STATE OF HIMACHAL PRADESH & ORS. versus RAJ KUMAR & ORS.

[2022] 15 S.C.R. 847

STATE OF HIMACHAL PRADESH & ORS.

RAJ KUMAR & ORS.

(Civil Appeal No. 9746 of 2011)

MAY 20, 2022

[UDAY UMESH LALIT, S. RAVINDRA BHAT ANDPAMIDIGHANTAM SRI NARASIMHA, JJ.]

Service Law: Himachal Pradesh Recruitment and PromotionRules, 1966 – H.P. Labour and Employment Department, LabourOfficers, Class–II (Gazetted) Ministerial Services R & P Rules, 2006– Conditions of service of public servant – Vacancies arose prior tothe promulgation of the new rules – To be filled only as per the oldrules or as per the amended rules – Five post of Labour Officergoverned by the 1966 Rules, to be filled by promotion – On20.07.2006, seven additional posts sanctioned for labour officers,and total posts increased from 5 to 12 – Subsequently, the 1966Rules amended – Under the New Rules of 2006, recruitment to thepost of Labour Officer is to be made by promotion as well as directrecruitment in the ratio of 75 per cent and 25 per cent respectively– Out of the total number of 12 posts, the promotional posts increasedfrom 5 to 9 (being 75 per cent) and direct recruitment posts came to3 (being 25 per cent) – Respondent no. 1 to 3-Labour Inspectorchallenged the filling up of 25 percent of the posts by directrecruitment on the ground that the vacancies arose before thepromulgation of the New Rules and thus, all the vacancies must befilled only by promotion – On direction by the tribunal, the Stategovt. considered the grievance and rejected the same – Challengedagain before the tribunal – During the pendency, State governmentcalled up for applications for filling up the 3 posts of Labour Officersunder the quota of direct recruitment – Respondent no. 4 to 6appointed to the post – Appointments challenged by the respondentno.1 to 3 – Division Bench allowed the petition relying on Rangaiah’scase – On appeal, held : Rangaiah’s case must be seen in the contextof its own facts, coupled with the declarations therein that there isno rule of universal application to the effect that vacancies mustnecessarily be filled on the basis of rules which existed on the date

CDEF

Awhich they arose – Statement in Rangaiah that the “vacancies whichoccurred prior to the amended rules would be governed by the oldrules and not by the amended rules”, does not reflect the correctproposition of law governing services under the Union and theStates, thus, it is overruled – There is no right for an employeeoutside the rules governing the services – Services under the StateBare in the nature of status, hallmark of which is the need of theState to unilaterally alter the rules to subserve the public interest –2006 Rules, governing the services of the respondents came intoforce immediately after they were notified – There is no provision inthe said rules to enable the respondents to be considered as per theC1966 Rules – Furthermore, there is no other right that respondentsno. 1 to 3 can claim for such consideration – Plea of the Governmentbased on its policy decision to restructure the cadre by creatingadditional posts and also providing for direct recruitment byamending the rules is accepted – Thus, the judgment of High Courtis set aside – Art. 309, 310, 311 – Constitution of India.DConstitution of India : Art. 310 – Doctrine of pleasure –Purpose/Object – Stated.

Allowing the appeals, the Court

HELD: 1.1 review of the fifteen cases that haveEdistinguished Rangaiah’s case would demonstrate that this Courthas been consistently carving out exceptions to the broadproposition formulated in Rangaiah. The findings in thesejudgments, that have direct bearing on the propositionformulated by Rangaiah are that there is no rule of universalFapplication that vacancies must be necessarily filled on the basisof the law which existed on the date when they arose, Rangaiah’scase must be understood in the context of the rules involvedtherein; that it is now settled proposition of law that candidatehas right to be considered in the light of the existed rules,which implies the “rule in force” as on the date considerationGtakes place; that the right to be considered for promotion occurson the date of consideration of the eligible candidates; TheGovernment is entitled to take conscious policy decision not tofill up the vacancies arising prior to the amendment of the rules.The employee does not acquire any vested right to beingHconsidered for promotion in accordance with the repealed rules

in view of the policy decision taken by the Government. There isno obligation for the Government to make appointments as perthe old rules in the event of restructuring of the cadre is intendedfor efficient working of the unit. The only requirement is that thepolicy decisions of the Government must be fair and reasonableand must be justified on the touchstone of Article 14. The principlein Rangaiah need not be applied merely because posts werecreated, as it is not obligatory for the appointing authority to fillup the posts immediately. When there is no statutory duty castupon the State to consider appointments to vacancies that existedprior to the amendment, the State cannot be directed to considerthe cases. [Para 36][895-F-G; 896-A-D]

1.2 The said observations made in the fifteen decisions thathave distinguished Rangaiah’s case demonstrate that the wideprinciple enunciated therein is substantially watered-down. Almostall the decisions that distinguished Rangaiah hold that there isno rule of universal application to the effect that vacancies mustnecessarily be filled on the basis of law that existed on the datewhen they arose. This only implies that decision in Rangaiah isconfined to the facts of that case. [Para 37.1][896-E-F]

1.3 The consistent findings in these fifteen decisions thatRangaiah’s case must be seen in the context of its own facts,coupled with the declarations therein that there is no rule ofuniversal application to the effect that vacancies must necessarilybe filled on the basis of rules which existed on the date whichthey arose, compels the Court to conclude that the decision inRangaiah is impliedly overruled. However, as there is nodeclaration of law to this effect, it continues to be cited as aprecedent and this Court has been distinguishing it on someground or the other. For clarity and certainty, it is, therefore,necessary to hold that the statement in Y.V. Rangaiah v. J.Sreenivasa Rao that, “the vacancies which occurred prior to theamended rules would be governed by the old rules and not bythe amended rules”, does not reflect the correct proposition oflaw governing services under the Union and the States underpart XIV of the Constitution, it is hereby overruled; and that therights and obligations of persons serving the Union and the States

Aare to be sourced from the rules governing the services. [Para37.3][897-C-F]

Y. V. Rangaiah v. J. Sreenivasa Rao (1983) 3 SCC 284– Overruled.

1.4 On facts, the Court noticed that the High CourtBproceeded on the premise that the vacancies occurring beforethe amendment of the Rules on 25.11.2006 must be governed bythe 1966 Rules. The decision of the High Court took within itssweep even the 7 new posts of Labour Officers that weresanctioned by an inter–departmental letter dated 20.07.2006,Cwhich included even the 3 posts allocated for direct recruitment.The direction of the High Court to encompass even the 3 postsallocated for direct recruitment was on the ground that the postswere sanctioned on 20.07.2006, which is prior to the amendmentof the Rules on 25.11.2006. [Para 38.1][897-F-H]

D1.5 There is no right for an employee outside the rulesgoverning the services. That the services under the State are inthe nature of status, hallmark of which is the need of the Stateto unilaterally alter the rules to subserve the public interest. The2006 rules, governing the services of the Respondents came intoforce immediately after they were notified. There is no provisionEin the said rules to enable the Respondents to be considered asper the 1966 Rules. The matter must end here. There is no otherright that Respondents no.1 to 3 can claim for suchconsideration.[Para 38.2][898-A-C]

Union of India v.Tulsiram Patel (1985) 3SCC 398 :F[1985] 2 Suppl. SCR 131; Roshan Lal Tandon v. Unionof India (1968) 1 SCR 185 – Followed.

1.6 The alternative plea of the Government based on itspolicy decision to restructure the cadre by creating additionalposts and also providing for direct recruitment by amending theGrules, as justification for not filling up the vacancies that aroseprior to the amendment is fully supported by the decisions of thisCourt. [Para 39.1][898-C-D]

Dr. K. Ramulu & Anr v. Dr. S Suryaprakash Rao (1997)3 SCC 59 : [1997] 1 SCR 287; Rajasthan Public

Service Commissionv. Chanan Ram (1998) 4 SCC 202: [1998] 1 SCR 1099; G. Venkateshwara Rao v. Unionof India (1999) 8 SCC 455; Shyama Charan Dash v.Stateof Orissa (2003) 4 SCC 218 : [2003] 2 SCR 899;Stateof Punjab v. Arun Kumar Aggarwal (2007) 10 SCC402 : [2007] 6 SCR 8; Deepak Agarwal v. State of U.P(2011) 6 SCC 725 : [2011] 4 SCR 149; Stateof Tripurav. Nikhil Ranjan Chakraborty (2017) 3 SCC 646; Stateof Orissa v. Dhirendra Sundar Das (2019) 6 SCC 270: [2019] 7 SCR 197; Union of India v. Krishna Kumar(2019) 4 SCC 319 : [2019] 1 SCR 982; Rajasthan StateSports Council v. Uma Dadhich (2019) 4 SCC 316 :[2019] 1 SCR 585 – relied on.

1.7 The material placed on record shows that the additionalposts of Labour Officers are created on 20.07.2006 andimmediately thereafter the 12 labour zones were created. This isfollowed by amendment to the Rules with effect from on 25.11.2006restructuring the cadre. The facts fully justify the alternativesubmission made by the State and the Court has no hesitation inaccepting the said submission. Thus, the judgment of the HighCourt dated 28.12.2009 is set aside. [Paras 39.2 and 40][898-D-E]

D. Raghuv. R. Basaveswarudu 2020 SCC Online 124;B. P. Singhal v. Union of India (2010) 6 SCC 331;Union of India v. Arun Kumar Roy (1986) 1 SCC 677;Narayana v. Purushotham (2008) 5 SCC 416 : [2008]6 SCR 1055; Brij Lal Mohan v. Union of India (2012)6 SCC 502 : [2012] 5 SCR 305; Syed Khalid Rizivi VUnion of India 1993 Supp (3) SCC 575 : [1992] 3Suppl. SCR 180; Hardev Singh v Union of India(2011) 10 SCC 121; P. Ganeshwar Rao v. State of A.P.(1988) Supp SCC 740 : [1988] Suppl. SCR 805; N. T.Devin Katti v. Karnataka Public Service Commission(1990) 3 SCC 157; A. A. Calton v. Director ofEducation and Anr (1983) 3 SCC 33; P. Mahendranand Ors v. State of Karnataka (1990) 1 SCC 411 :[1989] 2 Suppl. SCR 385; State of Rajasthan v. R.Dayal (1997) 10 SCC 419 : [1997] 2 SCR 108; B. L.

AGupta v. M.C.D (1998) 9 SCC 223; Arjun SinghRathore v. B.N. Chaturvedi (2007) 11 SCC 605 : [2007]11 SCR 320; Stateof Bihar v. Mithilesh Kumar (2010)13 SCC 467 : [2010] 10 SCR 161; Kulwant Singh v.Daya Ram (2015) 3 SCC 177 : [2014] 11 SCR 1053;Richa Mishra v. Stateof Chhattisgarh (2016) 4 SCC 179B: [2016] 1 SCR 316; Union of India v. S.S. Uppal(1996)2 SCC 168 : [1996] 1 SCR 230; ShankarshanDash v. Union of India (1991) 3 SCC 47 : [1991] 2SCR 567; State Bank of India v. Kashinath Kher (1996)8 SCC 762; Delhi Judicial Services Assn. v. Delhi HighCCourt (2001) 5 SCC 145 : [2001] (3) SCR 314; M.I.Kunjukunju v. Stateof Kerala (2015)11 SCC 440; D.Raghuv. R. Basaveswarudu (2020) 18 SCC 1 – referredto.

‘Law Relating to Public Services’, Samaraditya Pal, 3[rd]DEdition, Lexis Nexis, 2011 Para 7.1 – referred to.

STATE OF HIMACHAL PRADESH & ORS. v. RAJ KUMAR& ORS.

CIVIL APPELLATE JURISDICTION : Civil Appeal No.9746of 2011.

From the Judgment and Order dated 28.12.2009 of the High CourtGof Himachal Pradesh at Shimla in Civil Writ Petition No.3028 of 2008.

With

Civil Appeal No.9747 of 2011.

Abhinav Mukerji, AAG, P. S. Patwalia, Ms. Aprajita Singh,Ravindra Kumar Raizada, Sr. Advs., Mrs. Bihu Sharma, Ms. Pratishtha

AVij, Akshay C. Shrivastava, Vishal Sharma, Prasanjit Keswani, MaheshKumar, Nikhilesh Kumar, Ms. Devika Khanna, Mrs. V. D. Khanna,Vmz Chambers, Ms. Divya Roy, Akshay Amritanshu, Kartikey Singh,Ashutosh Jain, Ankit Kumar Lal, Varinder Kumar Sharma, UmangShankar, Madhup Singhal, Nirmal Singh, Ramjee Pandey, Advs. for theAppellants.B

The Judgment of the Court was delivered by

PAMIDIGHANTAM SRI NARASIMHA, J.

