Full Judgment Text
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PETITIONER:
U.P.STATE TOURISM DEVELOPMENT CORPORATION LTD.
Vs.
RESPONDENT:
I.B. MISRA & ORS.
DATE OF JUDGMENT18/01/1995
BENCH:
AGRAWAL, S.C. (J)
BENCH:
AGRAWAL, S.C. (J)
RAY, G.N. (J)
CITATION:
1995 SCC Supl. (1) 589 JT 1995 (1) 565
1995 SCALE (1)255
ACT:
HEADNOTE:
JUDGMENT:
S.C. AGRAWAL, J.:
1. Leave granted.
2. These appeals relate to appointment on the post of
General Manager in the U.P State Tourism Development
Corporation (hereinafter referred to as ’the Corporation’)
which is a company registered under the Companies Act and is
an undertaking of the Government of Uttar Pradesh. The said
appointment is governed by Rule 19 of the U.P. State Tourism
Development Corporation Rules, 1981 (hereinafter referred to
as ’the Rules’). The post of General Manager is a class one
post in the Corporation. I.B. Misra, respondent No. 1,
joined the Corporation on the post of Manager Grade-II in
1978. In March, 1984 he was promoted as Manager Grade-I.
He was selected for appointment on the post of Project
Officer by the Corporation in 1989 but as he was not
appointed on the said post he filed a Writ Petition No. 4733
of 1991 which is pending before the Lucknow Bench of the
Allahabad High Court. While the said Writ Petition was
pending a vacancy occurred on the post of General Manager in
the Corporation and respondent No. 1 filed Writ Petition No.
677 of 1992 giving rise to these appeals in the Allahabad
High Court, Lucknow Bench, wherein he prayed that direction,
order or a writ of mandamus be issued directing the
respondents in the said Writ Petition to hold selection for
the said post of General Manager in accordance with the
Rules. It appears that the said post of General Manager is
being filled by having on deputation officers in the State
services of the Government of Uttar Pradesh. The High Court
by its judgment dated March 24, 1994 allowed the said Writ
Petition filed by respondent No. 1 and issued a writ in the
nature of mandamus commanding the respondents in the said
Writ Petition to make selection on the post of General
Manager in accordance with observations made in the said
judgment within a period of four months and it was further
directed that the deputation of the present incumbent
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holding the post of General Manager in the Corporation would
come
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to an end after the expiry of four months. Review Petition
filed by the appellant against the said judgment was
dismissed by the High Court by order dated May 30, 1994.
These appeals have been filed by the appellant against the
said order dated March 24, 1994 and May 30, 1994 passed by
the High Court.
3. The question arising for consideration in these appeals
relates to the interpretation of Rule 19 of the Rules which
reads as under:-
"Rule 19. Sources of Recruitment:
Appointment to various posts under the
Corporation shall be made by the appointing
authority by any one of the following
methods:-
(a) By direct recruitment.
(b) By promotion of the Corporation
employees through a departmental test or an
interview or selection by any other manner
prescribed by the Managing Director from time
to time.
(c) By deputation from Government or any
other Central/State Corporation and other
statutory body.
(d) By employment on contract bass.
(e) From any other source as approved by the
Board.
All class I posts in the Corporation shall be
selection posts and will be filled by
selection or by deputation. Such of those
Corporation employees who are eligible in
terms of qualifications, age and experience,
may also compete for selection.
Fifty percent of the class II posts will be
filled by open market selection and 50 percent
reserved for the employees of the Corporation.
If however, it is found that sufficient number
of employees are not available for filling in
the quota by promotion on the basis of merit,
the Corporation may, fill those posts also by
open market selection. There will thus be no
rigidity about quota for direct recruitment or
by promotion and there will not be any
accumulation or carry out to subsequent years.
Promotions within the various posts falling
under class III will be made fifty percent by
promotion from within the Corporation
employees, provided, suitable candidates are
available, and fifty percent by promotion from
open market selection. In all the cases of
promotions the criteria of merit-cum-seniority
for holding the higher posts will apply and no
person shall have a right to be promoted on
the basis of seniority alone. Class III posts
at the lowest stage will be filled 15 percent
by promotion from Class IV provided suitable
candidates with requisite qualifications are
available from amongst the Class IV employees
and rest by open market. The Corporation may
fill these posts also- by open market on the
non availability of the sufficient number of
employees of filling in the quota for
promotion.
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Notwithstanding anything contained in the
above rules regarding source of recruitment
the Board will have full powers to modify the
source of recruitment or the stipulated
percentages for direct recruitment/promotion
and the Board’s decision shall, in such cases,
be final."
