http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 3  

PETITIONER: CHIEF COMMISSIONER (ADMN.) & COMMISSIONER OF INCOME-TAX,

       Vs.

RESPONDENT: K.C. SHARMA & ORS.

DATE OF JUDGMENT:       02/09/1998

BENCH: SUJATA V. MANOHAR, S. RAJENDRA BABU

ACT:

HEADNOTE:

JUDGMENT: [With C.A. No. 4569 of 1998 (arising out of S.L.P. (c) No. 7071 of 1993]                       J U D G M E N T Sujata V. Manohar. J.      Leave granted in S.L.P. (C) No. 7071 of 1993. Civil Appeal No 4028 of 1993      This appeal is from a judgment and order of the Central Administrative Tribunal,  Principal Bench,  dated 27.11.1992 by  which   the  Tribunal  has  set  aside  the  Income  tax Department Recruitment  (Amendment) Rules,  1986 insofar  as they deal  with promotions to the posts of Inspectors in the Income Tax Department.      Appointments to  be post of Income Tax Inspectors is by direct requirement  as well  as by promotion of departmental candidates in  the ratio  of 1/3rd to 2/3rd. All the Group C officials in  the  ministerial  cadre,  namely,  Supervisors Grade I  and Grade II, Head Clerks, Tax Assistants and Upper Division Clerks  are eligible  for promotion. Similarly, the cadre of  Stenographers is  also eligible for appointment by promotion to  the posts  of Inspectors.  All these  persons, whether in  the ministerial  cadre or  in the Stenographers’ cadre have  to qualify  in the  departmental examination for the post of Income tax Inspectors and should have put in the prescribed minimum years of service.      Prior to  April 1960, for the purpose of promotion, the list of  all departmental  candidates  who  had  passed  the departmental examination  was arranged  according  to  their seniority irrespective  of the  date or  year of passing the departmental examination.  This list  was submitted  to  the Departmental Promotion Committee for selection for promotion to the post of Income Tax Inspectors. This gave rise to some discontent, as young and junior persons who had qualified in the departmental  examination earlier  than  their  seniors, found themselves  lower in  the eligibility list. Therefore, the entire  matter was reconsidered and in April 1960 it was decided that  for the  purpose of  promotion to the grade of Inspectors,  persons   who  had   qualified  in  an  earlier departmental examination should be treated en-bloc senior to those  who  qualified  in  a  subsequent  examination.  This revised procedure  also  gave  rise  to  discontent  amongst

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 3  

seniors  who  passed  the  departmental  examination  later. Therefore, taking  all factors  into account, the Government decided that  there should  be a fair balance between senior persons who  qualify in  the departmental  examination at  a later stage  and junior  persons who  qualify  in  the  same examination earlier.  It was,  therefore, decided  that  two lists  should   be  drawn   up  of   persons  who  pass  the departmental examination.   In  the first  list,  the  names should be  arranged in  accordance  with  seniority  of  the persons in  the department  provided  they  had  passed  the departmental examination  and had put in the requisite years of service. In the second list, the names should be arranged in accordance with the date/year of passing the departmental examination. Both  these lists  would be  forwarded  to  the Departmental Promotion  Committee.   Selection would be made from both  the lists  on a  50:50 basis.   This decision was taken after  taking into  account the  demands of  both  the categories of  persons, namely, those who claimed that their seniority should  not be  overlooked, and  those who claimed that their  eligibility for promotion should depend upon the year of  passing the  departmental examination. Accordingly, orders to  this effect  were issued  in November, 1960. This procedure  for  promotion  of  departmental  candidates  was embodied in the recruitment rules for the post of Inspectors which were issued in December 1969.      Subsequently,  the   Stenographers  in  the  department represented  that  since  they  do  not  form  part  of  the ministerial cadre,  a separate  quota should be provided for them for the purpose of promotion to the grade of Inspector. This representation  was considered.  In  1985  instructions were  issued   fixing  the   promotion  quota   between  the ministerial cadre  and the Stenographers’ cadre in the ratio of 3:1.  The Recruitment  Rules for  the post  of Inspectors were accordingly  amended in  September, 1986. In respect of the Stenographers  also,  two  lists  were  required  to  be prepared, namely,  a list in the order of seniority of those Stenographers who  had passed  the departmental  examination and a  list of Stenographers arranged in accordance with the date and year of their passing the departmental examination. The same  procedure for  selection from  both these lists in the ratio  of 50:50  was to  be adopted for promotion to the post  of   Inspectors  in  the  quota  which  was  kept  for Stenographers.      This procedure  of two lists was in force for more than three  decades   and  had  worked  satisfactorily  when  the respondents challenged  the preparation  of two select lists for each  cadre in  the manner  provided in  the recruitment rules in  the present  proceedings. The  challenge is on the ground that  the preparation  of two select lists is against fair  play   and  natural  justice  and  is  irrational  and violative of  Articles 14  and  16.  The  Tribunal,  in  the impugned judgment  and order, has described the procedure as difficult  to   understand,  cumbersome   and   complicated. However, the  procedure has  been evolved  over a  period of time to meet the conflicting demands of two sets of persons, namely, those who are junior in the cadre but have qualified much  earlier  in  the  departmental  examination  and  are, therefore, meritorious  and eligible  for promotion, and the more  senior   persons  who  have  passed  the  departmental examination later.   The procedure has been in operation for over three  decades. Therefore,  this cannot be a ground for setting it aside.      The other  ground of  challenge is  that  there  is  no rational basis  on which this classification is made because both the  lists consist  of persons  who have  the requisite

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 3  

eligibility.   However, the  whole purpose  of preparing two lists is  to give  equal weightage to seniority from amongst eligible  candidates   and  merit   from  amongst   eligible candidates in  the form  of passing departmental examination much earlier.  There is, therefore an intelligible criterion for distinguishing  between the  two lists. The object which is sought  to be achieved by this differentiation is to give weightage to  those departmental  candidates who  have shown merit by  passing the  departmental examination earlier than their seniors,  while at  the same time preserving the claim of  the   seniors  who  may  have  passed  the  departmental examination later  for promotion  on the  strength of  their seniority.  The Tribunal, therefore, was not right in coming to the  conclusion  that  there  is  no  nexus  between  the formulation of  the two  lists and  the object  sought to be achieved. There  is, therefore,  no violation of Articles 14 and 16 in the present case.      The appeal  is, therefore,  allowed  and  the  impugned order of  the Tribunal  is set  aside and the application of the respondents  before the Tribunal is dismissed. The cross appeal  arising   from  S.L.P.  (C)  No.  7071  of  1993  is dismissed. There will, however, be no order as to costs.