March 11,’ 1964
of the Punjab High Court, Circuit Bench at Delhi in Civil
Writ Petition No. 189-D of 1962.
AND
WRIT PETITION No. 5 OF 1966.
Petition under Art. 32 of the Constitution of India- for the
enforcement of fundamental rights.
The appellant appeared in person (in C.A. No. 1038 of 1965).
706
S. V. Gupte, Solicitor-General, N. S. Bindra, R. Ganapathy
Iyer, R. H. Dhebar and R. Thiagarajan, for respondents Nos.
1-3.
A K. Sen, N. S. Bindra,-R. Ganapathy Iyer and R.
Thiagarajan, for respondent No. 4.
A. K. Sen, R. Ganapathy Iyer and R. Thiagarajan, for
respondents Nos. 5 and 6.
M. N. Shroff for L.N. Shroff, for respondents Nos. 12, 22,
25, 28, 29, 38, 40, 43, 54, 79, 86, 107 and 117.
Niren De, Addl. Solicitor-General, R. Ganapathy Iyer and
R. Thiagarajan, for respondents Nos. 20, 116 and 123.
The respondent No. 34 appeared in person.
R. Gopalakrishnan, Bishamberlal Khanna and H. K. Puri, for
intervener.
H. R. Gokhale, A. S. R. Chari, A. N. Sinha, J. B.
Dadachanji,
O. C. Mathur and Ravinder Narain, for the petitioner (in
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 15
W. P. No. 5 of 1966).
S. V. Gupte, Solicitor-General, N. S. Bindra, R. Ganapathy
lyer, R. H. Dhebar and R. Thiagarajan, for respondents Nos.
1-4.
S. V. Gupte, Solicitor-General, R. Ganapathy lyer, and
R. Thiagarajan, for respondents Nos. 6, 7, 9, 12-17, 19,
22, 24, 26, 30, 31, 35, 37, 41, 42-50, 52-61, 63, 64, 66,
68-70, 7274, 80, 82-85 87, 91, 95 and 96.
A. S. R. Chari, R. Gopalakrishnan, Bishamberlal Khanna and
H. K. Puri, for intervener.
The Judgment of the Court was delivered by Ramaswami, J.
Civil Appeal No. 1038 of 1965
This appeal is brought, by certificate, from the judgment of
the High Court of Punjab dated March 11, 1964 dismissing the
Writ petition of the appellant Civil Writ No. 189-D of 1962.
In his petition under Art. 226 of the Constitution, the
appellant, S. G. Jaisinghani, challenged the constitutional
validity of what has been described as the "seniority rule"
in regard to Income-tax Service, Class 1, Grade 11 along
with the improper implementation of the "quota" recruitment
to that Service as infringing the guarantee of Arts. 14 and
16(i) of the Constitution. The original respondents to the
petition were the Union of India, Secre-
707
tary to the Government of India in the Ministry of Finance
and the Central Board of Revenue-respondents 1 to 3.
Subsequently, respondents 4 to 126 were added and those are
promotees in the Income-Tax Service who will be affected by
the result of the petition.
In order to improve the Income Tax administration the
Government of India, on September 29, 1944, reconstituted
and classified the existing Income-Tax Services as Class I
and 11. The re-organisational scheme provided for
recruitment of Income-Tax Officers, Class I Grade 11 Service
partly by promotion and partly by direct recruitment. The
re-organisational scheme was set out in Government of India,
Finance Department (Central Revenues) letter dated September
29, 1944 (Ex. B). It created two classes of Income-Tax
Service, Class I with Grade I and Grade 11 and Class 11
Service with Grade 111. Recruitment to Class I Grade 11
Service was to be made : (a) by direct recruitment through a
competitive examination, and (b) by promotion from Class It
Grade III, the ratio prescribed in paragraph 2(d) of the
letter being 80% by direct recruitment and 20% by promotion
from Class 11 Grade III Service, and in case sufficient
number of suitable candidates was not available for
promotion, surplus vacancies would be filled by direct
recruitment. In Government of India, Ministry of Finance
(Revenue Division) letter dated January 24, 1950 (Ex. G to
the writ petition), the rules of seniority were laid down.
