THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA vs. J.R. WILLIAM SINGH

1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 200 OF 2020 The Institute of Chartered Accountants of India .. Appellant Versus J.R. William Singh .. Respondent J U D G M E N T M. R. Shah, J. Feeling   aggrieved   and   dissatisfied   with   the   impugned judgment   and   order   dated   05.02.2019   passed   by   the   Division Bench of the High Court of Delhi in LPA No. 245 of 2018, by which the Division Bench of the High Court has allowed the said appeal preferred by the respondent herein and has quashed and set aside the judgment and order dated 02.04.2018 passed by the learned Single Judge of the High Court and consequently has directed the Signature Not Verified Digitally signed by ARJUN BISHT Date: 2020.01.24 16:49:31 IST Reason: appellant herein to grant the respondent herein­original appellant the pay scale and designation of a Section Officer with effect from 2 05.03.1993   and   the   pay   scale   and   designation   of   an   Executive Officer   with   effect   from   05.03.2002   under   the   Time­Bound Promotion Scheme (hereinafter referred to as the TBPS) on notional basis since the respondent had already superannuated, the original respondent­ Institute of Chartered Accountants of India (for short “ICAI”)   has   preferred   the   present   appeal.       By   the   impugned judgment and order, the Division Bench of the High Court has also directed the appellant to pay the arrears of salary and emoluments to the respondent, as revised for the aforesaid scales from time to time. 2. The   facts   leading   to  the   present   appeal  in  nutshell  are as follows: That the respondent herein was appointed as an ‘Electrician’ on   terms   and   conditions   mentioned   in   the   order   of appointment/letter   dated   26.02.1974.     That,   by   the   office memorandum dated 01.05.1976, the respondent was confirmed in the   permanent   post   of   ‘Electrician’   with   effect   from   16.04.1976. That the respondent was also released the increments from time to time.  That a settlement dated 10.01.1984 was reached between the 3 appellant­Institute and its Employees’ Association with respect to time   bound   promotions/change   to   the   next   grade.       The   said settlement was to take effect from 01.01.1984.   According to the appellant, the said TBPS was applicable to only two categories of employees,   namely,   Peons/Chowkidars/Sweepers   (Class   IV)   and LDC to Executive Officers Grade (Class III).  In the said settlement, under   Clause   1(v)   it   was   further   provided   that   the   decision   in respect of cases not falling under the two broad categories referred to   hereinabove,   e.g.   Jamadar,   Drivers,   Gestetner   Operators, Electricians, Electrical Foreman and Library Attendant will be taken up by the  President.    It appears that thereafter and  in light of Clause 1(v) of the memorandum of settlement dated 10.01.1984, a decision was taken by the President of the appellant Institute on 25.02.1984,   by   which   it   was   provided   that   Jamadar,   Drivers, Gestetner Operators, Electricians etc., as mentioned in Clause 1(v) of the memorandum of settlement dated 10.01.1984 shall only be entitled   to   get   the   next   grade.     That   thereafter,   vide   office memorandum dated 13.03.1984, the respondent was informed that his basic pay was fixed at Rs.370/­ with effect from 01.01.1984.  He 4 was   further   informed   with   respect   to   the   next   increment. According to the appellant, as per the settlement dated 10.01.1984 and the subsequent decision of the President dated 25.02.1984, the respondent was given the benefit of enhancement in the salary in the  next   grade.     That  thereafter   vide   office   memorandum   dated 08.07.1986,   the   appellant   informed   the   respondent   that   on   his completion of 12 years of service on 04.03.1986, his pay scale has been revised from 330­10­180­EB­12­500­EB­15­560 to the higher scale of 425­15­500­EB­15­560­20­700­EB­25­800 with effect from 05.03.1986 and that his basic pay has been fixed at Rs.425/­ in that   grade.     He   was   also   informed   with   respect   to   the   next increment to fall due on 05.03.1987.   It appears that thereafter upon   acceptance   of   the   recommendations   of   the   Fourth   Pay Commission and in accordance with the option exercised by the respondent, the pay scale of the respondent was revised to Rs.1200­ 30­1560­EB­40­2040 with retrospective effect from 01.01.1986 and that his pay in that grade was fixed at Rs.1320/­.  It appears that thereafter in the year 1987­88, the Employees’ Association raised certain   demands.     With   respect   to   the   demands   raised,   a 5 memorandum of settlement dated 02.08.1988 was reached between the appellant Institute and its Employees’ Association.  It appears that, in terms of the aforesaid settlement dated 02.08.1988, the time span provided in the TBPS as mentioned in the settlement dated 10.01.1984 came to be reduced.   