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CASE NO.: Appeal (civil)  4968 of 2007

PETITIONER: Ashok Kumar Shrivastava and ors

RESPONDENT: Ram Lal and others

DATE OF JUDGMENT: 08/01/2008

BENCH: ALTAMAS KABIR & P.SATHASIVAM

JUDGMENT: J U D G M E N T With Civil Appeal Nos. 4969/07 and 4970/07

Altamas Kabir,J.

1.      These three appeals arise out of a common  judgment and order dated 20.9.2006 passed by the  Lucknow Bench of the Allahabad High Court  disposing of several Writ petitions filed by the  appellants in these appeals. Since these appeals  arise out of a common judgment and common  questions of fact and law are involved, they have  been taken up together for final hearing and  disposal. While C.A.No. 4968/2007, arises out of  W.P.No.1041/96, W.P.No.1295/97 and W.P.  No.1863/98, the other two appeals arise out of  the other Writ petitions disposed of by the  common judgment. 2.      In order to appreciate the issues which arise  in these appeals it is necessary to indicate some  of the facts set out in the writ petitions. 3.      At the relevant point of time in the U.P.  Trade Tax Department there were 669 posts of  Trade Tax Officers, Grade II.  Out of the said  669 posts, about 502 posts belonged to the Direct  Recruits quota, but in 1980 only 243 of the posts  had been filled. The vacancy in respect of the  remaining 259 posts were the result of the slow  and long drawn out process of the U.P. Public  Service Commission in conducting the U.P.  Subordinate Service Examination. 4.      During the hearing of the writ petitions it  transpired that the Commissioner, Trade Tax, had  sent a requisition to the U.P. Public Service  Commission on 25.9.1980 for filling up 75  vacancies. Another requisition was sent on  9.12.1981 for 115 posts. Against the first  requisition the Public Service commission sent  the names of candidates  only  on 6.9.1982. In  the meantime, after December 1981 a further 28  vacancies arose and a revised requisition was  sent on 14.10.1982 for 143 vacancies.  A total  number of 143 posts were advertised in 1985 and  in September 1986 the said 143 candidates were  made available by the Public Service Commission.

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5.      As will also appear from the records, between  1982-1986, further requisitions were repeatedly  made by the Commissioner, Trade Tax, requesting  the Public Service Commission and the Government  to make available further candidates in the  direct recruits quota to fill up the remaining  vacancies. Along with the vacancies in the quota  for direct recruits there were 167 vacancies in  the promotion quota also.  On 6.12.1983 the  Commissioner, Trade Tax sent a requisition for 26  posts which was enhanced to 33 posts by a letter  dated 28.8.1984. In February 1985 a reminder was  sent for 176 posts, though by that time the  Public Service Commission had already advertised  for 143 posts and the Commissioner, Trade Tax was  informed in January 1986 that 143 candidates  would probably be made available in June 1986. 6.      Since apparently the work of assessment and  collection of revenue was being seriously  hampered, the Commissioner, Trade Tax, wrote to  the Secretary, Institutional Finance, in February  1986, to provide retrenched officers from other  Departments to conduct the said work and in March  1986 the Commissioner, Trade Tax mooted the  proposal to amend the U.P. Sales Tax Officers  (Grade II) Service Rules 1983, and to add a  proviso to Rule 5(1) which would enable the  Governor, in case of an administrative necessity  and in the public interest, to authorise the  Commissioner, Trade Tax, to conduct a Limited  Departmental Examination from amongst the  permanent Group \021C\022 employees to fill up the  vacancies in Group \021B\022.  The said employees would  be deemed to be officers of the quota of direct  recruits and would be entitled to regular  appointment as contemplated under the Rules. 7.      The Special Secretary suggested that the  proposal of the Commissioner, Trade Tax, could be  placed before the Cabinet for its approval for  conducting a Limited Departmental Examination. On  11.8.1986 a detailed proposal was also sent by  the Commissioner, Sales Tax, for holding a  Limited Departmental Examination from amongst  permanent employees of the Department. 8.      The Special Secretary, Institutional Finance,  wrote to the Chairman, Public Service Commission,  on 23.8.1986 apprising him of the department\022s  decision to hold a Limited Departmental  Examination for which an interview would have to  be conducted by a Selection Committee where the  Public Service Commission would also be  represented by a Member. The said decision was  disapproved by the Commission, but ultimately the  Cabinet   gave its approval to the Department\022s  proposal to withdraw 97 posts of direct recruits  from the purview of the Public Service Commission  and to conduct a Limited Departmental Examination  for the said posts. The Commissioner, Trade Tax,  was informed of the said decision by the Special  Secretary by his letter dated 11.12.1986. 9.      Pursuant to the aforesaid communication a  Circular was issued by the Commissioner, Trade  Tax, on 23.12.1986 whereby applications were  invited for 97 posts from amongst the permanent  employees in Grade \021C\022 who had completed 7 years

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of service. In the Circular the posts to be  filled up were described as temporary posts from  the direct quota which would be converted into  permanent posts in course of time. It was also  mentioned that those who had been appointed as  Trade Tax Officers, Grade II, pursuant to the  requisition sent on 11.10.1982 would be senior to  the 143 candidates whose select list had been  made available by the Public Service Commission  in September, 1986. 10.     The two decisions taken by the Government on  11.12.86 and 23.12.86 were challenged by one  Brijendra Bahadur Singh by way of Writ Petition  No.456 of 1987.  On 5.2.1987, while issuing  notice on the said writ petition, the High Court  also passed an interim order to the effect that  it would be open to the respondents to make ad  hoc appointments in the vacant posts of Sales Tax  Officer, Grade II, but no permanent appointment  was to be made in respect of  2/3rd of the total  number of vacancies which were meant to be filled  up directly through the Public Service Commission  under the U.P. Sales Tax Officers Rules, 1977. 11.     Consequent to the above, the State Government  directed the Commissioner, Trade Tax, to  include  a condition in the appointment orders to be  issued to the persons selected through the  Limited Departmental Examination that in view of  the aforesaid order of the High Court the  appointment was being made on an ad hoc basis and  would be subject to the result of Writ Petition  No.456 of 1986.  On 19.2.1987 a similar interim  order was passed by the High Court in the Writ  Petition filed by Jai Singh.  Pursuant to the  above direction, the persons who were selected  through the Limited Departmental Examination were  given appointment on 28.6.1987 and their  appointment orders contained the condition that  their appointment was ad hoc  and would be  subject to the result of the writ petitions  pending before the High Court.  12.     In 1990, one Mohd. Zaki Khan  and some others  filed a Writ Petition challenging the Government  Order dated 11.12.1986 withdrawing the 97 posts  from the purview of the Public Service  Commission. The said writ petitioners were  candidates who had appeared in the written  examination conducted by the Public Service  Commission pursuant to the advertisement  published in 1985, but had failed to pass the  examination. The case of the writ petitioners in  the said writ petition was that while making a  requisition for 33  posts, if 97 posts for which  the Limited Departmental Examination was held had  been included in the requisition, they too would  have been selected. It was also their case that  since the 97 posts had been filled up only on an  ad hoc basis from the departmental candidates,  they would continue to be available in 1988 when  fresh examinations were held by the Public  Service Commission. A prayer was accordingly made  for a Mandamus to be issued to the Public Service  Commission to fill up the said 97 posts also by  regular candidates and since the Public Service  Commission was, in any event, conducting the U.P.