These rules laid down-the principle for determination of
seniority (a) as between direct recruits recruited on the
result of the combined competitive examination; (b) as
between promotees selected from Class 11 and (c) as between
the direct recruits who complete their probation in a given
year and the promotees in the same year for appointment to
Class 1. These rules were revised on September 5, 1952 by
the Government of India, Ministry of Finance, Revenue
Division, letter No. F. No. 58(3)-Ad. IT150, dated
September 5, 1952. The relevant rule, viz., rule I (f) as
framed in 1950 was as follows
"The seniority of direct recuits recruited on
the results of the examinations held by the
Federal Public ’Service Commission in 1944,
and subsequent years shall be reckoned as
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 15
follows :-
(i) Direct recruits of an earlier
examination shall rank above those recruited
from subsequent examination.
(ii) Direct recruits of any one examination
shall rank inter se-, in accordance with the
ranks obtained by them at that examination.
(iii) The promotees who have been certified by
the Commission in any calendar year shall be
senior to all
M2Sup. CI/67-16
708
direct recruits who complete their probation
during that year or after and are confirmed
with effect from a date in that year or after.
Provided that a person initially recruited as Class 11
Income-tax Officer, but subsequently appointed to Class I on
the results of a competitive examination conducted by the
Federal Public Service Commission shall if he has passed the
departmental examination held before his appointment to
Class I Service, be deemed to be promotee for the purpose of
seniority."
The rule, as revised in, 1952 was to the following effect.
"The seniority of direct recruits recruited on the results
of the examinations held by the Federal Public Service
Commission in 1944, and subsequent years shall be reckoned
as follows
(i) Direct recruits of an earlier
examination shall rank above those recruited
from a subsequent examination.
(ii) Direct recruits of any one examination
shall rank inter se in accordance with the
ranks obtained by them at that examination;
(iii) Officers promoted in accordance with the
recommendation of the,’ Departmental Promotion
Committee before the next meeting of the
Departmental Promotion Committee shall be
senior to all direct recruits appointed on the
results of the examinations held by the Union
Public Service Commission during the calendar
year in which the Departmental Promotion
Committee met and the three previous years.
(iii) Notwithstanding anything contained in
clause (iii).a Class 11 Income-tax Officer
subsequently appointed to Class I on the
results of a Competitive Examination conducted
by the Federal Public Service Commission
shall, if he has passed the Departmental
Examination held before his appointment to
Class I Service be deemed to be a promotee for
the purpose of seniority."
Clause (iv) of the 1952 Rule is almost a reproduction of the
proviso to clause (iii) of the rule framed in 1950 and
clause (iii) has been recast in somewhat different language,
though in substance it contains what the main body of clause
(iii) of the Rule of 1950 stated. The effect of clause
(iii) of 1952 Rule is that the promotee becomes senior to
the direct recruit who has completed
709
a probationary period of two years in the very year in which
the Departmental Promotion Committee meets recommending the
officers in Class 11 for promotion to Class 1. The following
illustrations clarify the application of the rule
Illustration ’A’
--------------------------------------------------------
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 15
Year of Year Year Depart- Position Promo-
Competitive of of mental of tees
Exam. appoint- comple-promo- direct seniority
ment tion tion recruit
by of Com-
direct 2 mittee
recruit years’ met
ment proba-
tion
-----------------------------------------------------------
1 2 3 4 5 6
------------------------------------------------------------
1947 the three 1948 1950 Has completed Senior
previous probation.
years.
1948 1949 1951 Has not completed Do.
probation.
1949 1950 1952 Has not completed
probation.
1950 1951 1953 1950 Do. Do.
----------------------------------------------------------
Ilustration ’B’
------------------------------------------------------------
1950 the three 1951 1953 Has com- Senior
previous pleted pro-
years.bation.
1951 1952 1954 Has not Do.
completed
probation.
1952 1953 1955 Do.Do.
1953 1954 1956 in 1953 Do. Do.
A Class 11 Officer when directly recruited had to be on pro-
bation for two years during which period he had to undergo a
course of theoretical and practical training and should pass
a departmental examination for being confirmed. After a
minimum
710
period of thee years of work as Income-tax Officer (after
his probation of two yea rs) he is considered by the
Departmental Promotion Committee for promotion to Class 1.
That is to say that he has to have a minimum service of 5
years in all in Class II before he is qualified for being
considered for promotion to Class I, Grade 11 Service.
Clause (iv) of rule 1(f) deals with a special situation in
which an officer initially appointed to Class 11 Service is
given seniority in the same manner as a departmental
promotee if subsequent to his passing the departmental
examination in Class 11 he is appointed to Class I on the
results of the combined competitive examination held by the
Union Public Service Commission.
