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CASE NO.: Appeal (civil)  2336 of 2007

PETITIONER: State of Punjab & Ors

RESPONDENT: Arun Kumar Aggarwal & Ors

DATE OF JUDGMENT: 04/05/2007

BENCH: H.K. SEMA & V.S. SIRPURKAR

JUDGMENT: J U D G M E N T

CIVIL APPEAL NOS.     2336           OF 2007 (Arising out of S.L.P. ( C ) Nos.25592-25601 of 2005) WITH CIVIL APPEAL NO.        2337 and 2338     OF 2007 (Arising out of S.L.P.( C ) Nos. 26872 of 2005 and 2685 of 2006)

H.K.SEMA,J.

1.              Leave granted.

2.              All the aforesaid appeals are directed against the  judgment and order dated 18.10.2005 passed by the High  Court of Punjab and Haryana in several writ petitions.    The  High Court by its impugned order disposed of all the writ  petitions by a common order. 3.              Although the hearing of these appeals has engaged  our attention for a considerable length of time and spread over  for many days’ arguments, the dispute to be resolved is  ensconced in a narrow compass.   4.              We have heard the parties at length. 5.              The core questions that arise for determination are  these:-  

(1)     Whether any indefeasible right has been  accrued to the diploma-holder  (outstanding categories) for promotion to  the post of SDO by virtue of being given  current duty charge by an order dated  21.6.2001 and whether any cause of  action arose by withdrawing the same by  an order dated 22.6.2005.

(2)     Whether old 1941 Rules or new 2004  Rules which became effective from  9.7.2004 will be applied for filling up the  vacancies which arose during 2000-01  under old 1941 Rules for promotion to the  post of SDO (Irrigation Department) in the  State of Punjab.  

Whether any indefeasible right has been accrued to the  diploma-holder (outstanding categories) for promotion to  the post of SDO by virtue of being given current duty  charge by an order dated 21.6.2001 and whether any

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cause of action arose by withdrawing the same by an order  dated 22.6.2005.

6.      The respondents were diploma-holder Junior Engineers.  By an order dated 21.6.2001, 20 Junior Engineers Diploma- holders (outstanding category) were given current duty charge  to look after the charge of  SDOs.  The current duty charge  were given under proviso to Rule 5 of 1941 Rules, who  otherwise did not possess the qualifications specified under  Rule 3 of the said Rules.  The power was exercised by the  Government conferred under Rule 19 of 1941 Rules.   

7.              The CDC/look after charge was given subject to the  following conditions:-

(A)     This CDC/Look After charge shall be on the  basis of approval to be granted as per  instructions issued by the Personnel  Department, Punjab, vide letter No.  4/2/2001- 3PP.1/3318 dated 15th March,  2001.

(B)     This charge is temporary in the existing pay  scale of official and can be withdrawn  without any prior notice and the officer  cannot claim seniority etc. on the basis  thereof.

(C)     The official on the basis of this CDC/ Look  after charge cannot raise any claim for  promotion under the provisions of Rule  3(1)(c) of the P.E.S. Class 2 Rules, 1941.

(D)     This CDC/Look after charge shall be  subject to the decision in different cases to  be given by different Courts.   

                 8.         The CDC was subsequently withdrawn by an order  dated 22.6.2005 which was impugned by the diploma holders  (outstanding category) by filing various writ petitions.  Many  grounds were recited supporting the decision to withdraw the  CDC.  One shocking ground which we are tempted to quote is  as under:- "Whereas regular enquiry No.28/2002 was  registered by the Vigilance Bureau Punjab for  tempering/stage-managing outstanding  reports by the Junior Engineers for getting  Current Duty Charge of the post of S.D.O. by  Junior Engineer and the same is still under  investigation."

9.              At this stage, we may point out one of the  arguments of Mr. Nageswara Rao, learned senior counsel,  appearing for diploma-holders (non outstanding category)  that  the diploma-holders represented by him are senior to those  who obtained outstanding certificates.  They are also more  meritorious but outstanding certificate was not granted to  them.  In the back drop of  the reasons recited, which we have

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noticed above, the contention of Mr. Rao appears to hold some  water.   10.             The other ground recited in the order dated  22.6.2005 supporting withdrawal of CDC which in our view  would be relevant to resolve the present controversy is in the  following terms:-

"Whereas, Govt. has notified Punjab Irrigation  Department (Group-A) Service Rules, 2004 on  30.4.2004 and it has been decided to fill up  the vacant posts of S.D.Os on regular basis  from amongst Junior Engineers by holding  D.P.C. under the Provisions of new Rules,  2004 ibid.

