HARIHARAN & ORS. versus HARSH VARDHAN SINGH RAO & ORS

[2022] 9 S.C.R.

HARIHARAN & ORS.

HARSH VARDHAN SINGH RAO & ORS.

(Civil Appeal No. 9228 of 2022)

BDecember 14, 2022

[S. ABDUL NAZEER AND ABHAY S. OKA, JJ.]

Service Law: Seniority – On 7 September 2016, modifiedseniority list of the Income Tax Inspectors in the cadre of the Gujaratregion was issued – In the said list, the direct recruits of CGLEC2010 were interspaced with promotees of the year 2009-2010 – Onthe basis of clarification issued by CBDT, revised seniority listdated 13 February 2018 was published – Direct recruits appointedagainst vacancies of the year 2009-2010 were interspaced with thepromotees of the recruitment year 2010-2011 – Respondents nos.1Dto 18, the direct recruits, filed writ petition before the High Courtfor challenging seniority list dated 13 February 2018 – By impugnedjudgment, seniority list dated 13 February 2018 was quashed andthe seniority list of 7 September 2016 was restored – Clarificationadded that only those direct recruits who were eligible and qualifiedin the recruitment year 2009-2010, shall be interspaced with 53Epromotees who were promoted vide DPC dated 29 June 2009 –These promotees filed instant appeal – Held: Four issues framedfor consideration – Whether the recruitment year is financial yearor calendar year – Whether the decision of this Court in K.Meghachandra’s case is per incuriam or in the alternative, whether itFrequires reconsideration – Whether the inter-se-seniority of the directrecruits and the promotees in the facts of this case could bedetermined as per the decision in N.R. Parmar’s case – Whether, inthe facts of this case, the process of recruitment of direct recruitscommenced in the very recruitment year in which the vacancies arose– Matter referred to larger Bench of five Hon’ble Judges – TheGinterim relief granted on 13 July 2018 vacated – Effect shall begiven to the impugned judgment subject to the final outcome of thisappeal or reference – Reference to larger bench.

Union of India & Ors. v. N. R. Parmar & Ors. 2012(13) SCC 340 : [2012] 13 SCR 555; K. MeghachandraH

HARIHARAN & ORS. v. HARSH VARDHAN SINGH RAO &ORS.

Singh & Ors. v. Ningam Siro & Ors. 2020 (5) SCC 689: [2019] 16 SCR 651; Mervyn Coutindo & Ors. v.Collector of Customs, Bombay & Ors. [1966] 3 SCR600; Hon’ble Punjab & Haryana High Court atChandigarh v. State of Punjab & Ors. 2019 (12) SCC496 : [2018] 13 SCR 91; Arvinder Singh Bains v. Stateof Punjab & Ors. 2006 (6) SCC 673 : [2006] 2 Suppl.SCR 886; M. Subba Reddy & Anr. v. A.P. State RoadTransport Corporation & Ors. 2004 (6) SCC 729 :[2004] 1 Suppl. SCR 7; Union of India & Ors. v. S.D.Gupta & Ors. 1996 (8) SCC 14 : [1996] 2 SCR 471-referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No.9228of 2022.

From the Judgment and Order dated 11.05.2018 of the High Courtof Gujarat at Ahmedabad in Special Civil Application No.3212 of 2018.

With

Diary No.12422 of 2022.

Vikramjit Banerjee, ASG, Huzefa Ahmadi, Nidhesh Gupta, Sr.Advs., Ms. Aastha Mehta, Ms. Vishakha, Sharukh Alam, Mishra Saurabh,Anmol Chandan, Shashank Bajpai, Ayush Anand, Sughosh Subramaniam,Abhishek Singh, Prashant Sinha, Siddhartha Sinha, Raj Bahadur Yadav,Ms. Pallavi Singh, V. K. Verma, Ms. Vriti Gujral, Tarun Verma, RajatSrivastav, Ms. Japneet Kaur, Ms. Rita Jha, Ms. Pallavi Singh, SameerSingh, Ms. Neelam Singh, Dr. Sushil Balwada, J. P. N. Shahi, Ms. J.Kiran, Rameshwar Prasad Goyal, Advs. for the appearing parties.

ASatyavi Kram, Ms. Lekha G.V., Zeeshan Diwan, ShrutanjayaBhardwaj, Jasir Aftab, Advs. For the Intervenors.

The Judgment of the Court was delivered by

ABHAY S. OKA, J.B1. Leave granted in Special Leave Petition (C) No.16161 of 2018.Delay in filing Special Leave Petition (C) Diary No.12422 of 2022 iscondoned and leave is granted in the said Special Leave Petition as well.

2. In Civil Appeal arising out of SLP (C) No.16161 of 2018, theappellants who are original respondents nos.11 to 14 before the HighCCourt of Gujarat, have challenged the judgment and order dated 11[th]May 2018 passed by Division Bench of the High Court of Gujarat ona writ petition under Article 226 of the Constitution of India filed byrespondents nos.1 to 18.

FACTUAL ASPECTS IN CIVIL APPEAL ARISING OUTDOF S.L.P.(C) NO.16161 OF 2018

3. Few factual details will have to be noted. The dispute is atypical dispute between promotees and direct appointees over inter-se-seniority. Here, the dispute is about the posts of Inspectors in the IncomeTax Department in the State of Gujarat. On 7[th] February 1986 and 3[rd]July 1986, Office Memoranda (for short, ‘OM’) were issued by theEMinistry of Personnel, Public Grievances and Pension. Both the OMsrecord that the principle of rotation of quota will be followed fordetermining the inter-se-seniority of promotees and direct recruits. It ismentioned therein that when direct recruits are not available, thepromotees would be bunched together at the bottom of the seniority listFbelow the last position up to which it is possible to determine seniority onthe basis of rotation of quota with reference to the actual number ofdirect recruits who become available. It is provided therein that the unfilleddirect recruitment quota vacancies would be carried forward and addedto the corresponding direct recruitment vacancies of the next year. It isalso provided that these additional direct recruits selected against theGcarried forward vacancies of the previous year, should be placed enbloc below the last promotee or direct recruit, as the case may be, in theseniority list based on the rotation of quota for that year. Prior to thesetwo OMs, there was an OM dated 22[nd] November 1959, which providedfor fixing the seniority of direct recruits and promotees based on theHrotation of quota.