On October 18, 1951 the recruitment quotas of 80’/ and 20%
under the re-organisation scheme dated September 29, 1944
were revised. Under the revised recruitment quota rule 66-
2/3% of the vacancies in Grade 11 Class I would be filled by
direct recruitment and the remaining 33-1/3% by promotion
from Grade III Class 11 Service. Any surplus vacancies
which could not be filled by promotion for want of suitable
candidates were to be added to the quota of vacancies to be
filled by direct recruitment.
Rule 4 of the Rules of Promotions at page 251 of the Central
Board of Revenue Office Procedure Manual has also been the
subject-matter of controversy in this appeal and is set out
below.
"Income-tax Officer, Class I (Grade 1)-
Promotions to this grade are made from the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 15
grade of Income-tax Officers Class 1, Grade
II. The promotions are made on the basis of
seniority subject to fitness, and not by
selection. Normally promotions from Class II
are made to Grade 11 of Class I only in the
first instance. However, in the initial
stages of the re-organisation of the Income-
tax Services, several senior officers were
promoted direct from Class 11 to Class 1,
Grade 1, but such promotions will not
ordinarily take place in future.
NOTE.-The Union Public Service Commission has
ruled that the promotion to Class 1, Grade I
of officiating I.T.O s., class 1, Grade 11-
whose retention in that grade has been
approved by the Departmental Promotion
Committee would also be in the nature of
promotion from I.T.O., Class 11, Grade III to
I.T.O., Class 1, Grade I and require
consultation with the Commission, even though
the promotion from I.T.O., Class 1, Grade 11
to Class 1, Grade I is made on the basis of
seniority cum-fitness without reference to the
Departmental Promotion Committee.
Appointments to Class I, Grade I should,
therefore, be referred to the Commission for
approval so long as the officers have not been
confirmed in the Class 1, Grade II post.
711
Basis of promotion is seniority-cum-fitness
and prescribed minimum service is five years
gazetted service including one year in Class
1, Grade II."
The Full Bench of the Punjab High Court rejected the writ
petition of the appellant holding that the principles for
determining seniority between direct recruits and promotees
laid down in rule 1(f)(iii) and (iv), 1952 were not
discriminatory and there was no infringement of Arts. 14 and
16(1) of the Constitution. It was also decided by the Full
Bench that the quota rule announced by the Government of
India was merely a policy statement and had no statutory
force and departure from the quota did not give rise to any,
justiciable issue. It was further observed that the
,promotion rule from Class I, Grade II to Class 1, Grade I
was not discriminatory and ultra vires of Arts. 14 and 16 of
the Constitution.
The first question to be considered in this appeal is
whether rule 1(f)(iii) of the seniority rules as framed in
1952 violates the guarantee under Arts. 14 and 16 of the
Constitution. It was contended on behalf of the appellant
that the impugned rule was upon an unjustifiable
classification between direct recruits and promotees after
they had entered into. Class 1, Grade 11 Service and on the
basis of that classification promotees are given seniority
with weightage over direct recruits of the same year and
three previous years. It was contended that there was a
discrimination between officers of Class 1, Grade 11 Service
after their recruitment and the actual working of the rule
kept on pushing down the direct recruits and postponing
their chances of promotion to higher posts in Class I
Service. It was submitted that all officers appointed to
Class 1, Grade II Service formed one class and after the
officers have been once recruited there could be no
distinction between direct recruits and promotees. In other
words, it was contended that the promotees and direct
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 15
recruits became one class immediately on entry and
thereafter there cannot be any class within that class. ,We
are unable to accept the contention of the appellant as
correct. In our opinion, it is not right to approach this
problem as if it is a case of classification of one service
into two classes for the purpose of promotion, and as the
promotion rule operation to the disadvantage of one of the
two classes. It is really a case of recruitment to the
Service from two different sources and then adjustment of
seniority between the recruits coming from the two sources.
So far as Art. 16(1) is concerned, it cannot be said that
the rule of seniority proceeds on an unreasonable basis.
The reason for the classification is the objective of
filling the higher echelons of the Income Tax Service by
experienced officers possessing not only a high degree of
ability but also first-rate experience. Having regard to
the particular circumstances of this case, we
712
are of opinion that the seniority rule is not unreasonable
when read with the quota rule which provides for a special
reservation of a small percentage of posts for the promotees
who are selected by a special Committee, which determines
the fitness of the candidates for promotion after they have
put in at least three years of service as Income-tax
Officers. A rule which gives seniority to outstanding
officers with considerable experience, and selected on merit
and limiting the promotion to a percentage not exceeding the
prescribed limit cannot per se be regarded as unreasonable.
