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CASE NO.: Appeal (civil)  4490 of 2007

PETITIONER: M. MOHAMMED ABDULLA

RESPONDENT: STATE OF KERALA AND ORS

DATE OF JUDGMENT: 25/09/2007

BENCH: S.B. SINHA & H.S. BEDI

JUDGMENT: J U D G M E N T (Arising out of SLP(C) No.10844/2006)

    S.B.SINHA, J.

       Leave granted.         Appellant herein is aggrieved by and dissatisfied with the judgment and  order dated 23.11.2005 passed by a Division Bench of the Kerala High Court  in Writ Petition (C) No.26149 of 2004.  

       The factual matrix involving the dispute is on a narrow compass.          There are two services in the State of Kerala; one is governed by the Kerala  Service Rules and the other by the Kerala State and Subordinate Service  Rules. Within the State service falls Local Fund Audit Service, known as  Kerala Local Fund Audit Service.  

       Appellant was appointed as Grade II Auditor on the recommendation  of  Public Service Commission on 7.7.1975. He was promoted as Inspector Local  Fund Account on 18.11.1995, which post was re-designated as Audit Officer.  

       In terms of paragraph 4 of Appendix XIIA of the Kerala Service Rules, to  which we will advert to a little later, the appellant while holding the post of  Audit Officer, applied for and was granted leave without allowance for a  period of 5 years from 1.9.1996 vide G.O. dated 18.11.1996 for taking  employment abroad. He rejoined his duties as an Audit Officer on  8.11.2001.   Respondent No.3 herein, who was junior to the appellant, was promoted as  Deputy Director of Local Fund Account on 5.8.2002 and he joined the said  post on 24.8.2002.  Appellant was declared to have completed his period of  probation in the  category of Audit Officer in terms of order passed by  Respondent No.2 dated 6.11.2003 with effect from 6.3.2003. In the seniority  list which was published on 6.11.2003, his seniority was shown at serial  No.8A. The original seniority assigned to the appellant in the category of  Audit Officer as published on 18.5.1998 was restored in favour of the  appellant by an order dated 3.1.2004 stating:         \023Government, in their orders read as 7th paper above, have  clarified that the seniority of those who avail of leave without  allowances before completion of probation in a grade will be  protected though they will lose promotion chances that may  arise during the currency of leave and until the date of  completion of successful probation above those recruited  after him and remaining in that grade.         Accordingly, the original seniority of Sri M. Mohammed  Ahdulla, Audit Officer as in the seniority list published as per  this office proceedings read as 1st paper above has to  be  restored.            It is therefore ordered that the original seniority of Sri  Mohammed Abdulla is restored as Sl. No.111, below Sri U.P.  Ramachandran (Sl. No.109) in the seniority list published as  per this office proceedings No. LF/6188/Spl. Cell/98 dated

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18.5.1998.         The revision and modification orders issued as per 5th  paper read above is hereby replaced by this final order  restoring the original seniority of Sri Mohammed Abdulla in  the light of Government orders.\024                       Questioning the said G.Os. dated 6.11.2003, 19.11.2003 and 3.1.2004, the  third respondent filed a writ application before the High Court of Kerala which  was marked as Writ Petition No.2075/2004.  An interim order of stay was  granted therein pursuant whereto the G.O. dated 3.1.2004 was cancelled. A  Select List was prepared on 7.5.2004 on the recommendation of the  Departmental Promotion Committee. Pursuant thereto, the appellant was  promoted to the post of Deputy Director of Local Fund Audit Account by order  dated 27.5.2004. However, the said order was reviewed by the Government  by its order dated 26.8.2004, inter alia on the premise that while passing the  same, the order of stay passed in Writ Petition No.2075/2004 had not been  taken into account whereby the promotion of the appellant was cancelled.         

       Aggrieved thereby the appellant filed another writ application being Writ  Petition (Civil) No.26149/2004 before the Kerala High Court for a declaration  that the inclusion of his name in the Select List and the order dated 27.5.2004  giving promotion to him was legal and valid and the same should not have  been reviewed.

       The said writ petition although was dismissed  but the review application  filed by the appellant was allowed. By reason of the impugned judgment, the  High Court upon hearing the parties, while dismissing the writ petition filed  by the appellant herein, allowed the writ petition filed by the third respondent  herein.  

       In view of the controversy involving the applicability of paragraph 4 or  paragraph 5 of Appendix XIIA to the Kerala Service Rules, we may at the  outset notice the same:      \0234 Permanent officers and non-permanent officers who have  completed probation in their entry cadre in the regular service  of Government may be granted leave without allowances  under these rules. In such cases, for, and during the currency  of the period of leave, the officers shall lose all service  benefits such as the earning of leave including half pay leave,  pension, gratuity, increment, etc., and also promotion  chances as may arise with reference to their seniority in the  posts from which they proceeded on leave. They shall also  lose seniority in the higher grade/grades with reference to  their juniors who might get promoted to such grade/grades  before they rejoin duty.  