       Now, therefore, in view of position  explained above when new Departmental  Service Rules, 2004 have been notified and  Govt. has issued fresh guidelines on  19.04.2005 for granting Current Duty Charge  and it has also been decided to fill-up the  Vacant posts of S.D.Os. on regular basis by  holding D.P.C. the continuity of holding  Current Duty Charge of the post of S.D.O. by  the above mentioned 20 Junior Engineers is  not in public interest, the Government of  Punjab is pleased to withdraw the Current  Duty Charge of the post of S.D.Os. from these  above mentioned 20 Junior Engineers with  immediate effect and these 20 junior engineers  shall continue to work as Junior Engineers  against their original posts."

                                       (emphasis supplied)

                  11.    It will be pertinent to mention that the  respondents/writ petitioners also challenged the vires of 2004  Rules but given up.  The High Court was of the view that since  vacancies arose under 1941 Rules, it should be filled up on  the basis of 1941 Rules.    The High Court quashed the order  dated 22.6.2005 and directed the Government to fill up posts  under the Government instructions issued on 1.10.1999,  29.12.2000 and 25.9.2003.  The High Court further held that  the vacancies  fallen  prior to 31.3.2001 shall be filled up by  following the creiteria indicated by instructions dated  1.10.1999 and 29.12.2000 for determination of outstanding  merit in terms of 1941 Rules. 12.             The High Court, in our view, completely ignored the  settled law enunciated by this Court on the subject.  13.             To avoid multiplicity, this Court in the case of  Ramakant Shripad Sinai  Advalpalkar    vs.   Union of  India, 1991 Supp.(2) SCC 733, held in paragraph 5 as under:-     

"The arrangements contemplated by this order  plainly do not amount to a promotion of the  appellant to the post of Treasurer.  The  distinction between a situation where a  government servant is promoted to a higher  post and one where he is merely asked to  discharge the duties of the higher post is too  clear to require any reiteration.  Asking an  officer who substantively holds a lower post  merely to discharge the duties of a higher post  cannot be treated as a promotion.  In such a

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case he does not get the salary of the higher  post; but gets only what in service parlance is  called a "charge allowance". Such situations  are contemplated where exigencies of pubic  service necessitate such arrangements and  even consideration of seniority do not enter  into it.  The person continues to hold his  substantive lower post and only discharges the  duties of the higher post essentially as a stop- gap arrangement"  

14.         In the case of State of Haryana   vs.  S.M. Sharma,  1993 Supp.(3) SCC 252, while considering the identical  question this Court held in paragraphs 11 and 12 as under:-         "11. Sharma was given the current duty  charge of the post of Executive Engineer under  the orders of the Chief Administrator and the  said charge was also withdrawn by the same  authority.  We have already reproduced above  Rule 4(2) of the General Rules and Rule 13 of  the Service Rules.  We are of the view that the  Chief Administrator, in the facts and  circumstances of this case, was within his  powers to issue the two orders dated June 13,  1991 and January 6, 1992.

12.     We are constrained to say that the High  Court extended its extraordinary jurisdiction  under Article 226 of the Constitution of India  to a frivolity.  No one has a right to ask for or  stick to a current duty charge.  The impugned  order did not cause any financial loss or  prejudice of any kind to Sharma.  He had no  cause of action whatsoever to invoke the writ  jurisdiction of the High Court.  It was a patent  misuse of the process of the court."                     15.             We, accordingly, hold no such right much less  indefeasible right has been accrued to the diploma-holder  junior engineers (outstanding category) by virtue of giving CDC  to the post of S.D.O. for regularization in the post.  It was  purely a stopgap arrangement, neither based on seniority nor  efficiency and no cause of action arises by withdrawing the  same by the order dated 22.6.2005. 16.             Though by now, it has become an academic  question, because, in view of our interim order no one is  holding the current duty charge and also in view of the fact  that the new Rules namely 2004 Rules have now become  operative and there is no provision under new Rules for  outstanding category.  Be that as it may, we are not persuaded  to accept the view taken by the High Court and the order of  the High Court quashing the order dated 22.6.2005 is set  aside.    

