Union Of India & Ors vs Deo Narain & Ors

Administrative Tribunal, Delhi (`CAT' for 2

short) in Original Application No. 2146 of

1998.

2. To appreciate the issue raised in the

present appeal, few relevant facts may be

noted.

3. The respondents herein (applicants

before CAT) filed Original Application against

the action of the Central Excise and Customs

Department of not considering their cases for

promotion to the post of Upper Division Clerk

(`UDC' for short) from the post of Lower

Division Clerk (`LDC' for short). According to

the applicants, they joined service in the

Office of Central Board of Excise and Customs,

Department of Revenue as LDCs. Applicant No.1

Deo Narain joined as LDC on June 11, 1962 (sic

1982). Applicant No. 2 Bijender Singh joined on

September 9, 1986. Applicant No. 3-Nandan Singh

joined on May 5, 1988 whereas applicant No.4-

Ram Kishan joined on March 17, 1987. In

accordance with the policy of Inter-

Collectorate Transfers, they got themselves 3

transferred to Meerut Collectorate. Consequent

upon their transfer, they lost their seniority

which they were having in the parent Department

i.e. the Department where they were serving.

They were placed at the bottom of the seniority

list in the new Department at Meerut under the

relevant rules and policy decisions. In view of

their relatively lower position in the combined

seniority list of LDCs, the applicants and

other similarly placed LDCs in the seniority

list, did not come within the zone of

consideration for promotion to the post of

Upper Division Clerk (UDC) in the year 1997-98.

Hence, when the Departmental Promotion

Committee (DPC) met for consideration of cases

for promotion of LDCs as UDCs, in the light of

position of the applicants in the combined

seniority list, they were not included in the

zone of consideration. Their cases, therefore,

were not considered.

4. The applicants, hence, approached the

CAT by filing Original Application challenging 4

the action of their non-consideration and non-

promotion from the post of LDC to the post of

UDC on the ground of their placement in the

seniority list. They contended that they had

completed requisite service as LDC and their

cases, therefore, ought to have been considered

by DPC. Non consideration of their service on

the basis of their position in combined

seniority list was illegal, arbitrary and

irrational. A relief was, therefore, sought to

direct the authorities to consider the cases of

the applicants for promotion to the post of UDC

from the post of LDC.

5. The CAT, vide its order dated April

13, 1999 allowed the application, directed the

authorities to convene DPC for the year 1997

and consider the cases of the applicants as

eligible LDCs for promotion to the post of UDC

in accordance with law by taking into account

their past regular service rendered as LDCs

before their transfer to Commissionerate,

Meerut. It also directed to take such action 5

within a period of three months from the date

of receipt of the copy of the order.

6. The appellants herein, being aggrieved

by the said order, approached the High Court by

filing a writ petition which as stated above,

came to be dismissed by the High Court holding

that there was no `merit' in the petition and

the order passed and direction issued by the

CAT could not be said to be illegal or contrary

to law.

7. The above orders are challenged by the

authorities in the present appeal.

8. On May 6, 2003, the Special Leave

Petition was placed for admission hearing.

Notice was issued. On September 22, 2003, delay

was condoned and leave was granted. By an order

passed by a Bench headed by the Hon'ble the

Chief Justice of India, the appeal was ordered

to be placed for final hearing in summer

vacation and that is how the matter has been

placed before us.

6

9. We have heard learned counsel for the

parties.

10. The learned counsel for the appellants

strenuously contended that the CAT as also the

High Court committed an error of law in

allowing the claim of the applicants and in

directing the authorities to consider their

cases for promotion to the post of UDC from the

post of LDC. According to the counsel, when the

applicants were transferred to another

Collectorate, they had foregone their

seniority. It was in accordance with the

Instructions issued by the Government of India.

It was expressly stated that in the new

Collectorate, where they were transferred, they

would be placed at the bottom of the seniority

list below all LDCs who were working at that

time. With open eyes, the applicants accepted

the said condition and joined the new

Collectorate at Meerut. It was thereafter not

open to the applicants to challenge the said

action. Again, there was gross delay and laches 7

on the part of applicants in challenging such

action. They were transferred in 1992. The

Departmental Promotion Committee (DPC)

considered the cases of LDCs for promotion as

UDCs in 1997. Till then, applicants did not

take any action. They filed Original

Application in September, 1998. Therefore, even

on the ground of delay, the CAT ought not to

have entertained the application and ought to

have dismissed it.

