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PETITIONER: S.K. MATHUR & ORS.

       Vs.

RESPONDENT: UNION OF INDIA & ORS.

DATE OF JUDGMENT:       13/01/1998

BENCH: S. SAGHIR AHMAD, D.P. WADHWA

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T S. SAGHIR AHMAD. J.      The Bank  Note Press,  Dewas (for  short, ‘the Press’), which is  a departmental  undertaking of  the Government  of India and  is engaged  in  the  sovereign  function  of  the printing of the Bank Notes, was established in 1972. The job of printing  and processing  of Bank  Notes is  said to be a unique bob  which requires  intensive and  highly  technical training with impeccable integrity. According to the counter affidavit filed  before us,  the production of Bank Notes is completed in  two parts,  namely, (i)  printing of Bank Note Sheets and  (ii) processing of Bank Notes right from cutting of sheets  into the  sizes of Notes to the final delivery to Reserve Bank  of India  at their cash-chests. The processing wing is know as Control Wing.      Since at  the time  of its establishment, the Press did not have its own cadres of various posts, including the post of Inspector  (Control), nor were any Recruitment Rules made for these  posts, it  approached the Government of India for certain posts  in the Control Wing being sanctioned 20 posts in the  grade of Inspector (Control). Since it was felt that it  would   not  be   safe  or   possible  to   entrust  the responsibilities of  processing and  final  supply  of  Bank Notes to the Reserve Bank of India. to raw hands, namely the new recruits,  the Press,  in consultation with the Ministry of Finance  decided  to  fill  up  50%  posts  of  Inspector (Control) from  qualified and trained persons working in the sister organisations, namely the India Security Press, Nasik Road, as  also the Security Paper Mill. Hoshangabad, and the remaining 50% by direct recruitment. Consequently, the Press issued a  requisition letter  dated 1.6.1972  to the  sister organisations, including  the India  Security  Press,  Nasik Road, for  sponsoring the names of the candidates willing to take up  the appointment  as Inspector  (Control), for which the eligibility criteria was five years experience as Asstt. Inspector (Control).      The Appellants,  who were appointed as Asstt. Inspector (Control) at  the India  Security Press,  Nasik Road, on the following  dates,   applied  for  appointment  as  Inspector (Control) in  the Press and were appointed on those posts on

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deputation on the dates mentioned below : ------------------------------------------------------------ S.No. Name  (S/Shri)   Date of appoint-    Date of initial                        ment as Asstt.      appointment in                        Inspector (Control) Bank Note Press                        in India Security   on deputation                        Press, Nasik Road. ------------------------------------------------------------ 1.  S.K. Mathur        9.2.1961             9.2.1973 2.  M. Laxminarayan    28.7.1961            9.2.1973 3.  H.R. Sharma        16.1.1962            3.10.1973 4.  V.P. Bhalla        22.7.1965            3.10.1973 5.  S.B. Deshmukh      7.1.1965             3.10.1973 6.  S.B. Khadilkar     7.6.1962             10.1.1974 ------------------------------------------------------------      In the  meantime, all  the  appellants  were  promoted, though nationally,  on the  posts of  Inspector (Control) in their parent  department during  the period  1974 - 1975 and confirmed on those posts.      The  Central  Government,  by  its  notification  dated 20.11.1974, promulgated  the  Bank  Note  Press  (Class  III posts) Recruitment  Rules, 1974,  for the posts of Inspector (Control), made  by the  President under  Article 302 of the Constitution. The  mode of  recruitment indicated  in  these Rules was  that the  posts of  Inspector (Control)  shall be filled up  to the  extend of  50% by  direct recruitment and remaining 50%  by promotion. These Rules were amended by the Notification  dated   1st  December,  1975.  The  method  of recruitment was  altered. It  was provided  that 26%  of the posts would  be  filled  u  by  direct  recruits  while  the remaining 75%  by promotion,  failing  which,  by  transfer; failing both,  by transfer on deputation and failing all, by direct recruitment.      The promotion quota was indicated as under :      PROMOTION      (i) 50% from Head Checkers with 8           years regular service in the           grade of Rs. 350-580.      (ii)   25%    from   Head    Clerk,           Confidential Secretary, Senior           Stenographer     and     Hindi           Translator in the grade of Rs,           425-700 and  Dy. Accountant in           the grade  of Rs. 425-640 with           at  least   3  years   regular           service  in   the   respective           grades. The posts  from which  appointment on transfer could be made on the post of Inspector (Control) were indicated as under:      TRANSFER      (i) Inspector  Control (Rs.550-800)      belonging  to   the  Currency  Note      Press, Nashik Road, failing which.      (ii)   Asstt.   Inspector   Control      belonging  to   the  Currency  Note      Press, Nashik Road, with at least 5      years regular  service in the grads      of Rs. 425-640.      In 1976.  six permanent  posts of  Inspector  (Control) were  sanctioned   by  the   Government  with   effect  from 22.1.1976. Respondent  Nos. 3  to 10,  who  are  the  direct recruits. were  initially appointed as Apprentice Inspectors (Control) between  October 1973  and January 1975 on a fixed stipend of  Rs. 350/-  per month.  They  were  appointed  in substantive capacity  in 1977.  The relevant  date of  their