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Subordinate Service Examination, the select list  could be expanded to include recommendations for  the 97 posts which had been filled up by the  department on ad hoc/temporary basis. 13.     The writ petition of Mohd. Zaki Khan and  others was decided against the writ petitioners  on the basis of the detailed correspondence  between the Commissioner of Trade Tax and the  Department, and between the Department and the  Public Service Commission. The High Court  ultimately came to the conclusion that the  Government had valid and cogent reasons for  taking out the 97 posts from the purview of the  Public Service Commission. It was also held that  since the matter had been decided by the Cabinet  the Governor was bound to accept such advice.  It  was also held that since the said posts had been  validly taken out from the purview of the Public  Service Commission it was not open to the court  to issue a Mandamus to the Public Service  Commission to fill up the said posts which had  gone out of the domain of the said Commission. 14.     The said decision in the writ petition filed  by Mohd. Zaki was delivered on 19.5.1996.  A  Special Leave Petition filed against the said  decision was dismissed in limine by this Court on  19.9.1996. 15.     After the decision in Mohd. Zaki\022s case, the  writ petition filed by the Brijender Bahadur  Singh was also dismissed on 3.10.1996 on the  basis of the decision in Mohd. Zaki Khan\022s writ  petition.

16.     In the meantime, the Commissioner, Trade Tax  mooted a proposal on 28.10.1995 to regularise the  services of the officers who had been appointed  pursuant to the Limited Departmental Examination  held in 1986-87, by amending Rule 5(1) of the  Service Rules of 1983 and urged the Government to   effect such amendment expeditiously. 17.     The said letter of 28.10.1995 written by the  Commissioner, Trade Tax, was challenged by one  Ram Lal and others by way of writ petition  No.1041/1996 whereby the direct recruits selected  pursuant to the 1985 requisition sought seniority  over the officers appointed on the basis of the  Limited Departmental Examination conducted in  1987. 18.      The ground of challenge was that the  appointment of those candidates who had been  appointed pursuant to the Limited Departmental  Examination was de hors the rules and had not  been approved by the Public Service Commission. 19.     Pursuant to the request of the Commissioner,  Trade Tax, for regularisation of the ad hoc  appointments made through the Limited  Departmental Examination, the Government effected  the Third Amendment to the 1983 Rules whereby the  definition of \023substantive appointment\024 was  amended to include appointments made in 1987  through the Limited Departmental Examination. 20.     The aforesaid amendment of 1997 was  challenged in writ petition No.1297 of 1997 by  one Vinod Kumar Gupta on the ground that the  amendment sought to retrospectively amend the

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Rules of 1983 for the purpose of regularising  those candidates who had been appointed in 1987  through the Limited Departmental Examination.   21.     Two other officers, Shri Govardhan Lal and  Shri Arvind Kumar Tiwari, who had been directly  recruited pursuant to the result of the  examination conducted by the U.P.Public Service  Commission in 1990 and appointed in 1994 and 1993  respectively, filed Writ Petition No.1863 of  1998, challenging the Government Order dated  5.6.1998 directing the Commissioner, Trade Tax,  to prepare a gradation list of officers of the  1985 batch who had been directly recruited and  appointed in 1990 and the 1987 batch who had been  appointed through the Limited Departmental  Examination.  The direct recruits who had been  appointed in 1990 claimed seniority over those  who had been appointed in 1987 by the Limited  Departmental Examination on the ground that the  1987 appointees had been appointed on an ad hoc  basis and their officiating service could not be  counted towards seniority. 22.     The State Government passed an order on  22.9.2000 directing that the seniority list of  those candidates, who had either been appointed  directly or on the basis of the Limited  Departmental Examination, would be deemed to be  undisputed up to 1985 in order to enable  promotions to be made therefrom.  The  Commissioner, Trade Tax, thereafter passed an  order to include the candidates of the 1985  direct recruits batch, who had been appointed in  1990, in the seniority list and though the order  was passed on 9.10.2000 the same did not include  the names of the appointees who had been  appointed in 1987 on the basis of the Limited  Departmental Examination. 23.     Two writ petitions, namely, Writ Petition  No.1778/2000 and Writ Petition No.2000/2000 were  filed at Lucknow by Jugal Kishore Pandey and  Rajendra Prasad, who had both been appointed in  1987. Another writ petition was filed by Ashok  Kumar Shrivastava at Allahabad in which an  interim order was passed staying the operation of  the Government Order dated 22.9.2000 and  9.10.2000. In the meanwhile, pursuant to an  application made under Clause 14 of the  Amalgamation Order this Court transferred Writ  Petition No.2787/2001 filed in Allahabad to  Lucknow with a request to the Chief Justice of  Allahabad High Court to constitute a Special  Bench to hear all the writ petitions at an early  date, and, if possible on a day to day basis. The  matters then came up before the Division Bench of  the Lucknow Bench of the Allahabad High Court for  final disposal. 24.     During the pendency of the writ petitions,  the State Government passed orders regularising  the services of the candidates who had been  appointed in 1987 pursuant to the Limited  Departmental Examination with effect from  25.9.1997. The State Government also informed the  Commissioner, Trade Tax, U.P., Lucknow, on  9.5.2005 that the date of substantial appointment  of the persons selected through the Limited

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Departmental Examination was 25.9.1997. 25.     Accepting the submissions made on behalf of  the candidates who had been selected pursuant to  the advertisement published in 1985 and  thereafter in 1990 for direct recruitment to the  post of Trade Tax officer, Grade II, the High  Court also came to the conclusion that the  appointments made in 1987 on the basis of the  Limited Departmental Examination were ad hoc in  nature and consequently such candidates could  claim seniority in the cadre only from 25.9.1997  when their services stood regularised.   Accordingly, even though the candidates of the  1985 batch were appointed after the 1987  candidates, the High Court directed that they  along with the candidates of 1990, who had been  selected by the regular selection process as  contemplated under the Rules, be placed above the  1987 appointees as their appointment stood  regularised only with effect from 25.9.1997, when  the Third Amendment to the Service Rules was  effected. It is the aforesaid decision of the  High Court in the said 8 writ petitions which is  the subject matter of the three appeals being  heard by us. 26.     Appearing for the appellants in C.A.Nos.4968  and 4969 of 2007, filed by the officers who had  been appointed pursuant to the Limited  Departmental Examination held in 1987, Mr. M.N.  Rao, learned Senior Advocate, submitted that the  controversy forming the subject matter of the  appeals involve the validity of the amendments  made to the U.P. Trade Tax Officers, Grade II,  Service Rules, 1983, (hereinafter referred to as  \0231983 Service Rules\022) in 1987, as also the  seniority given to those officers who had been  recruited pursuant to the Limited Departmental  Examination held in 1987. Mr. Rao further  contended that the appellants in Civil Appeal No.  4970/2007 were those direct recruits who had been  appointed by the U.P. Public Service Commission  in 1991 and 1994. 27.     According to Mr. Rao, the aforesaid 1983  Rules contemplated recruitment to the post of  Trade Tax Officer, Grade II, through two methods.  Rule 5 of the Rules provides that 75% of the said  officers are to be appointed through the Public  Service Commission by way of direct recruitment  and upon holding a competitive examination,  whereas the remaining 25% are to be appointed by  promotion after consultation with the Public  Service Commission. However, in 1979, the State  Government was facing an acute shortage of Trade  Tax Officers, Grade II, which was seriously  hampering the revenue collection, and this  resulted in the withdrawal of 97 vacant posts of  Trade Tax Officers, Grade II, from the purview of  the Public Service Commission with the object of  filling up the same by a Limited Departmental  Examination  28.     Mr. Rao also referred to the writ petition of  Mohd. Zaki Khan and submitted that while  dismissing the writ petition the High Court held  that the State Government was fully empowered to  withdraw the 97 posts from the control of the

