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CASE NO.: Appeal (civil)  5865 of 2007

PETITIONER: UNION OF INDIA & ANR.

RESPONDENT: NARENDRA SINGH

DATE OF JUDGMENT: 13/12/2007

BENCH: C.K. THAKKER & J.M. PANCHAL

JUDGMENT: J U D G M E N T ARISING OUT OF SPECIAL LEAVE PETITION (C) NO. 2041 OF 2005 C.K. THAKKER, J.

1.              Leave granted. 2.              The present appeal is directed against  the order dated May 12, 2000 passed by the  Central Administrative Tribunal, Jabalpur, Camp  Indore (\021Tribunal\022 for short) in Original  Application No. 76 of 1997 and confirmed by the  Division Bench of High Court of Madhya Pradesh,  Jabalpur (Indore Bench) on August 26, 2004 in  Writ Petition No. 1329 of 2000. 3.              Brief facts of the case are that the  respondent herein was working as Accountant in  the Office of the Accountant General, Madhya  Pradesh, Branch Office, Bhopal. By an order  dated January 1, 1990, he was mistakenly  promoted as Senior Accountant (Functional).  After about four years, the Department realized  that the promotion given to the respondent was  erroneous and he was not eligible to be  promoted.  The mistake was, therefore, sought  to be corrected. A notice under Rule 31-A of  the Fundamental Rules, 1922 was issued to the  respondent informing him that he could not have  been promoted as Senior Accountant as he had  not passed Departmental Examination of  Accountants as required by law.  He was, hence,  asked to show cause why the promotion given to  him erroneously should not be cancelled. By a  reply dated February 16, 1994, the respondent  contended that he was eligible and qualified  for getting promotion and accordingly he was  promoted. He also asserted that he was  performing his functions and discharging his  duties efficiently and there was no occasion to  revert him. According to him, there was no need  to clear Departmental Examination for  Accountants and the notice was required to be  discharged. 4.              After considering the reply submitted  by the respondent, the Principal Accountant  General, vide his order dated March 29, 1994,  cancelled the promotion. The respondent  challenged the cancellation of promotion by  filing Original Application No. 275 of 1994 in  the Tribunal. The Tribunal, on March 12, 1996,  allowed the petition and directed the

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Authorities to reconsider the case of the  respondent.  5.              In compliance with the order passed by  the Tribunal, the appellant considered the case  of the respondent and rejected his prayer.  Accordingly, by an order dated June 24, 1996,  the promotion was cancelled. 6.              The respondent again challenged the  order of reversion by approaching the Tribunal  and the Tribunal allowed the petition.  The  order was confirmed by the High Court. The said  decision is challenged in the present appeal by  the Union of India and the Accountant General. 7.              Notice was issued and keeping in view  the fact that the respondent was due to retire  shortly, the Registry was directed to place the  matter for final hearing which was placed  before us on December 5, 2007. 8.              We have heard learned counsel for the  parties. 9.              Learned counsel for the appellants  submitted that the action taken by the  appellant could not be said to be illegal,  unlawful or otherwise improper. He stated that  the respondent was not qualified to be promoted  as Senior Accountant as he had not passed the  relevant examination required by law. It was  due to mistake on the part of the Department  that he was promoted in spite of his  ineligibility. The said mistake was, therefore,  corrected after issuing notice calling upon the  respondent to show cause why the mistake should  not be corrected. It was submitted that as per  the direction issued by the Tribunal, the case  of the respondent was considered and the  Department rejected the prayer. The action of  the appellant which was in consonance with law  could not have been set aside by the Tribunal.  By interfering with the said action, the  Tribunal had committed an error of law. The  High Court confirmed that order.  Both the  orders, therefore, are liable to be set aside. 10.             Learned counsel for the respondent, on  the other hand, supported the order passed by  the Tribunal and affirmed by the High Court.  According to him, the respondent was not  required to pas any examination. He had  sufficient experience. All those factors were  considered by the Department when he was  promoted as Senior Accountant. There is no  allegation that the respondent had concealed  facts or by playing fraud, got the promotion.  Even if it is assumed that there was mistake on  the part of the Department, the respondent  should not suffer. It was further urged that in  earlier litigation, directions were issued by  the Tribunal, but they had not been complied  with. The Comptroller and Auditor General of  India ought to have relaxed the condition as to  passing of examination.  Moreover, the Tribunal  has merely directed to consider the case of the  respondent and there was no illegality in it.  The High Court, therefore, rightly did not  interfere with the said order. Finally, it was  submitted that the respondent was promoted on