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initial   appointment   as   Apprentice   Asstt.   Inspector (Control), their  appointment  as  Inspector  (Control)  (on probation) and  their appointment  is substantive  capacity, are indicated below: ------------------------------------------------------------ S. No. Name S/Shri   Date of       Date of      Date of                      appointment   appointment  substantive                      as Apprenti-  as Inspector appointment                      ce Asstt.     (Control)    as Inspector                      Inspector     (probation)  Control                      Control ----------------------------------------------------------- 1.  P.R. Sharma       5.10.1973    5.4.1975    1.8.1977 2.  Mohinder Singh   10.10.1973   10.4.1975    1.8.1977 3.  Paresh Joshi      5.10.1973   11.4.1975    1.8.1977 4.  V.H. Chitale      5.10.1973   12.4.1975    1.8.1977 5.  G.L. Damor (ST)  19.10.1973   19.4.1975    1.8.19774 6.  Chhattar Singh    3.8.1974     3.9.1975    3.9.1977 7.  D.D. Mathur       3.8.1974     3.9.1974    3.9.1977 8.  N.L. Mathur       3.8.1974     3.9.1975    3.9.1977 9.  Ramesh Gajbhaiye  20.1.1975    20.1.1976   Left the                 (SC)                           deptt ------------------------------------------------------------      Since, on  the date  on which  the posts  of  Inspector (Control) were  proposed to be filled up on permanent basis, no eligible  officer in  the feeder  line for  promotion was available, and  the direct recruits being on probation, were also ineligible,  the appellants, who were holding the posts of Inspector  (Control) on  deputation and  had already held these posts  in their  parent department on permanent basis, wee  considered  by  the  Departmental  Promotion  Committee convened on  1st and 2nd February, 1976. The DPC recommended that the appellants may be permanently absorbed on the posts of  Inspector  (Control)  in  the  Press  with  effect  from 22.1.1976, the  date on  which these  permanent  posts  were created. Consequently,  by order  dated 22.11976.  In  their order of appointment, it was indicated as under:      "2. Consequent  on their  acquiring      liens on  the  permanent  posts  of      Inspectors Control  to  which  they      have been  substantively  appointed      the liens held by them in the India      Security Press,  Nasik Road,  stand      terminated under  F.R. 14-A(g)  and      they have  severed all  connections      with that organisation.      The direct  recruits, namely,  respondent Nos.  3 to  9 were appointed  on  the  posts  of  Inspector  (Control)  in substantive capacity in 1975 on the dates indicated above.      Having regard  to the  above facts,  when the seniority list of  Inspectors (Control)  was issued by the department, the appellants  were shown as senior to the direct recruits. namely, respondent  Nos. 3  to 9, specially in the seniority list published on 18.9.1979.      It may  be pointed but that two posts of Deputy Control Officer (Group  ‘B’ Gazetted),  being the  promotional posts for Inspector  (Control) became  available. The  Recruitment Rules for  these posts  wee published  by Notification dated 26.12.1975, in  which the  mode of recruitment was indicated to be  ‘promotion’, failing  which, by  transfer and failing both these  mode the  posts were to be filled up by transfer on deputation.  Single Inspectors (Control) having requisite length of service were not available nor were candidates for appointment  by   transfer  on   deputation  available,  the eligibility condition  in the  Recruitment Rules was relaxed