11. According to the counsel, even on

merits, the applicants had no case. According

to the counsel, what weighed with the CAT as

also the High Court was that in accordance with

law, past services of applicants could not be

ignored. The counsel submitted that, to that

extent, the applicants were right and the CAT

and the High Court had not committed any

mistake in treating applicants as eligible and

qualified for consideration to the post of UDC

from the post of LDC. According to the counsel,

however, the CAT and the High Court went wrong 8

in equating eligibility with seniority. Two

things, namely, (i) eligibility, and (ii)

seniority are quite different and distinct.

Even if an employee is eligible and qualified,

it does not necessarily mean that his case must

be considered irrespective of his position in

the seniority list. Fixation or retention of

seniority depends upon the provisions of the

Act, Rules or Administrative Instructions in

force. In the case on hand, it was provided

that on transfer from one Collectorate to

another Collectorate, such transferee employees

would retain their requisite service as

experience for the purpose of consideration of

eligibility and qualification. But it was

specifically stated that in the new

Directorate, they will be placed at the bottom

and below all existing LDCs. The counsel stated

that for considering cases of eligible LDCs as

UDCs, there is a zone of consideration and

keeping in view lower position of applicants

who were transferees, they did not come within 9

the said zone and hence their cases could not

be considered. The said action was, according

to the counsel, perfectly legal and wholly

justified and the CAT and the High Court were

wrong in granting relief to the applicants. The

order passed by the CAT and confirmed by the

High Court, therefore, deserves to be set

aside.

12. The learned counsel for the contesting

respondents, on the other hand, supported the

order passed by the CAT and confirmed by the

High Court. It was submitted that once it is

said that the transferee LDCs would not lose

their past service, necessary corollary would

be that they would be treated as appointed as

LDCs the date they joined service and

thereafter it was not open to the authorities

to ignore their claim on the ground that their

placement was at the bottom of the seniority

list of the Collectorate where they were

transferred and placed below other LDCs since

they had foregone their seniority. Such an 1

action, according to the counsel, is arbitrary,

irrational, discriminatory and violative under

Articles 14 and 16 of the Constitution. It is

also unreasonable and infringing Article 19 of

the Constitution. The counsel also submitted

that when the applicants were otherwise

eligible and qualified, no power of relaxation

of eligibility could have been exercised by the

Government in favour of ineligible LDCs. The

CAT and the High Court were, therefore,

justified in granting the relief and no

interference is called for in exercise of

discretionary jurisdiction under Article 136 of

the Constitution. A prayer is, therefore, made

to dismiss the appeal.

13. Having given our anxious consideration

to the rival contentions of the parties, in our

opinion, the appeal deserves to be allowed.

14. In exercise of powers conferred under

the proviso to Article 309 of the Constitution,

the President of India framed rules regulating

the method of recruitment to Group C posts in 1

the Central Excise and Land Customs Department

known as "the Central Excise and Land Customs

Department Group C Posts Recruitment Rules,

1979". Procedure of recruitment, age limit,

qualifications, relaxation, etc. have also been

laid down in the Rules. Appointment as Upper

Division Clerk (UDC) is to be made, inter

alia, on promotion from the post of Lower

Division Clerk (LDC) with seven years

experience.

15. `Note' to the Rules reads as under:

"If a junior person is considered for promotion on the basis of his completing the prescribed qualifying period of service in that grade, all persons senior to him in the grade shall also be considered for promotion notwithstanding that they may not have rendered the prescribed qualifying period of service in that grade but have completed successfully the prescribed period of probation".

16. The Rules also provide for

Departmental Promotion Committee (DPC) and

consideration of cases of eligible candidates. 1

17. By a communication dated May 20, 1980,

the Government of India, Central Board of

Excise and Customs informed all Collectors of

Central Excise for consideration of cases of

transferee employees. It was stated that

transfer of all Group `C' officers from one

Collectorate to another Collectorate having

separate cadres were allowed on compassionate

ground with the approval of the Commissioner

subject to certain conditions. It was then

stated that requests received for inter-

Collectorate transfers from Group `C' officers

on genuine compassionate grounds can be

considered on merits. It was also expressly

provided that such transfers wherever

considered necessary, should be effected on the

conditions laid down in the said letter.