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Public Service Commission. Mr. Rao submitted that  the High Court had also held that once the 97  posts had been taken out of the purview of the  Public Service Commission the State Government  was free to fill up those posts after laying down  norms consistent with the constitutional  provisions and other related laws.  29.     Mr. Rao submitted that the disputes  concerning the appointment of the 1987 appointees  through the Limited Departmental Examination had  been set at rest by the High Court in Zaki Khan\022s  case and with the dismissal of the special leave  petition (SLP (C) No.18183/96) preferred against  the said judgment of the Allahabad High Court on  19.9.1996, the finding with regard to the  validity of the withdrawal of the said 97 posts  of Trade Tax Officers, Grade II, attained  finality and could not be reopened. 30.     Mr. Rao referred to the writ petition filed  by Brijender Bahadur Singh and others and the  interim order passed therein on 5.2.1987. He also  referred to the writ petition filed by Jai Singh  and others, wherein also an interim order was  passed on 19.2.1987.  Mr. Rao urged that the  effect of the interim orders was that the State  Government was free to make appointments from the  candidates selected through the Limited  Departmental Examination, but such appointments  were to be treated as ad hoc.  As a result, in  the appointment letters issued to the appointees  of 1987, it was mentioned that the appointments  were \021ad hoc\022.  Mr. Rao, submitted that this was  the stand taken by the State Government in the  counter-affidavit filed on behalf of the State in  the said two writ petitions, which were  subsequently dismissed on 3.10.1996 and 6.5.1994,  respectively. 31.     It was then urged that in 1997 the State  Government amended the 1983 Service Rules and  such amendments included amendment to Rule 3(j)  and 3(l).  By virtue of the said amendments the  definition of the term \023member of the service\024,  mentioned in the judgment herein, was widened to  include those who had been appointed on the basis  of the Limited Departmental Examination.  A  proviso was also added to the existing definition  of \023substantive appointment\024 indicating that  persons appointed on ad hoc basis in the year  1986-87 through the Limited Departmental  Examination from Group \021C\022 posts would be deemed  to have been substantively appointed.  It was  further urged that although it was never the  intention of the State Government to appoint  those selected on the basis of the Limited  Departmental Examination on an ad hoc basis, the  said expression had been included in the  appointment letters issued to such appointees in  view of the interim orders which had been passed  by the High Court in the writ petitions filed by  Brijendra Singh and Jai Singh, which were  subsequently dismissed. Mr. Rao submitted that it  had always been the intention of the State  Government to treat the appointments of the said  candidates to be substantive. It was only later  that the State Government changed its stand and

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contended that the 1987 appointees had been  substantively appointed only in 1997 from the  date of amendment of the Rules. 32.     The change in the stand of the State  Government was thereafter challenged by Muneshwar  Babu and others, who were 1987 appointees, in  writ petition No.166/05 before the Allahabad High  Court. They are some of the appellants in Civil  Appeal No.4969 /2007. 33.     Mr. Rao submitted that the direct recruits,  who had been appointed pursuant to the  advertisements published in 1985 and 1990, long  after the 1987 appointees had been appointed by  way of a Limited Departmental Examination, had no  locus standi to question the seniority of the  1987 appointees since at that time they had not  even been born in the cadre.  Mr. Rao contended  that once the question involving the exclusion of  the 97 posts from the purview of the Public  Service Commission had been finally decided in  Zaki Khan\022s case, the direct recruits who had  been subsequently appointed through the Public  Service Commission had no right to challenge the  seniority of the 1987 appointees or to canvas a  claim that the said 97 posts should be thrown  open to the candidates who had appeared at the  examination conducted by the Public Service  Commission in 1988 pursuant to the advertisement  published in 1985. It was submitted that the same  would also apply to the direct recruits appointed  pursuant to the publication of a similar  advertisement in 1990.  Mr. Rao submitted further  that since the 1987 appointees had not encroached  on any post earmarked for the direct recruits,  the said direct recruits could have no valid  grievance against the exclusion of certain posts  from the purview of the Public Service  Commission. 34.     Mr. Rao urged that the High Court had erred  in coming to a finding that the appointment given  to the 1987 appointees was in violation of the  procedure laid down in the Rules, and was  discriminatory for open market and senior  departmental candidates.  It was also urged that  the High Court had erroneously accepted the  contention of the direct recruits that the 1987  appointees had been appointed de hors the rules,  and, consequently, the amendment effected to the  Rules in 1997 could only operate prospectively. 35.     Mr. Rao submitted that the Division Bench of  the High Court had erred in taking the view that  the appointment of the 1987 appointees was in  violation of Rule 5 and the recruitment procedure  contemplated in the Rules.  He submitted that  once the posts had been taken out of the purview  of the Public Service Commission, Rule 5 of the  Service Rules, which prescribes the manner of  recruitment through the Public Service  Commission, was no longer applicable to such  posts and the procedure contemplated thereunder  for recruitment to the post of Trade Tax Officer,  Grade II, and the Government was free to  prescribe the procedure to be followed for the  purpose of filling up the said posts. Mr. Rao  urged that the 1983 Service Rules did not

