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PETITIONER: J. N. GOEL & ORS.G.L. GUPTA Y ORS.

       Vs.

RESPONDENT: UNION OF INDIA & ORS.

DATE OF JUDGMENT:       14/01/1997

BENCH: S.C. AGRAWAL, G.T. NANAVATI

ACT:

HEADNOTE:

JUDGMENT:                             WITH                CIVIL APPEAL NO. 5364 OF 1990                       J U D G M E N T      S.C. AGRAWAL, J. :-      There appeals,  by special  leave, are directed against the  judgment   of  the   Central  Administrative  Tribunal, Principal bench,  New Delhi (hereinafter referred to as ‘the Tribunal’) in  O.A. No. 704 of 1988 and O.A. No. 910 of 1989 The appeals  relate to  promotion of  Assistant Engineers to the post  of Executive  Engineer in the Central Public Works Department (for  short ‘the C.P.W.D.’), of the Government of India.      In the  C.P.W.D. Assistant  Engineers are  appointed by direct recruitment as well as by promotion from the cadre of Junior Engineers.  The cadre of Assistant Engineers consists of graduates  holding a  degree in  Engineering as  well  as holders of  diploma in  Engineering. Recruitment to the post of Executive  Engineer was  earlier governed  by the Central Engineering  Service   Group  ‘A’  Recruitment  Rules,  1954 (hereinafter referred  to as  ‘the 1954  Rules’). Under  the 1954 Rules appointment to the post of Executive Engineer was being made by promotion of Assistant Executive Engineers and Assistant Engineers. The promotion of Assistant Engineers as Executive Engineers  was governed  by Rule 21(3) of the 1954 Rules which provided as follows :-      "Rules 21(3). No Assistant Engineer      shall be  eligible for promotion to      the service, unless he :-      (a)  would,   but   for   age,   be      qualified  for   admission  to  the      competitive examination under Part-      III of these rules.      (b) has  rendered  at  least  three      years service  in  a  permanent  or      temporary capacity  as an Assistant      Engineer and  subordinate under the      Central Government, and      (c) satisfied  the commission  that      he is in every respect suitable for      appointment to the service."

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    In view  of sub-clause  (a) of Rule 21(3) only graduate Assistant Engineers  were eligible for promotion to the post of Executive  Engineer because  the qualification prescribed for recruitment  by Competitive  Examination under  Rule  11 (falling in  Part-III of  the 1954  Rules)  was  "degree  in Engineering from  a University incorporated by an Act of the Central  or   State  Legislature  in  India,  or  any  other educational institution  established by an Act of Parliament or declared  to be deemed as Universities under Section 3 of the University  Grants Commission  Act, 1956,  or a  foreign University approved  by the Government from time to time, or a qualification  which has been recognised by the Government for  the   purposes  of   admission   to   the   competitive examination". Executive  instructions were,  however, issued in 1956  for promotion of diploma holder Assistant Engineers as Executive  Engineers on  ad hoc  basis. This  practice of promoting diploma holder Assistant Engineers on ad hoc basis continued for  a considerable  time. A Writ Petition (C.W.P. 818 of  1972) was  filed by  one C.P. Gupta, a degree holder Assistant Engineer,  in the  Delhi High  Court  wherein  the action  of   the  Government  in  promoting  diploma  holder Assistant Engineers on ad hoc basis was challenged. The said Writ Petition,  which was  subsequently transferred  to  the Tribunal an  registered as  T-52 of 1985, was decided by the Tribunal, by  judgment dated  December 19,  1986, whereby it was held that administrative instructions could not override the  statutory   provisions  of  the  1954  Rules  and  that promotions made on the basis of administrative instructions, being contrary  to the statutory rules, were invalid. During the pendency of the said petition, the following proviso was inserted in  sub-rule (3)  of Rule  21 of  the 1954 Rules by Notification dated October 31, 1972 :-      "Provided   that    Government   in      consultation  with  the  Commission      may promote  an Assistant  Engineer      of outstanding  ability and record,      to Group A service in relaxation of      the   educational    qualifications      provided in clause (a)."      After the  insertion of  the said proviso promotions of diploma holder  Assistant Engineers  were being  made on the post of  Executive Engineer  on ad  hoc basis under the said proviso. Feeling  aggrieved by  such promotion  the graduate Assistant Engineers  filed an  application (O.A.  No. 704 of 1988) before  the Tribunal  wherein it was submitted that in view of  the proviso  inserted in sub-rule (3) of Rule 21 of the 1954 Rules only those diploma holder Assistant Engineers could be promoted to the post of Executive Engineers who had ‘outstanding ability  and record’  and that  diploma  holder Assistant Engineers who did not possess ‘outstanding ability and record’  were not  eligible for  promotion as  Executive Engineer either  on regular  or on  ad hoc  basis  and  that promotion of diploma holder Assistant Engineers could not be made simply  on the basis of seniority-cum-fitness by taking them at  par  with  graduate  Assistant  Engineers.  Another application (O.A.  No. 910  of 1989)  was filed  before  the Tribunal by  the  diploma  holder  Assistant  Engineers  who submitted that  the proviso to Rule 21(3) of the 1954 Rules, in so  far as  it prescribed the requirement of ‘outstanding ability and  record’ for the purpose of promotion of diploma holder  Assistant   Engineers  to   the  post  of  Executive Engineer, was  discriminatory and  violative of  Articles 14 and  16   of  the  Constitution.  On  behalf  of  the  Union Government it  was submitted  that the  proviso inserted  in Rule 21(3)  of the 1954 Rules is fair and just and cannot be