4. The said Rule, in clauses (a) to (e), prescribes five
methods for making appointments on the various posts under
the Corporation. But in so far as Class I posts
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are concerned, it is specifically mentioned that the said
posts shall be selection posts and must be filled either by
selection or by deputation. In other words, appointment on
Class I posts is restricted to two methods only, i.e., (i)
by selection or (ii) by deputation. The employees of the
Corporation who are eligible in terms of qualifications, age
and experience can also compete for such selection. In the
matter of appointment Class I posts differ from Class 11 and
Class III posts. As regards Class II posts the Rule
postulates that 50 per cent posts have to be filled by open
market selection and 50 per cent have to be reserved for the
employees of the Corporation by promotion on the basis of
merit. Insofar as Class III posts are concerned, the Rule
lays down that 50 per cent posts are to be filled by
promotion from within the Corporation employees on the basis
of meritcum-seniority and 50 per cent from open market
selection. But 15 per cent of Class III posts at lowest
stage are to be filled by promotion from Class IV employees
and rest from open market. It would thus appear that while
appointment by promotion is envisaged on Class 11 and Class
III posts, there is no provision for appointment by
promotion on Class I posts.
5. On behalf of respondent No. 1 it was urged before the
High Court that ever since 1981 the post of General Manager
has been filled by deputation of officers in State services
and no appointment has been made by selection even though
Rule 19 makes provision for appointment on Class I post by
selection. It was also urged that the persons who have been
appointed by deputation on the post of General Manager ever
since 1981 did not possess the qualifications required for
the post of General Manager and, in this connection,
reliance was placed on the qualifications that were
mentioned in the advertisement inviting applications for the
post of General Manager when the said post was advertised in
the year 1987. The said qualifications were as follows:-
"Graduate in any discipline or three years
diploma in Hotel Management from a recognised
Institute with minimum 15 years experience as
Senior Manager in hotel industry"
6. It was also urged on behalf of respondent No. 1 that on
the proper construction of the Rules, the Corporation should
first consider suitable candidates for appointment by
process of selection and, only if no candidate was found
suitable, the Corporation could resort to the mode of
appointment by deputation and it was not permissible for the
Corporation to completely ignore the mode of appointment by
selection and to continue making of appointments on the
posts of General Manager by deputation.
7. On behalf of the appellant it was submitted that
advertisement which was issued in year 1987 was for an
additional post of General Manager which was proposed to be
created in connection with the policy to expand the chain of
hotels in the State of Uttar Pradesh as a part of tourism
promotion but the said proposal to establish a chain of
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hotels was not approved by the Government and the post was
not created. It has been submitted that for the post of
General Manager a person with high administrative capacity
is required and for that reason the post has been filled by
taking on deputation officers from different departments of
the Government who were working on various responsible po-
sitions involving high level of
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administrative abilities.
8. While construing the provisions of Rule 19 the High
Court has held:-
"In nutshell, we are of the view that rule19
should be read to the extent that Class-I
posts must be filled by promotion from amongst
the eligible officers of the Corporation on
the basis of seniority merit. only when no
suitable candidate would be available for
promotion to the said post from amongst the
eligible officers of the Corporation, the
appointment may be made on deputation from
amongst the persons qualified for the said
post on certain qualifications, which may be
laid down by the Corporation, failing which
the appointment can be made by direct selec-
tion from amongst the candidates called for
interview"
9. In taking the said view the High Court has placed
reliance on the decision of this Court in Gujarat Housing
Board Engineers Association & Anr. v. State of Gujarat &
Ors., JT 1993 (6) S.C. 469. We find it difficult to endorse
the said view of High Court. As pointed out earlier, Rule
19 makes a distinction between the appointment on Class I
posts on the one hand and Class II and Class III posts on
the other. While in respect of Class II and Class III posts
provision has been made for appointment by promotion from
amongst the employees of the Corporation, there is no such
provision for appointment by promotion in respect of Class I
posts and appointment on Class I posts can only be made by
two modes, namely, by selection or by deputation. The em-
ployees of the Corporation who are eligible in terms of
qualifications, age and experience can, however, compete for
selection. In these circumstances, we are unable to
appreciate how the High Court could construe Rule 19 as
providing that Class I posts should be filled by promotion
of eligible officers of the Corporation on the basis of
seniority-cum-merit and that only if no suitable candidate
would be available for promotion from amongst the eligible
officers of the Corporation that the appointment should be
made on deputation and failing this from amongst the can-
didates competed. The High Court appears to have carved out
a third mode of appointment on the post of General Manager
[which is a Class I post] namely, by promotion, though Rule
19 does not provide for such mode of appointment. In our
opinion, such a construction is not permissible.
