Cadre restructuring involving creation of posts through matching savings constitutes promotion, attracting reservation rules.

The applicants, employees of the Indian Railways in Pay Matrix Level-7, challenged the legality of suitability/select lists dated 27.06.2023 and 04.07.2023 for upgradation to Level-8

This upgradation was initiated under Railway Board Policy RBE No. 155/2022, which approved upgrading 50% of Group ‘C’ posts from Level-7 to Level-8

Subsequent clarifications by the Railway Board on 01.12.2022 and 14.07.2023 specified that while functional responsibilities would remain unchanged, the process would be treated as "non-selection" based on seniority and scrutiny of service records, and that reservation rules would apply

To implement the scheme, the Railways surrendered 653 posts from Level-7 to Level-1 to create 578 posts in Level-8, a process known as "matching savings"

The applicants contended that the process was "upgradation simpliciter" (mere financial benefit to remove stagnation) rather than promotion, and therefore, applying reservation was unconstitutional and contrary to law

1. Whether the upgradation from Pay Matrix Level-7 to Pay Matrix Level-8 under the policy dated 17.11.2022 is a case of "upgradation simpliciter" or partakes the character of "promotion"?

2. Whether the application of reservation in the said process is legally sustainable?

3. Whether the impugned suitability/select lists suffer from any illegality warranting interference?

The court primarily relied on the principles established in Union of India v. Pushpa Rani (2008) 9 SCC 242, which held that if additional posts created through cadre restructuring are filled by promotion based on eligibility and suitability, reservation policy applies

It further applied the distinction between "upgradation simpliciter" and "promotion" defined in BSNL v. R. Santhakumari Velusamy (2011) 9 SCC 510: upgradation is a blanket financial benefit, whereas promotion involves selection elements or limited availability of posts

The Tribunal also cited the 3-judge bench decision in Rama Nand v. Chief Secretary, Govt. of NCT of Delhi (2020) 9 SCC 208, which held that higher pay scales granted through selection criteria and minimum service requirements constitute promotion

The Tribunal rejected the applicants' argument that the scheme was "upgradation simpliciter." It noted that the scheme was not universal but restricted to 50% of the cadre strength, making placement contingent on the availability of posts

Furthermore, the scheme included elements of selection: a five-year residency period, vigilance clearance, and scrutiny of service records

The Tribunal emphasized that the creation of Level-8 posts through "matching savings" (surrendering lower-level posts) constituted "cadre restructuring" rather than a mere pay revision

Following the dicta in Pushpa Rani and BSNL, the court reasoned that when restructuring results in additional posts filled via eligibility/suitability, it is a promotion in the wider sense

The Tribunal distinguished earlier contrary decisions from other CAT benches, noting they had failed to consider the Railway Board’s 2023 clarifications and the binding Rama Nand precedent

Consequently, the application of reservation in the suitability/select lists was held to be legally valid and in consonance with Supreme Court precedents. The Tribunal dismissed the OAs, holding that the impugned select lists did not suffer from any illegality

The interim relief granted earlier was vacated, and no order as to costs was made