4. In the facts of the case, we may note here that the relevantRecruitment Rules of 1969 provided that the quota of departmentalpromotees and direct recruits to the posts of Inspector will be 2:1. Thereis no dispute that the rule of rotation of quota or rota and quota is applicablefor fixing their inter-se-seniority. On 7[th] February 2000, Office Notewas issued by the Department of Personnel and Training (for short,‘DoPT’). By the said office note, it was directed that if the examinationis not held in the vacancy year, the seniority of the vacancy year cannotbe granted to direct recruits. There was further clarificatory OM issuedon 3[rd] March 2008 by DoPT, which clarified that when the appointmentagainst unfilled vacancies is made in subsequent years either by directrecruitment or promotion, the persons so appointed shall not get seniorityof the earlier year. However, they should be given the seniority of theyear in which they were appointed on substantive basis.5. On 26[th] June 2009, the Chief Commissioner of Income Tax,Ahmedabad filled in 53 posts of Income Tax Inspectors by promotion onthe basis of the recommendations of the Departmental PromotionCommittee (DPC). By communication dated 20[th] November 2009, theChief Commissioner of Income Tax, Ahmedabad forwarded requisitionfor making appointments to 46 direct posts (35 current and 11 carriedforward) enclosing therewith the details in the prescribed proforma. TheDoPT by the letter dated 15[th] January 2010 granted NOC for 482vacancies in the grade of Income Tax Inspector. Accordingly, by letterof the same date, the Department of Revenue of the Ministry of Financeforwarded the said NOC to the Secretary of the Staff SelectionCommission (SSC). However, the examination for recruitment was notconducted to fill up the vacant posts of Income Tax Inspectors for therecruitment year 2009-10 in the same year. Accordingly, SSC initiatedthe process by holding meeting with the officers for the conduct of theCombined Graduate Level Examination, 2010 (short, ‘CGLE-2010’). TheCentral Board of Direct Taxes (CBDT) proposed tentative vacanciesof 482 posts of Income Tax Inspectors for CGLE-2010. Anadvertisement was published on 30[th] January 2010 inviting applicationsfor CGLE-2010. On 26[th] April 2010, CBDT communicated to SSC thatvacancies for the recruitment year 2009-10 were included for selectionthrough SSC CGLE-2010. On 10[th] May 2010 and 31[st] July 2010,examinations were conducted by SSC for Tier-I and Tier-II. On 27[th]October 2010, CBDT finally submitted 846 vacancies as confirmedvacancies to SSC. Before the said letter was addressed, the Chief

ACommissioner of Income Tax, Ahmedabad informed CBDT that total of72 vacancies should be taken for the State of Gujarat. The result wasdeclared on 7[th] January 2011 and SSC recommended total 822 candidates.On 27[th] November 2012, decision of this Court in the case of Union ofIndia & Ors. v. N.R.Parmar & Ors.[1] was pronounced. This Courtdealt with contingency where the requisition for filling in the vacanciesBof direct recruits was issued in the same recruitment year and theadvertisement for recruitment was published in the same recruitmentyear when the vacancies had arisen, but the examination could not beconducted in the same recruitment year. This Court held that in such acase, the direct recruits would be entitled to seniority in the recruitmentCyear when the requisition was made and advertisement was issued.6. On 25[th] May 2014, draft seniority list of the Income TaxInspectors for the State of Gujarat was issued and on the basis of thedraft seniority list, the final seniority list was issued on 29[th] May 2014.Further, on 7[th] September 2016, modified seniority list of the IncomeDTax Inspectors in the cadre of the Gujarat region was issued. In the saidlist, the direct recruits of CGLE-2010 were interspaced with promoteesof the year 2009-10. There were several representations made againstthe said seniority list by the promotee candidates. On 17[th] January 2018,CBDT issued clarification stating that insofar as the fixing of inter-se-seniority of CGLE-2010 direct recruits with promotee officers wasEconcerned, the direct recruits may be interpolated with the promotees ofthe same recruitment year in accordance with OMs issued on 3[rd] July1986 and 4[th] March 2014. The said clarification was communicated byCBDT to all Principal Chief Commissioners of Income-Tax. On thebasis of the said clarification, revised seniority list dated 13[th] FebruaryF2018 was published. As per the said seniority list, the direct recruitsrecruited against vacancies of the year 2009-10 were interspaced withthe promotees of the recruitment year 2010-11. Respondents nos.1 to18 who were direct recruits, filed writ petition before the High Courtof Gujarat for challenging the said seniority list dated 13[th] February 2018. prayer was made in the writ petition for setting aside the clarificationGdated 17[th] January 2018 and the consequent seniority list dated 13[th]February 2018. consequential prayer was made for restoring theseniority list dated 7[th] September 2016. By the impugned judgment, theseniority list dated 13[th] February 2018 was quashed and the seniority list

of 7[th] September 2016 was restored with clarification that only thosedirect recruits who were eligible and qualified in the recruitment year2009-10, shall be interspaced with 53 promotees who were promotedvide DPC dated 29[th] June 2009.

7. On 13[th] July 2018, notice was issued in the Special LeavePetition no.16161 of 2018 which is the subject matter of the presentCivil Appeal and by an interim order, the status quo as of that date wasordered to be maintained. The appellants who were respondents in thewrit petition before the High Court, are the promotees who were promotedvide DPC dated 29[th] June 2009.

SUBMISSIONS IN BRIEF

8. Mr. Huzefa Ahmadi, the learned senior counsel appearing forthe appellants firstly submitted that the decision of this Court in the caseof N. R. Parmar[1 ]has been overruled by larger Bench of three Hon’bleJudges of this Court in the case of K. Meghachandra Singh & Ors. v.Ningam Siro & Ors.[2]on 19[th] November 2019. However, it was clarifiedthat the decision will apply prospectively. His submission is that arecruitment year is calendar year and not financial year. The learnedsenior counsel submitted that in the present case, the advertisement forrecruitment was not issued in the year 2009 and the examination wasconducted in 2010. He pointed out that in the case of N.R. Parmar[1], theadvertisement was issued in the same recruitment year in whichvacancies arose. He pointed out that requisition was sent on 21[st] January2010 to SSC for 482 vacancies of Income Tax Inspectors for 2009-10.However, in the next requisition letter dated 22[nd] November 2010 whichwas for CGLE-2010, carried forward vacancies (482) of 2009-10 werementioned. This requisition was made for total 844 vacancies whichincluded even vacancies of the recruitment year 2010-11. Based on theobservations made in paragraph 33 of the decision in N. R. Parmar’scase[1], the learned senior counsel would submit that in terms of the saiddecision, the vacancies arising during particular year, should be reportedin the same year and the advertisement for recruitment should also bepublished in the same year. He urged that in the present case, all theseconditions have not been fulfilled.

9. Inviting our attention to the decision of this Court in the case ofK. Meghachandra[2], he submitted that now this Court has categorically

2 2020 (5) SCC 689

Aheld that the seniority of direct recruits will be reckoned only from thedate of appointment and not from the stage when the requisition for theirappointment was sent. The learned senior counsel also pointed out thatCBDT by the letter dated 27[th] May 2019 clarified that in view ofsubsequent decision of the High Court of Delhi, the decision in the caseof N.R. Parmar[1 ]shall be implemented prospectively with effect fromB27[th] November 2012. The learned senior counsel also pointed out thatwhen there was no advertisement and no requisition issued for thevacancies of the year 2009, the vacancies of the year 2009 were combinedin CGLE-2010. Therefore, relative merit of selected candidates cannotbe determined for assigning the seniority in different recruitment years,Cthe reason being that there was only one merit list of CGLE-2010. Healso pointed out that the final position of vacancies was intimated to SSCfor the first time by the letter dated 27[th] October 2010. Therefore, thedirect recruits who were recruited on the basis of CGLE-2010 from thequota of earlier year, cannot be interspaced between the promotees ofthe year 2009. He submitted that now seniority cannot be disturbed afterDlapse of eleven or twelve years.10. Mr. Nidhesh Gupta, the learned senior counsel appearing forrespondents nos.1 to 5, 7, 8, 10 to 13, 15 to 18 and 29 to 39 firstly submittedthat even the decision in the case of K. Meghachandra[2 ]protects thecase of the said respondents (direct appointees) as it is specificallyEobserved that the decision will apply prospectively and it will not affectinter-se-seniority fixed on the basis of the decision of this Court in thecase of N. R. Parmar[1].