As we have already pointed out, the direct recruits joining
Class 1, Grade II Service have to undergo a period of two
years training and thereafter they become qualified for
confirmation. A promotee having already undergone the very
same training during the period of probation of Class II,
Grade III, joins Class 1, Grade II with three years period
of assessment and working experience of the Income-tax
Department. It is necessary to add that the selection of a
promotee to Class I is based on merit and great weightage is
given by the Departmental Promotion Committee to outstanding
qualifications, record of work and the ability of the can-
didate, so that those who come to Class 1, Grade 11 are
officers who have shown outstanding capability as Income-tax
Officers in Class 11 Service. The statement in Annexure 2
of the affidavit on behalf of respondents 1 to 4 in Writ
Petition No. 5 of 1966 shows that the standards of selection
are very stiff inasmuch as a very small proportion of
officers considered for selection is actually promoted. The
net effect of rule 1(f)(iii) therefore is that three years
of outstanding work in Class 11 is equated to two of
’probation in Class I Service and on consideration of this
aspect of the matter the promotee is given seniority over a
direct recruit completing the period of probation in the
same year.
The relevant law on the subject is well-settled. Under Art.
16 of the Constitution, there shall be equality of
opportunity for all citizens in matters relating to
employment or appointment to any office under the State or
to promotion from one office to a higher office thereunder.
Article 16 of the Constitution is only an incident of the
application of the concept of equality enshrined in Art. 14
thereof. It gives effect to the doctrine of equality in the
matter of appointment and promotion. It follows that there
can be a reasonable classification of the employees for the
purpose of appointment or promotion. The concept of
equality in the matter of promotion can be predicated only
when the promotees are drawn from the same source. If the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 15
preferential treatment of one source in relation to the
other is based on the differences between-the said two
sources, and the said differences have a reasonable relation
to the nature of the office or offices to which recruitment
is made, the said recruitment can legitimately be sustained
on the basis of a valid classification. Dealing with the
713
extent of protection of Art. 16(1) of the Constitution, this
Court observed in The General Manager, Southern Railway v.
Rangachari(1)
"It would be clear that matters relating to
employment cannot be confined only to the
initial matters prior to the act of
employment. The narrow construction would
confine the application of Art. 16 (1) to the
initial employment and nothing else; but that
clearly is only one of the matters relating to
employment. The other matters relating to
employment would inevitably be the provision
as to the salary and periodical increments
therein, terms as to leave, as to gratuity, as
to pension and as to the age of
superannuation.- These are all matters
relating to employment and they are, and must
deemed to- ’be included in the- expression
matters relating to employment’ in Art. 16(1).
What Art. 16(1) guaranttees is equality of
opportunity to all citizens in respect of all
the matters relating to employment illustrated
by us as well as to an appointment to any
office as explained by us. The three
provisions Art. 16(1), Art. 14 and Art. 15(1)
form part of the same constitutional code of
guarantees and supplement each other. If that
be so, there would be no difficulty in holding
that the matters relating to employment must
include all matters in- relation to employment
both prior, and. subsequent, to the employment
which are incidental to the employment and
form part of the terms and conditions of such
employment."
This Court further observed in that case
"Art. 16(2). prohibits, discrimination and
thus assures the effective enforcement of the
fundamental right, of equality of opportunity
guaranteed by Art. 16(1). The words, in
respect of only employment used in Art. 16(2)
must, therefore, include all matters relating
to employment as specified in. Art. 16(1).
Therefore, we are satisfied that promotion to
selection posts is. included both under Art.
16(1) and (2)."
We next proceed to consider the argument of the appellant
that the rule of promotion from I Income-tax Officers Class
1, Grade II to Class 1, Grade I is discriminatory in
character. It was contended, that while a direct recruit
has to put in 5 years as Income Tax Officer Class 1, Grade
II, a promotee officer gets into Grade 1 with a minimum of
one year’s service in Class I, Grade 11, the other four
years being counted in Class II, Grade III. It was I [1962]
2 S.C.R. 586, 596-598.
714
therefore submitted that the rule operated against the
direct recruit in a discriminatory manner. In our opinion,
there is no substance in the contention of the appellant.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 15
Once it is held that the rule of seniority enacted in rule
1(f)(iii) is legally valid, the rule of promotion i.e., rule
4 of Ch. IX of the Central Board of Revenue Office
Procedure Manual cannot be held to lead to any
discrimination as between direct recruits and promotees.