Whether old 1941 Rules or new 2004 Rules which became  effective from 9.7.2004 will be applied for filling up the  vacancies which arose during 2000-01 under old 1941  Rules for promotion to the posts of SDO (Irrigation  Department) in the State of Punjab.           17.             1941 Rules were repealed by 2004 Rules.  The  reason why 1941 Rules were repealed by the new Rules appear  to be that there was no channel of promotion for diploma-

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holders under old Rules.  The only provision on which  diploma-holders could be accommodated was proviso to Rule  5, which deals with the relaxation of the Rules.  Proviso to  Rule 5 reads:-  

"Provided that this rule may be relaxed by  Government on the recommendations of Chief  Engineer in order to admit the promotion of a  member of the Oversees Engineering Service or  Irrigation Branch, Punjab or Irrigation Branch  (Provincial Draftsman and Tracers) Service of  ’outstanding merit’ who may not possess the  qualifications specified in Rule 3."                                                           (emphasis supplied)                  Now under 2004 Rules the diploma-holders are entitled to  25% out of 40% promotional quota.  The criteria of  outstanding merits are also done away with by the new 2004  Rules and now the criteria applicable for promotion is  seniority- cum- merit.   Mr. Rao learned senior counsel   contended that in view of the aforesaid background the  Government has brought out the new 2004 Rules, which have  become effective from 9.7.2004.  He further contended that  1941 Rules were not amended but were repealed by 2004  Rules and therefore the executive instructions issued under  1941 Rules do not survive.  He has invited our pointed  attention to Rule 10 of 2004 Rules, which deals with Repeal  and saving. Rule 10 is reproduced in extenso:-  

10. Repeal and saving.  The Punjab Service of  Engineers Class-II, (Irrigation Branch) Rules,  1941 and the Punjab Services of Engineers  Class-I, P.W.D. (Irrigation Branch Rules, 1964,  are hereby repealed:

      Provided that any order issued or any  action taken under the rules, so repealed, shall  be deemed to have been issued or taken under  the corresponding provisions of these rules."

He, accordingly, contended that 1941 Rules are not in  existence and the instructions issued under 1941 Rules are  extinct along with the Rules.   He further contended that 2004  Rules created new posts and those posts need to be filled up in  accordance with 2004 Rules.  He further argued that the  conscious decision has been taken by the Government to fill  up the vacancies under the new Rules and, therefore, the High  Court was wrong in directing to fill up the vacancies under  1941 Rules, which were not in existence.      18.        Per contra Dr. Dhawan contended that the vacancies  arose during 2000-01 under 1941 Rules and, therefore, these  should be filled up under the 1941 Rules.  He further  contended that the vacancies so arisen under 1941 Rules be  filled up according to the instructions issued on 1.10.1999,  29.12.2000 and 25.9.2003.    He further contended that there  was no conscious decision arrived at by the Government.   According to him, such conscious decision, if any, must be  based on deliberations.  According to him, there was no such  deliberation.  He further contended that the conscious  decision of the Government, if any, cannot unsettle the Rules.  

WHETHER THERE WAS ANY CONSCIOUS DECISION BY  THE GOVERNMENT TO FILL UP THE VACANCIES UNDER  THE NEW RULES?

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19.        We have already noticed that in 1941 Rules there was  no provision for promotion quota for diploma holders. Instead,  under proviso to Rule 5 relaxation of the Rules provided to the  extent of outstanding merit for diploma holders.  The  outstanding merit category has been done away with by new  2004 Rules.  In 2004 Rules, the diploma holders are entitled  to 25% out of 40% promotional quota.  20.        While it is true that there appears to be no definite  decision arrived at based on deliberations, the intendment of  the authorities can be gathered from various background and  circumstances.  21.       As already noted in the withdrawal order of 22.6.2005  one of the reasons recited for withdrawal of CDC was, at the  risk of repetition runs as under:

"Whereas, Govt. has notified Punjab Irrigation  Department (Group-A) Service Rules, 2004 on  30.4.2004 and it has been decided to fill up  the vacant posts of S.D.Os on regular basis  from amongst Junior Engineers by holding  D.P.C. under the Provisions of new Rules,  2004 ibid.