11. He pointed out that this Court in the case of K. Meghachandra[2]held that seniority cannot be granted from the date when the candidateFwas not born in the cadre. He submitted that it is well settled positionof law that the said principle does not apply when the seniority is to bedetermined in accordance with rotation of vacancies between directrecruits and promotees based on quota of vacancies reserved for boththe categories. He relied upon the decision of Constitution Bench ofGthis Court in the case of Mervyn Coutindo & Ors. v. Collector ofCustoms, Bombay & Ors[3]. He submitted that in the said decision, theCourt upheld rotational system of fixing seniority. He submitted thatattention of the Bench of three Hon’ble Judges which decided the caseof K.Meghachandra[2 ]was not invited to the case of Mervyn Coutindo[3].

He would, therefore, submit that the decision of this Court in the case ofK. Meghachandra[2 ]is per incuriam. He submitted that the object ofrotational system of fixing seniority is to blend the talent with experienceand to augment the efficiency. He submitted that as held by this Court inthe case of Hon’ble Punjab & Haryana High Court at Chandigarhv. State of Punjab & Ors.[4], seniority has to be determined on the basisof roster and not on the basis of the date of joining of particular stream.He pointed out that in the judgment of this Court in the case of ArvinderSingh Bains v. State of Punjab & Ors.[5],it was held that making thedate of joining as the basis for determining seniority would lead todiscretion in the hands of the Government and the possibility of misuse.The reason being that selection process of promotees is shorter ascompared to that of direct recruits. Therefore, injustice to the directrecruits cannot be compounded by relegating them below the directrecruits.

12. He relied upon various OMs starting from OM dated 3[rd] July1986 till OM dated 13[th] August 2021, which clearly provide for seniorityto be determined according to the rotation of vacancies. The learnedsenior counsel submitted that though case is sought to be made outthat recruitment year is calendar year and not financial year, eventhe appellants have proceeded on the footing that it is the financial year.He relied upon several documents in that behalf.

13. He submitted that the relevant year for determining seniorityis the year in which recruitment requisition is sent. He pointed out theletter dated 20[th] November 2009 enclosing therewith the requisiteproforma for requisition of Income Tax Inspectors which clearly included35 current and 11 carried forward vacancies of the direct appointees.He pointed out that the subsequent letter addressed to the Secretary ofSSC is of 21[st] January 2010 which was issued in recruitment year 2009-10 itself which included vacancies of 2009-10. Even the advertisementwas issued in recruitment year 2009-10, as the same was issued on 30[th]January 2010. He would, therefore, submit that the recruitment year inthe present case was 2009-10. He submitted that segregation ofvacancies for 2009-10 and 2010-11 was already done as is apparentfrom the seniority list dated 7[th] September 2016.

14. He submitted that OM dated 7[th] February 1986 cannot beapplied and the same will apply when there is an earlier examination or

4 2019 (12) SCC 496

5 2006 (6) SCC 673

ABC

Aselection which is followed by subsequent examination or selection.He submitted that in the facts of the case, in the year 2009-10, therewas no examination or selection conducted for direct recruits. Theexpression ‘direct recruits do not become available’ used in OM dated7[th] February 1986 means that though the selection process is held duringthe relevant year, the candidates do not become available.B

15. Lastly, he pointed out that as matter of fact, large numberof direct recruits have been promoted since then. He submitted that asthe decision of this Court in the case of K. Meghachandra[2 ]is perincuriam, being contrary to the binding precedent of larger Bench inthe case of Mervyn Coutindo[3], the decision in the case of N.R. Parmar[1]Cwill prevail.

16. Mr. Vikramjit Banerjee, the learned Additional Solicitor Generalrepresenting the Income Tax Department and Union of India submittedthat new OM has been issued on 13[th] August 2021 by DoPT, clarifyingthat as the decision in the case of K. Meghachandra[2 ]will haveDprospective operation, cases of inters-se-seniority of direct recruits andpromotees shall not be disturbed during the period between the date ofthe decision in N.R. Parmar’s case[1 ]and the date of decision in K.Meghachandra’s case[2]. He submitted that in view of the said OM, thecases of inter-se-seniority between officers joined between 27[th]November 2012 and 18[th] November 2019 shall be governed by theEprovisions of OMs dated 7[th] February 1986/3[rd] July 1986 read with OMdated 4[th] March 2014. He submitted that departmental OM dated 26[th]October 2021 has been issued as per OM of DoPT dated 13[th] August2021.

17. He submitted that Income Tax Department is adverselyFaffected due to the order of status quo,passed in this appeal, as162 outof 486 sanctioned posts of Income Tax Officers (ITOs) are vacant. Hesubmitted that this had drastically affected service to the taxpayers. Hesubmitted that 109 Income Tax Inspectors are likely to be deputed forelection duty of Gujarat Assembly Elections. He submitted that non-convening of DPC for ITOs is having cascading effects as there areGleast number of promotions in Group ‘C’ cadre. He submitted that if thisCourt is inclined to refer the question to larger Bench, the interimorder may be clarified or vacated as the functioning of the Departmentis really affected by the interim order.

18. The learned senior counsel appearing for the appellants, byHway of rejoinder, submitted that direct recruits are selected by SSC by

open examination which is conducted annually. Therefore, SSC followsthe calendar year as opposed to the financial year. He submitted that asno recruitment occurred in 2009, the results of the 2010 examination willdetermine the seniority of carried forward candidates. He also pointedout various documents in support of his contention that recruitmentyear will have to be taken as calendar year.

CONSIDERATION OF SUBMISSIONS

19. We have carefully considered the submissions. The first issuewhich arises for consideration is whether the decision of this Court in K.Meghachandra’s case[2 ]is per incuriam or in the alternative, whether itrequires reconsideration being in conflict with the decision of theConstitution Bench in the case of Mervyn Coutindo[3 ]and the decisionof Bench of three Hon’ble Judges in the case of M. Subba Reddy &Anr. v. A.P. State Road Transport Corporation & Ors[6]. The next issuewill be assuming that the decision of this Court in N.R. Parmar’s case[1]stands overruled, in view of its prospective overruling, whether the inter-se-seniority of the direct recruits and the promotees in the facts of thiscase could be determined as per the decision in N.R. Parmar’s case[1].This is in the context of the fact that the seniority was fixed after thedecision in the case of N.R. Parmar[1]and before 19[th] November 2019i.e. when the decision in K. Meghachandra’s case[2 ]was rendered. Thethird issue to be decided is whether the recruitment year is financialyear or calendar year. Lastly, factual issue will have to be decidedwhether, in the facts of this case, the process of recruitment of directrecruits commenced in the very recruitment year in which the vacanciesarose.