Rule 4 states that the prescribed minimum service for Class
1, Grade 11 Officer in the matter of promotion to Grade I of
that Service is five years gazetted service including one
year in Class 1, Grade 11. For a promotee therefore the
minimum period of service for promotion to Class I, Grade I
is actually 4 years service in Class 11, Grade III and one
year service in Class 1, Grade 11. The object of the rule
is really to carry out the policy of rule 1(f) (iii) of the
Rules of Seniority and not allow it to be defeated by the
requirement of five years service in Class 1, Grade 11
itself before-consideration for promotion to Class I, Grade
1. The promotee is placed senior to a direct recruit who
completes probation in the year in which the promotee is
selected by the Departmental Promotion Committee. If it
should be laid down that the past service as Income-tax
Officer in Class 11 is not to be counted, then rule
1(f)(iii) would be nullified, because directly recruited
officers junior to the promotees would go to Grade I earlier
than the promotee officers. For example, a promotee
certified fit by the Departmental Promotion Committee in
1952 will be senior to the direct recruits who complete
their probation in that year. And if it is to be laid down
that the promotee officer shall not count his period of
service in Class 11 for the purpose of promotion to Grade 1,
Class I he will have to wait till 1957 or 1958 to go to
Grade 1, Class 1, while direct recruits who completed their
probation in 1952 or 1953 would have gone to Grade 1, Class
I in 1955 or 1956, counting the five years period from the
date on which they were placed on probation. To remove this
anomaly the promotion rule has been framed and we are unable
to accept the argument of the appellant that there is any
discrimination in the working of this rule. The rule of
promotion is inextricably linked with the rule of weightage
and seniority in Grade 11. If in the rule of promotion the
service in Grade III is not to be taken into account,
seniority in Grade 11 would be an empty formality.
In regard to rule 1(f)(iv) of the Seniority Rules, there are
only three respondents i.e., respondents 4, 5 and 6 who have
been promoted as "deemed promotees" under this clause of the
rule. Each one of them was appointed in Class 11, Grade III
Service in 1947 and was appointed in Class 1, Grade II
Service in 1951 after having successfully competed in the
competitive examination of the year 1950, the same year in
which the appellant was successful. The appellant also
joined Class 1, Grade 11 Service in 1951. The
715
three respondents have been shown as senior to the appellant
in the seniority list. The objection of the appellant is
that while they qualified in the same competitive
examination, they had become senior to him because of the
operation- of the artificial rule by which they are treated
as "deemed promotees"; otherwise they would have remained
junior to him. On behalf of these respondents it was argued
by Mr. Bindra that they had been appointed to Class 11,
Grade III Service in 1947 and completed 5 years service in
that class by the year 1952 and if the Departmental
Promotion Committee met in 1953, as it actually did meet,
and if it recommended their promotion to Class I, Grade 11,
each one of them would have become senior to the appellant
by the operation of cl. (iii) to rule 1(f). There was also
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 15
the further consideration that if rule 1(f)(iv) did not
exist there was no incentive to a promotee of this type to
sit for the competitive examination. It should also be
taken into account that if the service of the promotees in
Class 11, Grade III is entirely ignored and if they join the
Class 1, Grade 11 Service as direct recruits they might well
find themselves becoming junior to those who were left
behind in Class II, Grade Ill Service by the operation of
rule 1(f)(iii). We are accordingly of the opinion that rule
1(f)(iv) is based on a reasonable classification and does
not offend the guarantee under Art. 14 or Art. 16(1) of the
Constitution.
We proceed to consider the next question arising for consi-
deration in this appeal, viz.,. the allegation of the
appellant that there was excessive recruitment of promotees
in violation of the quota rule. Rule 3 of the Income-tax
Officers (Class 1, Grade 11) Service Recruitment Rules is to
the following effect
"The Service shall be recruited by the
following methods
(i) By competitive examination held in India
in accordance with Part 11 of these Rules.
(ii) By promotion on the basis of selection
from Grade HI (Class 11 Service) in accordance
with Part III of these Rules."
