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PETITIONER: S.K. CHAKRABORTHY AND ORS.

       Vs.

RESPONDENT: UNION OF INDIA & ORS.

DATE OF JUDGMENT11/07/1988

BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) SHARMA, L.M. (J)

CITATION:  1988 AIR 1645            1988 SCR  Supl. (1) 425  1988 SCC  (3) 575        JT 1988 (3)    76  1988 SCALE  (2)31  CITATOR INFO :  R          1991 SC2080  (9)

ACT:      Civil Services; Indian Railway Establishment Code,Vol.I Rule   158-Production   Control   Organisation,   Kharagpur- Memorandum No.  476-13-l0065  dated  4-5/l01/1979  directing that Railway  Board’s  circular  No  E(NG)  59-SRG-22  dated 22.4.1963  declaring   all  posts   in   PCO   ex-cadre   be implemented-Effect   of-Railway   Board’s   circular     No. E(NG) 1-79-PMT-242  (DC/JCM) dated  13.9.1984 excepting PCO, Integral Coach Factory-Whether discriminatory.      Constitution   of   India,   1950:   Article   14-Class disposition  forbidden-Reasonable   classification  for  the purpose   of    disposition   permissible-Twin    tests   of classification founded on intelligible differentia-To have a rational nexus to object sought to be achieved.

HEADNOTE:      Rule 158 of the Indian Railway Establishment Code, Vol. I, empowers  the General  Managers to make rules with regard to the  non-gazetted railway  servants provided they are not inconsistent with  any rules  made by  the President  or the Railway Board.  The Railway  Board brought  out  a  circular dated 22.4.1963  laying down  the rules for determination of seniority of  workshop  staff  employed  in  the  Production Control organisation  and declaring  all  posts  therein  as ex-cadre. Due  to the  stiff opposition  of organised labour the said  circular could not be implemented in the Kharagpur workshop. The  Superintendent, however, after discussing the question with  the organised  labour issued  a memorandum on 21.7.1973 stating  that all  posts in the PCO would be cadre posts.  Subsequently,  by  a  circular  dated  9.7.1978  the Railway Board  declared  that  the  staff  from  shop-floors posted in  the PCO would receive special pay of 10% of their pay but  this would  not be  available to the staff who were permanently absorbed in the PCO or directly recruited in the PCO. Upon  this, representations  were made by the labour to the  Railway  Board  for  implementing  its  circular  dated 22.4.1963 so that the staff of the Pco would be eligible for the special  pay. In pursuance of the meetings held with the labour, the  memorandum dated  4-5/l0/1979 was  issued which

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declared that  the Railway Board’s circular of 1963 would be implemented in  the PCO  and that all posts would be treated as ex-cadre posts. By another circular issued on 426 13.9.1984 the  Railway Board allowed the PCO at the Integral Coach Factory, Southern Railway, to continue on cadre basis.      Aggrieved by the said circular, the petitioners, who at the relet  time were  all employees  of  PCO  at  Kharagpur, carried  the   matter  before   the  Central  Administrative Tribunal and  contended; (i)  that their  posts could not be declared as ex-cadre because vested rights which had accrued in their  favour could  not be affected, and (ii) they could not be  treated differently from those of the Integral Coach Factory. This  was hostile  discrimination and  amounted  to violation of  their rights.  The Tribunal  rejected both the contentions.      Dismissing the special leave petition, ^      HELD: 1.  Administrative re-organisation is permissible and as  a result  of the same rights may be affected but the vested rights  could not  be taken away. In the instant case inasmuch  as   the  memorandum   dated   21st   July,   1973 inconsistent with  the circular  issued by the Railway Board in 1963  no right  vested in  the petitioners  and hence  no question of affecting vested rights arise. [429C-D]      T.R. Kapur  & Ors. v. State of Haryana & Ors. [1986] JT 1092 referred to.      2.1  Article  14  of  the  Constitution  forbids  class disposition but  permits reasonable  classification for  the purpose of disposition which classification must satisfy the twin  tests   of  classification   being   founded   on   an intelligible  differentia  which  distinguishes  persons  or things that  are grouped  together from  those that are left out of  the group  and that differentia must have a rational nexus  to   the  object   sought  to   be  achieved  by  the disposition. [430A-B]       D.S.  Nakara &  Ors. v.  Union of  India, [1983] 2 SCR 165, referred to.       2.2  The circular  of 1984  of the  Railway Board  was issued pursuant  to the  negotiations with  the staff in the Departmental Council  of Ministry  of Railways. The existing arrangement in  the PCO  of Integral  Coach Factory  was not disturbed because  the recognised  Unions there did not want it to  be so  disturbed; whereas in the PCO of Kharagpur the recognised  Unions  had  already  agreed  that  the  Railway Board’s circular  dated 22.4.1963  would be  implemented and that all  posts in  that PCO  would be  treated as ex-cadre. [429F-G] 427      2.3 The Railway Board is fully competent to bring about necessary changes  in the staff pattern of the various units under  its  control  for  the  purpose  of  steamlining  the organisation   and   improving   the   efficiency   of   the administration. There was, therefore, a good ground for this differentiation which  has a  rational nexus with the object of  streamlining   the  organisation.  This  differentiation cannot be condemned as violative of the rule of equality. It does not amount to hostile discrimination. [429G-H]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Special  Leave  Petition (Civil) No. 3584 of 1987.      From the  Judgment and  order dated  8.12.1986  of  the

