C Nos
1189798 of 1992 etc
From the judgment and Order dated 2881992 of the Delhi High Court in Civil Writ Petition Nos
1152  1157 of 1992
VR Reddy Addl
Solicitor General Kapil Sibbal PP Rao Rama Jois A Temton Dr Shankar Ghosh KK Venugopal Harish Salve FS Nariman AN Haksar Shanti Bhushan KN Bhat TR Andhyarujina CV Subba Rao PP Singh Mrs B Sunita Rao Sudhir Kulshreshtha Rohit Tandon Parijat Sinha Ms Sunanda Roy Ms section Bhattacharya BD Ahmed Man Mohan Singh Gopal Subramanium DN Mishra AM Dittia P K Ganguli Manoj K Das Amit Prabhat Tripurary Roy KL Mehta section Ganesh Pratap Venugopal KJ John Pramod Dayal Ajay K Jain and DN Najjunda Reddy for the appearing parties
The following Order of the Court was delivered by 116 K JAYACHANDRA REDDY J All these Special Leave Petitions arise out of the common judgment of the High Court of Delhi in Civil Writ Petitions Nos 1 152 and 1 15792
We heard these matters for considerable length of time
Eminent counsel appearing on both sides advanced detailed arguments
After the conclusion of the hearing it was represented that having regard to the constraint of time factor namely that the contracts with the Railways entered into by the manufacturers who are parties have to be completed very soon the judgment in these matters has to be delivered as early as possible or at least the conclusions have to be given soon
We are conscious of the fact that it is likely to take considerable time to deliver a detailed judgment
However having gone through the records carefully and after due consideration of the various arguments advanced we have reached the conclusions given hereunder and we propose to deliver the detailed judgment at a later stage giving all the reasons in support of these conclusions
We however think it necessary to state a few relevant facts and the issues involved in a concised form before we set out our conclusions
Every year the Railway Board enters into contracts with the manufacturers for the supply of cast steel bogies which are used in turn for building the wagons
Cast steel bogies come under a specialised item procured by the Railways from the established sources of proven ability
There are 12 suppliers in the field who have been regularly supplying these items
Two new firms Simplex and Beekay also entered the field
Among them admittedly Ms HDC Mukand and Bhartiya are bigger manufacturers having capacity to manufacture larger quantities
On 25 1091 a limited tender notice for procurement of 19000 cast steel bogies was issued to the regular suppliers as well as the above two new entrants for the year namely from 141992 to 31393
The last date for submission of offers to the Ministry of Railways was 271191 by 230 PM and the tenders were to be opened on the same day at 3 PM
It was also stated therein that the price was subject to the price variation clause and the base date for the purpose of escalation was 1991 and that the Railway reserved the right to order additional quantity upto 30 of the ordered quantity during the currency of the contract on the same price and terms and conditions with suitable extensions in delivery period
The offers were to remain open for a period of 90 days
On that day the tenders were opened in the presence of all parties
The price quoted by the three manufacturers 117 ie Ms HDC Mukand and Bharatiya was an identical price of Rs 77666 per bogie while other tenderers quoted between 83000 and 84500 per bogie
After the tenders were opened and before the same could be finalised the Government of India announced two major concessions namely reduction
of custom duty on the import of steel scrap and dispensation of freight equalisation fund for steel
The tenders were put up and and placed before the Tender Committee of the Railways which considered all the aspects
The committee concluded that three of the tenderers namely Ms HDC Mukand and Bharatiya who had quoted identical rates without any cushion for escalation between 1791 and 1991 have apparently formed acartel
The Tender committee also noted that the rates quoted by them were the lowest
Taking into consideration the reduction of Rs 1500 as a result of the concessions in respect of the reduction of custody duty on the import of steel scrap and dispensation of the freight equalisation fund for steel the Tender Committee concluded that the reasonable rate would be Rs76000per bogie
On the question of distribution of quantities to the various manufacturers the Tender committee decided to follow the existing procedure
The Tender Committee
signed these recommendations on 4292 but on the same day the Member Mechanical of the Committee received letters from Ms HDC and Mukand
Ms HDC in its letter stated that in view of the concessions and also on the basis that per kg
rate of casting per bogie could be reduced from Rs3750 to Rs29 the cost of casting can also be reduced and therefore they would be in a position to supply the bogies at a lesser rate in case a negotiation meeting is called
Ms Mukand in its letter also offered to substantially reduce the prices and they would like to co operate with the Railways and the Government and bring down the prices as low as possible and asked for negotiations
Though this was post tender correspondence the Department felt that the offers made by Ms HDC and Mukand could be considered
The whole matter was examined by the Advisor Finance in the first instance and by an elaborate note he observed that the need for encouraging open competition to improve quality and bring down costs has been recommended by the Government and if it is intended to continue the existing policy of fixing a rate and distributing the order among all the manufacturers then negotiations may not be useful as uniform prices offered to all manufacturers have to be sufficient even for the smaller and less economical units and that as any review of the 118 existing policy would take time the present tender can be decided on the basis of the existing policy
