TMI Blog1980 (4) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... r appointments must even have enabled the administration to tide over administrative stalemate. But the tough problem which the administration has to face is that whereas it is necessary to recognize and protect the claims of promotes who are appointed in excess of their quota, it is equally necessary to ensure that the direct recruits do not suffer an undue set back in service on account of the excessive appointments of promotes. The conflicting claims of the two components of Service, both having an importance of their own, have therefore to be reconciled. It was with that object that the rules have been modified from time to time. The judgments rendered by this Court in matters which the petitioners want to be reopened show, without a shadow of doubt, how every effort was made to ensure that no hardship or injustice is caused to the promotes merely because their appointments exceeded their quota. The Court adopted what it considered in the circumstances to be a satisfactory and scientific method of ascertaining the number of vacancies available for being filled up. It came to the conclusions that the number; of actual appointments should determine the number of vacancies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ergy in court-room battles. Thereby their attention is diverted from public to private affairs and their inter se disputes affect their sense of oneness without which no n institution can function effectively. The constitution of Service Tribunals by State Governments with an apex Tribunal at the Centre, which, in the generality of cases, should be the final arbiter of controversies relating to conditions of service, including the vexed question of seniority, may save the courts from the avalanche of writ petitions and appeals in service matter-. The proceedings of such Tribunals can have the merit of informality and if they will not be tied down to strict rules of evidence, they might be able to produce solutions which will satisfy many and displease only a few. There are always a few whom nothing can please. The three petitioners in Writ Petition No. 66 of 1974 are all promotees. Petitioner No. 1, Kamal Kanti Dutta, was appointed as an Inspector of Income-tax on December, 7, 1950 and after passing the departmental examination he was promoted an Income-tax officer, Class II on June 21, 1954. On January 1, 1966 he was promoted as Income-tax officer, Class I, which post he was ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-titles known as the first Gupta case and the Second Gupta case . Respondents 4, 7 and 8 are Assistant Commissioners of Income-tax while respondents 5 and 6 are workings Deputy Directors of Investigation. It will be difficult to appreciate the nature of the relief sought in these Writ Petitions without a proper understanding of the history of the litigation leading to these petitions. That history is quite checkered. one of the principal grievances of the petitioners is that some of the previous decisions rendered by this Court are erroneous and that some have not been properly understood and interpreted while framing rules of seniority. That makes it necessary to refer to the previous proceedings leading to the present controversy. With a view to improving the income-tax administration, the Government of India, in consultation with the Federal Public Service Commission, decided to reconstitute and classify the then existing Income-tax Services, Classes I and II. The scheme of reorganisation of the Services was set out in a letter dated September 29, 1944 of the Government of India, Finance Department (Central Revenues), which was sent to all the Commissioners of Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on with the Federal Public Service Commission and that no officer shall have any claim to such promotion as of right. By a letter dated January 24, 1950 the Government of India laid down certain rules of seniority (a) as between direct recruits, (b) as between promotees selected from Class II, and (c) as between direct recruits who completed their probation in a given year and the promotees appointed in the same year to Class I. On October 18, 1951, the Government of India addressed a letter to all the Commissioners of Income-tax on the subject Income-tax officers, 14-463 SCI/80 Grade II (Class I Service) quota of vacancies filled by promotion . The letter says: The Government of India have had under consideration the question of increasing the proportion of vacancies reserved for promotion from Class II Income-tax officers in Class I. It has been decided in consultation with the Union Public Service Commission and in modification of para 2(d) of the Finance Dept. (Central Revenues) letter No. 195-Admn. (IT/39 dated the 29th September, 1944 that for a period of five years in the first instance 66/2-3 % of the vacancies in Class I, Grade II, will be filled by direct recruit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as infringing Articles 14 and 16(1) of the Constitution. Promotees who were likely to be affected by the decision of the Writ Petition were added as respondents 4 to 126 to that Petition. Jaisinghani who was recruited directly as an Income-tax officer, Class I (Grade II), raised four principal contentions: (i) Rule l(f)(iii) of the seniority rules as framed in 1952 was based upon an unjustifiable classification between direct recruits and promotees after they had entered Class I, Grade II Service. On the basis of that classification, promotees were given seniority over direct recruits of the same year and with weightage of three previous years. All officers appointed to Class I, Grade II Service formed one class and after being recruited to that class, no distinction could be made between direct recruits and promotees. (ii) Rule 1(f)(iv) was discriminatory because though the petitioner, Jaisinghani, qualified in the same competitive