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Central Administrative  Tribunal, Calcutta  in T.A. No. 1143 of 1986.      Mrs. C. Markandeya for the Petitioners. (Not present)      B. Datta,  Additional Solicitor General, C.V. Subba Rao and A.K. Srivastava for the Respondents.      The Judgment of the Court was delivered by      SABYASACHI MUKHARJI,  J. This  is  an  application  for leave to  appeal under  Article  136  of  the  Constitution, directed against  the judgment  and  order  of  the  Central Administrative Tribunal,  Calcutta Bench  (Justice Ashamukul Pal and  Mr B.  Mukhopadhyay) dated  8th December, 1986. The Tribunal had dismissed the challenge made by the petitioners herein to the memorandum of 1979 declaring that the posts in Production Control Organisation (for short PCO) in Kharagpur would be treated as ex cadre.      There are  75 applicants  in this case. At the relevant time they all were employees of the PCO at Kharagpur Railway Workshop of  South Eastern  Railway. The petitioners contend that these  posts could  not be  declared as  ex cadre posts because vested rights of the petitioners could not have been affected. Secondly,  it was contended that they were treated differently from the employees of the Integral Coach Factory on the  Southern Railway and those of PCO there continued to hold the  cadre posts.  This is  hostile discrimination  and amounts to  violation  of  the  fundamental  rights  of  the petitioners. The  Tribunal by  its impugned  order  rejected both the contentions. 428      The PCO  was in  existence from  the time  of the  B.N. Railway. The staff of the PCO were either directly recruited or drafted from different shops of the workshop. In 1958 the PCO  was   considerably  expanded.   After  considering  the question the  Railway Board  brought out  a  Circular  dated 22.4.1963  laying   down  the  rules  for  determination  of seniority of workshop staff employed in the PCO. It was laid down in  the Circular  that all  posts in  the PCO should be treated as  ex-cadre posts. This is Annexure ’B’ to the writ application  which   was  ultimately   disposed  of  by  the Tribunal. The Circular, however, could not be implemented in the Kharagpur workshop on account of the stiff opposition of organised labour.  In the  premises  the  local  authorities could not  implement the  Circular of 1963. The question was discussed with the organised labour in a meeting held on 4th June, 1973  and in  pursuance of  the decision taken in that meeting the  memorandum dated  21st July, 1973 which is also Annexure ’B’  was  issued  by  the  Superintendent.  It  was evidently stated that all posts in PCO would be cadre posts.      It  may,  however,  be  reiterated  that  this  was  in violation of  the order  of  1963.  Another  memorandum  was issued by  the same  authority on  15th December, 1973 which not only  declared all  posts in  PCO to  be cadre posts but also laid  down that an option would be given to the persons already working  in the  PCO to  revert  to  the  shops.  It appears that  the question  of having  incentive schemes for the staff  of the PCO was under consideration of the Railway Board and  by a  Circular dated  9.7.1978 the  Railway Board declared that  the staff  from shop-floors posted in the PCO would receive special pay of 10% of their pay but this would not be  available to the staff who were permanently absorbed in the PCO or directly recruited in the PCO. It appears that this brought  a change  in the  attitude of  the labour  and representations  were   made  to   the  Railway   Board  for implementing its  Circular dated 22.4.1963 so that the staff of the  Pco would  be eligible  for the  special pay.  Joint meetings  were   held  with  the  labour  on  4th  and  22nd