22.       Civil Writ Petition No. 11644 of 1999 was filed by  Satbir Singh (AMIE Holder) praying for a mandamus to allot  31% of the promotional quota to their category.  The counter  affidavit was filed by one Mr. Samir Kumar IAS on 31.5.2000  before the High Court in Civil Misc. No.10810 of 2000 in  C.W.P.No.11644 of 1999.  It is stated in paragraphs 1 to 3 as  under: 1.      That the Government is considering to  amend the PSE Class II Rules 1941 and  Committee of 3 Chief Engineers namely Shri  P.K. Singla, Chief Engineer, Canals IW,  Punjab, Shri Sarup Singh, Chief Engineer  National Highways, Patiala and Shri  Jatinder Singh, Chief Engineer/Public  Health, Patiala has been constituted for  making recommendations with regard to  fixing the quota for different categories and  its due incorporation in the PSE Class 1  rules by amending the same.

2.      The regular promotion on the posts of   SDO’s will be considered after  finalization/amendment of the  Departmental Service Rules as explained in  para 3 of the Preliminary objection.

3.      The regular promotions of SDOs cannot be  considered at this stage because the  Government is considering the  amendment/finalization of departmental  service rules as explained in preliminary  objections."

\005\005\005\005.

\005\005\005\005.                                                 23.         From the record it appears that the Government also  constituted DPC for category of outstanding merit candidates  on various dates namely March, 2001, 30th April, 2001, 8th

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November, 2001, 21st November 2001, 9th January 2002 and  29th May, 2002.  On all these days although the date was fixed  but no DPC was conducted.  This would also indicate that the  Government was keeping in its mind the impending new Rules  of 2004.  24.     Mr. Rao, therefore, contended that the conscious  decision was taken by the Government not to fill up the posts  under the 1941 Rules.  In view of the conscious decision taken  by the Government, the Government, therefore, did not  conduct any DPC for promotion to the post of SDO.   To  substantiate his contention he has invited our attention to the  decision of this Court in Dr. K. Ramulu    vs.  Dr.  S.Suryaprakash Rao, (1997) 3 SCC 59.  The three Judge  Bench of this Court after referring to various decisions of this  Court upheld the conscious decision of the Government not to  fill up the post in view of the impending new rules.  This Court  finally held in paragraph 15 at scc p.67 as under:-

"15. Thus, we hold that the first respondent  has not acquired any vested right for being  considered for promotion in accordance with  the repealed Rules in view of the policy  decision taken by the Government which we  find is justifiable on the material available  from the record placed before us.  We hold that  the Tribunal was not right and correct in  directing the Government to prepare and  operate the panel for promotion to the post of  Assistant Directors of Animal Husbandry  Department in accordance with the repealed  Rules and to operate the same."                      25.       Dr.Dhawan contended that outstanding merit is a  valid criteria.  In this connection, he has referred to Subash  Chander Sharma   vs.   State of Punjab, (1999) 5 SCC 171  at para 7:

"\005Both the aforesaid decisions were not  directly concerned with the rules with which  we are concerned in these appeals.  Rule 5, as  it is worded, leaves no doubt that the rule- making authority intended by enacting the  second proviso that a Temporary  Engineer/Overseer referred to therein should  also satisfy other conditions before he can be  promoted to Class II service\005.The last proviso  could not have been intended to enable the  Government to relax the other conditions  mentioned in the second proviso in the case of  the class of persons referred to in the last  proviso.  Outstanding merit of a member of the  Overseers Engineering Service or Draftsmen  and Tracers Service obviously could not have  been ascertained unless he had completed at  least two years’ continuous service.  Similarly  a person having outstanding merit could have  been easily declared by the Commission on the  report of the Chief Engineer to be fit for service  and, therefore, there was hardly any point in  making a special provision for relaxation of  such conditions.  It is also not possible to  believe that the said proviso was enacted for  dispensing with the requirement of age.  It  would not have been difficult for a person  having outstanding merit to have passed a