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prescribe any method for recruitment to posts  which were taken out from the purview of the  Public Service Commission and, in fact, the  definition of \023substantive appointment\024 in the  unamended Rule 3 (l) takes care of such a  contingency by providing that if there are no  rules prescribed for such recruitment then the  procedure as prescribed by executive instructions  would be valid and persons appointed through such  a procedure would be considered to have been  substantively appointed. Mr. Rao submitted that  since in the Service Rules of 1983 no such  procedure has been prescribed for recruitment of  posts excluded from the purview of the Public  Service Commission, the State Government had  issued executive instructions for the purpose of  filling up the posts in question and since the  procedure adopted for filling up the said 97  posts had been duly laid down by the State  Government, the finding of the High Court that  the method prescribed was de hors the Service  Rules was not tenable.  36.     It was lastly contended by Mr. Rao that the  judgment of the High Court had proceeded on the  incorrect proposition that the appointment of the  1987 appointees by the Limited Departmental  Examination was ad hoc and fortuitous. Mr. Rao  submitted that the High Court had wrongly  referred to the 1987 appointees as \023promotees\024  when, in fact, they were direct recruits of the  year 1987 who had been inducted in the cadre of  Trade Tax Officer, Grade II, by means of a  Limited Departmental Examination in respect of  the posts which had been taken out of the purview  of the Public Service Commission. 37.     Mr. Rao submitted that the intention of the  State Government not to treat the 1987 appointees  as having been appointed on an ad hoc basis would  be evident from the fact that soon after the High  Court dismissed the writ petition of Brijender  Bahadur Singh, the State Government effected an  amendment in Rule 3(j) and 3(l) of the Service  Rules, with the intention of putting the  controversy beyond the pale of challenge.  Mr.Rao  referred to the proviso to Rule 3(l), as amended  in 1997, which provides that those officers who  had been appointed pursuant to the Limited  Departmental Examination held in 1987 would be  deemed to have been substantively appointed. The  High Court, according to Mr. Rao, had committed  an error in holding, while interpreting the  amended Rules, that the 1987 appointees were  promotees and formed a different group. 38.     In support of his aforesaid submission Mr.  Rao referred to and relied upon the decision of  this Court in Shah Bhojraj Kuverji Oil Mills and  Ginning Factory v. Subbash Chandra Yograj Sinha  (1962 (2) SCR 159) wherein, while interpreting a  deeming fiction incorporated in the proviso, this  Court held that the same had to be given full  effect. Mr. Rao also referred to a Constitution  Bench decision of this Court in State of Tamil  Nadu v. Arooran Sagars Limited (1997 (1) SCC 326)  where the scope of a deeming provision had been  explained. Mr. Rao submitted that the amendment

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in question being remedial in nature, the same  had to be given retrospective effect to correct  the prejudice caused earlier, unless of course a  specific date was indicated from which the  amended provisions would come into force. 39.     On the submissions made by learned counsel  for the Public Service Commission that temporary  or officiating appointments could be made as per  Rule 18(4) of the 1983 Rules, Mr. Rao submitted  that such a stand was not tenable on account of  the fact that the posts covered by Rule 18(4)  were within the purview of the Public Service  Commission and Regulation 5(a) of the U.P. Public  Service Commission (Limitation of Function)  Regulations, 1954, would apply. 40.     Concluding on the decision of the High Court  in Zaki Khan\022s case, Mr. Rao submitted that in  State of U.P. V. Manbodhanlal Srivastava (AIR  1957 SC 912), it had been held that Article 320  (3) of the Constitution is directory in nature  and consultation with the Public Service  Commission does not mean concurrence with the  said Commission and the State Government, in view  of Regulation 3 of the 1954 Regulations, which  fully empowered the State Government to take out  97 posts from the purview of the Public Service  Commission. Mr. Rao submitted that it was not  open to the later Division Bench of the High  Court to take a contrary view. 41.     Mr. Rao submitted that the judgment of the  High Court impugned in these Civil Appeal Nos.  4968-4969 of 2007 preferred by those officers who  had been appointed on the basis of the Limited  Departmental Examination held in 1987, was liable  to be set aside. 42.     Mr. Rao\022s submissions in support of Civil  Appeal Nos.4968-69 of2007 were strongly opposed  by Mr. Gaurab Banerji, learned Senior Advocate  appearing for the direct recruits of the 1985 and  the 1990 batches, who have been made respondent  Nos.1 to 6 in the said appeals.  Mr. Banerji  submitted that it was the case of the said  respondents that persons who had been appointed  on the basis of the Limited Departmental  Examination were not substantively appointed and  their appointment was of an ad hoc and/or  temporary nature and de hors the Service Rules.   It was also submitted that consequently their  services could be counted for the purpose of  seniority only from the date of regularisation of  their services in 1997. 43.     Mr. Banerji urged that the issues which had  arisen for determination in these appeals  revolved around the question as to whether the  appointments made in 1987 on the basis of the  Limited Departmental Examination held in 1987  were substantive or were ad hoc/temporary in  nature and contrary to the rules, in the light of  Articles 14 and 16 of the Constitution.   Referring to the case made out in the writ  petition filed by Muneshwar Babu & others, Mr.  Banerji contended that the limited issue for  determination in Zaki Khan\022s case was whether the  State Government had the power to withdraw  certain posts from the purview of the Public

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Service Commission. He added that the petitioners  in Zaki Khan\022s case were unsuccessful candidates  who had appeared for the Public Service  Commission examination held in 1988. Mr. Banerji  submitted that the Public Service Commission had  not filed any counter affidavit in Zaki Khan\022s  case to bring into focus the stand of the Public  Service Commission. Mr. Banerji urged that the  Cabinet decision, on which reliance had been  placed by the High Court, had gone  uncontroverted. Mr. Banerji also  urged that in  Zaki Khan\022s case the High Court had specifically  held that the method of appointment to the 97  posts, which were withdrawn from the purview of  the Public Service Commission had not been  challenged in the Writ Petition, and,  consequently, the validity of the appointments  made in respect of the said posts remained  untouched.  44.     Mr. Banerji submitted that the Court had also  held that the writ petitioners had not acquired  any right on the strength of having appeared at  the interview when ultimately they were  unsuccessful in their endeavour to be appointed  as Trade Tax Officers, Grade II. 45.     Mr. Banerji contended that the mode and  manner of appointment of the 1987 appointees was  not in issue in Zaki Khan\022s case and the High  Court had wrongly relied on the decision rendered  therein while deciding the several writ petitions  out of which these three appeals arise. 46.     Mr. Banerji reiterated that the Limited  Departmental Examination was in violation of Rule  5(1) and Rule 15 of the Rules and those appointed  on the basis thereof could not be said to have  been substantively appointed as per Rules 3(j)  and 3(l).  He also submitted that the  instructions contained in the letters dated  11.12.1986 and 23.12.1986, on the basis whereof  the Limited Departmental Examination was  conducted, could at best be treated as executive  instructions which could not go beyond or be  contrary to Article 309 of the Constitution. Mr.  Banerji submitted that even in the letter dated  23.12.1986 the posts in question had been shown  as temporary posts in the direct recruits quota.  Reference was also made to the appointment letter  issued to Muneshwar Babu on 20.6.87 which  included the condition that the concerned  employee could be removed to his parent post. It  was submitted that the said condition made it  clear that the appointments made on the basis of  the Limited Departmental Examination were all of  a stop-gap and/or temporary nature. 47.     Mr. Banerji urged that the appointments made  on the basis of the Limited Departmental  Examination was contrary to the 1983 Rules and  was only an ad hoc arrangement to meet the  demands of the Department pending the  recommendations from the Public Service  Commission of regular candidates to fill up the  vacancies in respect of which such ad hoc  arrangements had been made. 48.     Mr. Banerji also referred to writ petition  No.1041 of 1996 filed by the direct recruits of