THE CONCEPT OF RECRUITMENT YEAR

20. In the facts of the case, there is no dispute that as far as theposts of Income Tax Inspectors are concerned, the principle of rota andquota or rotation of quota will apply. The posts of Income Tax Inspectorsare being filled in by direct recruits and promotees in the proportionalready fixed. Therefore, roster will apply where the points will be fordirect recruits and promotees as per the proportion fixed. Before we gointo various legal issues, which we have flagged above, it will beappropriate if we discuss the factual issues first. For the decision on thefactual issues, it is necessary to decide whether the recruitment/requisition/

Avacancy year is the same as the financial year. The appellants havetried to contend that recruitment year will be calendar year. We mustnote here that no such case has been made out in the Civil Appeal arisingout of Special Leave Petition (C) No.16161 of 2018. In the synopsis onpages and G, the appellants themselves have referred to the financialyear while referring to the vacancies available in particular year. TheBappellants made representation dated 25[th] November 2016 in whichthey described the recruitment years as the financial years i.e 2009-10and 2010-11. The letter dated 3[rd] August 2016 addressed by theDirectorate of Income Tax, New Delhi to the Principal ChiefCommissioner of Income Tax, Ahmedabad treats recruitment year asCa financial year. In fact, it incorporates clarification issued by ITGOAwhich in turn, refers to the recruitment year on the footing that it is afinancial year. The appellants have annexed as ‘Annexure P-12’ to replyaffidavit in I.A.No.161060 of 2019, clarification dated 7[th] November2014 issued by the CBDT to All Principal Chief Commissioners of IncomeTax, which refers to vacancy years as financial years right from 1986-D87 till 2013-14. Along with the letter dated 3[rd] August 2010, the Office ofthe Chief Commissioner of Income Tax forwarded to the CBDT, thedetails of the confirmed vacancies in the post of Income Tax Inspectorsas on 31[st] March 2011 in the prescribed proforma. In the prescribedproforma, under the column ‘year’ (year of vacancies), financial yearsE2009-2010 and 2011-2012 have been mentioned. 35 vacancies of IncomeTax Inspectors have been shown against the year 2009-10. In the counteraffidavit of private respondents, reliance has been placed on the OMdated 8[th] May 2017 issued by the DoPT. Paragraph 5 of the said OMspecifically records that in partial modification of the OMs issued on10[th] April 1989, 16[th] June 2000 and 20[th] May 2014, the vacancy yearFmay be shifted to calendar year from the year 2018, wherever thevacancy year based on financial year was being followed. The documentson record clearly show that as far as the posts of Income Tax Inspectorsare concerned, the vacancy or recruitment year was always reckonedas the financial year.G21. The appellants have placed reliance on the advertisement ofCGLE-2010. We have perused the said advertisement. It does not referto any particular recruitment or vacancy year and it does not recordwhether the examination is being held for the vacancies of particularrecruitment year. Reliance is also placed on the fact that CGLE is alwaysHreferred to with reference to the calendar year and not the financial

year. This is hardly of any relevance. SSC acts as per the requirementsof the concerned department. SSC is not concerned in any manner withthe recruitment year. Its job is to conduct the process of recruitment asper the instructions of the concerned department. There is material onrecord to show that the Income Tax Department always treated thevacancy year or recruitment year as financial year.

22. We have, therefore, no manner of doubt that till the year 2018,in relation to the recruitment and vacancies to the posts of Income TaxInspectors, the financial year was being treated as the recruitment yearor vacancy year.

COMMENCEMENT OF THE PROCESS FOR THERECRUITMENT YEAR 2009-10 FOR DIRECT RECRUITS

23. The letter dated 20[th] November 2009 addressed by the ChiefCommissioner of Income Tax, Ahmedabad to an officer of CBDT, refersto the fact that there were 35 vacancies of direct recruits. The agencyfor recruiting direct recruits to the post of Income Tax Inspectors isadmittedly SSC. The Government of India addressed letter to theSecretary of SSC on 21[st] January 2010 stating that for CGLE-2009/10,approximately 482 vacancies were available. Thus, the requisition issuedto SSC was for filling in 482 vacancies of the year 2009-10. The noticeof CGLE-2010 was published on 31[st] January 2010. The last date forfiling applications was 2[nd] March 2010. The letter dated 3[rd] August 2010addressed by the Chief Commissioner of Income Tax, Ahmedabad toCBDT records that as on 31[st] March 2011, there will be 35 backlogvacancies for direct recruits for the year 2009-10. In this letter, it wasstated that there were total 74 vacancies for the posts of Income TaxInspectors, out of which, 35 vacancies were of the year 2009-10. Thesame vacancy position has been mentioned in the letter dated 20[th]November 2009 referred above. The documents on record clearly indicatethat these 35 posts of direct recruits for the recruitment year 2009-10were sought to be filled in on the basis of CGLE-2010 notified on 31[st]January 2010 which was held on 16[th] May 2010. The notice of CGLE-2010 records that the last date for submitting applications was 2[nd] March2010. The advertisement mentions that the applicants should be qualifiedas on 2[nd] March 2010, which is date within the recruitment/vacancyyear 2009-10. Thus, on facts, it can be concluded that the process ofrecruiting direct recruits to 35 posts of Income Tax Inspectors of thevacancy/recruitment year 2009-10 commenced in the same year 2009-10.

956SUPREME COURT REPORTS

ACASES OF N.R.PARMAR1AND K. MEGHACHANDRA2

24. Now, we turn to the decision in N.R. Parmar’s case[1]. ThisCourt dealt with the issue of inter-se-seniority between the promoteeIncome Tax Inspectors and direct recruits. As noted in paragraph 9 ofthe decision, the controversy pertained to the vacancies for the yearB1993-94. The vacancies of promotees were filled in the same year. SSCissued the advertisement in May/June 1993 for filling in the posts ofdirect recruits for the year 1993-94. Though the written test wasconducted in December 1993, viva-voce was conducted in October 1994.The result was declared in June 1995 and the direct recruits joined in theyear 1995. The Administrative Tribunal held that the date on which theCSSC made the selection of the direct recruits, will be the material datefor fixing their seniority. The High Court interfered with the order of theTribunal by passing an order of remand. Ultimately, the direct recruitssucceeded before the Tribunal. The writ petitions challenging the orderof the Tribunal passed on remand were filed before the High Court. TheDsaid petitions were transferred to this Court.

25. Perusal of the decision in the case of N.R. Parmar[1 ]showsthat this Court considered and interpreted OMs dated 22[nd] December1959, 7[th] February 1986, 3[rd] July 1986 and 3[rd] March 2008. Apart fromthese OMs, this Court considered various Office Notes as well asEcorrespondence. This Court held that the OM dated 3[rd] March 2008 hasto be ignored to the extent to which the same is in derogation of OMsdated 7[th] February 1986 and 3[rd] July 1986. In paragraph 52, this Courtrecorded its conclusions, which reads thus:“52. Having interpreted the effect of the OMs dated 7-2-1986Fand 3-7-1986 (in paras 25 to 29 hereinabove), we are satisfied,that not only the requisition but also the advertisement for directrecruitment was issued by SSC in the recruitment year in whichdirect recruit vacancies had arisen. The said factual position, asconfirmed by the rival parties, is common in all matters beingcollectively disposed of. In all these cases the advertisedGvacancies were filled up in the original/first examination/selection conducted for the same. None of the direct recruitIncome Tax Inspectors herein can be stated to be occupyingcarried-forward vacancies, or vacancies which came to befilled up by “later” examination/selection process. Thefacts only reveal that the examination and the selectionH

process of direct recruits could not be completed withinthe recruitment year itself. For this, the modification/amendment in the manner of determining the inter seseniority between the direct recruits and promotees,carried out through the OM dated 7-2-1986, and thecompilation of the instructions pertaining to seniority inthe OM dated 3-7-1986, leave no room for any doubt, thatthe “rotation of quotas” principle would be fully applicableto the direct recruits in the present controversy. The directrecruits herein will therefore have to be interspaced withpromotees of the same recruitment year.”