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departmental test and, therefore, it is not  possible to believe that the last proviso was  enacted with a view to dispense with the  requirement of that condition\005"                26.          He has also referred to J.N. Goel   v.   Union of  India (1997) 2 SCC 440 at para 14:

"We may now come to the proviso to Rule 21(3)  which was inserted in 1972.  As noticed  earlier, the proviso permits relaxation in the  matter of educational qualifications for  promotion of Assistant Engineers to the cadre  of Executive Engineers and an Assistant  Engineer though not a graduate could be  promoted provided he had "outstanding ability  and record".  The said criterion of "outstanding  ability and record" prescribed by the proviso  cannot be regarded as vague or arbitrary.  In  service jurisprudence "outstanding merit" is a  well-recognised concept for promotion to a  selection post on the basis of merit.  Such  assessment of outstanding merit is made by  the DPC on the basis of the record of  performance of the employee.  It cannot,  therefore, be said that the proviso to Rule 21(3)  which enabled a diploma-holder Assistant  Engineer to be promoted as Executive  Engineer if he had "outstanding ability and  record" suffers from the vice of arbitrariness\005"

27.          In our view, the decisions of this Court, referred to  by Dr. Dhawan are not at all applicable in the facts and  circumstances of the case at hand.  28.         We are gravely concerned with the manner in which  the certificates of outstanding merit categories were obtained  by diploma-holders (respondents herein).  It is disclosed in the  impugned order of 22nd June, 2005 that the certificates of  outstanding merit categories were obtained by  tempering/stage managing and manipulation by diploma-  holders Junior Engineers for getting CDC of the post of S.D.O.   This has casted a serious doubt of the credibility of their  outstanding merit categories.  It is also disclosed that enquiry  No. 28/2002 was also registered by Vigilance Bureau, Punjab.   We found ourselves extremely difficult to sift the grain from  the chaff.   This is one of the reasons that persuaded the  appropriate authority for taking conscious decision not to fill  up the post under 1941 Rules.   29.         Dr.Dhawan also contended that the vacancies are to  be filled up in accordance with the contemporary Rules.  In  this connection he has referred to Y.V. Rangaiah   v   J.Sreenivasa Rao,(1983) 3 SCC 284 at para 9: "\005Under the old rules a panel had to be  prepared every year in September.   Accordingly, a panel should have been  prepared in the year 1976 and transfer or  promotion to the post of Sub-Registrar Grade  II should have been made out of that panel.  In  that event the petitioners in the two  representation petitions who ranked higher  than Respondents 3 to 15 would not have been  deprived of their right of being considered for  promotion.  The vacancies which occurred  prior to the amended rules would be governed

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by the old rules and not by the amended rules.   It is admitted by counsel for both the parties  that henceforth promotion to the post of Sub- Registrar Grade II will be according to the new  rules on the zonal basis and not on the State- wise basis and, therefore, there was no  question of challenging the new rules.  But the  question is of filling the vacancies that  occurred prior to the amended rules.  We have  not the slightest doubt that the posts which  fell vacant prior to the amended rules would be  governed by the old rules and not by the new  rules."                          

30.           There is no quarrel over the proposition of law that  normal Rule is that the vacancy prior to new Rules would be  governed by the old Rules and not by the new Rules.  However,  in the present case, we have already held that the Government  has taken conscious decision not to fill the vacancy under the  old Rules and that such decision has been validly taken  keeping in view the facts and circumstances of the case.        31.       Dr.Dhawan has also referred to P.Ganeshwar Rao    vs.  State of A.P.  (1988) Supp. SCC 740 at para 11: "In view of the foregoing we are of the view that  the observations made by the Tribunal to the  following effect, namely:

In this case the Rules for  recruitment have been changed on  April 28, 1980.  Hence, prima facie  it would not be legal to make direct  recruitment against temporary  vacancies, even if the vacancies  were at an earlier date earmarked  for direct recruits\005.   In these  circumstances, there is, in my  opinion, no scope for direct  recruitment against temporary  vacancies after April 28, 1980 i.e.  the date on which the Rules were  amended as stated above.                                  are unsustainable.  We hold that the  amendment made on April 28, 1980 does not  apply to the vacancies which had arisen prior  to the date of the amendment."   