10. The decision in Gujarat Housing Board Engineers
Association & Anr. v. State of Gujarat (supra) on which
reliance has been placed by the High Court in coming to the
aforesaid conclusion stands on a different footing. In that
case, in clause (1) of Regulation 3 of the Gujarat Housing
Board Services Classifications of and Recruitment
Regulations, 1981, there were three modes for appointment to
the post of Assistant Housing Commissioner (Technical), now
Superintendent Engineer namely, (i) by promotion of
employees working as Executive Engineer in Board’s Higher
Services on the basis of senioritycum-merit; (ii) by calling
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Executive Engineer on deputation from State Building and
Communication Department (iii) by direct selection from
amongst the candidate called for interview. In clause (3)
of Regulation 3 of the said Regulations, it was expressly
provided : "If a suitable candidate is not available for
appointment by promotion from among the Executive Engineers
of the Housing Board, a panel of names of Executive
Engineers having at least 4 years standing experience from
the
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State B & C Department may be called for with a proviso that
no departmental inquiry should be pending against him. One
of the vacancy will be selected by the Board and the
selected candidate will be appointed by the Board."
11. This Court construed clause (1) of Regulation 3 in the
light of clause (3) of the said Regulation to hold that the
post must be filled by promotion of eligible Executive
Engineers of the Housing Board on the basis of
seniority-cum-merit and it is only if no suitable candidate
is available from amongst the Executive Engineers of the
Housing Board that the appointment should be made on
deputation from amongst the Executive Engineers of the State
Building and Communication Department and failing this, the
appointment can be made by direct selection amongst the
candidates called for interview. The language used in Rule
19 of the Rules is, however, different from that used in
Regulation 3 of the Gujarat Housing Board Services
Classifications of Recruitment Regulations, 1981 which was
considered by this Court in Gujarat Housing Board Engineers
Association & Anr. v. State of Gujarat (supra). There is no
provision in Rule 19 of the Rules providing for promotion as
a mode of appointment. Moreover, in Rule 19 there is no
provision similar to clause (3) of Regulation 3 of the said
Regulations and it is left to the Corporation to make
appointment on Class I post either by selection or by
deputation. The fact that ever since 1981 no appointment
has been made by selection and all appointments on the post
of General Manager have been made on deputation would not
justify construing Rule 19 in the way the High Court has
construed it.
12. It is no doubt true that as a result of appointments
that have been made on the post of General Manager by
deputation the other mode of appointment, namely, by
selection, as provided in Rule 19, has been rendered otiose.
Shri R.K. Jain, the learned senior counsel appearing for the
appellant, has submitted that the Corporation has preferred
appointment on the post of General Manager by deputation in
order to secure officers having high level of administrative
ability from the State Government because for the post of
General Manager a person with high administrative capacity
is needed and further more an officer appointed on
deputation, if he is not found suitable for the job, can be
sent back at any time but this may not be possible if
regular appointment is made by selection. Having regard to
the aforesaid submissions made by Shri Jain we are unable to
hold that the Corporation has been acting arbitrarily in
making appointments on the post of General Manager by
deputation and in not resorting to the process of selection
for making such appointment.
13.The High Court has observed that the present policy of
making appointment on the post of General Manager by depu-
tation would result in impairing the efficiency of the
person holding a post just below the post of General Manager
because he knows that he would never be appointed on the
post of General Manager and would have to stagnate on that
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post for ever. The High Court has pointed out that avenue
of promotion is one of the methods by means of which a
person shows his skill and efficiency. These observations
are in consonance with the law laid down by this Court. In
Council of Scientific and Industrial Research & Anr. v. K.
G.S. Bhatt & Anr., 1989 (4) SCC 635,
571
it has been observed :-
"A person is recruited by an Organisation not
just for a job, but for a whole career. One
must, therefore, be given an opportunity to
advance. This is the oldest and most
important feature of the free enterprise
system. The opportunity for advancement is a
requirement for progress of any organisation.
It is an incentive for personnel development
as well. Every management must provide
realistic opportunities for promising
employees to move upward. The organisation
that fails to develop a satisfactory procedure
for promotion is bound to pay a severe penalty
in terms of administrative costs, misallo-
cation of personnel, low morale, and inef-
fectual performance among both nonmanagerial
employees and their supervisors. There cannot
be any modem management must less any career
planning, manpower development, management de-
velopment etc. which is not related to a
system of promotions."
Similarly in Dr. Ms. O.Z Hussain v. Un of India, 1990 Supp.
SCC 688, it has bee said :-
"This Court has on more than one occasion,
pointed out that provision for promotion
increases efficiency of the public service
while stagnation reduces efficiency and the
service ineffective. Promotion is thus a
normal incidence of service"
14. But this does not justify reading into Rule 19 the
requirement that appointment on the post of General Manager
should be made by promotion and if no suitable person was
available appointment may be made by deputation. That is a
matter which appertains to the promotion policy to be
adopted by the Corporation. It is expected that the
Corporation while revising its promotion policy will keep in
view these observations.
15. In the result the appeals are allowed, the judgment
dated March 24, 1994 and the order dated May 13, 1994 passed
by the High Court are set aside and the Writ Petition filed
by respondent No. 1 is dismissed. But in circumstances of
the case, there is no order as to costs.
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