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by the  Government in  consultation with  the  Union  Public Service Commission  and the  appellants S.K.  Mathur and  M. Laxminarayanan were  appointed as  Deputy Control Officer on regular basis  with effect from 21.8.1978. It may be pointed out that  these two  appellants, who  were the  senior  most persons and  who were  the senior  most persons and who were inducted on  the post  of Inspector  (Control) in  the Press from India  Security Press,  Nashik Road,  had already  been given ad hoc promotion on the post of Deputy Control Officer for a  short term  of one year. S.K. Mathur was appointed on such short term promotion with effect from 9.7.1975 while M. Laxminarayanan was appointed with the effect from 4.7.1976.      Respondent Nos.  3  to  9.  feeling  aggrieved  by  the absorption of the appellants on permanent basis on the posts of Inspector (Control) as also by being treated as junior to the appellants,  filed a  writ petition in the High Court of Madhya Pradesh  in November,  1980, which was transferred to the Control  Administrative Tribunal,  Jabalpur Bench.   The relevant claims were :      "a) To declare that the recruitment           rules notified by the Ministry           of  Finance   in  1975  (i.e.,           recruitment rules for the post           of  Inspector  (Control)  vide           dated 1.12.75   (Annexure R-4)           are   unconstitutional   being           violative of  Article 14 and 1           6 of the Constitution.      b)  to quash the order of promotion           of Shri  S.K. Mathur  and Shri           M. Laxminarayanan  to the post           of Deputy  Control Officer  by           writ   in    the   nature   of           certiorari:      c)   to quash  the  seniority  list           published  on   18.9.79  (i.e.           seniority     of     Inspector           (Control) :      d)   to direct  the  department  to           treat     the     petitioners’           seniority over  the Respondent           No. 3 to 8."      The Tribunal, by the impugned judgment dated 26.4.1990, held that  he present  appellants could  not be  treated  as senior to respondent Nos. 3 to 9 and the service rendered by them prior  to 1.12.1975  could not be reckoned for purposes of determining  their  seniority  as  their  appointment  on deputation on  the posts  of Inspector  (Control) was not in accordance  with  the  rules  as  they    existed  prior  to 1.12.1975 when  there was no provision for appointment being made on  those posts  by deputation. The Tribunal was of the view that  a prevision  for appointment on deputation on the posts of  Inspector (Control) was made for the first time by amendment made  in the  Rules on  1.12.1975  and  since  the appellants were  absorbed in  substantive capacity  on those posts with  effect from  22.1.1976, they  could reckon their seniority with effect from that date, while respondents 3 to 9, who  were also appointed as Inspector (Control) would  be entitled  to   reckon  their  seniority  from  the  date  of continuous officiation on that post irrespective of the fact that respondents 3 to 9 had completed their probation period subsequent to the substantive  absorption of the appellants. The Tribunal  was also of the view that since deputation was not one  of the  modes of recruitment for appointment on the post of Inspector (Control), the deputationists, namely, the