examination of 1950 for appointment to Class I, Grade II Service as respondents 4, 5 and 6 to that petition, they were treated as senior to him by the operation of the artificial rule by which they were regarded as deemed promotees , since they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of vacancies which had arisen from year to year from 1945 onwards, the nature of the vacancies-permanent or temporary-the chain of vacancies and such other details which were relevant to the matters pending before the Court. In his affidavit dated January 31, 1967 Shri R. C. Dutt, Finance Secretary, said that he was not able to work out, in spite of his best endeavours, the number of vacancies arising in a particular year. However, a statement, Ex. E. was furnished to the Court showing the number of officers recruited by the two methods of recruitment to Class I Service during the relevant years. The Court found that it was not clear from Shri Dutt s affidavit whether the quota rule was followed strictly for the years in question and noted that in the absence of figures of permanent vacancies in Class 1, Grade II, for the relevant years, the Solicitor General was unable to say to what extent there had been deviation from that rule. Rejecting the submission of the Solicitor General that the quota rule was merely an administrative direction, the Court held that rule 4 of the Income-tax officers Class I, Grade II) Service Recruitment Rules was a statutory rule under which a statutory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was recruited directly as Income-tax officer, Class I, Grade II, with the only difference that he was appointed in 1953 while Jaisinghani was appointed in 1951. Thus the direct recruits succeeded substantially in their contentions. the quota rule acquired statutory force, appointments of promotees in excess of the quota became bad and it became obligatory for the Government to prepare a fresh seniority list. Promotees found to have been appointed in excess of the quota admissible to promotees had naturally to go down lin the final gradation of seniority. The aforesaid decision was given by this Court on February 2, 1967. But, in spite of the mandamus issued by it, Government did not prepare a fresh seniority list for over a year, which led to the filing of a contempt petition by Jaisinghani and Joshi. Those proceedings were dismissed by this Court on November 6, 1968. In the meanwhile on July 15, 1968, the Government prepared a fresh seniority list and filed it in this Court. That list failed to satisfy promotees as well as direct recruits. Two writ petitions were filed in the Delhi High Court to challenge the fresh seniority list: one by B. S. Gupta, a promotee of 1962 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he first principle was accepted as good. The second and the third principles were held to be partially incorrect in so far as they excluded reference to all the promotees of 1952. The Court held that the promotees of 1952 should be referred to in the seniority list whether they are affected or not, the object being the ascertainment of excess promotions. The fourth principle set out in the letter of July 15, 1968 which is important for our purpose reads thus: E In view of the difficulty in working out the vacancies arising in each year the total number of direct recruits and promotees in each year have been taken into account for the purpose of implementing the quota rule. This Court held that the rule dated October 18, 1951 was not concerned with the constitution of the cadre but was concerned with how permanent vacancies were to be filled and therefore the promotees would be entitled to 1/3 of the vacancies in any particular year whether or not there was direct recruitment by competitive examination in that year. This ratio of 2: 1 between the direct recruits and the promotees could not be made to depend on whether any direct recruits were appointed in any particular y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same on record in so many words . The Court observed that if the rule is followed as a guideline, a slight deviation from the quota would be permissible but if there was an enormous deviation , other considerations may arise. Taking into consideration the relevant circumstances, the Court came to the conclusion that in the normal course the Government was entitled to prepare the seniority list till the end of 1958 in accordance with the quota rule of 1951. In regard to the position after the year 1958, the Court came to the conclusion that the quota rule ceased to apply and came to an end on January 16, 1959 when the sanction to upgrade 100 temporary posts in class II, grade III to class I, grade II was given by the President. The seniority rule then fell with the quota rule. On these considerations it was held that the seniority list was valid in regard to promotions made upto January 15, 1959 to the extent that it was prepared on the basis of the quota rule dated October 18, 1951 read with the seniority rule 1(f) (iii). This position made it necessary for the Court to consider as to how the inter seniority between the direct recruits and the promotes was to be fixed aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er se shall be deter- mined by the order of merit in which they are selected for such appointment by the Union Public Service Commission and any person appointed as a result of an earlier select ion shall rank senior to all other persons appointed as a result of any subsequent selection; and (iii) the relative seniority among the promotes and the direct recruits shall be in the ratio of 1: 1 and the same shall be so determined and regulated in accordance with a roster maintained for the purpose, which shall follow the following sequence, namely:- (a) promote; (b) direct recruit; (c) promote; (d) direct recruit; and so on When the new list of seniority was prepared by the Government in accordance with