IN THE SUPREME COURT OF INDIA  CIVIL  APPELLATE JURISDICTION

   CIVIL APPEAL  NOS.1366-1367 OF 2004

NAGESH SINGH & ANR. Appellant(s)

       Versus

B.D. VIRDI & ORS.  Respondent(s)

O R D E R

We have heard learned counsel for the parties.

These appeals by special leave are directed against the order passed

by the Division Bench of  the Delhi High Court dated 22nd July,   2003.   The

Division Bench of the Delhi High Court in a writ petition filed by the respondent

herein  set  aside  the  order  passed  by  the  Administrative  Tribunal  dated  7th

January, 1999.  The order reads as under :-

“In the result these two O.As succeed and are allowed to the extent

that following the Supreme Court's Judgment in Shri Mohanty's case (supra) the

promotions made of those SC/ST candidates under Rule 13 (unamended),  IES

Rules, 1961 without considering the case of the applicants in the two O.As before

us, is held by us to be legally unsustainable.  Furthermore, the retrospective

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operation of the amendment to Rule 13, IES Rules to the extent that the same

takes  away  the  vested  rights  of  the  applicants  and  other  general  category

candidates is also unreasonable, arbitrary and as such violative of Articles 14 and

16 of the Constitution and is, therefore, struck down.

In  the  light  of  the  above,  respondents  are directed  to  review the

impugned promotions and consider the cases of  the applicants for promotions

from  the  date  the  impugned  promotions  were  made,  with  all  consequential

benefits.  While doing so the respondents should make all efforts to protest the

promotions  of  reserved  category candidates  to  the  extent  possible,  but  if  it

becomes absolutely necessary to revert them from the higher posts to which they

have been promoted under the unamended or amended Rules, that may be done.

While doing so, however, any financial benefits given to them while working in the

higher posts  should not be withdrawn and should be protected as personal to

them.”

Aggrieved  against  this  order,  the  writ  petition  was  filed  by  the

respondents herein and the Division Bench of the Delhi High Court set aside the

aforesaid direction and held that :

“We  have,  therefore,  no  other  alternative  but  to  set  aside  the

judgments of the Tribunal and remit the

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matter back to it for consideration of the matter afresh.”

So far as CWP No.223 of 2001 is concerned, the Division Bench held

that it is not maintainable and directed the petitioners to approach the Central

Administrative Tribunal. CM No.5066 of 2001 an application made by Mr. Gyan

Prakash in this writ petition is concerned, Court decline to implead applicant as

party.

We may at outset mention that we are not concerned with the facts

relating to the CWP No.223 of 2001.  We have been informed that the matter is

pending before the Tribunal pertaining to this subject.   Therefore, we are not

going into the facts pertaining to CWP No.223/2001.

The present appeals were filed by two persons namely Nagesh Singh

and B.S.Bhandari who filed the O.A. before the Tribunal praying the following

reliefs :  

i) “The Hon'ble Tribunal may be pleased to declare the applicants

having been promoted to Grade III  as per Rule 8(1)(b)(i) for his

juniors have been promoted before them.

ii)  That out  of turn promotion from Grade IV to Grade III of the IES

to junior officers belonging to SC/ST in supersession of claims of

seniors belonging to the general category be

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struck down as violative of the statutory rules of the IES, 1971 and

A 14, 16(1) and 335 of the Constitution of India,  

iii)This  Hon'ble  Tribunal  may be  pleased  to  quash  the  impugned

amendment dated  22.9.1989  (Annexure C)  amending Rule 13  as

being void,  

iv) That the applicants be deemed to be promoted to Grade III of the

IES from the date their juniors have been promoted,  

which were granted by the Tribunal and that have been set aside by

the Division Bench. Therefore, we are concerned with the grievance

of these two appellants before us vis-a-vis the respondents who are

party before us.  We are not touching the rights of other parties in

any manner.”

Both these appellants  i.e  Nagesh Singh and B.S.  Bhandari joined

Grade  IV  (Assistant  Director)  in  the  Indian  Economic  Service  (IES)  on  1st

September,  1982.   The  other  respondents  joined  the  service  after  them.

Respondent No.1  joined the service on 1.12.1982  and Respondent Nos.2  to  5

joined the service on 29th August, 1983.  Respondent No.1 was promoted on 25th

May, 1988 as Grade III (Deputy Director) by the Order dated 25th May, 1988 and

respondent Nos. 2 to 5 were promoted as Grade III

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(Deputy Director) on 7th July, 1988. Against these accelerated promotions against

reserved  quota  was  challenged  by  petitioner  Nos.  1  and  2  by  filing  a

representation but without any result.  Therefore, they were driven to file O.A.

before  the  Central  Administrative  Tribunal  under  Section  19  of  the

Administrative Tribunal's Act,  1985.   The main grievance of  these  petitioners

before the Tribunal was that as per Rule 13 as it stood in 1988 there was no

reservation quota in promotion for SC/ST and they have been wrongly promoted

under the garb of so called administrative instruction issued on 27th November,

1972.   The  validity of  this  Notification  dated  27th November,  1972  was  also

challenged.  It may be relevant to mention here that the Indian Economic Service

Rules, 1961 were framed under proviso to Rule 309 of the Constitution and they

came into force when they were published under the Gazette of  India (Extra

Ordinary) dated 1st November, 1961 and in that Rule 13 as it stood reads as under

:-

13.  Reservation  for  Scheduled  Castes,  Scheduled  Tribes  etc.  -

Appointments to the Service made otherwise than by promotion will be subject to

orders regarding special representation in the Services for Scheduled Castes and

Scheduled Tribes issued by the Ministry of Home Affairs from time to time.”