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present appellants  would  not  be  entitled  to  carry  the benefit  of   their  past  service,  including  the  service rendered in  the India  Security Press,  Nashik Road, to the department  in   which  they  were  ultimately  absorbed  in substantive capacity.  The Tribunal,  consequently,  quashed the seniority  list  and  directed  that  a  review  DPC  be convened to consider the cases of promotion from the post of Inspector  (Control)   with  reference   to  the  respective position of the candidates in the revised seniority list. It was further  provided that till this was done, the promotion of S.K.  Mathur and  M. Laxminarayanan  shall be  treated as provisional.      After having  heard learned counsel for the parties, we are of  the opinion that the Tribunal was wholly in error in quashing the  seniority list and in coming to the conclusion that a  person working  o deputation  is not entitled to the benefit of service rendered by him in the parent department.      The appellants,  who were  initially working  as Asstt. Inspector   (Control) in  the India  Security  Pres,  Nashik Road, were  appointed on the posts of Inspector (Control) in the Press on deputation during the period from 9th February, 1973 to  10th January, 1974, while there were no recruitment rules for regulating the appointments or other conditions of service in the Press, which was established only in 1972. In the  absence   of  rules  made  under  Article  309  of  the Constitution, the  authorities decided  to fill up the posts of Inspector  (Control) by  direct recruitment to the extent of 50%  and the  remaining 50%  by bringing in the qualified and trained  persons from  sister  organisations  so  as  to constitute a  nucleus of  trained and experienced persons in the cadre.  This decision  was taken in view of the delicacy of the  post and  the requirements  of intensive  and highly technical  training  coupled  with  unimpeachable  integrity required   to   man   those   posts.   Having   taken   this administrative decision, the authorities circulated a letter dated 1.  6.1972 to  sister organisations,  namely the India Security Press,  Nashik Road,  as also  the Security   Paper Mill, Hoshangabad,  for sponsoring the names of the suitable candidates who  were willing  to take  up the appointment in the  Press  at  Dewas.  The  appellants,  whose  names  were sponsored and  who had  also expressed  their willingness to work at  Dewas, were  consequently  appointed  as  Inspector (Control) on  deputation. The  Rules, namely,  the Bank Note Press  (Class   III  Posts)  Recruitment  Rules,  1974  were promulgated on  20.11.1974 when  the appellants  had already been appointed.  Their appointment on deputation, therefore, could not  have been  faulted by  the Tribunal on the ground that there was no provision for appointment on deputation on the posts of Inspector (Control) under the Recruitment Rules as it is well-settled that in the absence of Statutory Rules made under Article 309 of the Constitution, appointments and other  conditions   of   service   can   be   regulated   by administrative order or executive instructions.      The question  relating to  the inter  see seniority  of direct recruits, namely, respondents 3 to 9, and the persons brought on  deputation, namely,  the present  appellants who were ultimately  absorbed on permanent basis in the Press At Dewas, has  also been erroneously decided by the Tribunal by denying them the benefit of their past service.      From the facts given in the beginning of this judgment, it will  be seen  that the  appellants were  working on  the posts  of   Asstt,  Inspector   (Control)  in  their  parent department when they were sent on deputation to the Press at Dewas. In  due course,  they were  promoted to  the posts of Inspector (Control) in their parent department and were also

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given ‘permanent’ status. They were subsequently absorbed on permanent posts  in the  Press  at  Dews  with  effect  from 22.1.1976. They  were already working on the posts Inspector (Control) on  deputation, having  been appointed  during the period between 9th February 1973 to 10th January, 1974, when respondents 3  to 9  joined the Press, having been appointed as Apprentice  Asstt. Inspectors (Control) during the period between 5th  February, 1973  to 20th  January, 1975  to 20th January, 1976 and were subsequently appointed on substantive basis in  1977, five  of  them  on  1.8.1977  and  three  on 3.9.1977.      Respondents 1 and 2, namely, the Union of India and the General Manager,  Bank Note  Press, Dewas,  contended before the Tribunal  that in  the absence  of any  seniority rules, they had  assigned seniority  with reference  to the date of confirmation. Since  appellants were  confirmed prior to the confirmation of  respondents 3 to 9, the Former, namely, the appellants,  wee  treated  as  senior.  The  Tribunal  after considering their contention held as under :      "However, in  the peculiar  case of      the BNP Dewas where the respondents      3 to  8  have  been  inducted  from      other sister organisation at a time      when no  recruitment rules  existed      and the  subsequent  rule  provided      for    deputation    but    without      retrospective   effect   not   much      reliance  can   be  placed  on  the      general  principle   of   seniority      which the  respondents 1 and 2 have      cited in  support of  arranging the      seniority of  the  petitioners  and      the respondents 3 to 8 according to      the dates of their confirmation. It      is also  not normal  to  confirm  a      person from  the  date  of  regular      absorption as  has been done in the      case of  the respondents  3  to  8.      Confirmation  is   related  to  the      performance and  other criteria and      the cases  of confirmation  have to      be referred  to the DPC as required      by  Article  26(51)  of  the  Civil      Services Regulations.  Although the      respondents 3  to 8  may have  been      initially deputed  but  only  after      their   absorption    they   become      employees of  the new  organisation      1.8. in  this cast  the BNP  Dewas.      Thus, when  they were  absorbed  on      22.1.76 their cases of confirmation      had to  be taken  up and considered      like   any    other    departmental      employees.    They     cannot    be      automatically  confirmed  from  the      same   date    as   the   date   of      absorption. In  other words  if the      DPC has  not examined  the cases of      the confirmation of the respondents      3 to  8 and the respondents 1 and 2      he confirmed  them from  22.1.1976,      the date  of  confirmation  of  the      respondents  would   have   to   be      treated   as   an   arbitrary   one      resulting       in        invidious