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termed  as   discriminatory  and   that  the  assessment  of ‘outstanding ability  and  record’  of  the  diploma  holder Assistant Engineers  is done  by the  Departmental Promotion Committee (for  short ‘DPC’) which is chaired by a member of the Union  Public Service  Commission and that he assessment of merit is based on the total record of service. Both these applications have  been disposed  of by  the Tribunal by the impugned judgment dated April 30, 1990.      After referring to the proviso introduced in Rule 21(3) of the  1954 Rules,  the  Tribunal  has  observed  that  the eligibility  conferred   thereby  in   relaxation   of   the educational  qualification  is  conditioned  by  the  higher quality  of   performance  and  a  longer  work  experience, assessed as  ‘outstanding ability  and record’ and that this could be judged from the annual confidential reports (ACRs). According to  the Tribunal,  ACR is a vehicle for assessment of comparative and competitive merit of the officers equally placed for  the  purpose  of  promotion  and  that  such  an assessment cannot  quantify the compensatory element for the diploma holders  Assistant Engineers  which is  required  to place them  at  the  same  pedestal  as  graduate  Assistant Engineers  who   admittedly  have  higher  mental  equipment because the  DPC that  makes assessment  for the  purpose of promotion to  the higher  grade applies  uniform  norms  for assessing the  performance of the officers placed equally in the feeder  grade.  The  Tribunal  has  also  observed  that according to Rule 21(3) the Department is required to screen the diploma  holder Assistant Engineers based on their total record  of  service  to  identify  those  persons  who  have ‘outstanding ability  and record’  and  the  diploma  holder Assistant  Engineers  so  identified  should  thereafter  be placed at  par with  the graduate  Assistant  Engineers  and assessed for promotion to the grade of Executive Engineer in accordance with the procedure prescribed by the DPC and this has never been followed. Since both the assessments, namely, screening of  diploma holder  Assistant Engineers  first for identifying those  who have ‘outstanding ability and record’ in accordance with Rule 21 (3) and thereafter assessing them along with  the graduate  Assistant Engineers  by the DPC in accordance with  the  procedure  followed  by  it  for  such selection, are  made on  the basis  of job  performance, the work content  of which  is the same, for the diploma holders as well  as graduates,  Rule 21(3)  contains an  element  of arbitrariness and  discrimination. The  Tribunal  has  taken note of  the fact  that for  the last  three decades diploma holder Assistant  Engineers have  been promoted  on  ad  hoc basis along  with the  graduate Assistant Engineers based on the appraisal  of their  confidential record and that in the last three  DPCs held  in 1965,  1968 and  1971, the  select lists were  prepared applying  the selection norms uniformly to all  the Assistant  Engineers irrespective of their being diploma  holders   or  degree   holders  by   treating  them (graduates  and  non-graduates)  as  one  category  and  the selection was made without first determining the eligibility of  diploma   holder  Assistant   Engineers  for   the  next promotion. According  to the  Tribunal, the procedure so far has not  been in  conformity with  Rule 21(3).  The Tribunal has, therefore, held that the proviso inserted in Rule 21(3) is arbitrary  and  discriminatory  and  it  requires  to  be substituted by  a rational and just criterion, e.g., holding of a qualifying test for diploma holder Assistant Engineers, annually or  as may  be necessary, to obviate the element of arbitrariness and  make the  rule reasonable  and those  who qualify  in   such  a  departmental  test,  they  should  be considered  along  with  graduate  Assistant  Engineers  for