It appears that thereafter the   Employees’   Association   raised   several   demands   in   the   year 1991.     With   respect   to   the   fresh   demands,   a   memorandum   of settlement   dated   15.06.1991   was   reached.     It   appears   that thereafter the respondent vide his letter dated 12.05.1995 made a request   for   promotion   under   the   TBPS   provided   under   the settlement   dated   02.08.1988   as   well   as   the   settlement   dated 15.06.1991.  According to the respondent, he was entitled to get the promotion after expiry of seven years’ period and that his promotion became   due   on   05.03.1993.     Pending   such   representation,   vide office order dated 20.03.1996, the respondent was transferred to Diary/Dispatch Section.   He was asked to look after the work of Diary/Dispatch   Section.     However,   his   designation   came   to   be continued   as   Electrician.     That   vide   representation   dated 15.11.1999 the respondent requested the Secretary of the appellant 6 Institute for promoting him to the post of Section Officer. It was the case   of   behalf   of   the   respondent   that   he   was   appointed   on 05.03.1974 and that he was given the higher pay scale from time to time and that he was also given the pay scale of Assistant and therefore he is entitled to promotion to the next promotional post i.e.   Section   Officer   with   retrospective   effect   from   05.03.1993. Thereafter, a number of representations were made.  Thereafter, in the   year   2004,   the   respondent   was   transferred   from   the Diary/Dispatch Section (Head Office) to HRD (Noida).  In the order dated   28.04.2004   also,   the   designation   of   the   respondent   was mentioned as Electrician.  The prayer of the respondent to promote him   to  the   post   of   Section   Officer   under   the   TBPS   came   to  be rejected on the ground that as per the settlement dated 10.01.1984 and, more particularly, Clause 1(v) read with the decision of the President dated 25.02.1984, the respondent shall not be entitled to the promotion being an Electrician and shall only be entitled to the next grade which has been given to him.   That vide office order dated 14.02.2005, the respondent was transferred from Noida Office (Electrician) to Kanpur DCO (Electrician).   The said transfer was 7 opposed by the respondent.  That thereafter the respondent filed a Writ Petition (C) No. 8681 of 2005 before the High Court of Delhi, inter alia, praying to grant him the higher scale and designation of Section Officer and from Section Officer to the post of an Executive Officer.  He also prayed to quash and set aside the transfer orders dated 28.04.2004 and 14.02.2005.   That, during pendency of the said   petition,   the   respondent   retired   on   attaining   the   age   of superannuation.       That   by   the   judgment   and   order   dated 02.04.2018, the learned Single Judge of the High Court dismissed the aforesaid writ petition.  That thereafter the respondent preferred the Letters Patent Appeal before the Division Bench of the High Court   and   by   the   impugned   judgment   and   order,   the   Division Bench   of   the   High   Court   has   allowed   the   said   appeal  and   has quashed   and   set   aside   the   judgment   and   order   passed   by   the learned   Single   Judge   of   the   High   Court   and   has   directed   the appellant to grant the respondent the pay scale and designation of Section Officer with effect from 05.03.1993 and the pay scale and designation   of   an   Executive   Officer   with   effect   from   05.03.2002 8 under the TBPS along with the arrears of salary and emoluments, as revised for those scales from time to time. 2.1 Feeling   aggrieved   and   dissatisfied   with   the   impugned judgment   and   order   passed   by   the   Division   Bench   of   the   High Court, the Institute­ICAI has preferred the present appeal. 3. Learned   counsel   appearing   on   behalf   of   the   appellant   has vehemently submitted that the High Court has materially erred in directing the appellant to promote the respondent to the post of Section Officer and designation of an Executive Officer under the TBPS.  It is further submitted by the learned counsel appearing on behalf of the appellant that the High Court has failed to appreciate and consider the fact that the respondent being Electrician was not entitled   to   the   time­bound   promotion   in   view   of   the settlement/agreement   dated   01.10.1984   and,   more   particularly, Clause 1(v) and the decision of the President dated 25.02.1984. 3.1 Learned   counsel   appearing   for   the   appellant   has   further submitted that in fact in the promotional channel there was no promotion from the post of Electrician to that of the Section Officer and therefore there was no question of granting promotion to the 9 respondent to the post of Section Officer under the TBPS.   It is further submitted by the learned counsel appearing on behalf of the appellant that the High Court has materially erred in directing the appellant to promote the respondent to the post of Section Officer under   the   TBPS   relying   and/or   considering   the   subsequent settlements   dated   02.08.1988   and   15.06.1991.     