(emphasis added)

26. It is necessary to consider the findings rendered by the HighCourt in the impugned judgment. The High Court has expressly reliedupon the decision of this Court in the case of N.R. Parmar[1]. By applyingthe said decision to the facts of the case, the High Court held that:

i.Requisition for 35+11 vacancies for direct recruits was sentto CBDT in the recruitment year 2009-10 itself;

ii.The recruitment for the said vacancies could not be heldduring the recruitment year 2009-10 for the reasons forwhich the candidates were not responsible;

iii.It is not the case that the eligible candidates for filling in theposts of direct recruits were not available in the year 2009-10;

iv.The seniority list dated 7[th] September 2016 which wasprepared in terms of the decision of this Court in the caseof N.R. Parmar[1 ]was required to be restored with aclarification that those direct recruits who were eligible inthe recruitment year 2009-10 should be interspaced with53 promotees appointed during the year 2009-10; and

v.The seniority list dated 7[th] September 2016, which was thefinal seniority list, could not be modified without giving anGopportunity of being heard to the affected candidates.Therefore, the amended seniority list dated 13[th] February2018 was illegal.

27. Now, coming to the decision of the Bench of Hon’ble threeJudges in the case of K.Meghachandra [2], this Court was dealing with

Athe Manipur Police Service Rules, 1965 (for short, ‘the MPS Rules’).This Court was dealing with the issue of the dispute over the seniority inthe cadre of Manipur Police Service, Grade-II Officers between thedirect recruits and promotees. After referring to Rule 28 of the MPSRules, finding was recorded that the Rule expressly provided that theseniority shall be reckoned only from the date of appointment and notBfrom the stage when the requisition for the appointment was issued. Inparagraph 34, this Court held thus:“34. The judgment in N.R.Parmar [2012 (13) SCC 340] is nowto be considered in some detail as this is heavily relied on by theappellants’ counsel. At the outset, it must however be clearedCthat the cited case had nothing to do with the MPS Rules,1965 and that litigation related to the Income Tax Inspectorswho were claiming benefits of various Central GovernmentOMs (dated 22-12-1959, 7-2-1986, 3-7-1986 and 3-3-2008).The judgment was rendered in respect of the CentralDGovernment employees having their own Service Rules.The applicable Rules for the litigants in the present casehowever provide that the seniority in the service shall bedetermined by the order in which appointments are madeto the service. Therefore, the memorandums concernedreferred to in N.R. Parmar [2012 (13) SCC 340] which dealEwith general principles for determination of seniority ofpersons in the Central Government service, should notaccording to us, have any overriding effect for the policeofficers serving in the State of Manipur.”

(emphasis added)

In paragraph 38, this Court held thus:

“38. At this stage, we must also emphasise that the Courtin N.R.Parmar [2012 (13) SCC 340] need not have observedthat the selected candidate cannot be blamed forGadministrative delay and the gap between initiation ofprocess and appointment. Such observation is fallaciousinasmuch as none can be identified as being selectedcandidate on the date when the process of recruitment hadcommenced. On that day, body of persons aspiring to beappointed to the vacancy intended for direct recruits was

not in existence. The persons who might respond to anadvertisement cannot have any service-related rights, notto talk of right to have their seniority counted from thedate of the advertisement. In other words, only oncompletion of the process, the applicant morphs into aselected candidate and, therefore, unnecessary observationwas made in N.R. Parmar [2012 (13) SCC 340] to the effectthat the selected candidate cannot be blamed for theadministrative delay. In the same context, we may usefully referto the ratio in Shankarsan Dash v. Union of India [ShankarsanDash v. Union of India, (1991) 3 SCC 47 : 1991 SCC (L&S) 800], where it was held that even upon empanelment, an appointeedoes not acquire any right.”

(emphasis added)

In paragraph 39, this court observed:

“39. The judgment in N.R.Parmar [2012 (13) SCC 340] relatingto the Central Government employees cannot in our opinion,automatically apply to the Manipur State Police Officers, governedby the MPS Rules, 1965. We also feel that N.R. Parmar[1] hadincorrectly distinguished the long-standing seniority determinationprinciples propounded in, inter alia, Jagdish Ch.Patnaik [JagdishCh.Patnaik v. State of Orissa, (1998) 4 SCC 456 : 1998 SCC(L&S) 1156], Suraj Parkash Gupta v. State of J&K [Suraj ParkashGupta v. State of J&K, (2000) 7 SCC 561 : 2000 SCC (L&S)977] and Pawan Pratap Singh v. Reevan Singh [Pawan PratapSingh v. Reevan Singh, (2011) 3 SCC 267 : (2011) 1 SCC (L&S)481] . These three judgments and several others with likeenunciation on the law for determination of seniority makes itabundantly clear that under service jurisprudence, seniority cannotbe claimed from date when the incumbent is yet to be borne inthe cadre. In our considered opinion, the law on the issue is correctlydeclared in Jagdish Ch. Patnaik [Jagdish Ch. Patnaik v. State ofOrissa, (1998) 4 SCC 456 : 1998 SCC (L&S) 1156] andconsequently we disapprove the norms on assessment of inter seseniority, suggested in N.R. Parmar [Union of India v. N.R.Parmar, (2012) 13 SCC 340 : (2013) 3 SCC (L&S) 711].Accordingly, the decision in N.R. Parmar[1] is overruled.However, it is made clear that this decision will not affect

Athe inter se seniority already based on N.R. Parmar[1] andthe same is protected. This decision will apply prospectivelyexcept where seniority is to be fixed under the relevantrules from the date of vacancy/the date of advertisement.”