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    discrimination     against      the      petitioners.   Where   quotas   are      provided then confirmation has also      to take place against the vacancies      in  terms   of  the   quotas.   The      respondents have  not produced  any      DPC  record,   in  regard   to  the      confirmation of the petitioners and      the respondents 3 to 8 as Inspector      Control. Therefore,  the  dates  of      confirmation of  the respondents  3      to 8  as well as the petitioners on      which the  seniority lists of 1977,      1978 and  1979 are  based cannot be      held to  be proper or valid for the      reasons  discussed  above.  In  any      case the date of appointment of the      respondents  3   to  8   prior   to      1.12.1975 cannot  be  accepted  for      purposes  of  reckoning  seniority.      For these  reasons these  seniority      lists  cannot  be  upheld  and  are      liable to quashed."      After  recording   the  above   finding,  the  Tribunal proceeded to record the further finding as under :      "In the  circumstance of  the case,      the   only   valid   principle   of      determining seniority  between  the      petitioners and  the respondents  3      to 8  would  be  the  principle  of      continuous  officiation   from  the      dates of  the regular absorption as      regular     Inspector     (Control)      irrespective of  the fact  that the      petitioners     completed     their      probation period  subsequently. The      dates of  substantive  appointments      are not  necessarily the  dates  of      confirmation  but   the  dates   of      regularisation.         Substantive      appointment does  not mean  that an      official has  to be  confirmed.  He      hold a  substantive appointment  if      he has  been appointed in a regular      manner  or  regularised  against  a      clear civil  post. Thus,  the dates      of continuous  officiation  on  the      posts of  Inspector (Control) would      be reckoned from the dates of their      regular absorption. The respondents      1 & 2 should, therefore, revise the      seniority list  in  the  respective      orders  and   rearrange   them   in      accordance   with   the   principle      indicated above and in the light of      our  observations.   The  seniority      lists of  1977, 1978  and 1979  are      quashed."      In recording  the above finding, the Tribunal fell into patent  error   in  overlooking  the  vital  fact  that  the appellants who  were already  working as Inspector (Control) in the  sister organisation  had been appointed as Inspector (Control)  in  the  Press  at  Dewas  in  pursuance  of  the administrative decision  taken by  respondents 1  and  2  as there were no recruitment rules in existence. The appellants