5. In the case of non-permanent officers in regular service  who have not completed probation in the entry grade, leave  without allowances may be granted subject to the condition  that they will have to start afresh and complete their  probation on return from the leave without allowances. In  other words, the officers will forfeit the service benefits that  had accrued to them prior to their proceeding on leave and  they will be deemed as new entrants to Government service  on return from leave. What is protected is only their right to  rejoin Government service in the same entry grade as if they  were new entrants.\024

       The High Court relying upon its earlier decisions in Lukose vs. State of  Kerala (1995 (2) KLT 285) and Unnikrishna Panicker vs. Bhasi (2000 (1) KLT  449), held that in this case, paragraph 5 of Appendix XIIA shall apply.  Appellant contends that paragraph 4 is applicable in this case.  

       We may before embarking on the said issue at this juncture, notice the

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stand taken by the State of Kerala in its counter affidavit before the High  Court:  

\023It is submitted that the petitioner is governed by Clause 5 of  Appendix XIIA of KSR since he had not completed probation  before proceeding on leave. As per the Clause 4 & 5 of  Appendix XIIA of KSR, entry cadre means the cadre from  which the officer proceeds on leave. Officers who avail long  leave without allowances for employment abroad before the  completion of probation are governed by Clause 5 of the Rule  under Appendix XIIA of KSR. As per this rule, such officers  will be treated as new entrants when they rejoin duty and will  have to start the probation afresh. Since they have not  completed probation before proceeding on leave, they are  not eligible for promotion during the currency of leave  period.\024

       Before us, however, Mr. G. Prakash, learned counsel appearing on behalf of  the State would submit that in view of the fact that the appellant joined his  services in the Subordinate Service of the State on the post of Inspector of  Local Fund Account, now re-designated as Audit Officer, which is in the State  service and he having been appointed by transfer from the former to the  latter, would be deemed to have entered into the State service on 8.11.2001  and as before completion of his period of probation; the third respondent had  already been promoted as Deputy Director of Local Fund Account, the matter  would be governed by paragraph 5 and not paragraph 4 of Appendix XIIA of  the said rules.

       We may notice Rules 27 & 28 of the Kerala State and Subordinate Service  Rules which read as under: \02327. Seniority.- (a) Seniority of a person in a service, class,  category or grade shall, unless he has been reduced to a  lower rank as punishment, be determined by the date of the  order of his first appointment to such service, class, category  or grade. Explanation:- For the purposes of this sub-rule, ’appointment’  shall not include appointment under rule 9 or appointment by  promotion under rule 31.

28      (a) Promotion.- (i) Except in the case of appointment to the  posts of Heads of Departments no member of a service or  class of a service shall be eligible for promotion from the  category in which he was appointed to the service unless  he has satisfactorily completed his probation in that  category:           Kerala Local Fund Audit Service Special Rules, 1960 consists of only four  category of officers: 1. Examiner of Local Fund Accounts (re-designated as Director) 2. Deputy Examiner of Local Fund Accounts (re-designated as  Assistant Director)  3. Assistant Examiner of Local Fund Accounts (re-designated  as  Deputy Director)  4. Inspectors of Local Fund Accounts (re-designated as Audit  Officers)   

Rule 3 of the 1960  Rules provides as under:

\023Promotion to the posts of Deputy Examiner of Local Fund  Accounts and Assistant Examiner of Local Fund Accounts  and appointment by transfer to the post of Inspector of Local  Fund Accounts shall be made from select lists prepared from  among eligible officers on the basis of merit and ability,  seniority being considered only where merit and ability are  approximately equal.\024

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       Appellant availed leave without allowance in terms of paragraph 4 of the  said rules while he was working as Audit Officer of Local Fund Accounts. But  prior thereto he had already entered the cadre of Grade II Auditor and  completed his period of probation. He was a permanent Government servant.  Once he became permanent Government servant, the question of his availing  leave while he had not completed the period of probation in the entry grade  as envisaged in paragraph 5 of Appendix XIIA of the rules would not arise.  Distinction between paragraphs 4 and 5 is apparent. Paragraph 4 deals with  the cases of permanent officers who have completed the period of probation  in their entry cadre in the regular service, whereas paragraph 5 speaks of  non-permanent officers in regular service who have not completed probation  in their entry grade.  In the latter case, all the service benefits which had  accrued to the officer prior to his proceeding on leave, would be forfeited and  he has to be treated as new entrant when he rejoins his post.  It has  categorically been stated in paragraph 5 that only the service of  the  concerned officer is protected but any benefit thereof is not to be given.  Paragraph 4, on the other hand, deals with a situation where a person  availing  leave thereunder  would lose his seniority in the higher grade with  reference to his juniors who might get senior grade before he rejoins his  duty.