(emphasis added)

28. With the greatest respect to the Hon’ble Bench which dealtwith K.Meghachandra’s case[2], we find that the attention of the Benchwas not invited to the binding decision of the Coordinate Bench in thecase of M. Subba Reddy[6]. This decision was rendered by Bench ofthree Hon’ble Judges. This Court in the case of M. Subba Reddy[6 ] dealtCwith the issue of the fitment of the promotees to the posts of AssistantTraffic Manager and Assistant Mechanical Engineer in the integratedseniority list. The majority judgment refers to the relevant ServiceRegulations which provide that seniority is reckonable from the date ofappointment to service or grade. Paragraphs 6 and 7 of the said decisionread thus:D

“6. Mr Rakesh Dwivedi, learned Senior Counsel appearing onbehalf of the appellants submitted that the appellants had rightto be promoted within their quota during the years 1981 to 1987,when vacancies for promotees’ quota became available. Duringthis period, no direct recruits were available. Direct recruitsEbecame available in July 1988, November 1990 and June 1992.Appellant M. Subba Reddy was regularised from 27-12-1986 videorder dated 9-9-1988, when no direct recruits were available and,therefore, it was improper for the Corporation to place directrecruits above the promotees. It is the case of the appellantsFthat the direct recruits cannot claim appointments from thedate of the vacancy in their quota before their selection. Ithas been contended that Item 3 of Annexure ‘A’ (Section B)prescribes the method of recruitment in the manner in whichvacancy is allocated. According to the learned counsel it does notinvolve rota for the purposes of seniority. It prescribes only quota,Gtherefore, rota cannot be implied. It was urged that seniority isdealt with only by Regulation 3 of the Service Regulations, 1964and not by Regulation 34 of the Recruitment Regulations, 1966.Reliance was placed in this connection on Regulation 34 asamended on 15-9-1995. It was submitted that in view of the saidHamendments, Annexure ‘A’ refers to only allocation of vacancy

and not for determination of seniority. It was to be determinedonly by Regulation 3 of the Service Regulations. The non-availability of candidates in particular category, it wasurged, may be on account of ban on recruitment or on anyother ground. Therefore, in the present case, wherepromotees were regularised in the promotion quota whendirect recruits were not available, the quota in Item 3(1) ofAnnexure ‘A’ will not apply. It was submitted that in anyevent, allocation of vacancy under the said clause was notrigid and it cannot be basis for denying seniority to thepromotees from the date of regularisation. Reliance wasplaced on the judgment of this Court in the case of Direct RecruitClass II Engg. Officers’ Assn. v. State of Maharashtra [(1990) 2SCC 715 : 1990 SCC (L&S) 339 : (1990) 13 ATC 348 : AIR 1990SC 1607].7. We do not find any merit in the above arguments. The appellantshave not challenged the validity of the above regulations. As statedabove, it has been contended before us on behalf of the appellantsthat Item 3(1) of Annexure ‘A’ (Section B) prescribes method ofrecruitment and the manner in which vacancy is to be allocated,which does not involve rotation for the purposes of seniority; thatItem 3(1) of Annexure ‘A’ (Section B) prescribes only quota androta cannot be implied. However, the appellants before theHigh Court unequivocally submitted that under the aboveregulations, promotions and direct recruitments wererequired to be made in the ratio of 1:1 and that the saidregulations provided for cycle in which vacancies were tobe rotated. (See affidavit of M. Subba Reddy dated 28-12-1994.)In the said affidavit, it is further submitted that in theabsence of direct recruits, the slots reserved for directrecruits were liable to be adjusted with the promoteesimmediately and subsequently arrived direct recruits shouldbe given their positions in the seniority list subsequentlyin bunch. In our view, the averments of the appellantsbefore the High Court, if accepted, would result in completeviolation of the quota-and-rota rule embodied in the aboveregulations, which cannot be permitted. As stated above, theappellants were promoted originally subject to the conditionsenvisaged in Regulation 34 and, therefore, they cannot claim

seniority by ignoring the said regulations and on the basis of theirofficiating services. They were promoted temporarily underRegulation 30 which provides for ad hoc promotions. Regulation34 ensures induction of qualified direct recruits. But for Regulation34, candidates from feeder posts would be temporarily promotedto the slots reserved for direct recruits and on their regularisation,the quota prescribed for direct recruits will be defeated. Regulation34 has been enacted to protect quota prescribed for direct recruits.As stated above, Regulation 3 of the Service Regulations has tobe read with Regulations 30 and 34 of the said RecruitmentRegulations. The appellants were promoted on temporary basisunder Regulation 30 with the clear understanding that the periodof officiation will not give them any right over direct recruits infuture. It is for this reason that Regulation 30(6) states that if atemporary promotee is subsequently promoted in accordance withthe regulations, his probation will commence in the higher categoryonly from the date of subsequent promotions. For the same reason,Regulation 34 states that revertees shall be subsequentlyconsidered for repromotion against the quota of vacancies reservedfor being filled by promotion. Therefore, Regulation 34 protectsthe quota prescribed for direct recruits. On reading Regulation3 of the Service Regulations with Regulations 30 and 34 ofthe Recruitment Regulations, it becomes clear that neitherthe date of promotion nor the date of selection is thecriterion for fixation of seniority. The fixation of seniorityunder the above regulations depends upon the number ofvacancies falling in particular category. Therefore, therule of rota is inbuilt in the quota prescribed for directrecruits and for promotees in terms of Item 3 of Annexure‘A’ (Section B) to the Recruitment Regulations. In thepresent case, the above regulations prescribe quota of1:1, which leads to rota for confirmation. The fixation ofseniority under the above regulations depends upon thenumber of vacancies against which promotees became duefor promotion. In the case of Devendra Prasad Sharma v. Stateof Mizoram [(1997) 4 SCC 422 : 1997 SCC (L&S) 1053] Rule25(iii) stated that the relative seniority of direct recruits and ofpromotees shall be determined according to rotation of vacanciesbetween direct recruits and promotees based on the quota ofvacancies reserved for direct recruitment and promotion. Rule25(iii) is similar to Item 3(1) of Annexure ‘A’ (Section B). It washeld by this Court that in cases where there is rotation ofvacancies between direct recruits and promotees based onquota of vacancies, the rotation has to be considered inaccordance with the vacancies as and when they accrueunder the rules. Therefore, the quota rule needs to bestrictly adhered to, if not, it would lead to absurdity. If thecontention of the appellants is accepted, it would mean thatthe entire group of direct recruits will have to be placedbelow the entire group of promotees. We are of the opinionthat having fixed the quota between the two sources ofrecruitment, there is no discretion with the Corporation toalter the quota or to deviate from the quota. In thecircumstances, there is no merit in the argument of the appellantsthat Item 3(1) of Annexure ‘A’ (Section B) prescribes only quotaand not rota and that the said item was not for determination ofseniority. In the case of S.G. Jaisinghani v. Union of India [AIR1967 SC 1427] this Court held that having fixed the quota betweentwo sources of recruitment, it is not open to the Government toalter the quota or to deviate from the quota. In the case of Unionof India v. S.D. Gupta [(1996) 8 SCC 14 : 1996 SCC (L&S) 811: AIR 1996 SC 3325] the respondents were promotee ExtraAssistant Directors (Class III) in Central Water CommissionEngineering Class I Service. The Recruitment Rules were madew.e.f. 15-10-1965. In the earlier litigation, the Tribunal found thatone Shri V.P. Misra, Extra Assistant Director was promoted on adhoc basis on 31-3-1978 and he was required to be confirmed witheffect from the date on which vacancy was available to him inthe quota of promotees. The vacancy had admittedly arisen in thequota of promotees on 3-5-1979. Shri V.P. Misra was fitted inthat vacancy. While doing so, the Department applied the principleof rota and quota and determined the inter se seniority ofpromotees and direct recruits. Consequently, the promotees werepushed down in the order of seniority which led to the secondround of litigation. The question which arose for determinationbefore this Court was whether fitment of seniority determined bythe Department was in accordance with the rules. The Courtfound that 60% of the vacancies were to be filled by direct recruits