1.1 These appeals arise out of the decision of the High Court ofHimachal Pradesh allowing the writ petition and directing the State toCconsider the case of the writ petitioners, Respondents no. 1 to 3 herein,for promotion under Rules that existed when the vacancies arose andnot as per the subsequently amended rules. These directions were basedon the decision of this Court in the case of Y.V. Rangaiah v. J. SreenivasaRao[1]. As we noticed number of decisions of this Court that haveDfollowed Rangaiah, and far more decisions that have distinguished it,we had to examine the issue afresh. The question is whetherappointments to the public posts that fell vacant prior to the amendmentof the Rules would be governed by the old Rules or the new Rules.After examining the principle in the context of the constitutional positionof services under the State, and having reviewed the decisions thatEhave followed or distinguished Rangaiah in that perspective, we haveformulated the legal principles that should govern services under theState. Applying the said principles, we have held that the broad propositionformulated in Rangaiah does not reflect the correct constitutional position.We have thus allowed the appeals following the principles that we havelaid down.F

1.2 We will first refer to the facts leading to the presentcontroversy.

Facts:

1.3 The Himachal Pradesh Recruitment and Promotion Rules,G1966[2 ]dated 01.03.1966 made in exercise of the powers under Article309 of the Constitution govern the post of Labour Officer. There were5posts of Labour Officers and these were to filled by promotion from (i)

1 Y.V. Rangaiah v. J. Sreenivasa Rao (1983) 3 SCC 284, hereinafter referred to as‘Rangaiah’.H2 hereinafter referred to as the ‘1966 rules’.

factory Inspectors, (ii) labour inspectors and (iii) sectt.superintendents, being the feeder category. On 20.07.2006, Secretary,Labour and Employment Department addressed letter to the LabourCommissioner intimating sanction for creation of additional posts in thedepartment which inter alia included 7 more posts for Labour Officers.As consequence of the said decision, the total posts for Labour Officersincreased from 5 to 12. At this point in time Respondents No. 1 to 3were working as Labour Inspectors in the service of the State.1.4 Within four months from the sanction of the additional posts,the 1966 Rules came to be amended on 25.11.2006. Under the NewRules called the H.P. Labour and Employment Department, LabourOfficers, Class-II (Gazetted) Ministerial Services R & P Rules, 2006[3],recruitment to the post of Labour Officer is to be made by promotion aswell as direct recruitment in the ratio of 75 per cent and 25 per centrespectively. The effect of the New Rules coupled with the 7 new postsfor Labour Officers is that, from out of the total number of 12 posts ofLabour Officers, the promotional posts increased from 5 to 9 (being 75per cent)and direct recruitment posts came to 3 (being 25 percent).Immediately thereafter, the Government issued notificationcreating 12 Labour zones in the State.

1.5 It is in the above-referred background, that Respondents No.1 to 3 approached the Administrative Tribunal challenging the proposedaction of the State Government in filling up 25 per cent of the posts ofLabour Officers by direct recruitment. They contended that the vacanciesarose in July 2006, which is before the promulgation of the New Rulesand therefore all the vacancies must be filled only by promotion. By itsorder dated 24.01.2007, the Tribunal directed the State Government toconsider the grievance raised in the Original Application as if it is arepresentation to it. The representation was considered and rejected bythe Government on 27.06.2007. Challenging the rejection, the secondOriginal Application was filed by the Respondents before the StateAdministrative Tribunal.

1.6 While the matter was pending before the Tribunal, the StateGovernment proceeded further and issued an advertisement through theH.P. Public Service Commission, calling for applications for filling up the3 posts of Labour Officers under the quota of direct recruitment. ThePublic Service Commission completed the recruitment process and

3 hereinafter referred to as ‘the New Rules’.

ABC

Arecommended the names of Respondents No. 4 to 6.The recommendationwas accepted and the said Respondents were appointed. It is not indispute that they joined duties on the 4[th] and 5[th]of November, 2008.Questioning the legality and validity of the said appointments, RespondentsNo. 1 to 3 filed Civil Writ Petition No. 3028/2008 before the High Courtof Himachal Pradesh, which came to be allowed by the Division BenchBof the High Court by the impugned order on 28.12.2009. Challenging thedecision of the Division Bench the State of Himachal Pradesh preferreda Special Leave Petition before this Court, from which the present CivilAppeal arises pursuant to leave being granted on 08.11.2011. Similarly,the direct recruit appointees, Respondents No. 4 to 6 also filed SpecialCLeave Petition, which is numbered Civil Appeal no. 9747/2011 after leavewas granted.

2. The solitary argument advanced on behalf of Respondents No.1 to 3, which was accepted by the Division Bench was that the vacancieswhich arose prior to the promulgation of New Rules were to be filledDonly as per the 1966 Rules and not as per the New Rules. The HighCourt formulated the issue and proceeded to allow the Writ Petition onthe ground that it is covered by the decision of this Court in Y.V. Rangaiahv. J. Sreenivasa Rao (supra).The operative portion of the judgment isextracted herein for ready reference:

E“The question whether the vacancies occurring before theamendment to the Recruitment and Promotion Rules are to befilled up as per the old Recruitment and Promotion Rules orby way of new Recruitment and Promotion Rules is no moreres integra in view of the law laid down by their Lordships ofthis Court in Y.V. Rangaiah and others versus J. SreenivasaFRao, (1983) 3 SCC 284.”

Submissions:

3.1 In these appeals, we heard Shri P.S. Patwalia, Senior Advocateassisted by Advocate-on-Record Shri Abhinav Mukerji, for the Appellant-GState and Shri. Prasanjit Keshvani, Ld. Advocate representing theRespondents and also Shri. Ravindra Kumar Raizada, Senior Advocateassisted by Ms. Divya Roy, Advocate-on-Record appearing for someother Respondents.

3.2 Shri P.S. Patwalia, learned Senior Advocate for the Appellant-State made the following submissions. At the outset, he would submit,H

that there was no challenge to the legality of the New Rules and thereforethe Respondents cannot seek relief which is contrary to the Rules i.e.,filling up the posts by way of promotion as per the Old Rules. Secondly,the inter-departmental letter dated 20.07.2006 followed by the notificationdated 02.01.2007 creating the posts was in furtherance of the new policywhich was brought into effect by the amendments made to the Rules. Itwas therefore contended that the inter-departmental letter dated20.07.2006 cannot be seen as standalone event and that it is part of thelarger policy to restructure the cadre. Thirdly, there is no vested right topromotion, though there is only right to be considered for promotion asper the rules which are in force at the time of such consideration. Fourthly,the recruitment exercise undertaken by the State is completely based onthe policy consideration of the State which the High Court failed to takeinto account. In support of this submission, reliance was placed onjudgments of this Court in K. Ramulu[4], Deepak Agarwal[5]and KrishnaKumar[6]. It was finally contended that the High Court erred in applyingthe decision of Rangaiah which was the case of promotion, while thepresent case is about direct recruitment to the post of Labour Officers.

3.3 Shri Keshwani followed by Shri Raizada, Senior Advocate forthe Respondents made the following submissions. They would contendthat the 7 new posts were created before the promulgation of the NewRules and there was no Governmental Policy regarding the applicabilityof the New Rules retrospectively. Secondly, there is no evidence to showthat the State made conscious decision to keep the posts vacant, to befilled as per the New Rules. On the contrary, they would submit that thecommunication dated 20.07.2006 sanctioning the creation of the postsstated that they must be filled on regular basis. Thirdly, the High Courtwas right in applying the decision of Rangaiah which settled the law onappointments to posts falling vacant prior to the amendment of the rulesby holding that they must be governed by the old rules and not the newrules. Finally, to apply the New Rules to the pending vacancies, theappointing authority must demonstrate that they had (i) taken consciousdecision not to fill the vacancies until the promulgation of the new rulesand (ii) such decision must be for good and valid reason. For thispurpose, reliance is placed on judgments of this Court in K. Ramulu[7],

4 Dr. K. Ramulu & Anr v. Dr. S Suryaprakash Rao (1997) 3 SCC 59.

5 Deepak Agarwal v. State of U.P (2011) 6 SCC 725.

6 Union of India v. Krishna Kumar (2019) 4 SCC 319.

7 Dr. K. Ramulu & Anr v. Dr. S Suryaprakash Rao (1997) 3 SCC 59.

ABC

[2022] 15 S.C.R.

ADeepak Agarwal[8]and D. Raghu[9] to demonstrate that no such effortwas made.

Issue:

4.1 The real question is whether the vacancies which arose priorto the promulgation of the new rules are to be filled only as per the oldBrules and not as per the amended rules? It is argued that this principle isno more res-integra as the Supreme Court recognised such right inRangaiah’s case and it has been followed in large number ofsubsequent decisions. list of such judgments was forwarded to theCourt by the Respondents. On the other hand, while submitting thatCthere is no such right, an even larger list of decisions of this Court thatdistinguished Rangaiah was forwarded to us on behalf of the State.

4.2 We have taken note of the fact that there are large numberof decisions that have either followed the principle in Rangaiah or havedistinguished it. The principle in Rangaiah’s case has given rise to aDnumber of decisions, most of them have disapplied Rangaiah and havein fact, watered-down the principle while distinguishing it. In this view ofthe matter, and for clarity and certainty, it is necessary for us to reviewthe subject and restate the principle in simple and clear terms.

4.3 We will first examine the principle laid down in RangaiahEitself. We will verify it in the context of the constitutional position providedin Chapter XIV of the Constitution relating to services under the State.We will thereafter examine the decisions that followed Rangaiah andalso those that have distinguished it.After restating the principle, we willapply it to the facts of the case for arriving at our decision.

FThe decision in the case of Y.V. Rangaiah v. J. Sreenivasa Rao:

5.1 The Petitioners in Rangaiah’s case were working as LDCsin the Department of Registration and Stamps, Government of A.P. UnderRule 4(a)(1)(i) of the A.P. Registration and Subordinate Service Rules,appointments to the promotional posts of Sub-Registrar Grade II fromLDCs were to be made from the panel of “approved candidates” madeGunder Rule 34 (c). The panel was to be prepared by the prescribedauthority in the month of September every year and it could operate tilla list for the subsequent year was prepared. Importantly, the list had tocontain names of as manypersons as there are vacancies. As the8 Deepak Agarwalv. State of U.P (2011) 6 SCC 725.H9 D. Raghu v. R. Basaveswarudu 2020 SCC Online 124.

approved list was not prepared within the prescribed time, promotionscould not take place in time. In the meanwhile, the amended rules cameinto force, as per which the petitioners lost their chance to be consideredfor promotion. They contended before this Court that their right to beconsidered for appointment for promotion would not be lost with theadvent of new rules as the vacancies occurring prior to the amendmentof the rules were to be filled under the unamended rules. In other words,the contention was that the mandatory requirement under the old ruleswas violated. It is in this context that the Court observed as under:-“9. ….Under the old rules panel had to be prepared everyyear in September. Accordingly, panel should have beenprepared in the year 1976 and transfer or promotion to thepost of Sub-Registrar Grade-II should have been made outof that panel. In that event, the petitioners in the tworepresentation petitions who ranked higher than respondents3 to 15 would not have been deprived of their right of beingconsidered for promotion. The vacancies which occurred priorto the amended rules would be governed by the old rules andnot by the amended rules. It is admitted by counsel for boththe parties that henceforth promotion to the post of Sub-Registrar Grade II will be according to the new rules on thezonal basis and not on the State-wide basis and, therefore,there was no question of challenging the new rules. But thequestion is of filling the vacancies that occurred prior to theamended rules. We have not the slightest doubt that the postswhich fell vacant prior to the amended rules would begoverned by the old rules and not by the new rules.”

(emphasis supplied)

5.2 The question that arose in Rangaiah’s case related to themandatory obligation under the old rules to prepare an approved list ofcandidates and also the number of persons to be placed in the list as perthe vacancies available. It is in this context that the Court observed thatthe vacancies would be governed by the old rules. This decision isnot to be taken to be laying down an invariable principle that vacanciesoccurring prior to the amendment of the rules are to be governed by oldrules. It is important to note that the Court has not identified any vestedright of an employee, as has been read into this judgment in certainsubsequent cases.