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promotion to  the next  higher grade by the DPC by following the  normal   procedure.  The   Tribunal  has  directed  the Government to  further amend the 1954 Rules suitably and has also directed  that until  the  Rules  are  so  amended,  no regular promotion  of  diploma  holder  Assistant  Engineers shall be  made and that ad hoc promotions already made shall be regularised in accordance with the amended Rules.      Both  the   sides,  namely,   the  graduate   Assistant Engineers as  well as  diploma holder  Assistant  Engineers, have felt  aggrieved by  the judgment  of the  Tribunal. The graduate Assistant  Engineers have  filed Civil  Appeal  No. 5363 of  1990, while  the diploma holder Assistant Engineers have filed Civil Appeal No. 5364 of 1990.      During the pendency of these appeals, the Government of India has  made the Ministry of Urban Affairs and Employment (Department  of   Urban  Development),  Central  Engineering (Civil) Group  ‘A’ Service,  Rules, 1996 and the Ministry of Urban  Affairs   and   Employment   (Department   of   Urban Development) Central Engineering (Electrical and Mechanical) Group ‘A’  Service Rules,  1996 (hereinafter  referred to as ‘the 1996 Rules’). The 1996 Rules have been published in the Gazette of  India dated  October 29, 1996 vide notifications dated October  28, 1996.  The 1996 Rules have superseded the 1954 Rules and prescribe a quota system for promotion to the post of Executive Engineers from three sources :-      (i)  Assistant  Executive  Engineer      with four  years regular service in      the grade. 33/1/3%      (ii)   Degree    holder   Assistant      Engineers with  eight years regular      service in the grade. 33/1/3%      (iii)  Diploma   holder   Assistant      Engineers with  ten  years  regular      service in the grade. 33/1/3%      The 1996  Rules have  come into  force with effect from October 29,  1996. Since  the 1996  Rules are prospective in operation, the  promotions made  prior to  the making of the 1996  Rules  would  be  governed  by  the  1954  Rules  and, therefore,  the  question  regarding  the  validity  of  the proviso  to   Rule  21(3)  of  the  1954  Rules  has  to  be considered.      Before we  come to  the question regarding the validity of the  proviso to  Rule  21(3),  we  would  deal  with  the submission  of  Shri  G.K.  Aggarwal,  the  learned  counsel appearing for  the appellants  in Civil  Appeal No.  5364 of 1990  filed  by  the  diploma  holder  Assistant  Engineers, assailing the  validity of  Rule 21(3).  Shri  Aggarwal  has submitted that Rule 21(3) of the 1954 Rules, in so far as it restricts  eligibility   for  promotion   to  the  cadre  of Executive Engineer  to graduate Assistant Engineers only, is violative of  Articles 14  and 16  of the  Constitution. The submission is  that promotion  to  the  cadre  of  Assistant Engineers is  made from  amongst Junior  Engineers  who  are degree holders  as well as diploma holders on the basis of a limited departmental  examination and  that  diploma  holder Junior Engineers  who become  Assistant Engineers after such selection discharge  the same duties and responsibilities as graduate Assistant  Engineers and that there is no basis for denying diploma  holder Assistant Engineers promotion to the higher grade  of Executive Engineers. Shri Aggarwal has also urged that  since 1956  diploma holder  Assistant  Engineers were being  promoted as  Executive Engineers  and  there  is nothing  to   show  that   their  performance  as  Executive Engineers was found wanting.      We  are  unable  to  accept  this  contention  of  Shri