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January 1, 1990 and thus he has completed about  seventeen years of service on the promoted  post. He will be retiring within a few days  i.e. after the office hours of December 31,  2007. Hence, even if this Court holds that his  promotion was not strictly legal, the Court may  not interfere with the said order and allow him  to continue on that post for few days more. 11.             Having heard learned counsel for the  parties, in our opinion, the appeal deserves to  be partly allowed. So far as the promotion of  the respondent is concerned, it is not in  dispute that he was promoted as Senior  Accountant (Functional) on January 1, 1990. It  is not the allegation of the appellant that the  respondent had obtained such promotion by  concealing fact or by playing fraud.  12.             At the same time, however, in our  opinion, the learned counsel for the appellants  is right in submitting that the respondent was  not eligible and qualified to be promoted to  the post of Senior Accountant. In this  connection, he invited our attention to Article  148 of the Constitution. Clause (1) of the said  Article declares that there shall be a  Comptroller and Auditor-General of India who  shall be appointed by the President by warrant  under his hand and seal. Clause (5) deals with  staff of Comptroller and Auditor-General of  India and reads thus: (5) Subject to the provisions of  this Constitution and of any law  made by Parliament, the conditions  of service of persons serving in  the Indian Audit and Accounts  Department and the administrative  powers of the Comptroller and  Auditor-General shall be such as  may be prescribed by rules made by  the President after consultation  with the Comptroller and Auditor- General.

13.             In exercise of the power under  Clause (5) of Article 148, the President,  after consultation with the Comptroller and  Auditor General of India, framed rules  known as \021The Indian Audit and Accounts  Department (Senior Accountant) Recruitment  Rules, 1988\022 (hereinafter referred to as  \021the Rules\022). Rule 3 provides for method of  recruitment, age limit, qualifications,  etc. of Senior Accountants and reads as  under;  3.     Method of recruitment,  age limit, qualifications etc.\027  The method of recruitment, age  limit, qualifications and other  matters relating to the said  post shall be as specified in  columns 5 to 14 of the said  schedule.

14.             The Schedule to the Rule expressly  states that a person may be appointed as

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Senior Accountant \021by promotion, failing  which by transfer on deputation\022 (Column  11). Column 12 is material and relevant  part reads thus: 12. In case of recruitment by  promotion / deputation / transfer,  grades from which promotion/  deputation/transfer to be made :

Promotion : On seniority basis,  subject to rejection or unfit from  among Accountants in the grade of  Rs.1200-2040, with three year\022s  regular service in the grade having  passed the departmental examination  for Accountants.                  (emphasis supplied)

15.             Bare reading of Rule 3 with  Schedule thereof makes certain things  clear. Firstly, the Rules are framed by the  President of India in consultation with the  Comptroller and Auditor General of India in  exercise of power under Clause (5) of  Article 148 of the Constitution. The Rules  are thus statutory in nature. Secondly, the  Rules provide for mode of appointment to  the post of Senior Accountant by promotion,  failing which by transfer on deputation.  Thirdly, promotion is based on \021seniority\022  subject to rejection or unfit from among  Accountants, generally known as \021negative  test\022. Fourthly, an Accountant must have  three years regular service. Finally, such  Accountant must have passed Departmental  Examination for Accountants. 16.             It is not the case of the  respondent that he had passed the  Departmental Examination for Accountants.  It is, thus clear that the respondent was  not qualified for promotion to the post of  Senior Accountant under the Rules. 17.             The respondent, however, urged that  even if it is held that passing of  Departmental Examination was necessary, the  Authorities ought to have relaxed the rule  by exercising power under Rule 5. A  grievance was also made that the direction  of the Tribunal in earlier case had not  been complied with and the prayer of the  respondent was rejected mechanically. 18.             We are unable to agree with the  submission of the learned counsel.      Rule 5  confers discretionary power on the  Comptroller and Auditor General of India to  relax the provisions of the Rules. It is  relevant and may be reproduced: 5. Power to relax.\027Where the  Comptroller and Auditor General of  India is of the opinion that it is  expedient or necessary so to do, he  may by order and for reasons to be  recorded in writing, relax any of  the provisions of these rules with  respect to any class or category of

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persons\024.