A5.3 However, as the observation in Rangaiah’s case has beenconstrued as general principle that vacancies arising prior to theamendment of rules are to be filled only as per the old rules, it is necessaryfor us to examine the correct position of law. For this purpose, we willexamine the constitutional position and the status that governs therelationship between an employee and the State.B

Status of persons serving the Union and the States:

6.1 The relationship between the State and its employees isprovisioned in Part XIV of the Constitution. The provisions of this Partempower the Union and the States to make Laws and executive Rules,toregulate the recruitment, conditions of service[10], tenure[11] andCtermination[12] of persons serving the Union or the States.

6.2 Article 310 provides that, except as expressly provided in theConstitution, every person serving the Union or the States holds officeduring the pleasure of the President or the Governor.

6.3 The legislative power conferred on the Parliament or StateDLegislature, to make Laws, or the executive power conferred on thePresident or the Governor to make Rules under Article 309 is controlledby the doctrine of pleasure embodied in Article 310. This is clear fromthe fact that Article 309 opens with the restrictive clause, ‘subject tothe provision of the Constitution. It is for this reason that the power ofEthe legislature to make laws and the executive to make Rules, for layingdown conditions of services of public servant is always subject to thetenure at the pleasure of the President or the Governor under Article310.

7.1 The Constitutional provision to provide public employment onthe basis of tenure at pleasure of the President or the Governor isFbased on ‘public policy’, ‘public interest’ and ‘public good’. The conceptof holding public employment at pleasure is explained in ConstitutionBench decision of this Court in Union of India v. Tulsiram Patel[13].Therelationship between the Government and its employees, as explained inthis judgment can be formulated as under[14] :-G

10 Article 309, Constitution of India.

11 Article 310, Constitution of India.

12 Article 311, Constitution of India.

13 Union of India v. Tulsiram Patel(1985) 3 SCC 398.

14 The relevant propositions in the Tulsiram case, as identified and extracted in ‘LawRelating to Public Services’, Samaraditya Pal, 3[rd] Edition, Lexis Nexis, 2011is adoptedHfor convenience.

I. Unlike in the United Kingdom, in India it is not subject toany law made by Parliament but is subject only to what isexpressly provided by the Constitution.[15]

II. The pleasure doctrine relates to the tenure of Governmentservant… , … means the period for which an incumbent ofoffice holds it.[16]

III. The position that the pleasure doctrine is not based uponany special prerogative of the Crown but upon public policyhas been accepted by this Court in State of U.P. v. Babu RamUpadhya and Moti Ram Deka v. General Manager, N.E.F.,17Railways, Maligaon, Pandu.

IV. The only fetter which is placed on the exercise of suchpleasure is when it is expressly so provided in the Constitutionitself, that is when there is an express provision in that behalfin the Constitution. Express provisions in that behalf are tobe found in the case of certain Constitutional functionariesin respect of whose tenure special provision is made in theConstitution as, for instance, in clauses (4) and (5) of Article124 with respect to Judges of the Supreme Court, Article 218with respect to Judges of the High Court. Article 148(1) withrespect to the Comptroller and Auditor-General of India,Article 324(1) with respect to the Chief Election Commissioner,and Article 324(5) with respect to the Election Commissionersand Regional Commissioners.[18]

V. Clauses (1) and (2) of Article 311 impose restrictions uponthe exercise by the President or the Governor of State of hispleasure under Article 310(1). These are express provisionswith respect to termination of service by dismissal or removalas also with respect to reduction in rank of civil servantand thus come within the ambit of the expression Exceptasotherwise provided by this ‘Constitution’ qualifying Article310(1). Article 311 is thus an exception to Article 310 andwas described in Parshotam Lal Dhingra v. Union of India,[19]

15 (1985) 3 SCC 398 @ 439

16 Ibid at 440.

17 Ibid at 441

18 Ibidat 447.

19 Ibid at 447

[2022] 15 S.C.R.

as operating as proviso to Article 310(1) though set out ina separate Article.[20]

VI. Article 309, is however, not such an exception. It does notlay down any express provision which would derogate fromthe amplitude of the exercise of pleasure under Article 310(1).BIt merely confers upon the appropriate legislature or executivethe power to make laws and frame rules but this power ismade subject to the provisions of the Constitution. Thus,Article 309 is subject to Article 310(1) and any provisionrestricting exercise of the pleasure of the President orGovernor in an Act or rule made or framed under Article 309Cnot being an express provision of the Constitution, cannotfall within the expression ‘Except as expressly provided bythis Constitution’ occurring in Article 310(1) and would be inconflict with Article 310(1) and must be held to beunconstitutional.21

VII. Clauses (1) and (2) of Article 311 expressly restrict themanner in which Government servant can be dismissed,removed or reduced in rank and unless an Act made or ruleframed under Article 309 also conforms to these restrictions,it would be void. The restrictions placed by clauses (1) andE(2) of Article 311 are two- (i) with respect to the authorityempowered to dismiss or remove Government servantprovided for in clause (1) of Article 311, and (ii) with respectto the procedure for dismissal, removal or reduction in rankof Government servant provided for in clause (2).[22]

(emphasis supplied)

7.2 Regardless of its origin, the doctrine of pleasure incorporatedunder our constitutional scheme is to subserve an important publicpurpose. In Para 44 and 45 of Tulsiram Patel (supra), this Court hasexplained the purpose and object of incorporating this principle:

G“44. Ministers frame policies and Legislatures enact lawsand lay down the mode in which such policies are to be carriedout and the object of the legislation achieved. In many cases,

20 Ibid at 447.21 Ibid at 44722 Ibid at 447H

in Welfare State such as ours, such policies and statutes areintended to bring about socio-economic reforms and the upliftof the poor and disadvantaged classes. From the nature ofthings the task of efficiently and effectively implementing thesepolicies and enactments, however, rests with the civil services.The public is, therefore, vitally interested in the efficiency andintegrity of such services. Government servants are after allpaid from the public exchequer to which everyone contributeseither by way of direct or indirect taxes. Those who are paidby the public and are charged with public administration forpublic good must, therefore, in their turn bring to the dischargeof their duties sense of responsibility. The efficiency ofpublic administration does not depend only upon the topechelons of these services. It depends as much upon all theother members of such services, even on those in the mostsubordinate posts.For instance, railways do not run becauseof the members of the Railway Board or the General Managersof different railways or the heads of different departments ofthe railway administration. They run also because of engine-drivers, firemen, signalmen, booking clerks and those holdinghundred other similar posts. Similarly, it is not theadministrative heads who alone can see to the properfunctioning of the post and telegraph service. For serviceto run efficiently there must, therefore, be collective senseof responsibility. But for Government servant to dischargehis duties faithfully and conscientiously, he must have feelingof security of tenure. Under our Constitution, this is providedfor by the Acts and rules made under Article 309 as also bythe safeguards in respect of the punishments of dismissal,removal or reduction in rank provided in clauses (1) and (2)of Article 311. It is, however, as much in public interest andfor public good that Government servants who are inefficient,dishonest or corrupt or have become security risk shouldnot continue in service and that the protection afforded tothem by the Acts and rules made under Article 309 and byArticle 311 be not abused by them to the detriment of publicinterest and public good. When situation as envisaged inone of the three clauses of the second proviso to clause (2) ofArticle 311 arises and the relevant clause is properly applied

Aand the disciplinary inquiry dispensed with, the concernedGovernment servant cannot be heard to complain that he isdeprived of his livelihood. The livelihood of an individual isa matter of great concern to him and his family but hislivelihood is matter of his private interest and where suchlivelihood is provided by the public exchequer and the takingBaway of such livelihood is in the public interest and for publicgood, the former must yield to the latter. These consequencesfollow not because the pleasure doctrine is specialprerogative of the British Crown which has been inherited byIndia and transposed into our Constitution adapted to suitCthe constitutional set-up of our Republic but because publicpolicy requires, public interest needs and public good demandsthat there should be such doctrine.45. It is thus clear that the pleasure doctrine embodied inArticle 310(1), the protection afforded to civil servants byDclauses(1) and (2) of Article 311 and the withdrawal of theprotection under clause (2) of Article 311 by the secondproviso thereto are all provided in the Constitution on theground of public policy and in the public interest and are forpublic good.”

E8. The principle of public servant holding office at the pleasureof the President or the Governor is incorporated in the Constitutionitself (under Article 310). This has direct bearing on the powers of theParliament or the legislature to make Laws or the executive to makeRules for specifying conditions of service provided under Article 309.This position is clearly explained in the above-referred passages. In B.P.FSinghal v. Union of India[23 ]this Court explained the consequence ofholding the office during the pleasure of the President or the Governor:

“33. The doctrine of pleasure as originally envisaged inEngland was prerogative power which was unfettered. Itmeant that the holder of an office under pleasure could beGremoved at any time, without notice, without assigning cause,and without there being need for any cause. But where therule of law prevails, there is nothing like unfettered discretionor unaccountable action. The degree of need for reason mayvary. The degree of scrutiny during judicial review may vary.

H23 B.P. Singhal v. Union of India (2010) 6 SCC 331.

But the need for reason exists. As result, when theConstitution of India provides that some offices will be heldduring the pleasure of the President, without any expresslimitations or restrictions, it should however necessarily beread as being subject to the “fundamentals ofconstitutionalism”.

9. It is in this background that the employment of public servantis to be understood. Though the relationship between the employee andthe State originates in contract, but by virtue of the constitutionalconstraint, coupled with the legislative and executive rules governing theservice, the relation attains unique position. Identifying such arelationship as being ‘status’, as against contract, this Court in RoshanLal Tandon v. Union of India[24],explained what such ‘status’constitutes. We have extracted hereinbelow the exposition of the conceptof ‘status’ as explained by the Constitution Bench for ready reference.In this case, the petitioner Roshan Lal Tandon was appointed as Train-Examiner – Grade ‘D’. At the time when he joined the service, thepromotion to the next post in Grade ‘C’ was governed by certain ruleswhich later came to be amended. Questioning the amendment, hecontended that he had right to be promoted to Grade ‘C’ when hejoined the service and such right could not have been altered by wayof subsequent amendment. Rejecting this argument, this Court explainedthe relationship of Government employment as ‘status’ as under:

“6. We pass on to consider the next contention of thepetitioner that there was contractual right as regards thecondition of service applicable to the petitioner at the time heentered Grade ‘D’ and the condition of service could not bealtered to his disadvantage afterwards by the notificationissued by the Railway Board. It was said that the order of theRailway Board dated January 25, 1958, Annexure ‘B’, laiddown that promotion to Grade ‘C’ from Grade ‘D’ was to bebased on seniority-cum-suitability and this condition of servicewas contractual and could not be altered thereafter to theprejudice of the petitioner. In our opinion, there is no warrantfor this argument. It is true that the origin of Governmentservice is contractual. There is an offer and acceptance inevery case. But once appointed to his post or office the

24 Roshan Lal Tandon v. Union of India (1968) 1 SCR 185.

[2022] 15 S.C.R.

AGovernment servant acquires status and his rights andobligations are no longer determined by consent of bothparties, but by statute or statutory rules which may be framedand altered unilaterally by the Government. In other words,the legal position of Government servant is more one of-status than of contract. The hallmark of status is theBattachment to legal relationship of rights and duties imposedby the public law and not by mere agreement of the parties.The emolument of the Government servant and his terms ofservice are governed by statute or statutory rules which maybe unilaterally altered by the Government without the consentCof the employee. It is true that Article 311 imposesconstitutional restrictions upon the power of removal grantedto the President and the Governor under Article 310. Butit isobvious that the relationship between the Government and itsservant is not like an ordinary contract of service between amaster and servant. The legal relationship is something entirelyDdifferent, something in the nature of status. It is much morethan purely contractual relationship voluntarily entered intobetween the parties. The duties of status are fixed by the lawand in the enforcement of these duties, society has an interest…

7. We are therefore of the opinion that the petitioner has noEvested contractual right in regard to the terms of his serviceand that Counsel for the petitioner has been unable to makegood his submission on this aspect of the case.”

10. The principle laid down in Roshan Lal Tandon’s case isfollowed in number of decisions of this Court.[25 ]The following are theFpropositions emanating from the principles laid down in these precedents.