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the 1985 batch, wherein the letter of the  Commissioner of Trade Tax dated 28.10.1995  seeking regularisation of the appointees of 1987  by amendment of Rule 5 of the 1983 Rules had been  challenged. Mr. Banerji submitted that in the  said writ petition an interim order had been  passed on 26.9.1996 categorically directing that  the appointees under the Limited Departmental  Examination held in 1987 would not be assigned  seniority over and above the writ petitioners who  had been regularly appointed in accordance with  the rules in 1991. 49.     Mr. Banerji submitted that the amendment had  been effected on 26.9.97 and if the same was to  be given retrospective effect it would be  contrary to the order passed on 26.9.96 in which  it had not been stipulated that the rule was to  be given retrospective effect.  Mr. Banerji  submitted that it could only be given prospective  effect from the date on which it was made  effective. 50.     Relying on various decisions of this Court  namely \026 i) Shitala Prasad Shukla v. State of  U.P. (AIR 1986 SC 1859); ii) K. Madalai Muthu vs.  State of Tamil Nadu (2006)6 SCC 558); and iii)  M.P. State Coop. Bank V. Nanuram Yadav (2007 (11)  SCALE 439), Mr. Banerji urged that seniority  could be counted only from the date on which a  temporary post was regularised and since in the  instant case the appointment of the candidates  selected by the Limited Departmental Examination  was regularised only in 1997, they could claim  seniority only thereafter and not with  retrospective effect.   He also submitted that as  had been held in K. Narayanan v. State of  Karnataka (1994) Supp. (1) SCC 44, Rules operate  prospectively and that retrospectivity is an  exception. Even where the statute permitted  framing of Rules with retrospective effect the  exercise of power under such provision could not  be exercised in violation of any constitutional  right so as to affect a vested right. 51.     Mr. Banerji submitted that the submission  advanced by him on behalf of the respondents in  C.A.Nos.4969-70/2007, apply equally to the case  of the appellant, Govardhan Lal, in  C.A.No.4970/2007, since the appellant in the said  appeal was similarly placed as the respondents in  the other two appeals. 52.     Mr. R. Venkataramani, Learned Senior  Advocate, who appeared for the private  respondents in C.A. No. 4970 of 2007, generally  adopted the submissions made by Mr. Rao.  He,  however, added that once the issue relating to  the appointment of the 1987 appointees on the  basis of the Limited Departmental Examination  stood concluded in Zaki Khan\022s case, the High  Court erred in re-opening the same.  He urged  that after the exclusion of the Public Service  Commission from the appointment of the 1987  appointees, there was no further occasion for the  High Court to once again enquire into the process  of appointment of the said candidates as it  amounted to reviewing the judgment rendered in  Zaki Khan\022s case.  Mr. Venkataramani submitted

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that the expression \023substantive appointment\024 as  defined in clause 3(c) of the 1983 Service Rules  provides for appointment in terms of executive  instructions when no Rules are available to deal  with a situation such as the one in the instant  case.   Learned counsel referred to Rule 3(1) of  the aforesaid Rules which reads as follows:-  \023 Rule 3(1) \026 Substantive appointment means  an appointment, not being an ad hoc  appointment, on a post in the Cadre of the  service made after selection in accordance  with the rules and if there are no rules in  accordance with the procedure prescribed for  the time being by executive instructions  issued by the Government.\024

53.     It was urged that the aforesaid Rule clearly  indicates that where the Rules did not provide  for appointment in certain contingencies, the  vacuum could be filled up by executive  instructions, as had been done in the instant  case. Mr. Venkataramani submitted that once the  1987 appointees had been deemed to have been  substantively appointed, which, in fact, was the  stand initially taken by the State Government, a  fresh enquiry into the matter was not  permissible.  It was also urged that even if the  initial appointment of the 1987 appointees had  not been made by following the procedure laid  down by the Rules but the appointees continued in  the post uninterruptedly till their services were  regularised, the period of officiating service  would be counted for the purpose of seniority, as  had been held by a Constitution Bench of this  Court in Direct Recruit Class-II Engineering  Officers Association Vs. State of Maharashtra and  Anr. (1990 (2) SCC 715. This Court had held that  for the purposes of seniority, where initial  appointment is not made by following the  procedure laid down by the Rules but the  appointee continues in the post uninterruptedly  till the regularisation of his service in  accordance with the rules, the period of  officiating service would be counted. 54.     The stand of the State of Uttar Pradesh was  placed by Mr. Shail Kumar Dwivedi, learned  Additional Advocate General.  He submitted that  while admittedly 97 posts had been taken out by  the State Government from the purview of the U.P.  Public Service Commission, before the appointment  letters to the selected candidates could be  issued, one Brijendra Bahadur Singh filed Writ  Petition No. 456 of 1987 before the Allahabad  High Court in which the following interim order  was passed on 5th February, 1987, namely :-         \023Issue notice.  It will be open to  the respondents to make ad hoc  appointments on the vacant posts of Sales  Tax Officers Grade-II but no permanent  appointment shall be made on 2/rd of the  total number of vacancies of Sales Tax  Officer which meant to be filled up  directly through Public Service Commission  under the U.P. Sales Tax Officers Rules,

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1977.\024

55.     It was submitted that having regard to the  above interim order of 1987, candidates selected  on the basis of the Limited Departmental  Examination, were appointed on 20th June, 1987 on  an ad hoc basis.  Mr. Dwivedi submitted that the  interim order passed on 5th February, 1987 in the  Writ Petition of Brijendra Bahadur Singh was  never challenged, though ultimately the said Writ  Petition was dismissed on 3rd October, 1996.  It  was also contended that the 1987 ad hoc  appointees from the departmental candidates had  never filed any writ petition for regularisation  of their services.  56.     It was then submitted that respondent nos. 1  to 6 in the instant appeal and some other direct  recruits had filed Writ Petition No. 1041 of 1996  before the Allahabad High Court praying for an  order not to regularise the services of the 1987  ad hoc appointees and on 26th September, 1996,  whrein an interim order was passed in their  favour in the following terms :- \023Three weeks time is allowed to the  standing counsel to seek necessary  instructions.  List thereafter.  In  the meantime in the case opposite  parties 3 to 99 are regularised, they  shall not be assigned seniority over  and above the petitioners who  according to the petitioner\022s case  were regularly appointed in accordance  with the rules in the year 1991.\024