18. Condition (ii) which is relevant for

the purpose of present controversy, reads as

under:

(ii) The transferee will not be entitled to count the service 1

rendered by him in the former Collectorate for the purpose of seniority in the new charge. In other words, he will be treated as a new entrant in the Collectorate to which he is transferred and will be placed at the bottom of the list of the temporary employees of the concerned cadre in the new charge. (emphasis supplied)

19. In para 3 it was stated;

"A written undertaking to abide by the requisite terms and conditions may be obtained from the employees seeking transfers before the transfers are actually effected".

20. It is thus clear that as early as in

1980, a policy decision was taken by the

appellants that in certain circumstances, LDCs

could be transferred from one Collectorate to

another Collectorate purely on compassionate

grounds. But, it was also provided that such

transferee would not be entitled to count the

service rendered by him/her in the former

Collectorate for the purpose of seniority in

the new Collectorate. In other words, such 1

transferee would be treated as new entrant in

the Collectorate in which he/she is transferred

and will be placed at the bottom of the list of

temporary employees of the cadre in the new

charge.

21. From the above policy decision, it is

abundantly clear and there is no doubt

whatsoever that when any LDC working in one

Collectorate seeks transfer to another

Collectorate on compassionate ground, the said

action can only be taken on the terms and

conditions of the decision of the Government of

India, dated May 20, 1980. In that case, he/she

will not be entitled to get his/her service

rendered in the former Collectorate to be

counted for the purpose of seniority and will

be placed at the bottom of the list of

employees in the transferred Collectorate.

22. It is an admitted fact that in 1992,

the applicants got themselves transferred to

Meerut and they had, in consonance with the 1

policy decision of May 20, 1980, foregone their

seniority in the Collectorate where they were

working and were placed at the bottom of the

seniority list of the Meerut Collectorate where

they were transferred. In view of the above

fact and legal position, in our opinion, the

contention of the appellants that placement of

the respondents at the bottom of the seniority

list in the transferee Collectorate was legal

and valid is well founded and in consonance

with the decision of the Central Government.

There was no infirmity in the said order and it

ought not to have been disturbed.

23. The CAT, however, allowed the Original

Application relying upon a decision of this

Court in Union of India & Ors. v. C.N.

Ponnappan, (1996) 1 SCC 524. In Ponnappan, the

question before this Court was whether an

employee who was transferred from one Unit to

another Unit on compassionate ground and as a

result thereof has been placed at the bottom of

the seniority list, could have his service in 1

the earlier Unit from where he had been

transferred, counted as experience for the

purpose of promotion in the Unit where he was

transferred.

24. This Court noted that there was

cleavage of opinion amongst Benches of Central

Administrative Tribunal (CAT) on the question.

Whereas, the Madras Bench in C.N. Ponnappan v.

Union of India, (1987) 5 ATC 766 (Mad) had

taken the view that though on transfer on

compassionate grounds, the employee would lose

his seniority and would be placed at the bottom

of the seniority list at the transferred place,

for the purpose of promotion, his earlier

service in the Unit from where he was

transferred, would not be wiped out and the

said service would be treated as `experience'

for eligibility for promotion and if he is

found eligible, then his case for promotion has

to be considered on the basis of seniority `at

the transferred place'. [See also K.A. 1

Balasubramaniam v. Union of India, (1987) 4 ATC

805 (Mad) (FB)].

25. The Bangalore Bench of the CAT, on the

other hand, in S. Abdul Khayum v. Union of

India, (1987) 1 SLJ (CAT) 131 (Bang) did not

agree with the above view of Madras Bench and

held that an employee who was transferred on

compassionate ground and was placed at the

bottom of the seniority list at the place where

he was transferred, could not have his earlier

service at the place from where he was

transferred, counted as `experience' for the

purpose of eligibility for promotion.

26. This Court considered conflicting

views and held that the service rendered by an

employee at one place could not be ignored or

not counted for the purpose of promotion to

another Unit even if such transfer is made on

compassionate ground. He can be placed at the

bottom of the seniority at the transferred

place, but the experience obtained by him of

rendering service in the first Department could 1

not be ignored and must be considered as

experience for promotion in the new Unit also.