(i)Except as expressly provided in the Constitution, everyperson employed in the civil service of the Union or theStates holds office during the pleasure of the President orthe Governor (Article 310). Tenure at pleasure is aGconstitutional policy for rendering services under the statefor public interest and for the public good, as explained inTulsiram Patel (supra).

25 Union of India v. Arun Kumar Roy, (1986) 1 SCC 677; Narayana v. Purushotham(2008) 5 SCC 416; Brij Lal Mohan v. Union of India (2012) 6 SCC 502.H

(ii)The Union and the States are empowered to make lawsAand rules under Articles 309, 310 and 311 to regulate therecruitment, conditions of service, tenure and termination.The rights and obligations are no longer determined byconsent of the parties but by the legal relationship of rightsand duties imposed by statute or the rules. The services,Bthus, attain status.

(iii)The hallmark of status is in the legal rights and obligationsimposed by laws that may be framed and altered unilaterallyby the Government without the consent of the employee.

(iv)In view of the dominance of rules that govern therelationship between the Government and its employee, allmatters concerning employment, conditions of serviceincluding termination are governed by the rules. There areno rights outside the provision of the rules.

(v)In recruitment by State, there is no right to be appointedbut only right to be considered fairly. The process ofrecruitment will be governed by the rules framed for thesaid purpose.

(vi)Conditions of service of public servant, including mattersof promotion and seniority are governed by the extant rules.There are no vested rights independent of the rulesgoverning the service.[26]

(vii)With the enactment of laws and issuance of rules governingthe services, Governments are equally bound by the mandateof the rule. There is no power or discretion outside theprovision of the rules governing the services and the actionsof the State are subject to judicial review.[27]

11. In view of the above principles, flowing from the constitutionalstatus of person in employment with the State, we have no hesitationin holding that the observations in Rangaiah that posts which fell vacantprior to the amendment of Rules would be governed by old Rulesand not by new Rules do not reflect the correct position of law. Wehave already explained that the status of Government employee

26 Syed Khalid Rizivi V Union of India 1993 Supp (3) SCC 575 ;Hardev Singh vUnion of India 2011(10) SCC 121

27 Rajasthan Public Service Commission v. Chanan Ram, (1998) 4 SCC 202.

Ainvolves relationship governed exclusively by rules and that there areno rights outside these rules that govern the services. Further, the Courtin Rangaiah’s case has not justified its observation by locating such aright on any principle or on the basis of the new Rules.[28]As there are alarge number of judgments which followed Rangaiah under theassumption that an overarching principle has been laid down in Rangaiah,Bwe have to necessarily examine the cases that followed Rangaiah. Wewill now examine how subsequent decisions understood, applied ordistinguished Rangaiah.

Decisions that followed Y.V. Rangaiah & Ors. v. J. SreenivasaRaoC

12.1 The first case which followed Rangaiah is P. GaneshwarRao v. State of A.P.[29 ]The Court was concerned about recruitment tothe post of Assistant Engineer governed by the special rules.[30] Thequestion that arose for consideration was whether the vacancies arisingin the category of Assistant Engineers before the amendment to theDspecial rules were to be considered as per the amended or the unamendedrules. Having considered explanation (c) and the proviso of the specialrules which used the expression “vacancies arising in the category”,the Court concluded that the intendment of the amended rule itself is tofill vacancies based on the rules that existed prior to the amendment ofEthe rules. This is case that turned on the wording of the amended ruleitself. The Court observed as under:

“7. …The only question which has now to be considered iswhether the amendment made on April 28, 1980 to the SpecialRules applied only to the vacancies that arose after the dateFon which the amendment came into force or whether it appliedto the vacancies which had arisen before the said date also.The crucial words in the Explanation which was introducedby way of amendment in the Special Rules on April 28, 1980were “37 1/2 per cent of the substantive vacancies arising inthe category of Assistant Engineers shall be filled by the directG28 In fact, the case of Dr. K. Ramulu & Anr v. Dr. S Suryaprakash Rao(supra) is exactlythis where there was specific requirement in the new amended rules to fill up the oldvacancies as per the new amended rules. The repealed rules had provision for fillingup the past vacancies as per the new rules. Also, in P. Ganeshwar Rao v. State of A.P.,1988 Supp SCC 740the intendment was to fill the vacancies as per the old rules.29 P. Ganeshwar Rao v. State of A.P., 1988 Supp SCC 740.H30 AP Panchayat Raj Engineering Services (Special) Rules, 1963.

recruitment”. If the above clause had read “37 1/2 per centof the substantive vacancies in the category of AssistantEngineers shall be filled by the direct recruitment” perhapsthere would not have been much room for discussion. Thesaid clause then would have applied even to the vacancieswhich had arisen prior to the date of the amendment but whichhad not been filled up before that date. We feel that there ismuch force in the submission made on behalf of the appellantsand the State Government that the introduction of the word“arising” in the above clause made it applicable only to thosevacancies which came into existence subsequent to the dateof amendment.”

12.2 The decision, in this case, is based on the position of theamended rule. Even in this case, the Court has not identified any generalprinciple of vested right of public servant to be considered for vacanciesarising prior to the amendment of the rules. Without any analysis, theCourt observed that the principle as laid down in Rangaiah is applicableand proceeded with the interpretation of the new rules.

13.1 N.T. Devin Katti v. Karnataka Public ServiceCommission[31], is case concerning appointment to the post of Tehsildar,a selection post governed under 1975 Rules[32], to be filled from in-servicecandidates. While the advertisement was issued in May 1975, theprocedure for selection of candidates by following the rules of reservationin favour of SC/ST candidates was brought into force on 09 July 1975.The Court held that as the advertisement expressly stated that theselection shall be made in accordance with the existing rules, thecandidates who have appeared in the written test and have undergoneviva voce acquired vested right for being considered for selection interms of the advertisement. The Court held that, as the rules have noretrospective effect, the recruitment process cannot be affected. It is inthis context, that the Court referred to the case of Rangaiah and P.Ganeshwar Rao. The Court also relied on Calton[33] which was relatedto the appointment for the post of Principal under the U.P. IntermediateEducation Act, 1921, and Mahenderan’s[34] case which was related to

31 N.T. Devin Katti v. Karnataka Public Service Commission, (1990) 3 SCC 157.

32 Karnataka Administrative Services (Tehsildars) Recruitment (Special) Rules, 1975.

33 A.A. Calton v. Director of Education and Anr (1983) 3 SCC 33.

34 P. Mahendran and Ors v. State of Karnataka (1990) 1 SCC 411.

Athe recruitment process for direct appointment to the post of Motor VehicleInspector. Changes made to the rules after the issuance of theadvertisement was the question under consideration. The Court observed:

“11. There is yet another aspect of the question. Whereadvertisement is issued inviting applications for directBrecruitment to category of posts, and the advertisementexpressly states that selection shall be made in accordancewith the existing rules or Government orders, and if it furtherindicates the extent of reservations in favour of variouscategories, the selection of candidates in such case must bemade in accordance with the then existing rules andCGovernment orders. Candidates who apply, and undergowritten or viva voce test acquire vested right for beingconsidered for selection in accordance with the terms andconditions contained in the advertisement, unless theadvertisement itself indicates contrary intention. Generally,Da candidate has right to be considered in accordance withthe terms and conditions set out in the advertisement as hisright crystallises on the date of publication of advertisement,however he has no absolute right in the matter. If therecruitment Rules are amended retrospectively during thependency of selection, in that event selection must be held inEaccordance with the amended Rules. Whether the Rules haveretrospective effect or not, primarily depends upon thelanguage of the Rules and its construction to ascertain thelegislative intent. The legislative intent is ascertained eitherby express provision or by necessary implication; if theFamended Rules are not retrospective in nature the selectionmust be regulated in accordance with the rules and orderswhich were in force on the date of advertisement.Determination of this question largely depends on the factsof each case having regard to the terms and conditions setout in the advertisement and the relevant rules and orders.GLest there be any confusion, we would like to make it clearthat candidate on making application for post pursuantto an advertisement does not acquire any vested right ofselection, but if he is eligible and is otherwise qualified inaccordance with the relevant rules and the terms containedHin the advertisement, he does acquire vested right of being

considered for selection in accordance with the rules as theyexisted on the date of advertisement. He cannot be deprivedof that limited right on the amendment of rules during thependency of selection unless the amended rules areretrospective in nature.”

13.2 This case concerns appointment to the post pursuant to anadvertisement prescribing certain qualifications. Candidates who haveapplied on the basis of such qualifications have right to be consideredon the basis of the advertisement and such right cannot be taken awaywithout making retrospective amendment to rules is the ratio of thiscase. The issue involved in this case is different from the one confrontingus. The case does not throw much light on the issue involved in thepresent case.

14. In State of Rajasthan v. R. Dayal[35], selection for 9 existingvacancies which were to be filled by the Rajasthan Service of Engineers(Building and Roads Branch) Rules 1954 was in question. In shortorder, relying on Rangaiah, this Court observed that vacancies existingprior to the amendment of the rules are required to be filled in accordancewith the law existing as on the date when the vacancies arose. It washeld:

“6. As consequence, any appointment made as on that dateshould be consistent with the above Rule. In support thereof,he placed reliance on the decision of this Court in Y.V.Rangaiah v. J. Sreenivasa Rao.

8. Therefore, it is not in dispute and cannot be disputed thatwhile selecting officers, minimum requisite qualifications andexperience for promotion specified in the relevant column,should be taken into consideration against vacancies existingas on 1st April of the year of selection. But since the Rulescame to be amended and the amendment became effectivewith immediate effect and clause (11-B) of Rule 24-A indicatesthat options have been given to the Government or theAppointing Authority, as the case may be, to revise the selectlist as existing as per the law as on the date of the appointmentor as may be directed by competent court, selection is

35 State of Rajasthan v. R. Dayal (1997) 10 SCC 419.

Arequired to be made by the concerned DPC. An appointmentmade, after selection as per the procedure, to the vacanciesexisting prior to the amendment, is valid. But the question iswhether selection would be made, in the case of appointmentto the vacancies which admittedly arose after the amendmentof the Rules came into force, according to the amended RulesB-or in terms of Rule 9 read with Rules 23 and 24A, asmentioned hereinbefore. This Court has considered the similarquestion in para 9 of the judgment above-cited. This Courthas specifically laid that the vacancies which occurred priorto the amendment of the Rules would be governed by theCoriginal Rules and not by the amended Rules. Accordingly,this Court had held that the posts which fell vacant prior tothe amendment of the Rules would be governed by the originalRules and not the amended Rules. As necessary corollary,the vacancies that arose subsequent to the amendment of theRules are required to be filled in in accordance with the lawDexisting as on the date when the vacancies arose. Undoubtedly,the selection came to be made prior to the amendment of theRules in accordance with law then existing since theanticipated vacancies also must have been taken intoconsideration in the light of Rule 9 of the Rules. But after theEamended Rules came into force, necessarily the amended Ruleswould be required to be applied for and given effect to. But,unfortunately, that has not been done in the present case.The two courses are open to the Government or the AppointingAuthority, viz., either to make temporary promotions for theensuing financial year until the DPC meets or in exercise ofFthe power under Rule 24-A(11-B), they can revise the panelalready prepared in accordance with the Rules and makeappointments in accordance therewith.”

15.1 In B.L Gupta v. M.C.D.[36], appointment to the post of AssistantAccountant of DESU under MCD was under consideration. These postsGwere to be filled in accordance with the statutory rules framed in 1978which provided for an examination. 171 vacancies arose for the saidposts in 1993. Only 79 persons who appeared in the examination wereappointed. Writ petitions were filed in the High Court of Delhi praying

for all 171 vacancies to be filled as per the examination. During thependency of the writ petitions, the rules were amended in 1995 whichprovided that 80% of the posts to be filled by promotion and the remaining20% by examination. The High Court while deciding these writ petitionsheld that 79 posts were validly filled and the remaining vacancies wereto be filled as per the amended rules. The question was whether theremaining vacancies are to be filled as per the amended rules or theunamended rules. Allowing the appealsthe Court held:“9. When the statutory rules had been framed in 1978, thevacancies had to be filled only according to the said Rules.The Rules of 1995 have been held to be prospective by theHigh Court and in our opinion this was the correct conclusion.This being so, the question which arises is whether thevacancies which had arisen earlier than 1995 can be filledas per the 1995 Rules. Our attention has been drawn by MrMehta to decision of this Court in the case of N.T. DevinKatti v. Karnataka Public Service Commission [(1990) 3 SCC157]. In that case after referring to the earlier decisions inthe cases of Y.V. Rangaiah v. J. Sreenivasa Rao [(1983) 3SCC 284] , P. Ganeshwar Rao v. State of A.P. [1988 SuppSCC 740] and A.A. Calton v. Director of Education [(1983)3 SCC 33] it was held by this Court that the vacancies whichhad occurred prior to the amendment of the Rules would begoverned by the old Rules and not by the amended Rules.Though the High Court has referred to these judgments, butfor the reasons which are not easily decipherable itsapplicability was only restricted to 79 and not 171 vacancies,which admittedly existed. This being the correct legal position,the High Court ought to have directed the respondent todeclare the results for 171 posts of Assistant Accountants andnot 79 which it had done.