 Condition precedent for denying the concerned officer the benefit of his  seniority is that his junior in the  meantime must obtain a senior grade before  he rejoins his duty. Paragraph 4, in our opinion, speaks of the entry in the  regular service of the Government, whatever be the cadre held by the  employee.   

       The State, as noticed hereinbefore, proceeded on the basis that the  appellant had not completed his period of probation before proceeding on  leave. A factual error appears to have been committed by the State as it is  evident from the factual matrix, as noticed hereinbefore, that the appellant  had entered into Government service in the year 1975 and he had already  been promoted several times.  

       Furthermore, Rule 28 as noticed hereinbefore, provides for promotion,  which will be applicable in a case of this nature.  In terms of the said rule the  question as to whether the employee had completed his period of probation  or not may not be a relevant criteria.

       We may now notice the decisions of the High Court whereupon reliance has  been placed while passing the impugned judgment.  In Lukose (supra), the  Full Bench had no occasion to consider the applicability of Appendix XIIA  which was inserted only in the year 1986, as the cause of action therein had  arisen much prior thereto. Unnikrishna Panicker (supra) is a case where  admittedly paragraph 5 of the Rules was applicable. In that case, the third  respondent therein joined the service on 24.12.1981 and before completion of  his probation in the post of Drug Inspector, he had applied for leave for a  period of 5 years to take up employment abroad. It was in that view of the  matter that on rejoining his duty, he was treated as a new entrant in service.  In the fact situation obtaining therein, paragraph 5 indisputably was  applicable. It was so noticed by the Bench in the following terms:

\023The Government Order dated 16.12.1983 provided that non- permanent employees in regular service who have not  completed probation in the entry grade will have to start  afresh and complete their probation on return from leave  without allowance. In other words, the officers will forfeit the  service benefits that have accrued to them prior to their  proceeding on leave and they will be deemed as new entrant  to Government service on return from leave. Government  Order however protected their right to rejoin Government  service on the same grade as if they were new entrants. The  aforementioned G.O. was given the status of a rule and  inserted as Appendix XIIA vide G.O.(P) No. 953/86/Fin dated

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2.12.1986 published in the Keala Gazette dated 3.3.1987 with  effect from 16.12.1983.\024

       The High Court, therefore, in our opinion committed a serious error in  relying upon the decision in Lukose (supra) as also Unnikrishna Panicker  (supra). We may furthermore observe that a declaration of probation in a  grade would not automatically confer an employee a right of promotion. All  eligible permanent employees are required to be considered for promotion  inter alia upon taking into consideration their seniority in the service.  

       The submission of Mr. G. Prakash that the appellant was a fresh entrant in  the post of Inspector, Local Fund Account (now Audit Officer) may not be  entirely correct. He might have entered into the State service for the purpose  of the said rule, the same would not affect his career, if paragraph 5 of the  Appendix XIIA of the Kerala Service Rules is found to be inapplicable. At the  cost of repetition, we may reiterate that paragraphs 4 & 5, talk of  the position  of the employees with reference to their permanent or temporary status,  meaning thereby the persons who have completed their probation and  who  are yet to complete their probation. It does not take into consideration the  question in regard to entry in any other service to which he might have been  promoted or appointed by transfer.

       The High Court furthermore wrongly applied clause (c) of Rule 27 of the  Kerala State and Subordinate Service Rules,  as the question of fixation of  the relative seniority and the order in which their names are arranged in the  revised list (as recommended by Public Service Commission) would not arise  in a case of this nature where the question is as to whether the entry in the  State Service is by way of transfer from Subordinate Service or by promotion  as such a situation has to be made from amongst the existing Government  servants and not outsiders.  

       Rule 3 of the Kerala Local Fund Audit Service Special Rules in no  unmistakable term says that even for the purpose of appointment by transfer  to the post of Audit Officer the names of the employees mentioned in the  select list prepared from amongst the eligible officers on the basis of their  merit and ability are to be taken into consideration as the seniority is to be  considered only when merit and ability are approximately equal. Once,  therefore, the appellant was found to be eligible for promotion or for that  matter, for recruitment by transfer, to the post of Audit Officer on the basis of  his merit and ability, although seniority being the relevant criteria provided  merit and ability of the   respective candidates were approximately equal, in  our opinion, his promotion shall not have been cancelled.

       For the reasons aforementioned, we are of the opinion that the impugned  judgment cannot be sustained which is set aside accordingly.  The appeal is  allowed.  However, in the facts and circumstances of this case, there shall be  no order as to costs.  

       We make it clear that this order shall not affect the benefits which might  have been given to the third respondent herein pursuant to the order  impugned in the writ application.