Open competitive selection alone cannot justify denying pay protection to former PSU employees.

The applicant, a direct-recruit IRSME officer appointed on 29 May 2009, had previously been a regular employee of IOC Ltd., where he was working in Grade B.

He sought protection of his former pay, relying on an IOC service certificate dated 24 March 2011.

The Railway rejected his claim by order dated 26 August 2022, relying on the DoPT Office Memorandum (OM) dated 10 July 1998 and Railway Board letter RBE No. 16/2001, which restricted pay protection for candidates selected through open competitive examinations.

The applicant challenged that rejection before the Tribunal.

1. Whether a former regular IOC employee appointed to IRSME through an open competitive examination could be denied pay protection solely because his selection was not by interview alone

2. Whether the applicant’s claim could be rejected because the UPSC recommendation did not specify pay protection or because the South Western Railway was not his appointing authority

3. Whether the applicant was entitled to arrears for the entire period from appointment, or whether recovery should be limited by the principle in Union of India v. Tarsem Singh

The Tribunal applied the OM dated 7 August 1989, which provided for pay protection in covered cases of direct recruitment from public-sector or other qualifying employment, and considered the later OM dated 10 July 1998 and Railway Board RBE No. 16/2001, which restricted protection in cases of open competitive selection.

Relying on Sanjog Kapoor v. Union of India, W.P.(C) No. 5518/2004 (Delhi High Court, 20 April 2007), the Tribunal held that distinguishing between candidates selected by interview and those selected through open competitive examination was arbitrary and lacked rational justification.

It also relied on Union of India v. Abhay Kumar, W.P.(C) No. 3338/2022 (Delhi High Court, 23 February 2022), and other decisions applying the same principle.

Differential treatment of similarly situated employees may offend Article 14.

The Tribunal further applied Union of India v. Tarsem Singh, (2008) 8 SCC 648, to restrict arrears for a continuing wrong to three years before filing, while permitting notional refixation from the date of appointment.

The Tribunal found that the applicant’s claim was rejected on the basis of the very interview-versus-open-examination distinction held arbitrary in Sanjog Kapoor.

It considered that conclusion reinforced by decisions concerning Railway officers, including an IRSME officer from a PSU, and by the grant of pay protection to a similarly placed IRSME officer whose case had also proceeded through judicial review.

The absence of a UPSC recommendation specifying pay protection could not defeat the claim because that requirement formed part of the scheme resting on the invalid distinction.

Nor could the Railway avoid responsibility after it had examined and rejected the claim on its merits.

The OM dated 13 August 2020 was inapplicable because the applicant joined in 2009 and the relevant decision treated the OM as prospective.

As pay fixation constituted a continuing wrong, the applicant could receive notional refixation from appointment, but actual arrears were limited to the three years before the OA was filed.

The Tribunal quashed the rejection order dated 26 August 2022 and directed the respondents to notionally refix the applicant’s pay from 29 May 2009, protecting the pay he drew at IOC Ltd., subject to verification that he had completed probation and was a regular employee there.

Consequential refixation, including increments and pay revisions, was directed.

Actual arrears were limited to the three years immediately preceding the filing of the OA and were to be paid within three months of receipt of the certified order; thereafter, interest at the applicable GPF rate would accrue.

The claim for 18% interest was declined, and there was no order as to costs.