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Aggarwal. The  decisions of  this Court  have laid down that educational qualifications can justifiably be made the basis for classification  for the  purpose  of  promotion  to  the higher post.  In State  of Jammu  & Kashmir  v. Triloki Nath Khosa &  Ors.,  1974  (1)  SCR  771,  there  was  a  similar provision in  the  Jammu  &  Kashmir  Engineering  (Gazetted Service) Recruitment  Rules, 1970,  whereunder only graduate Assistant Engineers  were eligible for promotion to the post of Assistant  Executive Engineers.  The validity of the said rule was challenged by diploma holder Assistant Engineers on the ground  of violation  of  Articles  14  and  16  of  the Constitution and  the provision  was struck  down by Jammu & Kashmir High  Court, but,  on appeal, the rule was upheld as valid by this Court. It was held :-      "Formal education  may  not  always      produce    excellence     but     a      classification founded  on  variant      educational qualifications  is, for      purposes of  promotion to  the post      of an  Executive Engineer,  to  say      the least,  not unjust  on the fact      of it".                 [p. 780]      In that  case also an argument was advanced tat diploma holders could  comfortably fill  higher posts for over three decades and  no reason  was shown why they shall be rendered wholly ineligible even for being considered for promotion to the post of Executive Engineer. The Court has, however, held :-      "Efficiency  which   comes  in  the      trail of  a higher mental equipment      can reasonably  be attempted  to be      achieved by restricting promotional      opportunities to  those  possessing      higher educational qualifications."                 [p. 784]      In restricting  promotion to  the  cadre  of  Executive Engineer from amongst graduate Assistant Engineers only Rule 21(3) of  the 1954 Rules, as it stood prior to the amendment of 1972,  was not  different from  the rule  which has  been upheld as valid by this Court in State of Jammu & Kashmir v. Triloki Nath  Khosa &  Ors. (supra).  The insertion  of  the proviso in  Rule 21(3)  in  1972  removes  the  bar  against eligibility of  diploma  holder  Assistant  Engineers  being promoted as  Executive Engineers  and permits  relaxation in educational  qualification   in  respect   of   non-graduate Assistant  Engineers  of  outstanding  ability  and  record. Keeping in  view the  paramount requirement of efficiency in the higher  echelons of  the service,  the proviso  seeks to strike a  balance between  the aspirations  in the matter of promotion of  Assistant Engineers  having higher educational qualifications  and   Assistant  Engineers,   though  lesser qualified  educationally,  having  outstanding  ability  and record.      Shri  Aggarwal   has  placed  strong  reliance  on  the decision of  this Court in N. Abdul Basheer and Ors. v. K.K. Karunakaran and  Ors., 1989 Supp. (2) SCC 344, which related to promotion  from the  post of Excise Preventive Officer to that of  Second Grade  Excise Inspectors.  In that  case the provision fixing a quota for promotion between graduates and non-graduates was held to be violative of Articles 14 and 16 of the  Constitution on  the view  that  the  conditions  of employment  and   the  incidents  of  service  recognise  no distinction between  graduate and  non-graduate officers and that for  all material purposes they are effectively treated

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as equivalent.  The decision  in State of Jammu & Kashmir v. Triloki Nath  Khosa &  Ors. (supra)  was noticed  and it was observed that  in that  case having  regard to the object of achieving the  administrative efficiency  in the Engineering Service  it   was  a   just  qualification   to  maintain  a distinction between  Assistant  Engineers  who  were  degree holders and  those who  were  merely  diploma  holders.  The decision in  N. Abdul  Basheer &  Ors. v. K.K. Karunakaran & Ors. (supra)  does  not,  therefore,  lend  support  to  the submission of  Shri Aggarwal  that Rule  21(3) of  the  1954 Rules was  invalid. Reference in this context may be made to the recent  decision in  T.R. Kothandaraman  & Ors. v. Tamil Nadu Water Supply & Drainage Board & Ors., 1994 (6) SCC 282, wherein this  Court has  upheld that validity of the proviso to Regulation  19(2)  (b)  of  the  Tamil  Nadu  Supply  and Drainage Board  Service Regulations,  1972, which  permitted diploma Assistant  Engineers to be eligible for promotion to the post  of Executive  Engineer only  if they  were to have "exceptional merit"  in work, otherwise such diploma holders were not  eligible for  promotion. The challenge to the said provision on the basis of Article 16 of the Constitution was negativated on  the basis  of the  judgment in  Triloki Nath Khosa & Ors. (supra).      We may  now come to the proviso to Rule 21(3) which was inserted in  1972. As  noticed earlier,  the proviso permits relaxation in  the matter  of educational qualifications for promotion of  Assistant Engineers  to the cadre of Executive Engineers and  an Assistant  Engineer though  not a graduate could be  promoted provided  he had ‘outstanding ability and record’. The  said criterion  of  ‘outstanding  ability  and record’ prescribed  by the  proviso cannot  be  regarded  as vague or  arbitrary. In  service jurisprudence  ‘outstanding merit’ is  a well  recognised concept  for  promotion  to  a selection post  on the  basis of  merit. Such  assessment of outstanding merit  is made  by the  DPC on  the basis of the record of performance of the employee. It cannot, therefore, be said  that the  proviso to  Rule 21(3)  which  enabled  a diploma  holder   Assistant  Engineer   to  be  promoted  as Executive  Engineer  if  he  had  ‘outstanding  ability  and record’ suffers  from the  vice of  arbitrariness. The  only reason given  by the  Tribunal for  striking down  the  said proviso as invalid is that in the matter of promotions which have been  made on  the post of Executive Engineer, the DPCs have not  correctly applied the said criterion and have made selections   by    applying   selection    norms   uniformly irrespective  of   their  being   diploma  holder  Assistant Engineers or  degree holder Assistant Engineers. The failure on the part of the DPCs, in the past, to correctly apply the norms laid  down in  the proviso  and to  make an assessment about  the  eligibility  of  the  diploma  holder  Assistant Engineers on  the basis  of their  ‘outstanding ability  and record’ would  not  mean  that  the  proviso  which  enables diploma  holder   Assistant  Engineers  having  ‘outstanding ability and record’ being promoted as Executive Engineers is violative of  Articles 14  and 16 of the Constitution on the ground of  arbitrariness. The  failure to implement the said proviso properly  could only  mean that  the promotion which was made  without properly  applying the criterion laid down in the  proviso would  be open to challenge. But it does not mean that  the proviso  itself is bad as being arbitrary. We are, therefore,  unable to  hold that  the proviso  to  Rule 21(3) of  the 1954 Rules was violative of Articles 14 and 16 of the  Constitution. This  would mean  that the  promotions from the  cadre of Assistant Engineers (graduates as well as diploma holders)  to the  cadre of Executive Engineers prior