19.             Reading of the order dated June 24,  1996, passed by the Deputy Accountant  General (Administration), Gwalior, makes it  clear that the Deputy Accountant General  considered Rule 5 and observed that he did  not find any valid reason/ground to relax  Recruitment Rules in view of the facts  mentioned in the order. It was inter alia  observed that Rule 5 conferred power on the  Comptroller and Auditor General of India to  relax the Rules, if he is of the opinion  that it is expedient or necessary so to do  by recording reasons in writing. But he  proceeded to state that such power should  be exercised \021with respect to any class or  category of persons\022. Normally, the power  should be invoked if eligible candidates  are not available for promotion or for  similar valid grounds/reasons. The power,  however, should not be exercised to  perpetuate a mistake. Since the respondent  did not fulfill the condition of  Recruitment Rules and a large number of  Accountants who had passed Departmental  Examination were available and awaiting  promotion, it would be against their  interests to deprive them of promotion and  to continue the respondent who had not  passed the examination.  20.             In our considered opinion, the  reasons recorded by the Deputy Accountant- General were in conformity with the  Statutory Rules.  The Tribunal, therefore,  should not have interfered with the well  reasoned order passed by the Deputy  Accountant-General. The Tribunal, while  dealing with this aspect, observed; \023The reasons given for not  according relaxation to the  applicant is that the power to  relax is generally to be invoked  only in respect of class or  category of persons and is resorted  to only in cases when eligible  persons are not available for  consideration for promotion or for  any valid reasons/grounds, and the  power in not conferred to  perpetuates a mistake. We do not  think that the grounds taken for  rejection of the case of the  applicant are valid. This Court has  specifically directed with certain  observation to consider the case of  the applicant for relaxation under  the powers vested under rule 5 and  the respondent were duty bound to  consider it in accordance with the  order of this Tribunal\024.

21.             We are unable to persuade ourselves  as to how the Authorities did not carry out  the order in letter and spirit as contended

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by the learned counsel for the respondent.  We are also unable to agree with the  Tribunal that the reasons recorded for  rejection of the case of the respondent  were not \021valid\022. On the contrary, in our  judgment, the Deputy Accountant General was  right in keeping in view relevant  considerations, such as, the power should  be exercised with respect to any \021class or  category of persons\022, normally there should  not be any relaxation in Recruitment Rules  unless the eligible and qualified  candidates are not available; relaxation  should not be exercised to perpetuate  mistake; a large number of Accountants who  are eligible and qualified but they could  not be appointed only  because of non- availability of sufficient vacancies. 22.             In this connection, it may be  profitable to refer to a decision of this  Court in Keshav  Chandra Joshi & Ors. v.  Union of India & Ors., (1992) Supp (1) SCC  272 where this Court was called upon to  consider the ambit and scope of relaxation- clause in Recruitment Rules. Rule 27 of the  U.P. Forest Service Rules, 1952 invested in  the Government power of relaxation which  read thus: \023Where the Governor is satisfied that  the operation of any rule regarding  ’the conditions of service’ of the  members of the service causes undue  hardship in any particular case, he  may, in consultation with the  Commission, notwithstanding anything  contained in the rules applicable to  the case, by order dispense with or  relax the requirements of that rule to  such extent and subject to such  conditions as he may consider  necessary for dealing with the case in  a just and equitable manner\024. 23.             The Court held that such power should  be exercised to the extent as may be necessary  to ensure satisfactory working or removing  hardship in just and equitable manner but the  Government cannot consciously and deliberately  deviate from the Rules exercising the power of  relaxation. 24.             Interpreting the relaxation-clause and  the power of the Governor, this Court observed; \023Satisfaction of the Governor that the  operation of the rules regarding the  conditions of service would cause  undue hardship in a particular case or  cases and the need to relieve hardship  and to cause just and equitable  results is a pre-condition. Even  otherwise the court cannot substitute  its satisfaction for the satisfaction  of the Governor in exercise of the  power of deemed relaxation.\024 25.             The counsel for the respondent, no  doubt, submitted that in the impugned order,  the Tribunal merely directed the authorities to