Rule 4 reads
"Subject to the provisions of Rule 3,
Government shall determine the method or
methods to be employed for the purpose of
filling any particular vacancies, or such
vacancies as may require to be filled during
any particular period, and the number of
candidates to be recruited by each method."
716
Rule 5 states
"Vacancies in the Service which are filled
otherwise than by promotion shall be
apportioned between. the various communities
in India in accordance with the provisions of
the Government of India (Home Department)
Resolution No. F. 14/17-B/33-Ests. dated the
4th July, 1934 (regarding communal
representation in the services) and No.
23/5/42-Ests. (S) dated. the 11th August, 1943 (reg
arding
representation of Scheduled Castes in the Services
)
and the supplementary instructions connected the
rewith."
In the letter of the Government of India dated September
29, 1944 (Ex. B to the writpetition of the appellant) it
is stated
that the recruitment to Grade 11 of Class I will be made
partly by promotion and partly by direct recruitment and
that "80% of the vacancies arising in the Grade will be
filled by direct recruitment through the Indian Audit and
Allied Services Examination and the remaining 20% vacancies
will be filled on the basis of promotion by selection
provided suitable number of men ’are available for
promotion". It was also stated in the letter that if there
are any vacancies which could not be filled by promotion for
want of suitable candidates, these will be added to the
quota of vacancies to be filled by direct recruitment. The
quota was altered by the Government of India subsequently in
their letter dated October 18, 1951 (Ex. E to the writ
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 15
petition). In this letter the Government of India , said
that. they had decided in consultation. with the Union
Public Service Commission that for a period of five years,
in the first instance, 66-2/3 % vacancies in Class 1, Grade
11 will be filled by direct recruitment and the remaining
33-1/3 % vacancies on the basis of promotion and any surplus
vacancies which cannot be filled for want of suitable
candidates will- be added to the quota of vacancies to be
filled by direct recruitment. ,.There has been no argument,
in this case, with regard- to the operation of the rule
between the years 1945 and 1950, though in the petition the
appellant has alleged that in those years also there were
excessive recruitments of promotees. It appears from the
affidavit of respondent No. 1 that these were formative
years of the Income Tax Service and re-organisation of the
Department was being completed and the initial period of re-
organisation lasted up till 1950. The argument was confined
to the years 1951 to 1956. According to the appellant,
there was excessive recruitment of 71 promotees more than
the figure permitted by the quota rule. In the judgment
under appeal the High Court has examined the matter and
found that the excess number of promotees was 31 for the
four years 1951 to 1954. During the hearing of the appeal
we had ordered the Secretary of the Finance Ministry to
717
furnish the number of vacancies which had arisen from year
to year from 1945 onwards, the nature of the vacancies-
permanent or temporary and the chain of vacancies and such
other details which are relevant to the matters pending
before this Court. In his affidavit dated January 31, 1967
Mr. R. C. Dutt said that he was not able to work out, in
spite of his best endeavours the number of vacancies arising
in a particular year. However, a statement, Ex. E, was
furnished showing the number of officers recruited by the
two methods of recruitment to Class I Service during the
relevant years
-------------------------------------------------------------
UPSC War Officers
Exam. Service selected
Year recruits candi- from
datesClass
--------------------------------------------------------------
1951 50
1952 49
1953 52 38
1954 44 30
1955 45 24
1956 25-
----------------------------------------------------------------
It "is not clear from the affidavit of Mr. R., C. Dutt
whether the quota rule was strictly followed for the years
in question. In the counter-affidavits of respondents 1 to
4 in Writ Petition No. 5 of 1966 there is however an
assertion that the quota rule "has ’been substantially
complied with."
The Solicitor-General on behalf of respondents 1, 2 and 3
submitted that the quota rule was merely an administrative
direction to determine recruitment from two different
sources in the proportion stated in the rule and a breach of
that quota rule was not, a justiciable issue. The
Solicitor-General said that there was, however, substantial
compliance with the quota rule. But in the.absence of
figures of permanent vacancies in Class 1, Grade; II for the
relevant years the Solicitor-General was unable to say to
What extent there had been deviation from the rule. We are
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 14 of 15
unable to accept the argument of the Solicitor-General that
the quota rule was- not legally binding on the Government.