32.        He has also referred to B.L. Gupta   vs    M.C.D.,  (1988) 9 SCC 223 at para 9: "When the statutory rules had been framed in  1978, the vacancies had to be filled only  according to the said Rules.  The Rules of 1995  have been held to be prospective by the High  Court and in our opinion this was the correct  conclusion.  This being so, the question which  arises is whether the vacancies which had  arisen earlier than 1995 can be filed as per the  1995 Rules.  Our attention has been drawn by  Mr.Mehta to a decision of this Court in the  case of N.T. Devin Katti   v.  Karnataka Pubic  Service Commission.  In that case after  referring to the earlier decisions in the cases of  Y.V. Rangaiah v.  J.Sreenivasa Rao, P.  Ganeshwar Rao  v.  State of A.P. and A.A.  Calton  v.  Director of Education it was held by

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this Court that the vacancies which had  occurred prior to the amendment of the Rules  would be governed by the old Rules and not by  the amended Rules.  Though the High Court  has referred to these judgments, but for the  reasons which are not easily decipherable its  applicability was only restricted to 79 and not  171 vacancies, which admittedly existed\005"           33.          He further submitted that rights of candidates that  are eligible under the unamended Rules cannot be taken away  by subsequent amendment. In this connection, he referred to   P. Mahendran  vs. State of Karnataka,  (1990) 1 SCC 411  at para 5. "\005Since the amending Rules were not  retrospective, it could not adversely affect the  right of those candidates who were qualified  for selection and appointment on the date they  applied for the post, moreover as the process of  selection had already commenced when the  amending Rules came into force, the amended  Rules could not affect the existing rights of  those candidates who were being considered  for selection as they possessed the requisite  qualifications prescribed by the Rules before  its amendment moreover construction of  amending Rules should be made in a  reasonable manner to avoid unnecessary  hardship to those who have no control over the  subject matter."            34.       He further contended that the power of appointing  authority for the post amendment cases confined to those  cases.  Reference is made to AA Calton   vs.  Director of  Education, (1983) 3 SCC 33 at para 5: "\005Although the Director in the present case  exercised that power subsequent to August 18,  1975 on which date the amendment came into  force, it cannot be said that the selection made  by him was illegal since the amending law had  no retrospective effect.  It did not have any  effect on the proceedings which had  commenced prior to August 18, 1975.  Such  proceedings had to be continued in accordance  with the law as it stood at the commencement  of the said proceedings.  We do not, therefore,  find any substance in the contention of the  learned counsel for the appellant that the law  as amended by the U.P. Act 26 of 1975 should  have been followed in the present case."   

35.       All the decisions referred to above are relating to  amendment of the Rules.  We have already held that 1941  Rules were repealed by 2004 Rules.  The facts of those cases  are, therefore, not applicable to the facts of the present case.      36.         Dr. Dhawan further argued that the diploma-holders  outstanding merit candidates have vested rights under 1941  Rules and that rights under new Rules are saved and not  repealed by 2004 Rules.  Reference is made to N.T.Devin  Katti   vs.  KPSC, (1990) 3 SCC 157 at para 11: "\005.Lest there be any confusion, we would like  to make it clear that a candidate on making  application for a post pursuant to an  advertisement does not acquire any vested  right of selection, but if he is eligible and is

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otherwise qualified in accordance with the  relevant rules and the terms contained in the  advertisement, he does acquire a vested right  of being considered for selection is accordance  with the rules as they existed on the date of  advertisement.  He cannot be deprived of that  limited right on the amendment of rules during  the pendency of selection unless the amended  rules are retrospective in nature."                                                                                                      (emphasis supplied)          37.         These decisions are of no assistance to the diploma- holders outstanding category, in the view that we have taken. 38.       We hold the Government has taken conscious decision  not to fill up the posts under the old 1941 Rules.  The  impugned order of the High Court is set aside.  We may at this  stage point out that the problem seems to have been  compounded by the inaction/casual approach of the  Government detrimental to public interest.  The State  Government shall now fill up the vacant posts in accordance  with the 2004 Rules within a period of three months from  today.  All the eligible candidates who satisfy the criteria laid  down under 2004 Rules shall be considered.  The entire  process of recommendation and appointment shall be  completed within three months from today.                        39.        The impugned order of the High Court is set aside.   The appeals are disposed of in terms of the above directions.   No costs.