these rules, the Government had on its hands 73 promotes who, though appointed earlier between 1956 and 1958, had no quota posts for their absorption. The 73 promotes, described as spillovers on January 16, 1959 as also those who were promoted subsequently had to be absorbed in the Service, which could only be done by a special rule framed in that behalf. The method adopted in the preparation of this list was, according to Palekar, J., who spoke again for the Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected. lt could not be altered to the detriment of the promotes since to do so would violate Article 16 of the Constitution. This contention was rejected by the Court on the ground That when the 73 spillover appointments were made, there were no allocated or earmarked posts to which those promotes could have been validly appointed, the ordinary consequence of which would have been their reversion to Class II posts which they originally held. So long as the quota rule was in existence, appointments in excess of the quota, though invalid when made, were at least liable to be regularized in subsequent years when vacancies were available to the promotes as a consequence of the quota rule. But once the quota rule ceased to exist on January 16, 1959, any possibility of the excess appointments of the promotes being regularized vanished. It was in order to overcome this injustice to the promotes, that the new rule was framed by the Government. The new rule was thus not only the direct outcome of the judgment of the Court in the 1st Gupta case, 836 but it was founded on the very principles on which the Income tax Service had been constituted. The Court finally said that it had also to be re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osts on January 16, 1959 and December 9, 1960 respectively were exclusively allotted to promotes and were in fact filled in by the appointment of promotes. In regard to the decision in the 2nd Gupta case (Supra) it is contended that the decision suffers from the following infirmities: (i) It was wrongly held therein that the 73 spillover promotes as on January 16, 1959 could not be given priority en bloc, even though it was directed in the judgment in the 1st Gupta Case (supra) that they should be dealt with on a priority basis . (ii) It was wrongly held that 214 promotes were appointed in excess of the quota available to the promotes. (iii) The conclusion that no distinction can be made between promotes and direct recruits once they belong to a com- mon cadre was erroneous, as a result of which the promotes were unjustly deprived of their right to weightage. (iv) The provision in rule 3 (iii) of the new Rules of seniority of 1973 that direct recruits and promotes will be appointed in the ratio of SO: SO cannot work to the advantage of the promotes because the measure of SO percent is fixed by the new rules in relation to the actual appointments made, whereas the ol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recruits who are 15 years junior in age and 15 years junior in experience had been placed above him ; and that the seniority list dated April 15, 1978 of Assistant Commissioners of Income- tax, which is the basis of further promotion to the post of Commissioner of Income- tax, does not include his name at all, though he has been working as an Assistant Commissioner ever since 1969 when he was selected by the competent authority with the concurrence of the U.P.S.C., after putting in 22 years of service as an I.T.O., out of which 10 years service was rendered in Class I itself. Sajnani also prays that the seniority list dated April 15, 1978 for the cadre of Assistant Commissioners be set aside as violating Articles 14 and 16(1) of the Constitution. In addition to these grounds which are pressed upon us for reviewing our decisions in Jaisinghani, Ist Gupta case, 2nd Gupta case and Jangamayya, (supra) the petitioners have placed strong reliance on the findings of the 49th Report of the Committee on Petitions of the Rajya Sabha, which was presented on January 9, 1976. A full text of that Report is extracted at pages 242 to 363 of the compilation filed by the writ petitioners in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the level of Assistant Commissioners. The Committee hoped that with the separation of the two seniority lists, the controversy of inter se, seniority will be resolved and the hardship caused to the 434 officers promoted between 1956 to 1966 will be relieved. The Committee made certain calculations according to which, the correct number of spill-over promotes as on January 16, 1959 was 15 and not 73. Observing in paragraph 7(i) that the Parliament owes responsibility in service matters too and that the executive is answerable to the Parliament for its actions, the Committee concluded its Report with the observation: .... if necessary, a special law could be enacted and in corporated in the Ninth Schedule of the Constitution so that no further scope is left for disputes and litigation and the Department would start functioning as an efficient and well- knit unit and fulfil its intended role in combating the evils of black money and tax evasion and ensuring the stability and progress of our country. It is not necessary to go into complications arising out of the random placement of statutes, rules and notifications in the 9th Schedule, but we do hope that, some day, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly necessary to ensure that the direct recruits do not suffer an undue set back in service on account of the excessive appointments of promotes. The conflicting claims of the two components of Service, both having an importance of their own, have therefore to be reconciled. It was with that object that the rules have been modified from time to time. The judgments rendered by this Court in matters which the petitioners want to be reopened show, without a shadow of doubt, how every effort was made