It is not-disputed that rule 4 of the- Income-tax Officers
(Class 1, Grade II) Service Recruitment Rules is a statutory
rule and there is a statutory duty cast on the Government
under this rule to, determine the method or methods to be
employed for the purpose of filling the vacancies and. the
number of candidates to be recruited by each method. In the
letter of the Government of India dated October 18, 1951
718
there is no specific reference to rule 4, but the quota
fixed in their letter must be deemed to have been fixed by
the Government of India in exercise of the statutory power
given under rule 4. Having fixed the quota in that letter
under rule 4, it is not now open to the Government of India
to say that it is not incumbent upon it to follow the quota
for each year and it is open to it to alter the quota on
account of the particular situation (See para 24 of the
counter affidavit of respondents 1 to 3 in Writ Petition No.
5 of 1966). We are of opinion that having fixed the quota
in exercise of their power under rule 4 between the two
sources of recruitment, there is no discretion left with the
Government of India to Alter that quota according to the
exigencies of the situation or to deviate from the quota, in
any particular year, at its own will and pleasure. As we
have already indicated, the quota rule is linked up with the
seniority rule and unless the quota rule is strictly
observed in practice, it will be difficult to hold that the
seniority rule i.e., rule 1(f)(iii) & (iv), is not
unreasonable and does not offend Art. 16 of the
Constitution. We are accordingly of the opinion that
promotees from Class II, Grade III to Class 1, Grade II
Service in excess of the prescribed quotas for each of the
years 1951 to 1956 and onwards have been illegally promoted
and the appellant is entitled to a writ in the nature of
mandamus commanding respondents I to 3 to adjust the
seniority of the appellant and other officers similarly
placed like him and to prepare a fresh seniority list in
accordance with law after adjusting the recruitment for the
period’ 1951 to 1956 and onwards in accordance with the
quota rule prescribed in the letter of the Government of
India No. F. 24(2)-Admn. I.T./51 dated October 18, 1951.
We, however, wish to make it clear that this order will not
affect such Class 11 Officers who have been appointed
permanently as Assistant Commissioners of Income Tax. But
this order will apply to all other officers including those
who have been appointed Assistant Commissioners of Income
Tax provisionally pursuant to the orders of the High Court.
In this context it is important to emphasize that the
absence of arbitrary power is the first essential of the
rule of law upon which our whole constitutional system is
based. In a system governed by rule of law, discretion,
when conferred upon executive autho, rities, must be
confined within clearly defined limits. The rule of law
from this point of view means that decisions should be made
by the application of known principles and rules and, in
general, such decisions should be predictable and the
citizen should know where he is. If a decision is taken
without any principle or without any rule it is
unpredictable and such a decision is the antithesis of a
decision taken in accordance with the rule of law. (See
Dicey-"Law of the Constitution"-Tenth Edn., Introduction
ex). "Law has reached its finest moments", stated Douglas,
J.
719
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 15 of 15
United States v. Wunderlick(1), "when it has freed man from
he unlimited discretion of some ruler........ Where
discretion ; absolute, man has always suffered". It is in
this sense that the rule of law may be said to be the sworn
enemy of caprice. Discretion, as Lord Mansfield stated it
in classic terms in the case of John Wilkes(2), "means sound
discretion guided by law. It must be governed by rule, not
by humour : it must not be arbitrary, vague and fanciful."
We should also like to suggest to the Government that for
future years the roster system should be adopted by framing
an appropriate rule for working out the quota between the
direct recruits and the promotees and that a roster should
be maintained indicating the order in which appointments are
made by direct recruits and by promotion in accordance with
the percentages fixed under the statutory rule for each
method of recruitment.
For these reasons we allow this appeal in part and order
that a writ in the nature of ’Mandamus should be granted to
the appellant to the extent indicated above. There will be
no order as to costs in this appeal.
Writ Petition No. 5 of 1966
The questions arising for determination in this case are
similar in character to the questions which have been the
subject-matter of consideration in Civil Appeal No. 1038 of
1965. For the reasons given in that case, we hold that this
petition should be allowed and a writ in the nature of
mandamus under Art. 32 of the Constitution should be granted
commanding respondents 1 to 3 to adjust the seniority of the
petitioner and other officers similarly placed like him and
to prepare a fresh seniority list in accordance with law
after Adjusting the recruitment for the period 1951 to 1956-
and onwards in accordance with the quota rule prescribed in
the letter No. F. 24(2) Admn. I.T./51 dated October 18,
1951 of the Government of India. There will be no order as
to costs.
V.P.S.
Petition allowed.
Appeal allowed in part.
(1)342 U.S. 98.
(2)(1770) 4 Burr. 2528 at 2539.
720