With this noting the file was immediately sent to the Member  Mechanical the nest higher authority
He with some observation however recommended the acceptance of the Tender Committee s recommendations
The file was then put up to Financial Commissioner He noted that the Tender Committee was convinced that the three manufacturers who quoted identical price of Rs 77666 had formed a cartel
He also considered the offers made by Ms HDC and Mukand and observed that these three manufacturers who quoted a cartel price intended to get a larger order on the basis of such negotiated price which would eventually nullify the competition from the other manufacturers and lead to their industrial sickness and subsequently to monopolistic price situation
lie however approved the Tender committee s recommendations that a counter offer of Rs 76000 may be accepted but in the case of Ms HDC a price lower by Rs 1 1000 may be offered as per their letter dated 4292
lie also recommended that the two manufacturers Ms Cimmco and Texaco may the given orders to the extent of their capacity or quantity offered by them whichever is lower in view of the fact that they are wagon builders and the present formula regarding the distribution of quantities may he applied to all manufacturers except the three who have formed a cartel
He also recommended some recoveries from these three manufacturers who are alleged to have formed a cartel on the basis of their letters wherein they have quoted prices which were much less than the updated price as on 1991 of Rs 79305
He also made certain other recommendations and finally concluded that the post tender letters may be ignored and that for short term gains the Department can not sacrifice long term healthy competition
After these recommendations of the Financial commissioner the file was put up to the approving authority ie the Minister for Railways who in general agreed with the recommendations of the Financial Advisor
He also noted that these three manufacturers have formed a cartel
He also noted that subsequent to the Financial commissioner s note besides Ms HDC and Mukand has also offered to reduce the price by 10 or more vide their letter dated 19292 if called for negotiations
Taking these circumstances into consideration the Minister ordered that all these three firms may be offered a price lower by Rs 1 1000 with reference to the counter offer recommended by the Tender committee and the quantities also be suitably adjusted so that the cartel is broken
The Minister also noted that as a result of this a saving of about Rs 11 119 crores would be effected
In his note the Minister also ordered redistribution of the quantities
Heal so ordered that3O options should straightaway be exercised
After the approving authority took these decisionsthe file went to he Chairman Railway Board for implementing the decisions
The noted that action will be taken as decided by the Minister but added that action will be taken as decided by the Minister but added that it results in dual pricing namely one to the three manufacturers and the higher one to the others and therefore the Minister may consider whether they could counter offer the lower price to all the manufacturers as that would result in saving much more
The file was then again sent to and was considered by the financial Commissioner who noticed this endorsement made by the Chairman Railway Board
He however noted that so far all the other firms are concerned it is Rs3305 less than the present contract price but it would not be equitable to offer the lower price put forward by the three manufacturers as it would make the other units enviable and that incidentally the price of  Rs 76000 now proposed to be counteroffered to the other firms is also in line with the recommendation of the Tender committee
The however noted that some of the units were sick units and owe a lot of money to the nationalised banks and it would therefore be in the national interest to accept dual pricing
Therefore the file was again put up to the approving authority who agreed with the recommendations of the Financial Commissioner and the render Committee and directed that the same may be implemented
In view of this final decision taken by the approving authority a telegram was issued to the three manufacturers giving them a counter offer of Rs 65 000 per bogie
The counter offer was also made to the other nine manufacturers at the rate of Rs 76000per bogie namely the price worked out by the Tender committee
Soon after the receipt of this telegram dated 18392 Ms HDC and Mukand filed writ petitions in the Delhi High Court challenging the so called discriminatory counteroffer
Ms Bhartiya also filed a similar petition in Calcutta High Court but the same was withdrawn but another writ petition was filed later in the Delhi High Court
In the writ petitions filed by Ms HDC and Mukand the High Courts stayed the operation of the telegram dated 18392 and issued notice to the Union of India and to the Executive Director and Director of the Railways Stores who figured as respondents in those writ petitions
Ms HDC and Mukand also wrote to the Minister of Railways in reply to the telegram that they were not prepared to accept the counter offer at the rate of Rs65000 and 120 instead they offered to supply the bogies at the rate of Rs 67000 per bogie