It   is   further submitted   by   the   learned   counsel   appearing   on   behalf   of   the appellant that the High Court has materially erred in observing that in the subsequent settlements dated 02.08.1988 and 15.06.1991 there was no specific exclusion, as provided in the earlier settlement dated 10.01.1984.   It is submitted that in the settlement dated 02.8.1988   it   has   been   specifically   provided   that   the   earlier settlement dated 10.01.1984 shall be continued and/or applicable. It is submitted that, in fact, by the subsequent settlement dated 02.08.1988, only the time gap was reduced.   It is submitted that therefore the case of the respondent was specifically covered by the earlier settlement dated 10.01.1984 and the subsequent decision of the President dated 25.02.1984 which was in terms of Clause 1(v) of the said settlement. 10 3.2 It is further submitted by the learned counsel appearing on behalf of the appellant that, as such, the respondent was entitled to only   the   next   higher   scale   which   was/were   being   paid   to   the respondent from time to time. 3.3 It is further submitted by the learned counsel appearing on behalf   of   the   appellant   that   merely   because   for   some   time   the respondent was directed to look after the work in Diary/Dispatch Section   as   a   Section   Officer,   it   cannot   be   said   that   he   was appointed/promoted as Section Officer.   It is submitted that all throughout he was continued to be an Electrician and therefore, being   an   Electrician,   he   was   not   entitled   to   the   time­bound promotion. 3.4 It is further submitted by the learned counsel appearing on behalf of the appellant that the High Court has materially erred in not appreciating the fact that there was a clear distinction with regard to the policies applicable to the employees falling in Class­III and Class­IV categories and other employees such as Jamadars, Electricians, Drivers etc. who fall under a special category.   It is further   submitted   that   the   employees   of   the   aforesaid   category, 11 including the Electricians, were squarely excluded from the terms of the agreement dated 10.01.1984.  It is submitted that therefore the Division Bench of the High Court has materially erred in allowing the   petition   and   in   quashing   and   setting   aside   a   well­reasoned judgment and order passed by the learned Single Judge. 4. The present appeal is vehemently opposed by Ms. Tamali Wad, learned counsel appearing on behalf of the respondent. 4.1 It is submitted by the learned counsel appearing on behalf of the respondent that, in the facts and circumstances of the case, the Division Bench of the High Court has not committed any error in directing the appellant to grant promotion to the respondent under the TBPS. 4.2 It is further submitted by the learned counsel appearing on behalf of the respondent that, as such, the order of the President dated 25.02.1984 was not communicated to the respondent and therefore the same was not binding to the respondent.    4.3 It   is   further   submitted   that,   even   otherwise,   as   rightly observed   by   the   Division   Bench   of   the   High   Court,   in   the subsequent settlements dated 02.08.1988 and 15.06.1991, there 12 was no specific exclusion with respect to the post of Electrician, from granting the time bound promotions.    4.4 It is further submitted by the learned counsel appearing on behalf of the respondent that, even subsequently, the respondent was appointed as a Section Officer in the Diary/Dispatch Section and therefore it cannot be said that the respondent continued to serve as an Electrician.   It is submitted that even the respondent was   also   given   the   pay   scale   of   Assistant   with   effect   from 05.03.1996 and therefore was entitled to promotion to the next post of Section Officer under the TBPS. 4.5 It is further submitted by the learned counsel appearing on behalf   of   the   respondent   that   if   the   submission/contention   on behalf   of   the   appellant   is   accepted,   in   that   case,   there   will   be stagnation   and   the   respondent   would   never   get   any   chance   of promotion under the TBPS, which shall be against the policy of granting time bound promotion. 4.6 Making the above submissions, it is prayed to dismiss the present appeal. 5. Heard learned counsel appearing for the parties at length. 13 6. At the outset, it is required to be noted that the dispute is with respect to the promotion under the TBPS.  An employee is entitled to   the   promotion   under   the   TBPS   only   in   accordance   with   the scheme and the promotion to the next higher post is provided under the TBPS.  It is to be noted that, in the present case, the terms and conditions of the service of the employees of the appellant­ICAI were governed by the settlements/agreements arrived at from time to time   between   ICAI   and   its   Employees’   Association.       