to ensure that no hardship or injustice is caused to the promotes merely because their appointments exceeded their quota. It is not correct to say that the judgment in Jaisinghani (supra) was based on a concession or that the Court felt compelled to draw the particular conclusions therein because of the inability or refusal of the Finance Ministry to produce the relevant files. The Court adopted what it considered in the circumstances to be a satisfactory and scientific method of ascertaining the number of vacancies available for being filled up. It came to the conclusions that the number; of actual appointments should determine the number of vacancies available which, with great respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er which the seniority between Promotes and direct recruits was fixed alternately on a roster system, vacancies being equally divided between Promotes and direct recruits, for the entire period from 1959 up-to-date. Though the promotes submitted in the 2nd Gupta case (supra) that the new seniority rule was unfair to them, they were unable to put forward any rational alternative, a fact which is noted at page 119 of the Report. That led the Court to remark: They are indeed pleased with the increase in the promotional chances. But they are sore that the artificial rule of seniority which gave them weightage, has been removed. They do not dispute that by the increase in their ratio in Class I service, a larger number of Class II officers will, in course of time get a chance to be appointed by promotion as Assistant Commissioners. But they are sorry that their chances to be promoted to posts higher than that of the Assistant Commissioner are now retarded by the removal of the weightage. This shows how difficult it is to solve the jig-saw puzzle of service disputes. The Report of the Committee on Petitions of the Rajya Sabha, howsoever sincerely motivated and fully drawn, c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iscovery of new and important evidence, which would justify reconsideration of the decisions already rendered by this Court after the most careful examination of the competing contentions. The report of the Rajya Sabha Committee on Petitions shows, as already indicated, that the relevant files are still not traceable. The petitions are accordingly dismissed but there will be no order as to costs. DESAI, J.-I have carefully gone through the Judgment prepared by My Lord the Chief Justice but I regret my inability to agree with the same. The history, chronology of events, contentions canvassed and the three decisions of this Court disposing of the contentions have been so succinctly drawn up in the main judgment that its repetition would merely be an idle formality. I would, therefore, straightaway deal with the points raised in these petitions. The petitioners who are promote Income Tax officers Class I, Grade II, pray for reconsideration of the three decisions specifically S.G. Jaisinghani v. Union of India O.r.s.. Bishan Satup Gupta v. Union of India o.r.s..(2) ( 1st Gupta case for short) and, Bishan Sarup Gupta etc. etc. v. Union of India ors. etc. etc. (13) ( 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the purpose of filling in particular vacancies or such vacancies as may be required to be filled in during any particular period and the number of candidates to be recruited by each method. 5. The action of the Government in upgrading 214 posts between 1959 and 1962 from Class II, Grade III to Class I. Grade II was not open to question as at that stage there was no quota rule and rule 4 enabled the Government to make recruitment from either of the two sources in exercise of its executive power. In upholding the seniority rules in 2nd Gupta case the Court introduced quota rule retrospectively by the back door which is impermissible and its operation manifestly establishes its utter unfairness inasmuch as a direct recruit not any where in the Department or may be a student may secure a march over a promote who has been working in Class 1, Grade II. While no doubt this Court has constitutional power to review its decision, it is a power to be sparingly exercised because any such review has the tendency to unsettle questions which may have been finally determined. In fact, learned Solicitor-General appearing for the Union of India warned us that the credibility of this Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from being accident. We can only conclude that important information was deliberately withheld from the Supreme Court as well as from the Committee . On these observations the credibility submission would not only stand squarely answered, but need not deter us from going into the points made in these petitions. However, this Court does not lightly undertake review of its decisions, more especially where conflicting claims have been settled by a decision of the Court and the whole gamut may have to be gone through over again on a reconsideration of the decision. The approach of the Court on a plea of reconsideration has been spelt out in Sajan Singh v. State of Rajasthan,(l) where a plea for reconsideration of the decision of this Court in Sri Sankari Prasad Singh Deo v. Union of India State of Bihar,(2) was repelled observing as under: It was, however, urged before us during the course of the hearing of these writ petitions that we should reconsider the matter and review our earlier decision in Sankari Prasad s case. It is true that the Constitution does not place any restriction on our powers to review our earlier decisions or even to depart from them and there can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the quota prescribed by the Government referable to the power conferred by rule 4 were statutory in character. This is borne out by the observation of the Court which may be extracted: It is not disputed that rule 4 of the Income Tax officers, Class I, Grade II Service Recruitment Rules is a statutory rule and there is a statutory duty cast on the Government under this Rule to determine the method or methods to be employed for the purpose of filling the vacancies or number of candidates to be recruited by each method . Income Tax Service was reconstituted on September 29, 1944 The Government of India classified the existing Income Tax Service as Class I and Class II. The scheme provided for recruitment of Income Tax officers Class I, Grade II partly by promotion and partly by direct recruitment. The scheme was set out in the Government of India, Finance Department (Central Revenues) letter dated September 29, 1944. The quota prescribed therein has undergone a revision at a later date. It thus appears that the rules were pre-constitution Rules and, therefore, their source must be traced to the Government of India Act, 1935 ( 1935 Act for short). Section 241 of the. 