10. …The Rules of 1978 prescribe the mode in which thepromotions can be made. This mode has to be followed beforethe appointments could be made. If no statutory rules hadexisted, it may have been possible, though we express noopinion on it, that the existing incumbents may have beenregularised. Where, however, statutory rules exist, theappointments and promotions have to be made in accordance

874SUPREME COURT REPORTS

Awith the statutory rulesspecially where it has not been shownto us that the Rules gave the power to the appointing authorityof relaxing the said Rules. In the absence of any such powerof relaxation, the appointment as Assistant Accountant couldonly be made by requiring the candidates to take theexamination which was the method which was prescribed byBthe 1978 Rules.”

15.2 In this short judgment, the Court proceeded on the premisethat Rangaiah and the subsequent decisions such as N.T. Devin Kattiheld that vacancies occurring prior to the amendment should be governedby the old rules. There is neither discussion on the Constitutional position,Cnor is there reference to the principle governing service conditions ofa Government servant as laid down in Roshan Lal Tandon’s case. Sufficeto say that the Court has in its order referred to and followed Rangaiah.This is the fourth case which has merely followed Rangaiah withoutexamining the principle.D[[37]]

16.1 In Arjun Singh Rathore v. B.N. Chaturvedi,[[37]] the Courtfollowed Rangaiah in its short order. The case related to promotion tothe post of Area Managers or Senior Managers under the relevant Rulesof 1988. While 15 vacancies were available for promotion, the rulescame to be amended in 1998. Reversing the decision of the High Court,Ethis Court observed that the vacancies had to be filled as per the vacanciesthat existed prior to the amendment of the rules under which the processof interviews and selection had already taken place.The Court followedRangaiah and observed:“6. The above legal position has not been seriously disputedFby the learned counsel for Respondents 6 and 7. We aretherefore of the opinion that the vacancies which had occurredprior to the enforcement of the Rules of 1998 had to be filledin under the Rules of 1988 and as per the procedure laid”down therein...

G16.2 It is only to ensure detailed analysis and review of thedecisions that have followed Rangaiah that we are referring to each ofthese judgments. We notice that the follow up cases have simply referredto Rangaiah when the Court felt that the selection process must be asper the rules which existed prior to the amendment. None of these cases

H37 Arjun Singh Rathore v. B.N. Chaturvedi, (2007) 11 SCC 605.

recognise the existence of any vested right, nor do they referred toConstitutional position or the principle laid down in Roshan Lal Tandon’scase.

17.1 In State of Bihar v. Mithilesh Kumar,[38 ]the Court wasconcerned with the appointment to the posts of Instructors and AssistantInstructors as per an advertisement published on 30.12.2001. Pursuantto the advertisement, the writ petitioner applied and was called for aninterview on 09.11.2002. Thereafter, on 14.11.2002, instructions wereissued not to send any further recommendations to the said post as thescheme under which the appointments to the post were called for wasno longer valid. The respondent therein was declared successful in theinterview but was not appointed and therefore he approached the Court.While upholding the decision of the High Court and dismissing the appeal,this Court following Rangaiah held:

“14. The learned counsel submitted that the conditions of theadvertisement inviting applications for filling up the posts ofAssistant Instructor (Electronics) in Kamla Nehru SocialService Institute for Handicapped and Rehabilitation TrainingCentre, Patna, could not have been altered to the prejudiceof the respondent on account of decision taken subsequentlyto have persons with disabilities trained by professionallyestablished NGOs/institutions. Reliance was placed on thedecision of this Court in Y.V. Rangaiah v. J. Sreenivasa Rao,where this Court in similar circumstances had held that whenservice rules are amended, vacancies which had occurredprior to the amended Rules would be governed by the oldRules and not by the amended Rules.

23. While person may not acquire an indefeasible right toappointment merely on the basis of selection, in the instantcase the fact situation is different since the claim of therespondent to be appointed had been negated by change in”policy after the selection process had begun.

17.2 This is case of selection by way of an advertisement andnot promotion of Government servant from post held by him. TheCourt observed that the terms of the advertisement could not have been

38 State of Bihar v. Mithilesh Kumar (2010) 13 SCC 467.

Aaltered to the prejudice of the respondent on the basis of decisiontaken subsequently. There was no occasion for the Court to considerthe status of public servant in the context of rules governing his service.

18. In Kulwant Singh v. Daya Ram[39], the Punjab Police Rules,1934 dealt with the promotion of Constables to the post of HeadBConstables. The 1982 amendment to the Rule 13.7 mandated thatconstables considered for promotion to be sent to promotional courseon the basis of seniority-cum-merit. batch of 15 constables was selectedon the basis of the 1982 rules and was sent for the course in April 1988.Thereafter, 71 vacancies arose and another amendment to the rule in1988 was made which provided for sending constables to the promotionalCcourse on merit-cum-seniority basis. The issue arose when the SeniorSuperintendent of Police issued letter to the effect that new ruleswould apply to the said promotions. Interdicting the decision and reiteratingthe decision of the Tribunal which followed Rangaiah and the subsequentdecisions referred to in paras 38 to 41, the Court observed:-D“41. In B.L. Gupta [B.L. Gupta v. MCD, (1998) 9 SCC 223]the Court reiterated the principle stated in Y.V. Rangaiah [Y.V.Rangaiah v. J. Sreenivasa Rao, (1983) 3 SCC 284] , P.Ganeshwar Rao [P. Ganeshwar Rao v. State of A.P., 1988Supp SCC 740] and A.A. Calton v. Director ofEEducation [(1983) 3 SCC 33] wherein it had been held thatthe vacancies which had occurred prior to the amendment ofrules were governed by the old rules and not by the amendedrules. In Arjun Singh Rathore [Arjun Singh Rathore v. B.N.Chaturvedi, (2007) 11 SCC 605] the views stated in Y.V.Rangaiah [Y.V. Rangaiah v. J. Sreenivasa Rao, (1983) 3 SCCF284] and R. Dayal [State of Rajasthan v. R. Dayal, (1997)10 SCC 419] were reiterated.

42. The reference to the aforesaid proposition of law makes itvivid that the decision rendered by the Tribunal in AcchharChandcase was in accordance with the precedent of this CourtGand, in fact the Tribunal clearly meant that.”19.1 In Richa Mishra v. State of Chhattisgarh[40], the issue relatedto appointment to the post of DSP. The State Government sent

39 Kulwant Singh v. Daya Ram, (2015) 3 SCC 177.H40 Richa Mishra v. State of Chhattisgarh, (2016) 4 SCC 179.

requisition for filling up various vacancies including the post of DSP inaccordance with the 2000 Rules. Thereafter, the Chhattisgarh PoliceExecutive (Gazetted) Service Recruitment and Promotion Rules, 2005were published. The appellant therein participated in the selection processand she qualified at each stage. However, her name was still not includedin the list of successful candidates since the 2000 Rules provided thatthe upper age limit for appointment to the post of DSP was 25 years andshe had already crossed the said age limit and therefore was ineligiblefor the post in question. The question that arose for consideration waswhether the 2000 rules or the 2005 rules would apply. Having examinedthe requisition for appointment, which was made prior to the advent ofthe new rules and further applying the principle of Rangaiah the Courtobserved as under:

“18. The High Court held that the first and second requisitionsto commence recruitment process against the vacant seats tothe post of DSP were made when the 2000 Rules were in force.Therefore, recruitment was rightly undertaken under the 2000Rules. The admitted facts are that the process of selectionstarted before the 2005 Rules were promulgated with therequisitions dated 27-9-2004 and 26-3-2005 sent by the StateGovernment to CPSC.At that time, the 2000 Rules were invogue. For this reason, even in the requisition it was mentionedthat appointments are to be made under the 2000 Rules.Further, it is also an admitted fact that the vacancies inquestion which were to be filled were for the period prior to2005. Such vacancies needed to be filled in as per those Rulesi.e. the 2000 Rules. This is patent legal position which can bediscerned from Y.V. Rangaiah v. J. Sreenivasa Rao[Y.V.Rangaiah v. J. Sreenivasa Rao, (1983) 3 SCC 284]….”

19.2 As is evident from the above, this decision also appliedRangaiah in the context of the facts and without any reference to theConstitutional position of the employment of Government servant andthe principle laid down in Roshan Lal Tandon’s case.

Analysis:

20.1 Except in the case of P. Ganeshwar Rao, which not onlyfollowed Rangaiah but also observed that the new Rules enabled thevacancies to be filled as per the Rules that existed prior to the amendment,

Aall the other judgments adopted the principle in Rangaiah and directedappointments to be made as per the rules that existed when the vacanciesarose. These cases do not discuss any source of such right of aGovernment employee. There is also no reference to any rule, be it oldor new, to enable effectuation of such right. None of these cases referto constitutional position of status or the principle laid down in RoshanBLal Tandon’s case.

20.2 We will now discuss cases that have distinguished Rangaiah.These decisions adopt different reasons for not following the principlelaid down in Rangaiah.

CDecisions that have distinguished Rangaiah’scase:

21. In Union of India v. S.S. Uppal[41]the respondent thereinwas being considered for absorption to IAS for vacancy that arose in01.02.1989. The Indian Administrative Services (Regulation of Seniority)Rules, 1987 were amended on 03.02.1989. The respondent who wasDappointed on 15.02.1989 claimed that his seniority must be calculatedfrom the date on which the vacancy arose, i.e., 01.02.1989 and for thispurpose he relied on the decision in Rangaiah and that was accepted bythe Tribunal. Reversing the decision of the Tribunal, this Court held thatRangaiah has no application at all. Further, relying on the decision inShankarshan Dash v. Union of India[42], which held that the existenceEof vacancy does not give rise to legal right to selected candidate,the Court held as under:

“15. The facts in the case before us are entirely different.There has been no infraction of any rule or violation of anyinstruction issued by the Government. Respondent 1 has notFbeen able to point out any violation of rules or regulationson the part of the Government by which he was prejudiciallyaffected.

17. …He was actually inducted into the service on 15-2-1989.GThe rules which were in force on that day for determinationof seniority will clearly apply to his case. It is true that Uppal’sname was included in panel drawn up sometime in August

41 Union of India v. S.S. Uppal, (1996) 2 SCC 168.42 Shankarshan Dash v. Union of India (1991) 3 SCC 47.H

1988. But mere inclusion of his name in the panel did notconfer upon him any right to automatic appointment to theIAS. Nor can it be said that he was to be treated as to havebeen appointed from the date when suitable post fell vacant.… The seniority of an officer appointed into the IAS isdetermined according to the seniority rules applicable on thedate of appointment to the IAS. Weightage in seniority cannotbe given retrospective effect unless it was specifically providedin the rule in force at the material time…”

22. State Bank of India v. Kashinath Kher[43 ]is again casewhere the employee relied on the principle in Rangaiah to contend thatpromotion to the post of Middle Management Grade Scale- II is to bemade on the basis of vacancies that arose in 1988, 1989 and 1990 withoutapplying the new policy that came into effect from 1990. In the firstplace, this is case involving service under the State Bank of India, notbeing service under the State governed by laws or rules made underArticle 309. However, as we are considering the principle laid down inRangaiah and also the decisions that followed and dissented it, we haveexamined this case. It is interesting to note that the learned Judgesassumed that Rangaiah’s case considered question of “retrospectiveapplication of therule to the vacancies existing prior to the rules”. Infact, Rangaiah does not observe anything like that and we would leaveit at this. This Court observed:

“14. The learned counsel for the respondents is not right incontending that the vacancies have arisen in 1988, 1989 and1990 and that the rule of relaxation cannot be given in 1990to the vacancies that have arisen in 1988, 1989 and 1990and be considered according to the rules in vogue when thevacancies had arisen. It is seen that the policy decision wastaken for the first time on 21-3-1990 effective from 1-8-1988.In other words, the promotions are required to be consideredretrospectively in the light of the decision to fill up thevacancies existing as on August 1988. Therefore, it is not acase of applying rule which was made later to vacancywhich was existing anterior thereto. Equally, it is not correctto state that this principle is an unjust principle. It is true thatthis Court in Y.V. Rangaiah v. J. Sreenivasa Rao [(1983) 343 State Bank of India v. Kashinath Kher (1996) 8 SCC 762.