The   first settlement/agreement was arrived at on 10.01.1984 which, inter alia, provided for Time­bound promotions/change to the next grade for its Class III and Class IV employees.  It provided that if any LDC had already completed five years in the pay­scale of Rs.260­400 he is to be placed in the pay­scale of UDC­Steno Typist i.e. Rs.330­560 and so on.   Under Clause 1(v) of the said settlement/agreement, it was specifically provided that in respect of cases not falling under the two broad categories i.e. Clause III and Class IV, the decision was to be taken by the President of ICAI.   This included the cases of   Jamadar,   Driver   and   Electrician.       The   respondent   was   an Electrician and therefore he was governed under Clause 1(v) of the 14 settlement   dated   10.01.1984.     In   terms   of   Clause   1(v)   of   the settlement/agreement   dated   10.10.1984   which   was   arrived   at between ICAI and its Employees’ Association, the President of ICAI took   a   decision   on   25.02.1984,   by   which   it   was   provided   that Jamadars, Drivers, Electricians etc., as mentioned in Clause 1(v) of the memorandum of settlement dated 10.01.1984, shall only be entitled to get the next grade.   Accordingly, the respondent herein was put in the pay scale of Rs.330­560 and his basic pay was fixed at   Rs.370/­   with   retrospective   effect   from   01.01.1984.     At   this stage,   it   is   required   to   be   noted   that   the   said   fixation   was   in accordance with the decision taken by the President of ICAI dated 25.02.1984.  That, thereafter the respondent was granted the next higher pay­scale of the grade of Assistant i.e. Rs.425­800.   That, thereafter   the   next   settlement   between   ICAI   and   its   Employees’ Association was arrived at on 02.08.1988 and thereafter in the year 1991.     On a bare reading of the subsequent settlements dated 02.08.1988 and 15.06.1991 it appears that only the time gap for promotion under the TBPS came to be reduced.  According to the respondent, there was no such clarification/clause like Clause 1(v) 15 of the settlement/agreement dated 10.01.1984 excluding the post of Jamadar,   Electrician   etc.   in   the   subsequent   settlements   dated 02.08.1988   and   15.06.1991   and   therefore   he   was   entitled   to promotion to the post of Assistant and thereafter to the post of Section Officer.   The High Court in paragraph 17 has accepted the same   and   has   observed   and   held   that   in   the   subsequent settlements dated 02.08.1988 and 15.06.1991 it was not clarified that such of those who had earlier been covered under Clause 1(v) of the settlement dated 10.01.1984 and who had been granted the scale of an Assistant, would not be entitled to any further time­ bound promotion under the settlement dated 02.08.1988, or for that   matter,   of   the   further   settlement   dated   15.06.1991   and therefore in the absence of any exclusion of such of those who had been granted the pay­scale of an Assistant, would be entitled to the next   higher   pay­scale   of   the   Section   Officer   on   completion   of requisite years of service in terms of settlements dated 02.08.1988 and   15.06.1991.     However,   the   High   Court   has   not   properly considered the subsequent settlement dated 02.08.1988.  The High Court has absolutely mis­read and mis­interpreted the settlement 16 dated 02.08.1988 when it has come to the conclusion, so stated in paragraph 17 of the impugned judgment and order, that in the subsequent   settlement   dated   02.08.1988   there   is   no   specific exclusion which was   there under the special Clause 1(v) of the settlement dated 10.01.1984.   In the memorandum of settlement dated 02.08.1988, the only change was with respect to the time gap for promotion under the TBPS as per the earlier settlement dated 10.01.1984   and   the   period   for   getting   the   promotion   under  the TBPS came to be reduced.  That was the only change/modification. In the memorandum of settlement dated 02.08.1988 it has been specifically provided and so stated that except for and subject to the changes made by the said settlement, namely, reduction of time period for getting the promotion under the TBPS, all other terms and   conditions   relating   to   the   TBPS,   as   contained   in   the settlement/agreement dated 10.01.1984, shall remain in force and be   applicable   during   the   period   of   the   said   agreement.     By   a subsequent   settlement   dated   15.06.1991   the   period   was   further reduced.       Therefore,   whatever   was   stated/provided   in   the settlement/agreement dated 10.01.1984, more particularly, Clause 17 1(v) and the subsequent decision of the President dated 25.02.1984 continued to be in operation.  