27. In para 4, the Court stated;

"4. The service rendered by an employee at the place from where he was transferred on compassionate grounds is regular service. It is no different from the service rendered at the place where he is transferred. Both the periods are taken into account for the purpose of leave and retiral benefits. The fact that as a result of transfer he is placed at the bottom of the seniority list at the place of transfer does not wipe out his service at the place from where he was transferred. The said service, being regular service in the grade, has to taken into account as part of his experience for the purpose of eligibility for promotion and it cannot be ignored only on the ground that it was not rendered at the place where he has been transferred. In our opinion, the Tribunal has rightly held that the service held at the place from where the employee has been transferred has to be counted as experience for the purpose of eligibility for promotion at the place where he has been transferred". (emphasis supplied)

28. We are unable to understand how the

CAT read this judgment as giving benefit of 1

seniority to the transferred employee in the

transferee Department over the employees who

were very much there. In our considered

opinion, the direction in the judgment is

abundantly clear which draws distinction

between `experience' on the one hand and

`seniority' on the other hand. What was held in

Ponnappan by this Court was that if an employee

is transferred from one Department to another

Department on compassionate ground, he would be

placed at the bottom of the seniority in the

transferee Department. Hence, at the time of

his transfer in the transferee Department, all

employees in the same cadre who were very much

serving at that time would be shown above such

transferee employee and in such combined

seniority list, the transferred employee would

be shown as junior most. The only thing which

this Court said and with respect, rightly is

that such employee who had already worked in a

particular cadre and gained experience, will 2

not lose past service and experience for the

purpose of considering eligibility when his

case comes up for consideration for further

promotion.

29. In our judgment, the ratio laid down

by this Court in Ponnappan clearly lays down

the principle formulated in the Government of

India's letter dated May 20, 1980 as also in a

subsequent communication, dated May 23, 1997

issued by the Ministry of Finance, Department

of Revenue. Even otherwise, in our considered

opinion, the two concepts, viz. (i)

`eligibility' and (ii) `seniority' are quite

distinct, different and independent of each

other. A person may be eligible, fit or

qualified to be considered for promotion. It

does not, however, necessarily mean that he

must be treated as having requisite `seniority'

for entry in the zone of consideration. Even if

he fulfils the first requirement, but does not

come within the zone of consideration in the 2

light of his position and placement in

`seniority' and the second conditions is not

fulfilled, he cannot claim consideration merely

on the basis of his eligibility or

qualification. It is only at the time when

`seniority' cases of other employees similarly

placed are considered that his case must also

be considered. The CAT, in our view, therefore,

was not right in applying Ponnappan and in

granting relief to the applicants. There is no

doubt in our mind that it says to the contrary.

30. Our attention was also invited to Renu

Mullick (Smt) v. Union of India & Anr., (1994)

1 SCC 373. In Renu Mullick, the appellant was

appointed as LDC in Central Excise and Customs,

New Delhi on December 17, 1974. She was

promoted as UDC on May 10, 1985. Then, on her

own request, she was transferred to the Central

Excise Collectorate, Allahabad where she joined

on August 4, 1987. She gave an undertaking that

on unilateral transfer, her seniority may be

"fixed below the last temporary UDC in the 2

Allahabad Collectorate" i.e. she might be

"treated as a fresh entrant in the cadre of

UDC", at Allahabad.

31. In 1991, she was initially promoted as

Inspector but later on reverted on the ground

that she did not fulfill the eligibility

conditions laid down in Rule 4 for the

recruitment which required experience of a

particular period. According to the Department,

since she was considered as fresh entrant, she

had not completed the requisite service and

having necessary experience and was, therefore,

not eligible for promotion to the post of

Inspector.

32. This Court held that the Department

was not right. According to the Court, even if

the employee sought unilateral transfer by

agreeing to be placed at the bottom of

seniority list in the transferee Department, it

would not wipe out the services rendered by

such employee. In other words, according to

this Court, an employee who is otherwise 2

eligible, would not become ineligible, merely

on the ground of voluntary or unilateral

transfer.