ASCC 284] had considered the question of retrospectiveapplication of the rule to the vacancies existing prior to therules, in paragraphs 7 and 8 of the judgment.But in thatcase, the rule was in vogue for Sub-Registrars Grade II inRegistration Department of Andhra Pradesh. But no list wasprepared, promotion was not made according to the existingBrules. The list of eligible candidates was prepared accordingto the amended Rules, consequential to the zonal systemintroduced in Andhra Pradesh under Article 371-D of theConstitution and Presidential Order. It was held that thevacancies that had arisen prior to making the amendment toCthe Rules should be filled in accordance with the rules thatwere in vogue prior to the amendment and vacancies thatarose subsequently should be filled according to the amended”Rules. That situation does not apply to the factual matrix.

23.1 K.Ramuluv. S. Suryaprakash Rao[44], is an important decision.DThe issue related to applicability of the A.P. Animal Husbandry ServicesRules, 1996(which repealed the existing 1977 rules) to vacancies thatarose before the 1996 amendment to the promotional post of AssistantDirector. Under Rule 4,the Government was to prepare and operate thepanel for the year 1995-96 for promotion to the said post. However, aconscious decision was taken in 1988 by the Government not to fill upEany vacancies until the repealed rules were duly amended. In light ofthis, the Government did not prepare and finalise the panel for promotionto the post of Assistant Veterinary Surgeons to Assistant Director forthe year 1995-96. It was held that:

“12. …But the question is whether the ratio in Rangaiah caseFwould apply to the facts of this case. The Government thereinmerely amended the Rules, applied the amended Rules withouttaking any conscious decision not to fill up the existingvacancies pending amendment of the Rules on the date thenew Rules came into force.It is true, as contended by MrGH.S. Gururaja Rao, that this Court has followed the ratiotherein in many decision and those cited by him are P.Ganeshwar Rao v. State of A.P., P. Mahendran v. State ofKarnataka, A.A. Calton v. Director of Education, N.T. DevinKatti v. Karnataka Public Service Commission, Ramesh Kumar

H44 K. Ramulu v. S. Suryaprakash Rao (1997) 3 SCC 59.

Choudha v. State of M.P. In none of these decisions, asituation which has arisen in the present case had come upfor consideration.

13. It is seen that since the Government have taken consciousdecision not to make any appointment till the amendment ofthe Rules, Rule 3 of the General Rules is not of any help tothe respondent...

15. Thus, we hold that the first respondent has not acquiredany vested right for beingconsidered for promotion inaccordance with the repealed Rules in view of the policydecisiontaken by the Government which we find is justifiableon the material available from the record placed before us.We hold that the Tribunal was not right and correct in directingthe Government to prepare and operate the panel forpromotion to the post of Assistant Directors of AnimalHusbandry Department in accordance with the repealed Rulesand to operate the same.”

23.2 This judgment clearly recognises the principle that policydecision taken by the Government in public interest would prevail overany claim to fill up the vacancies. Further, when such decision is taken,the employee has no vested right for being considered for promotion inaccordance with repealed rules.

24.1 In Rajasthan Public Service Commission v. Chanan Ram[45]an advertisement for direct recruitment to 23 posts of Assistant Director(Junior) under Rules, 1986[46] was released on 05.11.1993. The respondenttherein applied in pursuance of the said advertisement. Further, the lastdate for applying in pursuance of this advertisement was 31.12.1993.However, on 28.12.1993, three days prior to the last date for applications,the State Government asked the RPSC not to proceed with therecruitments. Thereafter, on 19.04.1995, the rules were amended andconsequently, the aforementioned advertisement was cancelled. Anotherconsequence of the amendment was that the post of Assistant Director(Junior) was abolished and restructured as Marketing Officer. freshadvertisement for 26 posts of Marketing Officer was released and the

45 Rajasthan Public Service Commission v. Chanan Ram, (1998) 4 SCC 202.

46 Rajasthan Agricultural Marketing Services Rules, 1986.

A23 posts, in respect of which the advertisement was issued, were carriedforward. The respondent successfully contended before the High Courtthat the recruitment must be based on the rules that existed at the timeof vacancies by relying on the decision on Rangaiah and the subsequentcases that followed it. Rejecting the argument and allowing the appealthis Court held:B

“15…..On the contrary three-Judge Bench judgment of thisCourt in the case of Jai Singh Dalal v. State of Haryana wouldsquarely get attracted on the facts of the present case. A.M.Ahmadi J., speaking for the three-Judge Bench in para 7 ofthe Report relying on an earlier judgment of this Court inCcase of State of Haryana v. Subash Chander Marwaha laiddown that when the special process of recruitment had notbeen finalised and culminated into select list the candidatedid not have any right to appointment. In this connection, itwas observed that the recruitment process could be stoppedDby the Government at any time before candidate has beenappointed. candidate has no vested right to get the processcompleted and at the most the Government could be requiredto justify its action on the touchstone of Article 14 of theConstitution.

E16.In the facts of the present case it cannot even be suggestedthat the action of the State of Rajasthan was in any wayarbitrary in intercepting the earlier recruitment processpursuant to the first advertisement dated 05-11-1993 AnnexureP-1 as the Rules themselves had got amended and the postsearlier advertised had ceased to exist.”F

24.2 As is evident from the above, after referring to the decisionsin Rangaiah, P. Ganeshwar and other decisions, the Court adopted theprinciple that the State has right to stop recruitment process at anytime before the appointment takes place. This is to say that there is novested right to get the process completed. This is important for the reasonGthat while it holds that there is no right of an employee, it recognises theobligation of State to justify its action on the touchstone of the Article14 of the Constitution.

25.1 In G. Venkateshwara Rao v. Union of India[47 ]the appellanttherein expected appointment by promotion against vacancy that aroseH47 G. Venkateshwara Rao v. Union of India (1999) 8 SCC 455.

in 1991, being the very next candidate on the panel. However, the proposalremained pending till 1993 and in the meanwhile cadre restructuringtook place and as result of which another candidate became eligible tobe appointed. Relying on Rangaiah he contended that vacancies mustbe filled as per the rules that existed prior to the restructuring. Rejectingthe argument, the Court observed as under:

“4….the learned advocate appearing in support of this appealreiterated the same contentions and urged that the view takenby CAT, Hyderabad is erroneous and cannot be sustained.While dealing with the first contention, he urged that if theRailway Board were to take the decision expeditiously, theappellant could have been accommodated on such dereservedvacancy. He urged that there was no impediment in takingthe decision of dereservation and it was merely an inactionon the part of the Railway Board which had deprived theappellant of being appointed against the vacancy. We do notset any substance in this contention because nothing has beenpointed out to us from the record which would justify thiscontention. The learned counsel for the appellant drew ourattention to the decision of this Court in Y.V. Rangaiah v. J.Sreenivasa Rao [(1983) 3 SCC 284 : 1983 SCC (L&S) 382]and in particular, he relied upon paras 4 and 9. We havegone through the judgment and in our opinion, the ratiothereof has no application. It was case dealing with delayin preparing panel for promotional cadre under the thenexisting rules which were substituted by new rules. The panelwas prepared under the new rules.

5. Coming to the second contention as regards restructuringof the cadre, it is quite clear that the restructuring appears tohave been made for the efficient working in the WorkshopUnit.We, therefore, do not see any substance in thiscontention.”

25.2 While distinguishing Rangaiah’s principle this Courtrecognised yet another factor on the basis of which the Governmentneed not fill up the vacancies as per the old rules. The reason mentionedin this case is restructuring the cadre. While upholding the contentionthat restructuring is undertaken for efficient working of the unit, thisCourt justified the decision of the Government not to fill up the vacanciesas per the principle in Rangaiah.

A26.1 In Delhi Judicial Services Association v. Delhi HighCourt,[48]the Court formulated the issue as, “in view of the submissionmade at the Bar, the first question that requires consideration iswhether the temporary posts having been created prior to theamendment of Rules, is it the law that require those posts to be filledup only in accordance with the unamended Rules and notBotherwise?”Rejecting the contention and distinguishing Rangaiah onthe facts of the case, the Court held as under:

“5… In Rangaiah case [(1983) 3 SCC 284] this Court on aconsideration of the relevant rules as well as the instructionsissued by the Government, came to hold that list of approvedCcandidates was required to be prepared as of 1-9-1976 formaking appointments to the grade of Sub-Registrar Grade IIby transfer, but no such list having been prepared and instead,the same having been drawn up in 1977, by which time theamended rules had come into force, it was held that theDlegitimate right and expectations of those who were entitledto be included in the list which ought to have been preparedin September 1976 cannot be frustrated on account of thefact that the panel had not been prepared and it was soprepared only in the year 1977. It is on this conclusion, theCourt had held that the vacancies available prior to 1-9-1976Eought to be filled up under the unamended rules. The aforesaiddecision will have no application to the case in hand inasmuchas in the Delhi Higher Judicial Service there is no requirementof preparation of any panel or list of candidates eligible forpromotion by any particular date. Then again, merely becauseFposts were created under Rule 16, it was not obligatory forthe appointing authority to fill up those posts immediately…”

26.2 This decision recognised yet another exception to theapplication of the principle in Rangaiah case. Court held that even ifvacancies were created prior to the amendment of the Rules, there is noGobligation upon the authorities to fill those vacancies immediately. Thedecision made direct inroads into the principle of Rangaiah.

27.1 In Shyama Charan Dash v. State of Orissa[49 ]the appellanttherein was working as Block Level Extension Officer which is

48 Delhi Judicial Services Assn. v. Delhi High Court, (2001) 5 SCC 145.

H49 Shyama Charan Dash v. State of Orissa, (2003) 4 SCC 218.

feeder category to the post of Sub-Assistant Registrar. While he waseligible to be appointed to the vacancies in the post of Sub-Registrar, therules came to be amended in 1991 reducing his chances to be appointed.Relying on Rangaiah he contended that the vacancies that arose priorto the amendment must be filled as per the rules existing prior to theamendment.This Court held that:

“5. It is appropriate at this stage to make reference to some ofthe decisions relied upon by the learned counsel on eitherside. Y.V. Rangaiah v. J. Sreenivasa Rao [(1983) 3 SCC 284]being case where not only there was omission to preparethe promotion panel in time as per rules then in force but theamended rules dispensed with the original provision forconsidering LDCs along with UDCs for promotion, adverselyaffecting their promotional prospects, has no application tothe case on hand…

9. …As long as the IPOs, as class or category, are renderedeligible even from 1986 and that is not challenged, thedifferences, if any, existing and based on the scales of payamong them, when resolved to be done away with in theundoubted exercise of its power by the State, as matter ofpolicy, cannot be legitimately challenged by the appellantsmerely because due to the enlargement of the horizon ofconsideration resulting therefrom, the chances of considerationfor promotion of Industrial Supervisors become diminished.The reasons, which weighed with the State Government indoing so, are found to be genuine, real and substantive andmeant to do substantial justice to all categories or grades ofposts equated for purposes of Rule 7 of the Rules. The factthat in different proceedings where claim for identical scalesof pay came to be contested by the Government or rejectedby the Tribunal, is no justification to countenance the claimof the appellants in these proceedings inasmuch as the criteriato be applied in dealing with such claims are totally differentor, at any rate, may be one only among several requirementsto be satisfied. Consequently, the challenge on behalf of theappellants has no merit whatsoever and shall stand rejected.”

A27.2 This is again case where the Court upheld the decision ofthe Government not to fill up the vacancies as per the old rules. Thedecision of the Government was upheld because the Court found thatthe policy decision is genuine, real and substantive and meant to dosubstantial justice to all categories or grades of posts equated for thepurpose of Rule 7.These decisions demonstrate that this Court neverBapplied the principle in Rangaiah’s case when the policy decision of theGovernment required amendment of rules for justifiable reason.