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consider the case of the respondent for  relaxation of Rules and no grievance could be  made by the appellants. 26.             We are unable to uphold the  contention. Para 6 of the order issued by the  Tribunal is explicitly clear. It reads thus: \0236. In view of aforesaid discussions,  we feel that this is fit case for  according relaxation under Rule 5.  Accordingly, this O.A. is disposed of  with a direction to the respondents to  consider the case of the applicant for  promotion to the post of Senior  Accountant by relaxing the condition  of qualifying in the examination and  if found suitable, promote him to the  post of Senior Accountant within a  period of three months from the date  of receipt of this order, subject to  availability of vacancy. In case the  said vacancy is not available, he  shall be promoted immediately after  the vacancy is made available.  However, in case there are persons who  are senior to the applicant and who  have already qualified the examination  of Senior Accountant, the case of the  applicant shall be considered  immediately after the promotion of  such persons or such persons are  promoted\024.         (emphasis supplied) 27.             Plain reading of the above direction  leaves no room for doubt that the Tribunal  \021concluded\022 that it was a \021fit case for  according relaxation under Rule 5\022. Moreover,  the Tribunal directed the appellants to promote  the respondent, if found suitable, within the  stipulated period. The Tribunal further stated  that if there is no vacancy, the respondent  should be promoted after the vacancy is  available. There is, therefore, no doubt that  the question as to relaxation of rule was  \021finally decided\022 and the directions were to be  carried out by the Authorities on the basis of  such conclusion. It, therefore, cannot be said  that direction was limited to \021consideration\022  of the case of the respondent and to take an  appropriate decision in accordance with law. 28.             It is true that the mistake was of the  Department and the respondent was promoted  though he was not eligible and qualified. But,  we cannot countenance the submission of the  respondent that the mistake cannot be  corrected. Mistakes are mistakes and they can  always be corrected by following due process of  law. In Indian Council of Agricultural Research  & Anr. v. T.K. Suryanarayan & Ors., (1997) 6  SCC 766, it was held that if erroneous  promotion is given by wrongly interpreting the   rules, the employer cannot be prevented from  applying the rules rightly and in correcting  the mistake. It may cause hardship to the  employees but a court of law cannot ignore  Statutory Rules. 29.             As observed by us, Statutory Rules

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provide for passing of Departmental Examination  and the Authorities were right in not relaxing  the said condition and no fault can be found  with the Authorities in insisting for the  requirement of law.  In the circumstances, the  action of the Authorities of correcting the  mistake cannot be faulted. 30.             True it is that before such an action  is taken and a person is actually reverted, he  must be given an opportunity to show cause why  the proposed action should not be taken. He may  be able to satisfy the Authorities that there  was no such mistake.  But even otherwise,  principles of natural justice and fair play  require giving of such opportunity to him.  But  as observed earlier, in the instance case, in  accordance with Rule 31-A of the Fundamental  Rules, notice was issued to the respondent- employee, explanation was sought and thereafter  the order was passed. The said order, in our  considered view, was just, proper and in  consonance with law and it ought not to have  been set aside by the Tribunal or by the High  Court. To that extent, therefore, the orders  impugned in this appeal deserve to be set  aside. 31.             The last prayer on behalf of  respondent, however, needs to be  sympathetically considered. The respondent is  holding the post of Senior Accountant  (Functional) since last seventeen years. He is  on the verge of retirement, so much so, that  only few days have remained. He will be  reaching at the age of superannuation by the  end of this month i.e. December 31, 2007. In  our view, therefore, it would not be  appropriate now to revert the respondent to the  post of Accountant for very short period. We,  therefore, direct the appellants to continue  the respondent as Senior Accountant  (Functional) till he reaches the age of  superannuation i.e. upto December 31, 2007. At  the same time, we hold that since the action of  the Authorities was in accordance with  Statutory Rules, an order passed by the Deputy  Accountant-General canceling promotion of the  respondent and reverting him to his substantive  post of Accountant was legal and valid and the  respondent could not have been promoted as  Senior Accountant, he would be deemed to have  retired as Accountant and not as Senior  Accountant (Functional) and his pensionary and  retiral benefits would be fixed accordingly by  treating him as Accountant all throughout. 32.             For the foregoing reasons, the appeal  is partly allowed. Though the respondent is  allowed to continue on the post of Senior  Accountant (Functional) till he reaches the age  of retirement i.e. December 31, 2007 and salary  paid to him in that capacity will not be  recovered, his retiral benefits will be fixed  not as Senior Accountant (Functional) but as  Accountant. In the facts and circumstances of  case, there shall be no order as to costs.