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quota is not statutory but merely a guideline, the Government whenever making appointment would be acting in exercise of power conferred by rule 4 which leaves it to the discretion of the Government to decide from what source recruitment should be made and what must be the quantum of vacancies that must be filled in at a given point of time and such appointment could not be said Hi to be invalid. Alternatively, even if the assumption made in Jaisinghi s case that rule 4 and the quota referable to the exercise of power conferred by rule 4 is unquestionable yet when this Court held that the quota is related to the vacancies, the decision proceeding on an incorrect plea that the information about the number of vacancies in a year is not available, is unsustainable for two reasons, namely, (I) that the files are now produced; and (2) in the absence of information about the vacancies available the Court could not have invalidated any appointment on the assumption that appointment from the source of promotes was in excess of the quota. On a plain reading of rules 3, 4 and S it appears crystal clear that the quota was related to vacancies and at one stage that was accepted. On this fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate upto 1956, the quota rule on its own strength evaporated because it was to be in operation for a period of five years and no fresh quota rule was issued by the Government. Therefore, after 1956 rule 4 remained in force in all its rigour and was not hedged in by any quota. Rule 4 permitted the Government to make recruitment from either source without lettering its discretion by any quota rule which it was not bound to prescribe. On January 16, 1959, Government in the ministry of Finance informed the commissioners of Income tax that the President had sanctioned the upgrading to class I of 100 temporary Posts of Income Tax officers, Class II. On December 19, 1960, there was further upgrading of 114 posts from class II to class I. Between 1959 and 1962 these 214 posts were filled in by promotes. Now, in the Ist Gupta case this court held that even though the quota rule expired in 1956, yet the Government of India adopted it as a guideline. May be, it may be so. Does any appointment in breach of the guideline neither statutory nor even having the fragrance of any executive instruction become invalid more so when the Government had power to make appointment from either source uninhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be unfair. But apart from this, even in 1959 there was no quota rule and assuming that the old service rule giving weightage to the promotes crushed under that weight of large number of promotes being promoted, it would not be open to the Government to so prepare a fresh seniority list which cannot be given effect to unless a roster is introduced which introduces quota by the back door and which is so unfair in its operation that promotes of 1962 will have to yield place to direct recruits of 1966. Now under the old weightage rule promotes were given a weightage for service of 2-3 years over direct recruits because direct recruits were unable to undertake regular assessment work for a period of 2-3 years when they were more or less under training while promotes have been doing this work for a number of years and their experience is rejected in the weightage. The whole thing now appears in the reverse gear in that an uninitiated direct recruit takes precedence over an experienced promote. The unfairness of the new rule is writ large on the face of it. This rule violates another important rule well recognised in the service jurisprudence that in the absence of any valid rule of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no difficulty in tracing a common thread of reasoning. However, there are divergencies in the ratiocination between Mervyn Coutindo (supra) and Govind Dattatray Kelkar and ors. v. Chief Controller of Imports and Exports and ors., on the one hand and S. G. Jaisinghani v. Union of India (supra) Bishan Sarup Gupta v. Union of India (supra) Union of India and ors. v. Bishan Sarup Gupta , and A. K. Subraman and ors. v. Union of India on the other, especially on the rota system and the year being regarded as a unit, that this Court may one day have to harmonize the discordance unless Government wakes up to the need for properly drafting its service rules so as to eliminate litigative waste of its servants energies . It is not for a moment suggested and I say so with utmost respect that the aforementioned three decisions are incorrect. In the light of the materials now placed especially the files which were withheld from the Court and the Committee the only view that I express is that enough compelling and necessary material has been placed on record making out a strong case for reconsideration of these decisions. Accordingly, in my view the present two petitions deserve to be placed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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