Full Judgment Text
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CASE NO.:
Appeal (civil) 5660 of 1998
PETITIONER:
BOARD OF DIRECTORS, REPRESENTED
Vs.
RESPONDENT:
DIRECTOR, NATIONAL ALUMINIUM
DATE OF JUDGMENT: 25/07/2001
BENCH:
S. Rajendra Babu & Shivaraj V. Patil
JUDGMENT:
WITH
CIVIL APPEAL NO. 5661 OF 1998
J U D G M E N T
Shivaraj V. Patil, J.
The respondents herein filed writ petitions OJC No. 9368 of
1995 and OJC No. 9218 of 1996 challenging the introduction of E-O
grade in the executive cadre as promotional avenue for the
channel of supervisors inter alia in S-3 cadre on the ground that
it deprived the employees of their legitimate promotional avenue
E-1 in executive cadre. The respondents also prayed for quashing
the circular No. 64 dated 29.6.1995 contending that it was
issued without the decision of the Board of Directors as to the
introduction of new induction point E-O grade in the executive
cadre.
The writ petitions were resisted by the appellants stating
that the Recruitment and Promotion Rules for Executives, 1984
(for short ‘the 1984 Rules) were applicable only to executives
and not for the employees in the non-executive cadres; scheme for
promotion of the non-executives to executive cadre was separate
and independent; the impugned circular No. 64 noted that over
the years, executive cadre was stablised with consequent
reduction in the requirement of E-1 level officers. Hence, it
had become necessary to implement the said circular to provide
promotional avenues to the employees working at supervisory level
in the S-3 grade for selection against the executive posts at E-O
level subject to fulfillment of conditions prescribed. A
settlement under Section 18(3) of the Industrial Disputes Act,
1947 was arrived at before the Conciliation Officer between the
appellant company and nine different non-executive employees
unions representing substantial majority of them. In the said
binding settlement it is specifically stipulated that the
employees in the revised grades M-6/T-6/P-6/S-3 (corresponding to
s-3 level) would continue to be eligible for internal selection
for posts at E-O level according to the prescribed conditions.
The High Court disposed of the writ petition OJC No. 9368
of 1995 by a short order without dealing with various contentions
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raised by the appellants directing that the scheme contained in
Annexure-5 can only remain in force if any part or portion
thereof which is at variance with the conditions contained in
Annexure-1 cannot have any legal effect prejudicing the rights of
the petitioner or similarly situated persons in the matter of
promotion and other incidental aspects. OJC No. 9218 of 1996
was disposed of following the order made in OJC No. 9368 of 1995.
Hence these two appeals by the appellant company.
On behalf of the appellants it was urged that the 1984
Rules deal with executive posts in the company and they were not
applicable to the non-executives including the employees in S-3
supervisory cadre; separate schemes were framed for promotion of
supervisory personnel from non-executive to executive cadre;
since there were no promotional chances from S-3 cadre to E-1
executive level consequent upon the reduction in the requirement
of E-1 level, the scheme was issued creating promotional avenues
at E-O level to the supervisory personnel in S-3 grade; and on
account of the same no prejudice was caused to the respondents.
Our attention was drawn to the relevant provisions contained in
the Rules, Schemes and the impugned circular.
On behalf of the respondents submissions were made
supporting the impugned orders passed by the High Court. It was
contended that the legitimate expectations of the respondents for
promotion from S-3 cadre to E-1 executive level cadre was denied
by virtue of the schemes introduced which were inconsistent with
the Rules.
In order to appreciate the respective submissions it is
useful to look at the Rules, schemes and the impugned circular to
the extent they are relevant for the purpose. In Rule 1.1.2.2 of
1984 Rules it is clearly stated that these rules shall apply to
all executive posts up to and including the posts in the scale of
Rs.2250-2750 (E-7) in the company and will not apply to the cases
of promotion from non-executive posts to executive posts.
A separate scheme called Promotion Scheme for non-executive
to executive level was approved by the CMD on 18.5.1985 to be
effective from 25.11.1985, which provides for a system of manning
posts in E-1 level up to maximum of 50% of available vacancies at
that level from amongst and competent employees at S-3 level.
