TMI Blog1967 (2) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... sistant Commissioners of Income-tax provisionally pursuant to the orders of the High Court. Appeal allowed. - Civil Appeal No. 1038 of 1965 - - - Dated:- 22-2-1967 - Judge(s) : V. RAMASWAMY., K. SUBBA RAO., J. C. SHAH., S. M. SIKRI., C. A. VAIDIALINGAM JUDGMENT The judgment of the court was delivered by RAMASWAMI J. Civil Appeal No. 1038 of 1965 : This appeal is brought, by certificate, from the judgment of the High Court of Punjab dated March 11, 1964, dismissing the writ petition of the appellant-Civil Writ No. 189-D of 1962. In his petition under article 226 of the Constitution, the appellant, S.G. Jaisinghani, challenged the constitutional validity of what has been described as the " seniority rule " in regard to the Income-tax Service, Class I, Grade II, along with the improper implementation of the " quota " recruitment to that service as infringing the guarantee of articles 14 and 16(1) of the Constitution. The original respondents to the petition were the Union of India, Secretary to the Government of India in the Ministry of Finance and the Central Board of Revenue-respondents Nos.1 to 3. Subsequently, respondents Nos. 4 to 126 were added and those are pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en certified by the Commission in any calendar year shall be senior to all direct recruits who complete their probation during that year or after and are confirmed with effect from a date in that year or after. Provided that a person initially recruited as Class II-Income-tax Officer but subsequently appointed to Class I on the results of a competitive examination conducted by the Federal Public Service Commission shall, if he has passed the departmental examination held before his appointment to Class I Service, be deemed to be a promotee for the purpose of seniority." The rule, as revised in 1952, was to the following effect : " The seniority of direct recruits recruited on the results of the examinations, held by the Federal Public Service Commission in 1944, and subsequent years shall be reckoned as follows : (i) Direct recruits of an earlier examination shall rank above those recruited from a subsequent examination. (ii) Direct recruits of any one examination shall rank inter se in accordance with the ranks obtained by them at that examination ; (iii) Officers promoted in accordance with the recommendation of the Departmental Promotion Committee before the ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... romotion direct 2 years' Committee recruit- probation met ment ---------------------------------------------------------------------------------------------------------------------------------------------------- 1 2 3 4 5 6 (1950) 1951 1953 Has completed pro- Senior the three pre- bation. vious years. (1951) 1952 1954 Has not completed do. probation. (1952) 1953 1955 do. do. (1953) 1954 1956 in 1953 do. do. ---------------------------------------------------------------------------------------------------------------------------------------------------- A Class II Officer when directly recruited had to be on probation for two years during which period he had to undergo a course of theoretical and practical training and should pass a departmental examination for being confirmed. After a minimum period of three years of work as Income-tax Officer (after his probation of two years) he is considered by the Departmental Promotion Committee for promotion to Class I. That is to say that he has to have a minimum service of 5 years in all in Class II before he is qualified for being considered for promotion to Class I, Grade II Service.Clause (iv) of rule 1( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty-cum-fitness and prescribed minimum service is five years gazetted service including one year in Class I, Grade II." The Full Bench of the Punjab High Court rejected the writ petition of the appellant holding that the principles for determining seniority between direct recruits and promotees laid down in rule 1(f) (iii) and (iv), 1952, were not discriminatory and there was no infringement of articles 14 and 16(1) of the Constitution. It was also decided by the Full Bench that the quota rule announced by the Government of India was merely a policy statement and had no statutory force and departure from the quota did not give rise to any justiciable issue. It was further observed that the promotion rule from Class I, Grade II, to Class I, Grade I, was not discriminatory and ultra vires of articles 14 and 16 of the Constitution. The first question to be considered in this appeal is whether rule 1(f) (iii) of the seniority rules as framed in 1952 violates the guarantee under articles 14 and 16 of the Constitution. It was contended on behalf of the appellant that the impugned rule was based upon an unjustifiable classification between direct recruits and promotees after they had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wo years' training and thereafter they become qualified for confirmation. A promotee having already undergone the very same training during the period of probation of Class II, Grade III, joins Class I, Grade II, with three years' period of assessment and working experience of the Income-tax department. It is necessary to add that the selection of a promotee to Class I is based on merit and great weightage is given by the Departmental Promotion Committee to outstanding qualifications, record of work and the ability of the candidate, so that those who come to Class I, Grade II, are officers who have shown outstanding capability as Income-tax Officers in Class II Service. The statement in annexure 2 of the affidavit on behalf of respondents, Nos.1 to 4 in Writ Petition No. 5 of 1966 shows that the standards of selection are very stiff inasmuch as a very small proportion of officers considered for selection is actually promoted. The net effect of rule 1(f)(iii) therefore is that three years of outstanding work in Class II is equated to two years of probation in Class I Service and on a consideration of this aspect of the matter the promotee is given seniority over