28.1 In State of Punjab v. Arun Kumar Aggarwal,[50] the secondissue in the casewas “whether the old 1941 Rules or the new 2004Rules, which became effective from 09.07.2004 will be applied forCfilling up the vacancies which arose during 2000-2001 under theold 2001 Rules for promotion to the post of SDO in the State ofPunjab”. The respondents therein contended that they have anindefeasible right to be promoted to the post of SDO as per the decisionin Rangaiah case. Rejecting the argument, the Court held as under:-

D“30. There is no quarrel over the proposition of law that normalrule is that the vacancy prior to the new Rules would begoverned by the old Rules and not by the new Rules. However,in the present case, we have already held that the Governmenthas taken conscious decision not to fill the vacancy underEthe old Rules and that such decision has been validly takenkeeping in view the facts and circumstances of the case.

35. All the decisions referred to above are related toamendment of the Rules. We have already held that the 1941FRules were repealed by the 2004 Rules. The facts of thosecases are, therefore, not applicable to the facts of the presentcase.

38. We hold that the Government has taken consciousGdecision not to fill up the posts under the old 1941 Rules. Theimpugned order of the High Court is set aside. We may at thisstage point out that the problem seems to have beencompounded by the inaction/casual approach of the

50 State of Punjab v. Arun Kumar Aggarwal (2007) 10 SCC 402.H

Government detrimental to public interest. The StateGovernment shall now fill up the vacant posts in accordancewith the 2004 Rules within period of three months from today.All the eligible candidates who satisfy the criteria laid downunder the 2004 Rules shall be considered. The entire processof recommendation and appointment shall be completed withinthree months from today.”

28.2 This is yet another case where deviating from Rangaiah’sprinciple this Court recognized the decision of the Government not to fillthe vacancies arising prior to the amendment as per the old rules for thereason that there is conscious decision of the Government.

29.1 In Deepak Agarwal v. State of U.P.[51], the question aroseas to whether the appellants therein were entitled to be considered forpromotion to the post of Deputy Excise Commissioner under the U.P.Excise Group ‘A’ Service Rules, 1983. The prayer was for considerationto the vacancies which occurred prior to the amendment of 1999 Rules.Reliance was placed on Rangaiah which was rejected. The Courtobserved as under:-

“24. We are of the considered opinion that the judgment inY.V. Rangaiah case would not be applicable in the facts andcircumstances of this case.The aforesaid judgment wasrendered on the interpretation of Rule 4(a)(1)(i) of the AndhraPradesh Registration and Subordinate Service Rules, 1976.The aforesaid Rule provided for preparation of panel forthe eligible candidates every year in the month of September.This was statutory duty cast upon the State. The exercisewas required to be conducted each year. Thereafter, onlypromotion orders were to be issued. However, no panel hadbeen prepared for the year 1976. Subsequently, the Rule wasamended, which rendered the petitioners therein ineligible tobe considered for promotion. In these circumstances, it wasobserved by this Court that the amendment would not beapplicable to the vacancies which had arisen prior to theamendment. The vacancies which occurred prior to theamended Rules would be governed by the old Rules and notthe amended Rules.

51 Deepak Agarwal v. State of U.P., (2011) 6 SCC 725.

25. In the present case, there is no statutory duty cast uponthe respondents to either prepare yearwise panel of theeligible candidates or of the selected candidates for promotion.In fact, the proviso to Rule 2 enables the State to keep anypost unfilled. Therefore, clearly there is no statutory dutywhich the State could be mandated to perform under theapplicable Rules. The requirement to identify the vacanciesin year or to take decision as to how many posts are to befilled under Rule 7 cannot be equated with not issuingpromotion orders to the candidates duly selected forpromotion. In our opinion, the appellants had not acquiredany right to be considered for promotion. Therefore, it isdifficult to accept the submissions of Dr. Rajeev Dhavan thatthe vacancies, which had arisen before 17-5-1999 had to befilled under the unamended Rules.

26. It is by now settled proposition of law that candidateDhas the right to be considered in the light of the existing rules,which implies the “rule in force” on the date the considerationtook place. There is no rule of universal or absoluteapplication that vacancies are to be filled invariably by thelaw existing on the date when the vacancy arises.Therequirement of filling up old vacancies under the old rules isEinterlinked with the candidate having acquired right to beconsidered for promotion.The right to be considered forpromotion accrues on the date of consideration of the eligiblecandidates. Unless, of course, the applicable rule, as in-Rangaiah case lays down any particular timeframe, withinFwhich the selection process is to be completed.In the presentcase, consideration for promotion took place after theamendment came into operation. Thus, it cannot be acceptedthat any accrued or vested right of the appellants has beentaken away by the amendment.

28. In our opinion, the matter is squarely covered by the ratioof the judgment of this Court in Dr. K. Ramulu. In the aforesaidcase, this Court considered all the judgments cited by thelearned Senior Counsel for the appellant and heldthatRangaiah case would not be applicable in the facts and

circumstances of that case. It was observed that for reasonsgermane to the decision, the Government is entitled to take adecision not to fill up the existing vacancies as on the relevantdate. It was also held that when the Government takes aconscious decision and amends the rules, the promotion haveto be made in accordance with the rules prevalent at the timewhen the consideration takes place.”

29.2 This is very important case which recognises many pointsof distinction. (a) The Court found that there is no statutory duty cast onthe Government to prepare panels as in the case of Rangaiah, (b)acandidate has right to be considered only as per the existing rules, i.e.,“the rule in force”, (c) the rule applicable is the rule in force as on thedate of consideration, (d) the principle in Rangaiah has no universalapplication, (e) for reasons germane to its decision, the Government isentitled to take conscious decision about the filling of the vacanciesand the rules applicable. This decision made deep inroads into the principlelaid down in Rangaiah’s case.

30.1 M.I. Kunjukunju v. State of Kerela[52], related to claimmade by the appellant therein to the post of Industrial Extension Officers.In this case that the selection process commenced on 25.06.1992 whenthe Commission invited applications and prescribed the method ofappointment and qualifications for the post of Industrial ExtensionOfficers. It was contended that the new rules issued in 2001 could nothave retrospective effect to take away the vested right. The vestedright argument was considered in detail and the Court rejected the sameon the ground that no vested right exists and held as under:

“19. Therefore, it is clear that candidate on makingapplication for the post pursuant to an advertisement doesnot acquire any vested right for selection. If he is eligibleand is otherwise qualified in accordance with the relevantrules, he does acquire right for being considered for selectionas per existing rules.

22. In the present case, the Rules have not been framed underthe proviso to Article 309 of the Constitution of India. Thelegislature has framed the 1968 Act in exercise of power

conferred under Article 309 of the Constitution of India.Under the 1968 Act, the State Government was empowered tomake Rules either prospectively or retrospectively to regulatethe recruitment and condition of service of persons appointedto public services and posts in question with the Departmentof Industry and Commerce of the State of Kerala.

23. In view of such delegation of power of the legislature tothe State under the 1968 Act, the Special Rules framed by theState Government giving retrospective effect from 1-7-1983cannot be held to be illegal or invalid.

26. In the present case, we find that the appellants have notderived any benefit out of the old Government order whichwas in force at the time of advertisement. We, therefore, holdthat no vested right or benefit accrued to the appellants haveDbeen taken away by sub-rule (2) of Rule 1 of the SpecialRules.”

30.2 This is case where the Government made rules whichclearly applied retrospectively to facts that existed before and after theamendment. The Court held that no right subsists for consideration tothe vacancies that existed prior to the commencement of the rules.

31.1 In State of Tripura v. Nikhil Ranjan Chakraborty,[53 ]theCourt considered submission that additional posts in ‘Group A’ and‘Group B’ of Schedule IV must be considered only on the basis of therules that existed prior to the amendment on 24.12.2011. The Court foundFno difficulty in straight away applying the decision of this Court in DeepakAgarwal (supra) which distinguishes Rangaiah to hold as under: -

“9. The law is thus clear that candidate has the right to beconsidered in the light of the existing rules, namely, “rules inforce on the date” the consideration takes place and thatthere is no rule of absolute application that vacancies mustGinvariably be filled by the law existing on the date when theyarose. As against the case of total exclusion and absolutedeprivation of chance to be considered as in DeepakAgarwalin the instant case certain additional posts have been

H53 State of Tripura v. Nikhil Ranjan Chakraborty (2017) 3 SCC 646.

included in the feeder cadre, thereby expanding the zone ofconsideration. It is not as if the writ petitioners or similarlysituated candidates were totally excluded. At best, they nowhad to compete with some more candidates. In any case, sincethere was no accrued right nor was there any mandate thatvacancies must be filled invariably by the law existing on thedate when the vacancy arose, the State was well within itsrights to stipulate that the vacancies be filled in accordancewith the Rules as amended. Secondly, the process to amendthe Rules had also begun well before the Notification dated24-11-2011.

10. In our view, the instant case is fully covered by the lawlaid down by this Court in Deepak Agrawal and the HighCourt was completely in error in allowing the writ petitionand in dismissing the writ appeals. We, therefore, allow theseappeals, set aside the judgment under appeal and dismissWrit Petitions (Civil) Nos. 104, 105, 106, 153 and 181 of2012.”

31.2 The Court reiterated that there is no rule of absoluteapplication that vacancies must be filled as per the law existing on thedate when they arose. The Court held that there is neither an accruedright nor is there mandate under the rules to fill the vacancies as perthe law that existed. The Court recognised the right of the Governmentto stipulate the vacancies in accordance with rules as amended.

32.1 By 2019 the perspective in which this Court has consideredthe decision in Rangaiah was clear. By this time, the Court recognizedmany exceptions to the principle. In Union of India v. KrishnaKumar[54],this Court noted that, “the decision of this Court in Y.V.Rangaiah v. J. Sreenivasa Rao has been construed in subsequentdecisions as case where the applicable rule required the processof promotion or selection to be completed within stipulated time-frame”. This case relates to claim made by Havaldars for beingconsidered for the post of Naib Subedar for the vacancies which occurredprior to the changes that were made in the structure of Assam Rifles in2011. The High Court accepted the submission and directed the applicantsto be considered for the posts as per the pre-amended rules. Allowingthe appeal this Court held as under:-

54 Union of India v. Krishna Kumar (2019) 4 SCC 319.

“10. In considering the rival submissions, it must, at the outset,be noted that it is well settled that there is no vested right topromotion, but right be considered for promotion inaccordance with the Rules which prevail on the date on whichconsideration for promotion takes place. This Court has heldthat there is no rule of universal application to the effect thatvacancies must necessarily be filled in on the basis of the lawwhich existed on the date when they arose. The decision ofthis Court in Y.V. Rangaiah v. J. Sreenivasa Rao [Y.V. Rangaiahv. J. Sreenivasa Rao, (1983) 3 SCC 284 :] has been construedin subsequent decisions as case where the applicable Rulesrequired the process of promotion or selection to be completed-within stipulated timeframe.Hence, it has been held in H.S.Grewal v. Union of India [H.S. Grewal v. Union of India,(1997) 11 SCC 758 : 1998 SCC (L&S) 420] that the creationof an intermediate post would not amount to an interferencewith the vested right to promotion…..

13. In view of this statement of the law, it is evident that oncethe structure of Assam Rifles underwent change followingthe creation of the intermediate post of Warrant Officer,Epersons holding the post of Havaldar would be consideredfor promotion to the post of Warrant Officer. The intermediatepost of Warrant Officer was created as result of therestructuring exercise. The High Court was, in our view, inerror in postulating that vacancies which arose prior to theamendment of the Recruitment Rules would necessarily beFgoverned by the Rules which existed at the time of theoccurrence of the vacancies. As the decided cases notedearlier indicate, there is no such rule of absolute or universalapplication. The entire basis of the decision of the High Courtwas that those who were recruited prior to the restructuringGexercise and were holding the post of Havaldars had acquireda vested right of promotion to the post of Naib Subedar. Thisdoes not reflect the correct position in law. The right is to beconsidered for promotion in accordance with the Rules as”they exist when the exercise is carried out for promotion.

32.2 Apart from holding that there is no rule of universal applicationto the effect that vacancies must necessarily be filled on the basis of thelaw that existed on the date when they arose, this Court also held thatthe right is to be considered for promotion in accordance with rules asthey exist when the exercise is carried out for promotion.