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held a  permanent lien  in the  sister organisation  and  on their  absorption   at  Dewas,  their  lien  in  the  parent department was  terminated. Under  the  circumstances,  they were entitled  to the benefit of service rendered by them in the parent  department  on  identical  posts.  This  benefit cannot be  legally denied  to them.  The Tribunal  erred  in holding otherwise.      This Court  in S.S.  Moghe &  Ors. vs. Union of India & Ors. (1981)  3 SCC  271 has  already held  that when  a  new service is  proposed to be constituted by the Government, it is fully  within the  competence of the Government to decide as a  matter of  policy the sources from which the personnel required for manning the service are to be drawn.      In this  decision, it  has  also  laid  down  that  the deputationists, who  had already put in a number of years of service  in  their  parent  department,  were  to  be  given seniority  over   the  direct   recruits  for   purposes  of promotion.      Again, in  K. Madhavan & Anr. vs. Union of India & Ors. (1987)  4   SCC  566,  while  considering  the  question  of seniority of  a deputationist, who was subsequently absorbed on permanent  basis in  the  new department, it was observed as under :      "We may examine the question from a      different point  of View.  Thee  is      not   much    difference    between      deputation  and  transfer.  Indeed,      when a deputationist is permanently      absorbed in  the CBI,  he is  under      the rules appointed on transfer. In      other  words,   deputation  may  be      regarded as  a  transfer  from  one      government department  to  another.      It will  be against  all  rules  of      service   jurisprudence,    if    a      government   servant    holding   a      particular post  is transferred  to      the same  or an  equivalent post in      another government  department, the      transfer   is    to   taken    into      consideration  in   computing   his      seniority in  the transferred post.      The transfer  cannot wipe  out  his      length of  service in the post from      which he  has been  transferred. It      has been  observed  by  this  Court      that it  is a  just  and  wholesome      principle  commonly  applied  where      persons from  different sources are      drafted to  serve in  a new service      that   their   pre-existing   total      length of  service  in  the  parent      department should  be respected and      presented by  taking the  same into      account   in    determining   their      ranking in the new service cadre."      We are  in respectful agreement with the above view. We are of  the opinion  that where recruitment is made from two different  sources  and  an  integrated  seniority  list  is prepared of the persons so recruited, the benefit of service already rendered on a similar post in a similar organisation under the  same employer will have to be given to the person appointed on  the new post.  We are also of the opinion that in the  particular facts  and circumstances  of the  present case, benefit  of service  rendered by the appellants on the

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post of  Inspector (Control)  in the parent department could not have  been legally denied to them, particularly as there were no  rules of  seniority made  under Article  209 of the Constitution providing  specifically that  benefit  of  past service would not be allowed. The Tribunal was not justified in allowing  seniority to respondents 3 to 9 on the basis of continuous officiation  on the  post of  Inspector (Control) even though  appellants  had  been  appointed  earlier.  The Tribunal was  in error  in treating  the appellants  to have joined  the   department  only   from  the   date  of  their substantive absorption.  By treating  respondents 3  to 9 as senior to the appellants, the Tribunal acted contrary to the basic tenets of service jurisprudence discussed above.      In addition  to what  has been stated above, respondent Nos. 1  and 9,  who had assigned seniority to the appellants on the  basis of the respective dates of their confirmation, could not be said to have acted contrary to law, at least in the particular circumstances of the case where respondents 1 and 2 had to balance the equities in the matter of seniority between  the  appellants  and  respondents  3  to  9.  While respondents 3  to 9  had  been  directly  recruited  in  the service and  after  completing  their  apprenticeship,  were placed on probation for the post of Inspector (Control), the appellants had already worked for quite a number of years on this post  in their parents department where they were given notional promotion  as they  were on deputation on the press as  Inspector   (Control)  on  which  posts  they  wee  also confirmed  earlier   than  respondents   3  to  9.  In  this situation, respondents  1 and  2  were  fully  justified  in adopting ‘date  of confirmation’  as the basis of seniority, particularly as  there  were  no  service  rules  regulating seniority of  the persons  working in  the  Press.  On  this criteria, which, in our opinion, in wholly reasonable in the facts of  this case,  appellants  were  rightly  treated  by respondents 1 and 2 as senior to respondents 3 to 9.      Viewed from  any angle,  the appellants have to be held as senior to respondents 3 to 9.      In view  of the  above,  the  appeal  is  allowed,  the judgment dated 26.4.1990 passed by the Tribunal is set aside and the  claim petition  filed by  respondents  3  to  9  is dismissed, but without any order as to costs. IN THE MATTER OF :-