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The grievance of the petitioners was that Rule 13 did not contemplate

any reservation against in promotion quota.  It clearly mandates that appointment

of service made otherwise than by promotion will be subject to orders regarding

special representation in service for SC/ST issued by the Ministry of Home Affairs

from time to time.  Therefore, according to Rule 13, the reservation could only be

made in service otherwise than by way of promotion.  It means that the only area

in which the reservation could be made is  in the direct appointment.   In our

opinion Rule 13 clearly mandates that the reservation was only in recruitment and

not in promotion.    However, this issue has been a subject matter of litigation

before this Court in number of cases  but no useful purpose will be served by

highlighting  all  those  cases  because  subsequently,  Rule  13  was  amended  by

Notification dated 22nd September, 1989 and the amended rule reads as under :-

“13.  Reservation for Scheduled Castes and Scheduled Tribes, etc. -

Appointment  to  the  service  shall  be  made  subject  to  the  orders  relating  to

reservation for Scheduled Castes  and Scheduled Tribes  issued by the Central

Government from time to time.”

As a result of this amendment the hurdle imposed in unamended Rule

13 was taken away and the area was left

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open for  reservation in  direct  recruitment as  well  as  in  promotions  but  this

amended rule dated  22nd September,  1989  was made retrospective effect  with

effect from   27th November, 1972.  On 27th November, 1972 an order was issued

by the Government for providing a reservation for promotion quota also but it

had no legal sanction at that time.  Therefore, now a legal sanction was given by

amending Rule 13 and substituting the new rule making it retrospective from 27th

November, 1972 so as to protect all the promotions which have been done from

27th November, 1972.  This amended Rule 13 had come up for interpretation in

identical service rules i.e. in the Indian Statistical Service before this Court and

the amended rule in the Indian Statistical Service is pari materia with the present

rule which reads as under :-

13.  Reservation for Scheduled Castes  and Scheduled Tribes etc. -

Appointment to the service made otherwise than by promotion will be subject to

orders regarding special representation in the Service for Scheduled Castes and

Scheduled Tribes issued by the Government from time to time.”  This rule was

also given retrospective operation from 27th November, 1972.

This  rule came up for interpretation before this  Court and Their

Lordships after examining the various

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other decisions of this Court concluded that retrospectivity cannot be given to the

rule and it was observed that the legislature and the competent authority under

Article  309  of  the  Constitution  of  India  have the  power to  make laws  with

retrospective effect.  This power, however, cannot be used to justify the arbitrary,

illegal or unconstitutional acts of the Executive.  When a person is deprived of an

accrued right vested in him under a statute or under the Constitution and he

successfully challenges the same in the court of law, the legislature cannot render

the  said  right  and  the  relief  obtained  nugatory  by  enacting  retrospective

legislation.

It was also observed that the retrospective operation of the amended

rule 13 cannot be sustained.

It was observed in para 14 and 15 in Union of India and Others vs.

Tushal Ranjan Mohanty and Others case reported in (1994) 5 SCC 450 which

read as under :-

14.”The legislatures and the competent authority under Article 309 of the Constitution of India have the power to make laws with retrospective effect.  This power, however, cannot be used to justify the arbitrary, illegal or unconstitutional acts of the Executive.   When a person is  deprived of  an accrued right vested in him under a statute or under the Constitution and he successfully  challenges  the  same  in  the  Court  of  law,  the legislature cannot render the said right and the relief obtain nugatory by enacting retrospective legislation.

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15.Respectfully following the law laid down by this Court in the judgments referred to and quoted above, we are of the view that the retrospective operation of the amended Rule 13 cannot be  sustained.   We  are  satisfied  that  the  retrospective amendment of  Rule  13  of  the  Rules  takes  away the  vested rights of Mohanty and other general category candidates senior to Respondents 2 to 9.  We, therefore, declare amended Rule 13 to the extent it has been made operative retrospectively to be unreasonable, arbitrary and, as such, violative of Articles 14 and  16  of  the  Constitution of  India.   We strike down  the retrospective operation of the rule.  In the view we have taken on  the  point  it  is  not  necessary  to  deal  with  the  other contentions raised by Mohanty.”

Therefore, ratio of this case is equally applicable in this service also.

The net result of above discussion is that at the time when the respondents were

promoted there was no rule and it was only administrative instruction which was

sought to be given a legal sanction by amending the Rule 13 from 1972 but that

retrospectivity has already been set aside in the case of Mohanty(supra).

Therefore, on the basis of the reasoning given by the Hon'ble Sawant,

J. in Union of India vs. V. Mohanty's, we read down the Rule 13 that it cannot be

given retrospectivity.  Accordingly, we set aside the order of the Division Bench of

the  Delhi  High  Court  and  restore  the  order  of  the  Tribunal  passed  in  OA

No.1206/93 and direct

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that  the  case  of  both  these  appellants  before  us  shall  be  considered  by  the

respondents  from the  date  when their juniors  were promoted  to  the  post  of

Deputy Director, Grade III.  However, we direct that whatever monetary benefits

which have been accrued to these respondents shall not be deprived to them.

We have been informed that both these appellants have already been

granted retrospective promotion and all the benefits flowing therefrom.

The appeals are allowed and the order of the Delhi High Court is set

aside.  All the applications filed by Appellant No.3 – in person – are permitted to

be withdrawn.

No order as to costs.

              ....................J.         (A.K.MATHUR)             

                          .....................J.             (P. SATHASIVAM)

New Delhi, July 24, 2008