33. The Court stated;

"10. We are of the view that the Tribunal fell into patent error in dismissing the application of the appellant. A bare reading of para 2

(ii) of the executive instructions dated May 20, 1980 shows that the transferee is not entitled to count the service rendered by him/her in the former collectorate for the purpose of seniority in the new charge. The later part of that para cannot be read differently. The transferee is to be treated as a new entrant in the collectorate to which he is transferred for the purpose of seniority. It means that the appellant would come up for consideration for promotion as per her turn in the seniority list in the transferee unit and only if she has put in two years' service in the category of UDC. But when she is so considered, her past service in the previous collectorate cannot be ignored for the purposes of determining her eligibility as per Rule 4 aforesaid. Her seniority in the previous collectorate is taken away for the purpose of counting her seniority in the new charge but that has no relevance for judging her eligibility for promotion under Rule 4 which is a statutory rule. The eligibility for promotion has to be, determined with reference to Rule 4 alone, which prescribes the criteria 2

for eligibility. There is no other way of reading the instructions aforementioned. If the instructions are read the way the Tribunal has done, it may be open to challenge on the ground of arbitrariness.

11. The provisions of the rules reproduced above lay down that a UDC with five years service or UDC with thirteen years of total service as UDC and LDC taken together subject to the condition that he should have put in a minimum of two years of service in the grade of UDC, is eligible to be considered for promotion to the post of Inspector. The rule nowhere lays down than five years or thirteen years have to be spent in one collectorate.

There is no indication, whatsoever, in the rule that the service period of five years and thirteen years is not applicable to an officer who has been transferred from one collectorate to another on his own request. On the plain language of the rule the appellant, having served the department for more than five years as UDC and also having completed thirteen years composite service as UDC and LDC including two years minimum service as UDC, was eligible to be considered for promotion to the post of Inspector. The Tribunal failed to appreciate the elementary rules of interpretation and fell into patent error in non-suiting the appellant".

34. In our opinion, Renu Mullick also

supports the view which we are inclined to 2

take, namely, that an employee who is

transferred to other Collectorate does not lose

his/her past service for the purpose of

considering his/her eligibility. But, if such

transfer is voluntary or unilateral on

condition that he/she will be placed at the

bottom of the seniority list in the transferee

Department, the said condition would bind

him/her and he/she cannot claim seniority over

the employees in the transferee Department.

35. Finally, in Scientific Advisor to

Raksha Mantri & Anr. v. V.M. Joseph, (1998) 5

SCC 305, again, a similar view has been taken

by this Court. It was held that if the

eligibility condition requires certain length

of service, service rendered in another

organization before unilateral transfer at own

request cannot be counted for the purpose of

seniority. But it must be counted for

determining eligibility for promotion.

36. Referring to and relying on Ponnappan,

this Court stated;

2

"From the facts set out above, it will be seen that promotion was denied to the respondent on the post of Senior Store Keeper on the ground that he had completed three years of regular service as Store keeper on 7th June, 1980 and therefore, he could not be promoted earlier than 1980. In coming to this conclusion, the appellants excluded the period of service rendered by the respondent in the Central Ordnance Depot, Pune, as a Store Keeper for the period from 27th April, 1971 to 6th June, 1977. The appellants contended that, since the respondent had been transferred on compassionate ground, on his own request to the post of Store Keeper at Cochin and was placed at the bottom of the Seniority list, the period of three years of regular service can be treated to commence only from the date on which he was transferred to Cochin. This is obviously fallacious inasmuch as the respondent had already acquired the status of a permanent employee at Pune where he had rendered more than three years of service as a Store Keeper. Even if an employee is transferred at his own request, from one place to another, on the same post, the period of service rendered by him at the earlier place where he held a permanent post and had acquired permanent status, cannot be excluded from consideration for determining his eligibility for promotion, though he may have been placed at the bottom of the seniority list at the transferred place. Eligibility for promotion cannot be confused with seniority as 2

they are two different and distinct factors". (emphasis supplied)

37. The CAT in para 4 of the judgment,

observed as under;

"4. The respondents in their reply have submitted that the applicants have been transferred from other departments to the Central Excise, Commissionerate, Meerut on Inter Department transfer basis in 1992. They have relied on their Ministry's instructions dated 20.5.1980 and have submitted that the applicants have lost their seniority in the parent department in the grade of their inter departmental transfer from other Commissionerates to the Central Excise, Commissionerate, Meerut and have been placed at the bottom of the seniority list of the LDCs of Combined Central Excise Commissionerate, Kanpur/Allahabad/Meerut. They have stated that the applicants have worked as LDCs between four to eight years prior to joining in Meerut Commissionerate. As they are placed at bottom in the Seniority list of LDCs they have submitted that the applicants have no claim over and above the officials senior to them and they will be duly considered as and when their turn comes for promotion as per their seniority in the combined cadre of Allahabad/Kanpur/Meerut Commissionerate".