Therefore, those employees like the respondent herein serving as Electricians etc. were not entitled to any   promotion   under   the   TBPS,   as   contained   in   the settlement/agreement dated 10.01.1984 and/or such subsequent memorandum   of   settlements   dated   02.08.1988   and   15.06.1991. Being an Electrician, the respondent was already given the pay­ scale of an Assistant as per the decision of the President dated 25.02.1984, which was as per Clause 1(v) of the memorandum of settlement   dated   10.01.1984.     Therefore,   the   High   Court   has committed   a   grave   error   in   observing   and   holding   that   the respondent shall be entitled to promotion under the TBPS as per the memorandum of settlements dated 02.08.1988 and 15.06.1991. At the cost of repetition, it is to be noted that the employees of ICAI were governed by the memorandum of settlement dated 10.1.1984 so   far   as   the   time­bound   promotion   is   concerned   and   the subsequent settlements dated 02.08.1988 and 15.06.1991 were in continuation of the same.   No new rights of promotion under the 18 TBPS were conferred under the memorandum of settlements dated 02.08.1988 and 15.06.1991.    7. Now, so far as the submission on behalf of the respondent that subsequently even the respondent was working as a Section Officer and, therefore, shall be entitled to promotion under the TBPS to the post of Section Officer is concerned, it is required to be noted that as such there was no specific order of promotion promoting the respondent   to   the   post   of   Section   Officer.   For   some   time,   the respondent was directed to look after the work of Diary/Dispatch Section.       However,   his   designation   came   to   be   continued   as Electrician.     Merely   because   an   employee   is   given   a   temporary charge to do a particular work of a particular post, it cannot be said that in fact he has been promoted to the said post.  At this stage, it is required to be noted that subsequently when the respondent was transferred   in   the   year   2005   from   Noida   Office   (Electrician)   to Kanpur DCO (Electrician), the respondent opposed the said transfer contending, inter alia, that there is no post of an Electrician at Kanpur and therefore he should be continued at Noida (Electrician). Therefore, even on 04.03.2005, the respondent himself claimed to 19 be the Electrician.  Therefore, now it is not open to the respondent that he was already promoted to the post of Section Officer in the year 1996.   Therefore also, the High Court has committed a grave error in directing the appellant to promote the respondent to the post of Section Officer under the TBPS.  However, at the same time, the   respondent   shall   be   entitled   to   the   same   salary   of   Section Officer for the period during which he worked as a Section Officer either on officiating basis and/or he was given the charge, if not paid so far. 8. Now, so far as the submission on behalf of the respondent that if the respondent is not promoted to the post of Section Officer under the TBPS, in that case, the object and purpose of providing the promotion under the TBPS, namely, to remove the stagnation at the work place shall be frustrated is concerned, it is true that the TBPS   is   intended   to   remove   the   stagnation   at   the   work   place. However, at the same time, one cannot lose sight of the fact that the promotion shall be governed as per the promotion scheme only. At no   point   of   time,   Clause   1(v)   of   the   main   settlement   dated 10.01.1984 and the decision of the President dated 25.02.1984 not 20 providing any promotion under the TBPS so far as Electrician etc. are concerned, has been challenged.     It is not that there is a complete stagnation so far as the respondent is concerned.   He has been   granted   the   next   higher   grade   as   per   the   decision   of   the President dated 25.02.1984 which was as per Clause 1(v) of the main settlement dated 10.01.1984.  It is to be noted that, being an employee   and   the   member   of   the   Employees’   Association,   the settlement arrived at between the management and its Employees’ Association was binding on the respondent. 9. In view of the above and for the reasons stated above, we are of the firm opinion that the impugned judgment and order passed by   Division   Bench   of   the   High   Court  directing   the   appellant   to promote the respondent to the post of Assistant and thereafter to the post of Section Officer under the TBPS as per the memorandum of   settlements   dated   02.08.1988   and   15.06.1991   cannot   be sustained  and  the same deserves to  be  quashed  and set aside. Accordingly,   the   impugned   judgment   and   order   passed   by   the Division   Bench   of   the   High   Court   is   quashed   and   set   aside. However, it is observed and directed that the respondent shall be 21 entitled to the same salary which was being paid to the Section Officers for the period during which he worked as a Section Officer either on officiating basis and/or he was given the charge and the appellant is directed to pay the same, if not paid so far.     The appeal is allowed accordingly.  No costs. ………………………..J. (ASHOK BHUSHAN) …………………………..J. (M. R. SHAH) New Delhi; January 24, 2020.