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September, 1979  and in  pursuance of the decisions taken in these meetings  the memorandum  dated 4-5/10/79  at Annexure (I) was  issued which  declared  that  the  Railway  Board’s Circular of  1963 would  be implemented  in the PCO and that all posts  would be  treated as  ex-cadre  posts.  This  was impugned before the Tribunal.      It was  contended that  the vested rights which accrued in favour  of  the  petitioners  by  the  operation  of  the memoranda dated  21st July  and  15th  December,  1973  were affected by  declaring that  the posts  in PCO  would be  on cadre basis. These were issued, it appears, in viola- 429 tion of  the clear  directives of 1963 of the Railway Board. Hence, these  Circulars were in violation of Rule l58 of the Indian Railway  Establishment Code,  Vol. I, which lays down that the  General Managers  of the Indian Railways have full powers to  make rules  with regard  to non-gazetted  railway servants  under   their  control   provided  they   are  not inconsistent with  any rules  made by  the President  or the Railway Board.      It, however,  appears that  the memorandum  dated  21st July, 1973 was clearly inconsistent with the Circular issued by the  Railway Board in 1963 for the former stipulated that all posts  in the  PCO would  be  cadre  posts.  Both  these memoranda were  issued as  a result  of the meeting with the workers. In  that view  of the  matter, in  our opinion,  it cannot be  contended that  vested rights have been affected. Administrative  re-organisation  is  permissible  and  as  a result of  the same  rights may  be affected  but the vested rights could  not be  taken away. See in this connection the observations of this Court in T. R. Kapur & Ors. v. State of Haryana & Ors., [1986] JT 1092. Here, however, in as much as the memorandum  dated 21st  July, 1973 was inconsistent with the Circular issued by the Railway Board, no right vested in the petitioners  and, hence, no question of affecting vested rights arises.      The second  ground was  that there  was  discrimination against the  petitioners referred  to  the  Railway  Board’s Circular dated  13th September, 1984 which made an exception for the  Integral Coach  Factory at the Southern Railway and allowed the PCO to continue on cadre basis. It was submitted that this  was a case of discrimination. It appears that the impugned Circular  of 1984  of the  Railway Board was issued pursuant  to   the  negotiations   with  the  staff  in  the Departmental Council  of Ministry  of Railways. The existing arrangement in  the PCO  of Integral  Coach Factory  was not disturbed because  the recognised  Unions there did not want it to  be so  disturbed; whereas in the PCO of Kharagpur the recognised Unions  had already  agreed, as  appears from the impugned memorandum at Annexure ’I’ that the Railway Board’s Circular  dated   22.4.1963  would  be  implemented  in  the Kharagpur, PCO  and that  all posts  in  the  PCO  would  be treated as  ex-cadre  posts.  The  Railway  Board  is  fully competent to  bring about  unnecessary changes  in the staff pattern of  the various  units under  its  control  for  the purpose of  streamlining the  organisation and improving the efficiency of  the administration.  Hence, there  was a good ground for  this differentiation  which has a rational nexus with the  object  of  streamlining  the  organisation.  This differentiation cannot be condemned as violative of the rule of equality. It does not amount to hostile discrimina- 430 tion.  Article   14  of   the  Constitution   forbids  class disposition but  permits reasonable  classification for  the purpose of disposition which classification must satisfy the

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twin  tests   of  classification   being   founded   on   an intelligible  differentia  which  distinguishes  persons  or things that  are grouped  together from  those that are left out of  the group  and that differentia must have a rational nexus  to   the  object   sought  to   be  achieved  by  the disposition.      See D.  S. Nakara  & others v. Union of India, [1983] 2 S.C.R. 165 at 179.      Further, the  Tribunal modified certain portions of the impugned memorandum  and directed that the provisions should be made  for those  who  opt  to  continue  in  the  PCO  at Kharagpur after the issue of the Circular dated 13.9.1984 so that they  may be  given an  opportunity to  exercise  their option in  this regard  and  be  provided  with  avenue  for promotion within  the PCO.  Previously, in  1963 such option was  provided   and  it   was  stipulated   that   employees permanently absorbed in the PCO or directly recruited in the PCO who  did not exercise option in favour of transfer, they would be  considered for  promotion  along  with  others  to higher grade  posts in  the PCO only. In our opinion, it was done to help the petitioners.      In the  aforesaid view  of the matter, the Tribunal was right in  rejecting the  contentions urged  on behalf of the petitioners.  The   challenge  to   the  Tribunal’s   order, therefore, cannot be entertained.      Before concluding  it is  worthwhile to  note that none appeared for  the petitioners when the matter was called on. The matter  was called twice. We have disposed of the matter on  perusing  the  order  of  the  Tribunal  and  also  upon considering the  submissions made  by the  respondents.  The application, therefore,  fails and dismissed. No order as to cost P.S.S.    Petition dismissed. 431