 57.     It was submitted that the interim order  continued till the passing of the impugned  judgment dated 20th September, 2006.   Mr. Dwivedi  submitted that the said interim order had also  not been challenged by the appointees of the 1987  batch and the said position continued for about  10 years.  It was only by way of Notification  dated 25th September, 1997 that the State of Uttar  Pradesh amended the 1983 Service Rules whereupon  the appointment of the appointees of the 1987  batch were regularised. 58.     Mr. Dwivedi also relied on the Direct  Recruit\022s case (supra) wherein it had also been  held that once an incumbent is appointed to a  post according to the rules, his seniority has to  be counted from the date of his appointment and  not from the date of confirmation.  In other  words, according to Mr. Dwivedi, where an  appointment is made as a stop gap arrangement,  the officiation in such post could not be taken  into account for consideration of seniority. 59.     Reference was also made to the case of  Shitala Prasad Shukla (supra), wherein it had  been held that an employee must belong to the  same stream before he can claim seniority over  others.   60.     Mr. Dwivedi concluded on the note that having  regard to the aforesaid decision, the appointees  of the 1987 batch could not for the purpose of  seniority in the cadre, claim the benefit of

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their service from the time of their initial  appointment till they were regularised in 1997. 61.     Although, extensive arguments have been  advanced on behalf of the various parties, the  controversy involved in these appeals is broadly  limited to three questions, namely :

i)      Was the State Government entitled  to withdraw from the purview of  the U.P. Public Service  Commission  posts which were to  be filled up by direct  recruitment ?  ii)     Would the 97 posts which were  taken out from the purview of the  U.P. Public Service Commission  continue to be governed by the  recruitment process for direct  recruits as contained in the  Uttar Pradesh (Sales Tax Officers  Grade II) Service Rules, 1983 ? ;  and iii)    Whether having regard to the  condition contained in their  appointment letters that their  appointments were being made on  purely ad hoc basis the  appointees to the said posts  could claim seniority on the  basis of the service rendered by  them from 1987 to 25.9.1997 when  pursuant to an amendment of the  Service Rules their services were  regularised ?  62.     The first two questions were raised and  decided in Mohd. Zaki Khan\022s case. After  discussing the circumstances which led to the  decision of the State Government to withdraw the  97 posts from the purview of the U.P. Public  Service Commission, the High Court observed that  the question for consideration in the said case  was whether the State Government was empowered to  take out the said 97 posts from the purview of  the Commission and to fill up the same through a  Limited Departmental Examination. 63.     After considering the proviso to clause (3)  of Article 320 of the Constitution and the 1983  Rules framed thereunder, the High Court held that  from the second part of clause (b) of Regulation  (3), it was amply clear that the Governor after  consultation with the Commission could direct  that the service or post in question would be  outside the purview of the Commission.  It was  also observed that the Cabinet had taken the  decision to take out the 97 posts from the  purview of the Commission which was communicated  to the Commissioner of Sales Tax by letters dated  11.12.1986 and 17.12.1986.  Further, considering  the effect of Article 163 of the Constitution,  the High Court had also held that the Governor  was required to act on the aid and advice of the  Council of Ministers headed by the Chief Minister  and that the decision of the Cabinet had to be  accepted by the Governor. The High Court  ultimately held that the said 97 posts of Trade

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Tax Officer, Grade II, had been taken out from  the purview of the Commission by the State  Government on the basis of the decision of the  Cabinet and that though the Commission did not  concur with the decision of the Cabinet, the  State Government fulfilled its obligation of  consulting the Commission on the issue before  taking a decision in the matter. 64.     The other question which came up for  consideration before the High Court in Zaki  Khan\022s case was the contention raised by the  respondents in the first two appeals also that  since the appointments in the 97 posts were of an  ad hoc nature, such appointments could last only  till the regularly-selected candidates became  available from the Commission.  The said  contention was also negatived by the High Court  upon holding that since the 97 posts had been  taken out from the purview of the Public Service  Commission, the State Government was free to fill  up the said posts after laying down norms  consistent with the constitutional provisions and  other laws.  While considering the case of the  writ petitioners in the said writ petition, the  High Court also held that simply because the writ  petitioners in the said case had appeared in the  interview test held for the combined Upper  Subordinate Examination 1985-86, they did not  acquire any right to be selected on the ground  that more vacancies existed at the time of the  examination or at the time of the advertisement. 65.     It is, therefore, apparent that the validity  of the State action in withdrawing 97 posts from  the purview of the U.P. Public Service Commission  had been answered in the affirmative in Zaki  Khan\022s case and the right of the State Government  to fill up the said posts in accordance with the  norms laid down by it had also been approved.  Since the special leave petition which was filed  against the said decision of the High Court was  dismissed, the findings of the High Court in Zaki  Khan\022s case became final and were not capable of  being questioned in similar proceedings either  before the High Court or this Court. 66.     The submissions made on behalf of the  appellants in Civil Appeal Nos. 4968-69 of 2007,  in this regard have, therefore, to be accepted. 67.      It is clear that the proviso to clause (3)  of Article 320 of the Constitution empowers the  Governor of a State to withdraw from the purview  of the Public Service Commission services and  posts in connection with the affairs of a State  and to make regulations in support thereof. 68.     In the instant case, as has been indicated in  detail by the High Court, the State Government  took the step to withdraw 97 posts from the  purview of the Public Service Commission after  the said Commission expressed its inability to  fill up the vacancies within a short span of time  because of the various reasons indicated by it,  such as shortage of staff and the mal-functioning  of obsolete machinery and equipment. It is in  such circumstances and also on account of the  fact that the collection of revenue was being  seriously hampered, that the State Government in

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its Cabinet ultimately took the decision to  withdraw the 97 posts from the purview of the  Public Service Commission and to have them filled  up on the basis of a Limited Departmental  Examination.  Even after concluding its judgment,  the High Court spent some time in scrutinising  the laches on the part of the Commission in  providing candidates to fill up the vacancies in  the Sales Tax/Trade Tax department. There is no  getting away from the fact that posts which were  vacant in 1984 were  advertised by the Commission  in 1985 and the selection tests were held only in  1988 pursuant to which recommendations were made  in 1990. The process of providing candidates for  the vacancies which occurred in 1984 or even  before that could not be filled up by the  Commission for whatever reason before the passage  of seven years. 69.     As far as the second question is concerned,  we are unable to accept the view of the High  Court that although the 97 posts had been taken  out of the purview of the Public Service  Commission, the recruitment to the said posts  would continue to be governed by the 1983 Rules,  and, consequently, the appointment of the  candidates to fill up the said 97 posts by a  Limited Departmental Examination could only be an  ad hoc arrangement to tide over the period within  which regular candidates could be recommended by  the Public Service Commission. 70.     Though the said approach appears at the first  instance to be correct, on a closer scrutiny the  situation appears to be different. The very fact  that the 97 posts were taken out of the purview  of the Public Service Commission indicates that  the recruitment in respect thereof was not  required to be in conformity with the recruitment  rules followed by the said Commission but in  accordance with the norms and regulations as  might be prescribed by the State Government in  that behalf. In the present case, a decision was  taken at the Cabinet level to fill up the said 97  posts by a Limited Departmental Examination.   There was, therefore, no foundation for the  submission that appointment to the 97 posts were  only meant to fill up a temporary need and was  not intended to be substantive in nature.  It is  no doubt true that in the appointment letters  issued to the departmental candidates   who had  been selected, it was indicated that such  appointments were purely of an ad hoc nature, but  such a condition came to be inserted in the  appointment letters on account of an interim  order passed by the High Court in the writ  petition No.456/1987 filed by one Brijendra  Bahadur Singh on 5.2.1987. By the said order the  High Court indicated that it would be open to the  respondents to make appointments in the vacant  posts of Sales Tax Officers Gr. II, but no  permanent appointment was to be made on 2/3rd of  the total number of vacancies which were meant to  be filled up directly through the Public Service  Commission under the U.P Sales Tax Officers  Rules, 1977.  Further, as will be evident from  the stand initially taken by the State