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to the  coming into force of 1996 Rules would be governed by Rule 21(3)  of the 1954 Rules, as amended in 1972 to include the proviso.      In O.A.  No. 704  of 1988  which filed  by the graduate Assistant Engineers,  the  relief  sought  was  confined  to future promotions  of diploma  holder Assistant Engineers to the cadre  of Executive  Engineers on  regular as well as ad hoc basis.  The scope of Civil Appeal No. 5363 of 1990 filed by the  graduate Assistant Engineers is, therefore, confined to promotions  made to the cadre of Executive Engineers from amongst diploma holder Assistant Engineers after the date of filing of  D.A. No. 704 of 1988 in the Tribunal. It has been pointed out that subsequent to the filing of O.A. No. 704 of 1988 before  the Tribunal  some orders  were passed  in 1994 whereby regular  appointments have been made to the cadre of Executive Engineers from amongst Assistant Engineers, degree holders as  well as diploma holders. It has also been stated that most of the diploma holder Assistant engineers who were regularly  appointed  as  Executive  Engineers  under  these orders have  already retired  from service. The grievance of the graduate  Assistant  Engineers  is  mainly  confined  to diploma holder  Assistant Engineers who have been working as Executive Engineers  on ad  hoc basis.  Since the 1954 Rules were in  operation prior  to the  promulgation of  the  1996 Rules, regular  promotion on the post of Executive Engineers against vacancies  which occurred  prior to the promulgation of the 1996 Rules will be governed by the 1954 Rules. If any of the  appellants in  Civil Appeal  No. 5363  of 1990 feels aggrieved by  the regular  promotion of  any of  the diploma holder  Assistant   Engineers  to  the  cadre  of  Executive Engineer after  the filing of O.A. No. 704 of 1988 and prior to the  coming into  force of the 1996 Rules, he may agitate the said  grievance in the competent forum. The promotion of diploma holder Assistant Engineers who have been promoted on the post of Executive Engineer on ad hoc basis, will have to be  reviewed  by  the  authorities  and  regular  promotions against vacancies  which occurred  prior to the promulgation of the  1996 Rules  will have  to be made in accordance with the 1954  Rules. Regularisation  of diploma holder Assistant Engineers who  are working  as Executive Engineers on ad hoc basis   against   vacancies   which   occurred   after   the promulgation of  the 1996  Rules will  have to  be  made  in accordance with the provisions of the 1996 Rules.      The  appeals   are  disposed  of  accordingly  and  the impugned judgment  of the  Tribunal will  stand modified  in these terms. No order as to costs.