Aand 40% by promotees. Among the 40% quota, there was furtherdemarcation in the ratio of 25% and 15% between promoteesand transferees. Admittedly, the promotees were entitled to theirfitment within 25% quota. Vacancies for the promotees had arisenon 3-5-1979 and, therefore, V.P. Misra was entitled to that vacancywhich arose on that date. However, as stated above, in theBintegrated list, the promotees were pushed down. It wascontended on behalf of the promotees that the directrecruits were not borne in the service when the promoteeswere promoted and equity requires that the promoteescannot be pushed down. This Court rejected the saidCargument by observing that the object of direct recruitmentis to blend talent and experience. So long as the systemcontinues, consequences are inevitable. Although the directrecruits were recruited later, their fitment in the order ofseniority had to be determined with reference to rota andquota prescribed under the rules. In such case, there wasDno illegality even when promotees were pushed downwardsin the order of seniority. In our view, the judgment of this Courtin S.D. Gupta case [(1996) 8 SCC 14 : 1996 SCC (L&S) 811 :AIR 1996 SC 3325] squarely applies to the facts of the presentcase.”

(emphasis added)

It was held that although certain direct recruits were recruitedsubsequent to the promotees, their fitment in the order of seniority hadto be determined with reference to rota and quota or ‘rotation of quota’prescribed under the Rules. It was held that there was no illegality whenthe promotees were pushed downwards in the order of seniority. ThisFCourt quoted with approval its earlier judgment in the case of Union ofIndia & Ors. v. S.D. Gupta & Ors[7]. In this case, by applying theprinciple of rota and quota, the inter-se-seniority of the promotees anddirect recruits was fixed. This Court, in the said case, held that thoughdirect recruits were recruited subsequent to the appointment of promotees,Gthe fitment of direct recruits and promotees must be determined withreference to the rota and quota prescribed. In paragraph 8, this Courtdealt with an argument that the direct recruits were not born in theservice when the promotees were promoted and therefore, the promoteesshould not be pushed down. In paragraph 8, this Court held thus:

H7 1996 (8) SCC 14

“8. It is then contended that the direct recruits were not born inthe service when the promotees were promoted and equity requiresthat they cannot be pushed down. The object of directrecruitment is to blend talent and experience to augmentefficiency when direct recruits, though came from greenpastures, were imbued with dedication and honesty. So longas system continues, consequences are inevitable. Thequestion of equity does not arise. Shri Krishnamani thencontended that direct recruits are shown temporary and so theycannot be similar to promotee substantive appointees. The quotaof 60% of direct recruits is to substantive vacancies, though theirinitial appointment is temporary; on completion of period ofprobation they become substantive appointees. That is the settledprinciple of law in this behalf. The Tribunal, therefore, is not rightin giving direction to consider their fitment vis-à-vis the orderpassed by this Court in their quota above the direct recruits.”

(emphasis added)

29. Now, we turn to the decision of the Constitution Bench in thecase of Mervyn Coutindo[3]. This Court decided petition under Article32 of the Constitution of India filed by the Appraisers in the CustomsDepartment. The Constitution Bench noted that the system whichprevailed for recruitment to the posts of Appraisers was that 50% ofposts were reserved for direct recruits and the remaining 50% werefilled in by promotion from sub-ordinate officers in the CustomsDepartment. The contention raised in the petition was that this systemhad resulted in discriminatory treatment to the promotees in as much asthe promotees who had rendered much longer service in the cadre ofAppraisers were put in seniority below the direct recruits with muchshorter service. There was one more grievance in the petition with whichwe are not concerned. The Apex Court referred to the circular/OMdated 12[th] September 1959 which is referred in the OMs dated 7[th]February 1986 and 3[rd] July 1986. After considering the submissions, theConstitution Bench held thus:

“6. Before we come to what has been done in 1963 in the matterof fixing seniority of Appraisers, we may refer to two othercirculars. The first is circular of the Board issued in 1953. Thatcircular in our opinion has nothing to do with the question of fixingof seniority as between direct recruits and promotees. Its main

value is that it emphasises that the proportion fixed for directrecruits and promotees should be rigidly maintained. It also directsthat promotion to higher grades should be made on the basis of acombined seniority list of both direct recruits and promotees. Thenthere is another circular of 1955. That circular again emphasisesthe rotational system and says that it has been decided that“inter se seniority of direct recruits and promotees in thegrade of Appraisers should be determined in the order inwhich the vacancy in that grade is filled by direct recruitor by promotee according to the quota fixed for suchappointments”. Stress has been laid on behalf of thepetitioners on the words “is filled” in this circular, and it isurged that this means that until the direct recruit is actuallyrecruited and fills the vacancy meant for direct recruit hecannot get seniority from before the date he fills the vacancymerely on the ground of rotational system of fixing seniority.We do not think that this is the meaning of the words “isfilled” used in this circular. We have already said that thiscircular also emphasises the rotational system in the matterof fixing of seniority and all that it means is that vacanciesshould be filled either by direct recruits or by promoteesaccording to the quota fixed for such appointments.

7. This brings us back to the circular of 1959, and the main questionEin that connection is the meaning to be assigned to the words“seniority determined accordingly”, in the explanation to principle6 relating to relative seniority of direct recruits and promotees.As we read these words, their plain meaning is that seniorityas between direct recruits and promotees should beFdetermined in accordance with the roster, which has alsobeen specified, namely, one promotee followed by one directrecruit and so on. Where therefore recruitment to cadreis from two sources, namely, direct recruits and promoteesand rotational system is in force, seniority has to be fixedas provided in the explanation by alternately fixing aGpromotee and direct recruit in the seniority list. We donot see any violation of the principle of equality ofopportunity enshrined in Article 16(1) by following therotational system of fixing seniority in cadre half of whichconsists of direct recruits and the other half of promotees,and the rotational system by itself working in this way cannot

be said to deny equality of opportunity in governmentservice. The anomalies which have been referred to in thepetition arise not on account of there being anything opposedto equality of opportunity in government service by the useof the rotational system; they arise out of the fortuitouscircumstance that in this particular service of Appraisers,for one reason or another, direct recruitment has fallen shortof the quota fixed for it. It is merely because of thisfortuitous circumstance that anomalies to which referencehas been made in the petition have arisen. There is no doubtthat if direct recruitment had kept pace with the quota fixedtherefor there would have been no anomalies in fixing theseniority list. The question therefore narrows down to this: Canit be said that there is denial of equality of opportunity which arisesout of this fortuitous circumstance and which is not vice inherentin the rotational system? We are not prepared to say that therotational system of fixing seniority itself offends equality ofopportunity in government service. Any anomalies which may haveresulted on account of insufficient recruitment of direct recruitsin the past cannot in our opinion be ground for striking down therotational system, which, as we have said, does not itself amountto denial of equality of opportunity in the matter of employment ingovernment service. It is regrettable that some anomalieshave appeared because of insufficient recruitment of directrecruits in the past in this particular service. But that inour opinion can be no reason for striking down the senioritylist prepared in 1963 which is undoubtedly in strictaccordance with the rotational system based on the fixedquotas for recruitment of direct recruits and promotees.The order of the Board of 1963 on the basis of which theimpugned seniority list of Appraisers has been preparedclearly lays down that “the principle of determination ofseniority of the direct recruits and the promotees inter sein the prescribed ratio of 1:1 should be worked out”. Thisorder is in accordance with the circular of 1959 and as wehave said already, there is no inherent vice in the principleof fixing seniority by rotation in case where service iscomposed in fixed proportion of direct recruits andpromotees.”