33.1 In State of Orissa v. Dhirendra Sundar Das[55], the Courtwas concerned with appointment by promotion to Orissa AdministrativeService, Class II Cadre. The employees contended that OAS Class IIRules, 1978 read with OAS Class II, Regulations, 1978 were in force atthe time when the State decided to fill up the 150 OAS Class II posts on28.4.2008. It was their contention that the subsequent restructuring cannotaffect their right to be considered for the 150 posts as per the 1978Rules. For this purpose, reliance was placed on Rangaiah. Rejectingthis contention, the Court allowed the appeal by holding:

“9.14. Reliance placed by the counsel for the respondents onY.V. Rangaiah v. J. Sreenivasa Raoin order to submit that thevacancies which had arisen under the old Rules would begoverned by the old Rules, is of no avail.

9.15. similar submission was rejected by this Court inDeepak Agarwal v. State of U.P. [Deepak Agarwal v. State ofU.P., (2011) 6 SCC 725 : (2011) 2 SCC (L&S) 175]…

10. On the aforesaid grounds, we hold that the judgment ofthe Division Bench is liable to be set aside since the contestingrespondents did not have vested or fructified right ofpromotion to OAS Class II posts which had arisen during therecruitment year 2008. The names of the contestingrespondents were merely recommended for consideration. Inthe meanwhile, in 2009 the State had restructured the cadre,and abolished the OAS Class II cadre. The reconstituted cadreviz. the Orissa Revenue Service Group ‘B’ cadre came in itsplace. Hence, the direction of the Division Bench to appointthe contesting respondents in the vacancies which hadoccurred in the abolished cadre, in accordance with therepealed 1978 Rules, was contrary to law, and liable to be”set aside.

55 State of Orissa v. Dhirendra Sundar Das, (2019) 6 SCC 270.

A33.2 Following the line adopted in Deepak Agarwal v. State ofU.P. (supra) this Court held that the respondents therein do not have avested and fructified right and therefore held that the appointments neednot be made as per the old rules.

34.1 In Rajasthan State Sports Council v. Uma Dadhich[56], theBrespondent therein was appointed under the Rajasthan State SportsCouncil on the posts of Coach Grade-III on 20.03.1986. She waspromoted to Coach Grade-II in 1990 and Coach Grade-I in 1997.Promotion to the post of Sports Officer from the Cadre of Coach Grade-I was challenged by the respondent on the ground that the postsfellvacant in the year 2003-2004, for which the 2006 Rules changed theCqualification from mere seniority to seniority-cum-merit could not beapplied. Allowing the appeal this Court has held as under:-

“5. There is merit in the submission which has been urged onbehalf of the appellants that the respondent had no vestedright to promotion but only right to be considered inDaccordance with the rules as they existed on the date whenthe case for promotion was taken up. This principle has beenreiterated in several decisions of this Court. (See H.S. Grewalv. Union of India [H.S. Grewal v. Union of India, (1997) 11SCC 758], Deepak Agarwal v. State of U.P. [Deepak Agarwalv. State of U.P., (2011) 6 SCC 725], State of Tripura v. NikhilERanjan Chakraborty [State of Tripura v. Nikhil RanjanChakraborty, (2017) 3 SCC 646] and Union of India v.Krishna Kumar [Union of India v. Krishna Kumar, (2019) 4SCC 319]).

6. The judgment in Y.V. Rangaiah v. J. Sreenivasa RaodealtFwith situation where the rules required that the promotionalexercise must be completed within the relevant year. Rangaiahcase [Y.V.Rangaiah v. J. Sreenivasa Rao, (1983) 3 SCC 284],has hence been distinguished in the judgments noted above.

7. Rule 9(4) of the Rajasthan State Sports Council ServiceGRules, 2006 on which reliance has been placed on behalf ofthe appellant does not indicate that the vacancies must befilled in on the basis of Rules as they prevail in the year inwhich they have occurred. Rule 9(4) is in the following terms:“9. (4) The appointing authority shall determine the vacancies

H56 Rajasthan State Sports Council v. Uma Dadhich (2019) 4 SCC 316.

of earlier years, year-wise which were required to be filled inby promotion, if such vacancies were not determined and filledearlier in the year in which they were required to be filledin.”

34.2 The Court considered large number of decisions thatdistinguished Rangaiah’s case and held as matter of principle thatrules that exist on the date when the case for promotion was taken upwould hold the field. The Court further observed that there is no rulewhich specifically mandates that the vacancies prior to the amendmentmust be filled as per the rules that existed and not the new rules. This isa complete reversal of the principle set to have been laid down inRangaiah’s case.

35. Finally,the case of D. Raghu v. R. Basaveswarudu[57], is yetanother decision that has not followed the principle in Rangaiah’s case.

The Court held as under:-

“129.8. The High Court was in error in holding that it has tobe necessarily held that the vacancies which arose prior tothe revised Recruitment Rules coming into force has to befilled up under the then existing Rules (the 1979 Rules) relyingupon case law includingRangaiah.There was consciousdecision taken to not fill up vacancies based on therestructuring, and what is more, letters dated 28-10-2002 and14-11-2002 show that promotion to the post of Inspector wasto be effected based on the new Recruitment Rules.”

Analysis:

36. review of the fifteen cases that have distinguished Rangaiahwould demonstrate that this Court has been consistently carving outexceptions to the broad proposition formulated in Rangaiah. The findingsin these judgments, that have direct bearing on the proposition formulatedby Rangaiah are as under:

1.There is no rule of universal application that vacancies mustbe necessarily filled on the basis of the law which existedon the date when they arose, Rangaiah’s case must beunderstood in the context of the rules involved therein.[58]

2.It is now settled proposition of law that candidate has aright to be considered in the light of the existed rules, which

57 D. Raghu v. R. Basaveswarudu, (2020) 18 SCC 1.

58 Deepak Agarwal v. State of U.P., (2011) 6 SCC 725, Para 26; Union of India v.Krishna Kumar, (2019) 4 SCC 319, Para 10.

Aimplies the “rule in force” as on the date consideration takesplace. The right to be considered for promotion occurs onthe date of consideration of the eligible candidates[59].

3.The Government is entitled to take conscious policydecision not to fill up the vacancies arising prior to theamendment of the rules. The employee does not acquireBany vested right to being considered for promotion inaccordance with the repealed rules in view of the policydecision taken by the Government.[60 ]There is no obligationfor the Government to make appointments as per the oldrules in the event of restructuring of the cadre is intendedCfor efficient working of the unit.[61 ]The only requirement isthat the policy decisions of the Government must be fairand reasonable and must be justified on the touchstone ofArticle 14.[62]

4.The principle in Rangaiah need not be applied merelybecause posts were created, as it is not obligatory for theDappointing authority to fill up the posts immediately.[63]

5.When there is no statutory duty cast upon the State toconsider appointments to vacancies that existed prior to theamendment, the State cannot be directed to consider thecases.[64]

E37.1 The above-referred observations made in the fifteen decisionsthat have distinguished Rangaiah’s case demonstrate that the wideprinciple enunciated therein is substantially watered-down. Almost allthe decisions that distinguished Rangaiah hold that there is no rule ofuniversal application to the effect that vacancies must necessarily befilled on the basis of law that existed on the date when they arose. ThisFonly implies that decision in Rangaiah is confined to the facts of thatcase.

59 Deepak Agarwal v. State of U.P., (2011) 6 SCC 725, Para 26; Union of India v.Krishna Kumar, (2019) 4 SCC 319, Para 10.

60 K. Ramulu v. Suryaprakash Rao, (1997) 3 SCC 59, Paras 12 and 13, Shyam ChandraDas v. State of Orissa, (2003) 4 SCC 218, Para 9, State of Punjab v. Arun KumarGAggarwal, (2007) 10 SCC 402, Para 38; Deepak Agarwal v. State of U.P., (2011) 6 SCC725, Para 28.

61 G. Venkateshwara Rao v. Union of India, (1999) 8 SCC 455, Para 4.62 Rajasthan Public Service Commission v. Charan Ram, (1998) 4 SCC 202, Para 15; K.Ramulu v. Suryaprakash Rao, (1997) 3 SCC 59, Para 15.

63 In Delhi Judicial Services Association v. Delhi High Court, (2001) 5 SCC 145, Para

5.H64 Deepak Agarwal v. State of U.P., (2011) 6 SCC 725, Para 25.

37.2 The decision in Deepak Agarwal (supra) is completedeparture from the principle in Rangaiah,in as much as the Court hasheld that candidate has right to be considered in the light of theexisting rule.That is the rule in force on the date the considerationtakes place. This enunciation is followed in many subsequent decisionsincluding that of Union of India v. Krishna Kumar (supra). In fact, inKrishna Kumar Court held that there is only “right to be consideredfor promotion in accordance with rules which prevail on the date onwhich consideration for promotion take place.”

37.3 The consistent findings in these fifteen decisions thatRangaiah’s case must be seen in the context of its own facts, coupledwith the declarations therein that there is no rule of universal applicationto the effect that vacancies must necessarily be filled on the basis ofrules which existed on the date which they arose, compels us to concludethat the decision in Rangaiah is impliedly overruled. However, as thereis no declaration of law to this effect, it continues to be cited as aprecedent and this Court has been distinguishing it on some ground orthe other, as we have indicated hereinabove. For clarity and certainty, itis, therefore, necessary for us to hold;

(a) The statement in Y.V. Rangaiah v. J. Sreenivasa Raothat, “the vacancies which occurred prior to the amendedrules would be governed by the old rules and not by theamended rules”, does not reflect the correct proposition oflaw governing services under the Union and the States underpart XIV of the Constitution. It is hereby overruled.

(b) The rights and obligations of persons serving the Unionand the States are to be sourced from the rules governing theservices.

Application of the principle to the facts of the present case:

38.1 Returning to the facts of the present case, we have noticedthat the High Court has proceeded on the premise that the vacanciesoccurring before the amendment of the Rules on 25.11.2006 must begoverned by the 1966 Rules. The decision of the High Court took withinits sweep even the 7 new posts of Labour Officers that were sanctionedby an inter-departmental letter dated 20.07.2006, which included eventhe 3 posts allocated for direct recruitment. The direction of the HighCourt to encompass even the 3 posts allocated for direct recruitmentwas on the ground that the posts were sanctioned on 20.07.2006, whichis prior to the amendment of the Rules on 25.11.2006.

A38.2 We have already held that there is no right for an employeeoutside the rules governing the services. We have also followed andapplied the Constitution Bench decisions in Union of India v. TulsiramPatel (supra) and more particularly the decision in Roshan Lal Tandonv. Union of India (supra) that the services under the State are in thenature of status, hallmark of which is the need of the State toBunilaterally alter the rules to subserve the public interest. The 2006 rules,governing the services of the Respondents came into force immediatelyafter they were notified. There is no provision in the said rules to enablethe Respondents to be considered as per the 1966 Rules. The mattermust end here. There is no other right that Respondents no. 1 to 3 canclaim for such consideration.C

39.1 The alternative plea of the Government based on its policydecision to restructure the cadre by creating additional posts and alsoproviding for direct recruitment by amending the rules, as justificationfor not filling up the vacancies that arose prior to the amendment is fullysupported by the following decisions of this Court.[65]

39.2 The material placed on record shows that the additional postsof Labour Officers are created on 20.07.2006 and immediately thereafterthe 12 labour zones were created. This is followed by amendment to theRules with effect from on 25.11.2006 restructuring the cadre. The factsfully justify the alternative submission made by the State and we haveno hesitation in accepting the said submission.E

40. For these reasons stated above we set aside the judgment ofthe High Court in CWP No. 3028 of 2008 dated 28.12.2009 and allowCivil Appeal No. 9746 and Civil Appeal No. 9747 of 2011. There shall beno order on cost.

FNidhi Jain(Assisted by : Tamana, LCRA)

Appeals allowed.

65 K. Ramulu v. S. Suryaprakash Rao, (1997) 3 SCC 59;Rajasthan Public ServiceGCommission v. Chanan Ram, (1998) 4 SCC 202; G. Venkateshwara Rao v. Union ofIndia, (1999) 8 SCC 455;Shyama Charan Dash v. State of Orissa, (2003) 4 SCC218;State of Punjab v. Arun Kumar Aggarwal, (2007) 10 SCC 402;Deepak Agarwal v.State of U.P., (2011) 6 SCC 725;State of Tripura v. Nikhil Ranjan Chakraborty, (2017)3 SCC 646;Union of India v. Krishna Kumar (2019) 4 SCC 319;State of Orissa v.Dhirendra Sundar Das, (2019) 6 SCC 270;Rajasthan State Sports Council v. UmaHDadhich, (2019) 4 SCC 316.