a direct recruit com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty in holding that the matters relating to employment must include all matters in relation to employment both prior, and subsequent, to the employment which are incidental to the employment and form part of the terms and conditions of such employment." This court further observed in that case : " Article 16(2) prohibits discrimination and thus assures the effective enforcement of the fundamental right of equality of opportunity guaranteed by article 16(1). The words ' in respect of any employment ' used in article 16(2) must, therefore, include all matters relating to employment as specified in article 16(1). Therefore, we are satisfied ... that promotion to selection posts is included both under article 16(1) and (2) ". We next proceed to consider the argument of the appellant that the rule of promotion from Income-tax Officers Class I, Grade II, to Class I, Grade I, is discriminatory in character. It was contended that while a direct recruit has to put in 5 years as Income-tax Officer Class I, Grade II, a promotee officer gets into Grade I with a minimum of one year's service in Class I, Grade II, the other four years being counted in Class II, Grade III. It was, theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the rule of promotion the service in Grade III is not to be taken into account, seniority in Grade II would be an empty formality. In regard to rule 1(f)(iv) of the Seniority Rules, there are only three respondents, i.e., respondents Nos. 4, 5 and 6, who have been promoted as " deemed promotees " under this clause of the rule. Each one of them was appointed in Class II, Grade III Service in 1947 and was appointed in Class I, Grade II Service, in 1951 after having successfully competed in the competitive examination of the year 1950, the same year in which the appellant was successful. The appellant also joined Class I, Grade II Service, in 1951. The three respondents have been shown as senior to the appellant in the seniority list. The objection of the appellant is that while they qualified in the same competitive examination, they had become senior to him because of the operation of the artificial rule by which they are treated as " deemed promotees " ; otherwise they would have remained junior to him. On behalf of these respondents it was argued by Mr. Bindra that they had been appointed to Class II, Grade III Service, in 1947 and completed 5 years' service in that class by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government of India dated September 29, 1944 (exhibit B to the writ petition of the appellant), it is stated that the recruitment to Grade II of Class I will be made partly by promotion and partly by direct recruitment and that " 80 per cent. of the vacancies arising in the Grade will be filled by direct recruitment through the Indian Audit and Allied Services Examination and the remaining 20 per cent. vacancies will be filled on the basis of promotion by selection provided suitable number of men are available for promotion." It was also stated in the letter that if there are any vacancies which could not be filled by promotion for want of suitable candidates, these will be added to the quota of vacancies to be filled by direct recruitment. The quota was altered by the Government of India subsequently in their letter dated October 18, 1951 (exhibit E to the writ petition). In this letter the Government of India said that they had decided in consultation with the Union Public Service Commission that for a period of five years, in the first instance, 66-2/3 per cent. vacancies in Class I, Grade II, will be filled by direct recruitments and the remaining 33-1/3 per cent. vacancies on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Mr. R. C. Dutt whether the quota rule was strictly followed for the years in question. In the counter-affidavits of respondents Nos. 1 to 4 in Writ Petition No. 5 of 1966 there is however anassertion that the quota rule " has been substantially complied with. " The Solicitor--General on behalf of respondents Nos. 1, 2 and 3 submitted that the quota rule was merely an administrative direction to determine recruitment from two different sources in the proportion stated in the rule and a breach of that quota rule was not a justiciable issue. The Solicitor-General said that there was, however, substantial compliance with the quota rule. But in the absence of figures of permanent vacancies in Class I, Grade II, for the relevant years the Solicitor-General was unable to say to what extent there had been deviation from the rule. We are unable to accept the argument of the Solicitor-General that the quota rule was not legally binding on the Government. 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 em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... important to emphasize that the absence of arbitrary power is the first essential of the rule of law upon which our whole constitutional system is based. In a system governed by the rule of law, discretion, when conferred upon executive authorities, must be confined within clearly defined limits. The rule of law from this point of view means that decisions should be made by the application of known principles and rules and, in general, such decisions should be predictable and the citizen should know where he is. If a decision is taken without any principle or without any rule it is unpredictable and such a decision is the antithesis of a decision taken in accordance with the rule of law (see Dicey--Law of the Constitution--Tenth edition, Introduction cx). " Law has reached its finest moments, " stated Douglas J. in United States v. Wunderuck, " when it has freed man from the unlimited discretion of some ruler ... Where discretion is absolute, man has always suffered ". It is in this sense that the rule of law may be said to be the sworn enemy of caprice. Discretion, as Lord Mansfield stated it in classic terms in the case of John Wilkes, " means sound discretion guided by law. It ..... X X X X Extracts X X X X X X X X Extracts X X X X
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