(emphasis added)

A30. The argument made before us is that the decision in the caseof K. Meghachandra[2 ]will have to be ignored on the ground that it isper incuriam as the attention of the Bench which decided the case wasnot invited to the binding decisions of the Constitution Bench in the caseof Mervyn Coutindo[3 ]and Coordinate Bench in the case of M. SubbaReddy[6]. Prima facie, we find substance in the argument that the attentionBof the Bench which decided the case of K. Meghachandra[2 ]was notinvited to the aforesaid binding precedents. Therefore, we are of theview that the appropriate course of action will be to refer the question toa larger Bench. We are dealing with case where the ‘rotation of quota’or rota and quota system is being followed. If the promotees are recruitedCin the relevant recruitment year, but the process of recruitment of thedirect recruits which commenced in the same recruitment year couldnot be completed in the same year, the direct recruits appointedsubsequently will have to be interspaced between the promotees of thesame recruitment year. In such case, it cannot be said that directrecruits were not available during the recruitment year. Their appointmentDcould not be made during the same year, though the process ofappointment commenced in the same year. But, if the process ofrecruitment of the direct recruits is completed in the same recruitmentyear but an adequate number of candidates could not be selected, theshortfall should be carried forward to the next recruitment year. In suchEcases, the candidates who are selected against shortfall vacancies willhave to be bunched below the promotees of the earlier years. Unlesssuch procedure is followed, the rotation of quota system will be defeated.31. Coming to the facts of the case, though process of recruitmentof direct recruits to the post of Income Tax Inspectors commenced inFthe recruitment year 2009-10, the same could not be completed in thesame recruitment year. This is not case where an adequate number ofdirect recruits could not be recruited even though the recruitment wasdone in the recruitment year itself. In this case, those who were eligiblefor direct recruitment were deprived of the opportunity as the process

of recruitment could not be completed during the same recruitment yearG2009-10 due to no fault on their part. The documents annexed to thecounter affidavit show that the segregation of vacancies for 2009-10and 2010-11 has been properly made.

32. In any event, the decision in the case of K. Meghachandra[2]has prospective operation. The seniority list of 7[th] September 2016H

was made in terms of the decision in the case of N. R. Parmar[1]. Hence,the same could not have been altered on 13[th] February 2018 when thesaid decision was in force.

33. Thus, our conclusion can be summarised as under:

i.The decision in the case of K. Meghachandra[2 ]requiresreconsideration by larger Bench in view of the fact thatthe binding decision of Constitution Bench in the case ofMervyn Coutindo[3 ]and another binding decision of aCoordinate Bench in the case of M. Subba Reddy[6]werenot placed for consideration before the Bench which decidedthe case of K. Meghachandra[2] ;

ii.Even assuming that the case of K. Meghachandra[2 ]wascorrectly decided, paragraph 39 of the decision shows thatthe decision in the case of N.R. Parmar[1 ]has beenprospectively overruled by observing that the decision willnot affect the inter-se-seniority already fixed on the basisof the case of N.R. Parmar[1 ]and the same was protected.It is also held that the decision will apply prospectively exceptwhere seniority is to be fixed under the relevant Rules fromthe date of vacancy / the date of advertisement. In thiscase, as on the date when the case of N.R. Parmar[1 ]wasdecided, there was no rule which required that the inter-se-seniority of direct recruits and promotees to the post ofIncome Tax Inspectors should be fixed from the date onwhich person is born in the cadre. In the facts of thecase, the seniority list was correctly published on 7[th]September 2016 in terms of the decision in the case of N.R.Parmar[1 ]by interspacing those direct recruits who wereeligible in the recruitment year 2009-10 and were appointedagainst the vacancies of the said year with 53 promoteeswho were promoted vide DPC dated 29[th] June 2009. Theseniority list was later on modified on 13[th] February 2018without giving an opportunity of being heard to the affecteddirect recruits.

34. At this stage, we may note here the factual aspects stated inthe affidavit dated 12[th] October 2022 filed by Shri Anurag Chandra,Deputy Commissioner of Income Tax in the Office of the Principal Chief

ACommissioner of Income Tax, Gujarat. The affidavit refers to the interimorder dated 13[th] July 2018 in the Civil Appeal arising out of S.L.P. (C)No.16161 of 2018, by which status quo as of that date with respect tothe posts held, was ordered to be maintained. The affidavit notes that asa result of the interim order, the promotion to the cadre of Income TaxOfficers from the cadre of Income Tax Inspectors could not take place.BAs result, 33.33% of posts in the cadre of Income Tax Officers arevacant as the same cannot be filled in. As noted earlier, the decision inthe case of K.Meghachandra[2 ]applies prospectively i.e. from 19[th]November 2019. Prima facie, the seniority fixed based on the decisionin the case of N.R. Parmar[1 ]has to be given effect. Therefore, whileCwe are recommending reference to larger Bench, interim relief willhave to be vacated and seniority will have to be fixed on the basis of theimpugned judgment, subject to the final outcome of the appeal or thedecision of the larger Bench, as the case may be.

35. Hence, we pass the following order:

Di. We are of the considered view that the following questionsneed to be decided by larger Bench of five Hon’ble Judges:

a. Whether the decision in the case of K. Meghachandra[2]can be said to be binding precedent in the light of the law laiddown by the Constitution Bench in the case of MervynECoutindo[3 ]and the law laid down by Coordinate Bench in thecase of M. Subba Reddy[6]?

b. In absence of specific statutory rules to the contrary, whenthe ‘rotation of quota’ rule is applicable, whether the seniorityof direct recruits who were recruited in the recruitment processFwhich commenced in the relevant recruitment year but endedthereafter, can be fixed by following ‘rotation of quota’ byinterspacing them with the direct recruits of the samerecruitment year who were promoted earlier during the sameyear?

Gii. We direct the Registry to place this petition before Hon’ble theChief Justice of India for appropriate orders.

iii. The interim relief granted on 13[th] July 2018 stands vacated.Effect shall be given to the impugned judgment subject to the finaloutcome of this appeal or reference, as the case may be. We alsoHclarify that the seniority of promotees and direct recruits who

may be appointed hereafter will be subject to the final outcome ofthe decision of this appeal or the decision in reference, as thecase may be. Accordingly, concerned persons shall be informedin writing by the Income Tax Department.

36. In the Civil Appeal arising out of Special Leave Petition (C)Diary No.12422 of 2022, the challenge is to the judgment and orderdated 6[th] February 2018 passed by the High Court of Judicature at Patnawhich follows the decision in the case of N.R. Parmar[1 ]dealing with theissue of appointment of Income Tax Inspectors pertaining to therecruitment year 2009-10. This appeal be heard along with the mainappeal.

Devika Gujral

Directions issued.

(Assisted by : Mr. Shubhanshu Das, LCRA)