38. The CAT then concluded;

2

"In the result, this application is allowed with the directions to the respondents to convene review DPC for the year 1997, and consider the eligible LDCs for promotion to the post of UDCs in accordance with the principles laid down by the Supreme Court by taking into consideration the period of their past regular service rendered as LDCs before their transfer to another Commissionerate. In the circumstances, any relaxation of the Rules to consider the senior persons who do not have the eligibility conditions of seven years as laid down in the relevant recruitment Rules cannot be resorted to by the respondents when there are sufficient number of other persons who may be junior but, however, fulfill the eligibility conditions prescribed in the Rules. This action shall be taken within three months from the date of receipt of a copy of this order. No order as to costs".

39. As already discussed hereinabove, in

our opinion, the CAT was not right in allowing

the application and issuing directions to the

Department.

40. When the appellants herein approached

the High Court, the High Court observed;

"The fact of the matter is not in dispute. In the year 1992, the respondents joined the offices of the petitioners as lower division clerks 2

on different dates in 1992 on inter- departmental transfers. Admittedly, in terms of the existent rules, consequent upon their transfer, they had foregone their respective seniority in their departments and they were placed at the bottom of the seniority list. On or about 23rd May 1997, the Ministry of Finance, Department of Revenue issued instructions to all Commissionrates under the Central Board of Excise and Customs that an officer on transfer form one Commissionerate to another would be entitled to get the benefit of his past service for the purpose of promotion although his seniority shall be retained at the bottom of the transferred Commissionerate".

(emphasis supplied)

41. Referring to Renu Mullick, the High

Court observed that "it is not in dispute that

the persons on voluntary transfer, would lose

their seniority but the same by itself would

not mean that their entire past service is

wiped off. For the purpose of consideration of

their cases for promotion, their past service

is required to be taken into consideration".

42. We are in agreement with the High

Court. Renu Mullick and other cases referred to 3

by us, clearly lay down the above proposition

of law that even if the transfer is voluntary

and unilateral, services rendered by an

employee would not be wiped off for considering

eligibility for promotion to the higher cadre.

43. The High Court then proceeded to

observe that there was no bar in considering

the cases of the applicants for promotion. The

Court observed that though there were LDCs who

were senior to the applicants but they were not

eligible to be appointed as UDCs and hence, the

applicants were entitled to be considered for

promotional post of UDCs.

44. In our considered opinion, there the

High Court was not right. The statutory rules

referred to above, empower the Central

Government to relax the provisions of the

Rules. In exercise of the said power under Rule

7 of the Rules, the Central Government relaxed

eligibility condition. Such action, therefore,

cannot be held illegal or unlawful and could

not have been interfered with by the CAT or by 3

the High Court. Moreover, the applicants opted

for voluntary and unilateral transfer foregoing

their seniority and joined Meerut Collectorate

with open eyes and were placed below all LDCs

who were serving in the said Collectorate. It

was, therefore, not open to them to make

grievance if LDCs shown above them in the

seniority list are considered for promotion to

the cadre of LDC. Thus, neither law nor equity

supports the so-called claim of the applicants.

45. For the foregoing reasons, the appeal

is allowed. The order passed by the CAT on

April 13, 1999 in O.A. No. 2146 of 1998 titled

Deo Narain & Ors. v. Union of India & Ors. and

confirmed by the High Court on January 30, 2002

in C.W.P. No. 6281 of 1999 titled Union of

India v. Deo Narain & Ors. is set aside and the

original application filed by the applicants-

respondents herein is ordered to be dismissed.

46. On the facts and in the circumstances

of the case, however, there shall be no order

as to costs.

3

47. Ordered accordingly.

.....................................................................J. (C.K. THAKKER)

NEW DELHI, .....................................................................J. SEPTEMBER 15, 2008. (LOKESHWAR SINGH PANTA)