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Government, appointments in the 97 posts were  intended to be substantive in nature and the  condition relating to the ad hoc nature of the  appointments was included in the appointment  letters of the candidates who had been appointed  for filling up the said vacancies only on account  of the interim order passed in Brijendra Bahadur  Singh\022s case.  Of course, such stand was  subsequently altered by the State Government, but  it is clear that the change in stance came after  a decision was taken to amend Rule 3 of the 1983  Rules to regularise the services of the 1987  appointees  on 25.9.97, the date on which the  third amendment in the Service Rules was  notified. 71.     The said issue has also been considered in  detail in Mohd. Zaki Khan\022s case  and the  shifting  stand of the State Government has been  extensively dealt with as indicated hereinbefore.  In Mohd. Zaki Khan\022s case the High Court after  considering the provisions of clause (3) of  Article 320 of the Constitution came to the  finding that once the decision had been taken by  the State Government to withdraw the 97 posts  from the purview of the Public Service  Commission, it was open to the State Government  to fill up the said vacancies by formulating its  own norms which were within the constitutional  requirements. 72.     We agree with the view expressed in Zaki  Khan\022s case that once the power of the State  Government to withdraw certain posts from the  purview of the Public Service Commission in  certain exigencies is accepted, it would  naturally follow that the Rules of recruitment as  applicable to the Commission would not apply in  respect of the said 97 posts and the same could  be filled up by the State Government in keeping  with its prescribed norms.  It is well- established that in the absence of specific rules  for recruitment, guidelines framed by the  Executive authorities and directions given from  time to time in aid thereof would be applicable  to such recruitment.  The second question,  therefore, is also answered in the affirmative. 73.     This brings us to the last and in our view  the most important question to be answered in  these appeals, as to whether having regard to the  terms and conditions contained in their  appointment letters, the 1987 appointees could  claim the benefit of the service rendered by them  between 1987 and 1997 for purposes of computing  their seniority. 74.     It has already been indicated hereinabove as  to how the Public Service Commission delayed in  making recommendations for filling up the  vacancies in the Trade Tax Department and the  inability expressed by it to make recommendations  quickly to fill up the vacancies that were  gradually increasing.  It is only thereafter that  the Commissioner of Sales Tax took up the matter  of taking out the 97 posts from the purview of  the Public Service Commission. The matter was  taken up by the Chief Secretary with the Public  Service Commission requesting its concurrence to

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the Department\022s suggestion of holding a Limited  Departmental Examination to fill up the vacancies  in order to prevent loss of revenue and to ensure  smooth working of the Department. The  Commissioner, in his turn, sent the detailed  outline of the Limited Departmental Examination  proposed to be held to the Special Secretary  (Finance) by his letter dated 12.8.1986.  The  same was followed by the sanction given by the  Cabinet to withdraw the 97 posts and to fill them  up by a Limited Departmental Examination.   Although, initially the number of posts had not  been specified, by its letter dated 17.12.1986   the Government informed the Commissioner that the  Cabinet decision was in relation to the 97 posts  which had been withdrawn from the purview of the  Public Service Commission. 75.     In taking the aforesaid decision, the State  Government had apparently chosen to act in terms  of the proviso to clause (3) of Article 320 of  the Constitution which also empowered the State  Government to specify either generally or in any  particular class of case that it would not be  necessary to have any consultation with the  Public Service Commission. Having once exercised  such powers and having withdrawn the 97 posts in  question from the purview of the Public Service  Commission, the Government was also free to take  steps for recruitment in the said posts and to  prescribe guidelines for such recruitment.   Apparently, in the absence of Rules for such a  contingency, the High Court took an erroneous  view in holding that even though the posts in  question had been taken out of the purview of the  Public Service Commission the appointments made  therein would be subject to the 1983 Service  Rules relating to recruitments, as they were of a  purely ad hoc nature. Consequently, till such  time as the services of the said appointees were  regularised they could not be said to be part of  the cadre  and only after their services were  regularised in 1997 could they be treated to be  part of the cadre of Trade Officers for the  purpose of computing their seniority. 76.     We are aware that it is a well-established  principle of law that till such time as an  employee is born on the cadre he cannot have any  claim to seniority over others who are already in  the cadre.  The High Court has proceeded on the  basis that the recruits by way of Limited  Departmental Examination may have been appointed  in 1987 before the direct recruits but the direct  recruits were appointed in the cadre long prior  to the regularisation of the services of the 1987  appointees which was initially ad hoc in nature.  According to the High Court, since the regular  appointment of the direct recruits of 1985 and  1990 were confirmed prior to the regularisation   of the services of the 1987 appointees in 1997,  they would be senior to the 1987 appointees. 77.     In our view, although the stand of the High  Court is legalistically correct, we will have to  pierce the veil in order to ascertain the    true  intention of the Government while making the  appointments for the 97 posts by a Limited

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Departmental Examination.  The said intention is,  in fact, borne out from the initial stand taken  by the State Government in the different writ  applications filed by the candidates who had  either  been successful in the Limited  Departmental Examination or had failed to succeed  in the regular recruitment process undertaken by  the Public Service Commission. As has been  commented upon by the High Court, in these writ  petitions the State had filed counter-affidavits  indicating that the decision of the Government to  hold Limited Departmental Examination had already  been upheld in Zaki Khan\022s case which had  substantially decided the issue raised in the  said writ petitions by the direct recruits and it  was also the stand of the State Government that  the expression \023ad hoc appointments\024 had been  used in the appointment letters issued to the  successful 1987 candidates having regard to  interim order passed by the High Court in  Brijendra Bahadur Singh\022s case. It was the  Government\022s stand that in order to pay due  regard to the interim order dated 5.2.1987 that  the Government had directed the Commissioner,  Trade Tax, to use the expression \023ad hoc\024 in the  appointment letters. In any event, the said  interim order stood discharged when the writ  petition was dismissed on 3.10.1996.  It was also  the stand of the State Government that the  appointments made in 1987 by way of the Limited  Departmental Examination had been made after   following due procedure.  What is most important  was the Government\022s stand that the appointments  made on 20.6.1987 on the basis of the Limited  Departmental Examination were of substantive  nature. 78.     In the writ petition filed by Vinod Kumar  Gupta (W.P.No.1295/SB/1997) the Government filed  its counter affidavit indicating that the  amendment was made to achieve the policy decision  of giving substantive appointment from the date  of initial appointment to those persons who had  been appointed on the basis of the Limited  Departmental Examination and the word \021ad hoc\022  had been used in due deference to the interim  order passed by the High Court on 12.2.1987 which  ceased to operate after the dismissal of the writ  petitions Nos.496 of 1987 and 1008 of 1987.  Subsequently, when the 1983 Service Rules were  amended in 1997, the Government also indicated  that the amendment was made only to  clarify/declare that the appointments made under  the Limited Departmental Examination were regular  and substantive and only a declaration had been  made in that regard in the third amendment and  that no regularisation was at all envisaged.  In  the writ petition filed by Govardhan Lal the  State in its counter affidavit stated : \023The Service Rules of 1985 had  been amended which envisaged that  the persons appointed through  Limited Departmental Examination  were appointed on a regular and  substantive basis from the date of  their initial appointment\022