In the said scheme, it is specifically stated that these norms
may be withdrawn, amended, modified or cancelled at any time at
the discretion of the CMD without notice. In the impugned
circular No. 64 dated 29.6.1995 it is stated that on introduction
of E-O grade in the executive salary structure, it was decided
that the supervisory personnel at S-3 level would be considered
for selection to E-O grade with effect from 1.7.1991 vide
circular No. CPD/RR/0012.5(B)/951(45)/91 dated 19.3.1991. The
said decision was temporarily kept in abeyance vide IOM No.
CPD/RR/002.2/1965/91 dated 20.6.1991. It is further stated that
over the years, the executive cadre has stablised with consequent
reduction in the requirement at E-1 level. It has, therefore,
become necessary to implement E-O grade for the purpose of
selection of eligible supervisory personnel against the
executive posts at E-O level subject to fulfillment of given
conditions. The said circular also states that the scheme may be
amended, modified or withdrawn at any time without notice at the
discretion of CMD. It is made clear that the policy to regulate
further promotions from E-O grade to E-1 grade will be issued
separately. In para 4.1 of Annexure P-5, the Memorandum of
Settlement dated 14.12.1995 entered into between the appellant
company and nine non-executive employees union before the
Conciliation Officer it is stated that the revised wage structure
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of different categories of employees is given at Annexure A.
In para 7 of this Annexure it is stated that the employees in the
revised grades M6/T6/P6/S3 will continue to be eligible for
internal selection for executive posts at E-O level according to
the prescribed conditions.
Looking to these Rules, schemes and the circular including
the settlement dated 14.12.1995 the High Court was not correct in
passing the impugned orders granting relief to the respondents.
As noticed above 1984 Rules do not apply to non-executives, the
High Court proceeded on the assumption that the said Rules were
applicable to the non-executives and the impugned circular No. 64
to the extent inconsistent with the said Rules could not be
sustained. The submission of the appellants that the decision of
the company to operate E-O level in the executive cadre was taken
in the general interest of career advancement of non-executive
employees consistent with the employers requirements at
executive level due to shrinkage of vacancies at executive level
is acceptable, particularly, when nothing was shown as to how
creating one more level in the executive cadre to provide
promotional avenues to non-executive employees was prejudicial.
It is not the case of the respondents that the vacancies at E-1
executive level were not reduced on account of stablisation of
vacancies over number of years after the starting of the company.
In the same impugned circular it is clearly stated that the
policy to regulate promotions from E-O grade to E-1 grade would
be issued separately. Thus, the employees working at S-3 level
will be benefited rather than prejudiced by the impugned
circular. If such a scheme for creation or operation of E-O
level was not there and in the absence of vacancies in E-1
executive level the employees in the non-executive cadre would
have been stagnated. Further, in the settlement (Annexure P-5)
also it is clearly stated that the employees in the revised
grades including S-3 will continue to be eligible for internal
selection for executive posts at E-O level according to the
prescribed conditions. To this settlement as many as nine
employees unions were parties. If the employees were aggrieved
or prejudiced as to creation of E-O level as one of the
promotional avenues they should not have been parties to such
settlement. We are told number of employees from non-executive
cadre had already been promoted to E-O level of executive cadre.
At any rate the respondents were unable to say as to how they
were prejudiced by creation of E-O level in the executive cadre
to provide one more promotional opportunity in the circumstances
already stated above. The appellants also brought to our notice
that NALCO Recruitment and Promotion Rules for Executives, 1997
(Annexure P-9 filed in this Court) have come into force
superseding the 1984 Rules. Rule 16.1 of the 1997 Rules says
that all executive posts in the Company shall be classified in
different grades including E-O level. Thus, having regard to all
the aspects we find it difficult to sustain the impugned orders
passed by the High Court.
In this view the appeals are allowed. The impugned orders
are set aside. Consequently the writ petitions stand dismissed.
There shall be no order as to costs.
.......................J.
[S. Rajendra Babu]
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.......................J.
[Shivaraj V. Patil]
New Delhi;
July 25, 2001.
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