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                       (Emphasis supplied)

79.     In the said counter affidavit it was once  again emphasised  that in the facts of the case,  it was not a case of regularisation of the  services of the 1987 appointees, as projected on  behalf of the respondents in the first two  appeals, but that on the contrary it was a case  where the 1987 appointees had been appointed on  substantive basis with due procedure which had  been approved in the case of Mohd. Zaki Khan.  It  was once again emphasised that the amendment only  declared  what was in existence and did not  create any new right. Again at para 34 of the  counter affidavit it was stated as follows: \023..that no process was ever  initiated to regularise the service  of respondents Nos. 3 to 99.  This  was for the reason that the  appointment of respondent Nos.3 to  99 (1987 appointees) was always  considered to be substantive  appointment\024

80.     The shift in the State Government\022s stand  came later as would be evident from the orders  passed by it on  22.9.2000 onwards.  It will be  evident from the above, that the State Government  had considered the appointments in the 97 posts  to be substantive in nature.  As a result whereof  no steps were taken between 1987 and 1997 to  regularise the appointments of the 1987  appointees. It is only a fortuitous circumstance,  namely passing of the interim order in Brijendra  Bahadur Singh\022s  case on 5.2.1987, that the  expression \021ad hoc\022 came to be mentioned  in the  appointment letters of the 1987 appointees,  although the State Government had intended such  appointments to be substantive in nature. It is  to be decided whether the respondents in the  first two appeals and the appellants in the third  appeal, as also the State Government, can now  take advantage of the inclusion of such  expression in the appointment letters issued to  the 1987 appointees, particularly when the writ  petitions out of which the same emanated were  ultimately dismissed. 81.     In our view, notwithstanding the well-settled  principle that an employee\022s service is to be  counted for seniority only after he is born in  the cadre, in the facts of this case the 1987  appointees will have to be treated differently.   Although, the State Government may have shifted  its stand to the extent that the services  rendered by the 1987 appointees till 1997 could  not be counted for computing their seniority, as  their initial appointment was ad hoc in nature,  we are of the view that such a stand would lead  to inequity in view of the expressed intention of  the State Government in the earlier writ  petitions. 82.     As we have mentioned earlier, it is in only  fortuitous circumstances that the appointment of  the 1987 appointees through the Limited

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Departmental Examination was treated to be ad  hoc, although, as initially expressed by the  State Government such appointments were meant to  be substantive in nature. It is quite obvious  that having included the condition that the  appointments were ad hoc in nature in the  appointment letters issued to the 1987  appointees, that the State Government has now  sought to place the 1987 appointees below those  who had sat for the recruitment examination after  the appointment of the 1987 appointees and had  not been borne on the cadre prior to 1990.  While  agreeing with Mr. Gaurab Banerji that it is well- settled that an employee can only count his  seniority from the moment he becomes part of the  cadre, in the instant case we are of the view  that the facts are distinguishable in that the  services of the 1987 appointees should be treated  as substantive from the date of their initial  appointment and not from 1997 when by amendment  of the Service Rules their services were deemed  to have been regularised and they were included  in the cadre with effect from the date of such  amendment.  The fact remains that the 1987  appointees  were appointed in the 97 posts  which  were taken out of the purview of the Public  Service Commission but continued to be in the  cadre of Trade Tax Officer, Grade II.  Having  regard to Rule 3(1) of the 1983 Service Rules,  the 1987 appointees must be held to have been  substantially appointed in accordance with the  procedure prescribed by the State Government. In  our view, such an appointment did not, in any  manner, derogate from their appointment in the  cadre of Trade Tax Officer, Grade II. 83.     It is nobody\022s case that the 97 posts which  were taken out from the purview of the Public  Service Commission ceased to be posts in the  cadre of Trade Tax Officer, Grade II.  On the  contrary, the specific stand taken in Mohd. Zaki  Khan\022s case was that since the appointment of the  1987 appointees were ad hoc in nature the said  posts were never filled-up and were still  available  for being filled up by regular  candidates from amongst the direct recruits. 84.     The State Government has in paragraph 34 of  its counter-affidavit in Govardhan Lal\022s writ  petition said in no uncertain terms that no  process had been initiated  to  regularise the  services of the 1987 appointees for the reason  that their appointment was always considered to  be substantial in nature.   We, therefore, have  little hesitation in holding that the service  rendered by the 1987 appointees between 1987 and  1997 cannot be ignored for computing their  seniority in the cadre on the ground that in view  of the interim orders passed by the High Court in  different writ petitions, which ultimately came  to be dismissed, their appointments were treated  to be ad hoc. 85.     We, accordingly, allow Civil Appeal Nos. 4968  of 2007 filed by Ashok Kumar Shrivastava and 63  others, Civil Appeal No.4969 of 2007 filed by  Muneshwar Babu and Ashok Kumar Srivastava, as  also Civil Appeal No.4970  preferred by Goverdhan

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Lal.      Consequently, Writ Petition No.1041(SB) of   1996 filed by Ram Lal and others, Writ Petition  No.1295 (S/B) of 1997 filed by Vinod Gupta, Writ  Petition No.1863 (S/B) of 1998 filed by Govardhan  Lal are dismissed and the impugned order so far  as it relates to the aforesaid writ petitions, is  set aside. 86.     Consequently, Writ petition No.1778 (S/B) of  2000 filed by Jugul Kishore, Writ Petition  No.2000 (S/B) of 2000 filed by Rajendra Prasad,  Writ Petition No.2787(S/B) of 2001 filed by Ashok  Kumar Srivastava, Writ Petition No.1666 (S/B) of  2005 filed by Muneshwar Babu and another, and  Writ Petition No.894 (S/B) of 1999 filed by Shiv  Prasad Tewari and others are allowed.  The  concerned respondents are directed to treat the  1987 appointees who had been appointed on the  basis of Limited Departmental Examination to have  been substantially appointed at the time of their  initial appointment in 1987 and to revise the  seniority list pertaining to Trade Tax Officer,  Grade II, on such basis.         All the three appeals are disposed of  accordingly, but having regard to the peculiar  circumstances the parties will bear their own  costs.