The Railways accepted this offer and intimated Ms HDC and Mukand accordingly
The High Court in an interlocutory stage pending the writ petitions passed an order on 2492 directing the Ministry to accept the allocation of bogies recommended by the Tender committee and to pay a price at the rate of Rs 67000 only per bogie and that would be subject to the final decision of the writ petitions
Being aggrieved by this order the Railways filed a petition for special leave to appeal No 551292 and this court while refusing to interfere at that interlocutory stage made the following observations on 28492 However we may observe and so direct that during the pendency of the writ petition if any of the suppliers in terms of the package of distribution indicated by the High Court including the petitioners in the High Court in the writ petition seek an on account payment representing the difference between the sum of Rs 67000 indicated as price by the High Court and the sun of Rs 76000 contemplated by the Railways the order of the High Court shall not prohibit the Government making such on account payment to such suppliers on each wagon on the condition that the said on account payment of Rs 9000 per bogie should be covered by a bank guarantee for its prompt repayment together with interest at 20 per anum in the event the on account payment cannot be observed in the price structure that may ultimately come to be determined pursuant to the final decision in the writ petitions
The special leave petitions are disposed of accordingly
 Thereafter the High Court took up the writ petitions for final hearing and by the impugned judgment allowed the writ petitions filed by Ms HDC and Mukand and directed that all the suppliers should make the supplies at the rate of Rs 67000 per bogie and also set aside the quantity allocation and directed that the same should be considered 121 afresh on a reasonable basis and pending such fresh consideration future supplies should he made on the basis of the recommendations ofthe Tender Committee
In the course of the judgment the High Court also made certain observation to the effect that the decision of the approving authority is arbitrary and that this Government has no justification to offer a higher price than the market price to any supplier to rehabilitate it
It was further observed that the stand of the Railways that those three manufacturers formed a cartel is based on extraneous considerations
The learned judges of the High Court also observed that they failed to understand as to why the Railways authorities could not initiate negotiations with those manufacturers who had offered to reduce their offer which could result in saving crores of rupees to the Railways
Aggrieved by this judgment of the High Court the Union of India filed SLP civil Nos 1 1897 9892
Before the High Court in the two writ petitions filed by Ms HDC and Mukand the other manufacturers figured is respondents Nos 4 to 12 and Ms Bharatiya otherwise Known as Besco figured as respondent No 13
The other SLPs are filed by those nine manufacturers
Ms Bharatiya respondent No 13 has not questioned the judgment of the High Court
As mentioned above Ms Bharatiya filed a separate writ petition No 1753 92 in the Delhi High Court after withdrawing an earlier writ petition filed in the Calcutta High Court
The same also was disposed of in terms of the judgment in the other two writ petitions Nos 1 152 and 115792
But they have not questioned the same
Consequently Ms Bhartiya figures as a respondent before us in the SLP filed by the Union of India
Before we proceed further
we would like to briefly indicate the main submissions made on behalf of all the parties to the extent relevant and important for arriving at the necessary conclusions
Learned counsel have advanced arguments on several other aspects which are incidental
We propose to deal with them and give our findings in our detailed judgment at a later stage
Mr Kapil Sibal learned counsel appearing for the Union of India submitted that the three big manufacturers ie Ms HDC Mukand and Bhartiya formed a cartel and the same is evident from the fact that each one of them quoted an identical price which is a cartel price and that the Government in the matters of economic policy for good and sufficient reasons and in the public interest can reject the lowest offer with a view not to allow any monopoly and to encourage competition among the recognised manufacturers and that the dual pricing adopted 122 by the Railways under the circumstances is not discriminatory
In this context it is also submitted that the Railways had rightly taken into account the two concessions and found that the price at the rate of Rs 67000 per bogie was not reasonable and workable and it was only a cartel price and that Rs 76000 was the reasonable price and on that basis made acounter offer to other manufacturers except to these three big manufacturers
The Railways had no option except to accept the offer of Rs 67000 by the three big manufacturers as they took firm stand that the price is reasonable and that they would be able to supply on that rate and thereby a binding contract came into force so far these three manufacturers are concerned
Regarding the allocation of quantities the Railways have taken into consideration all the relevant factors namely that three of the nine manufacturers were BIER companies and the two others are also wagon builders having their entire business with Railways only and on that rational basis the quantities were allotted
It is also his submission that since the three big manufacture originally offered a cartel price and ill of them later apparently offered Rs 67000  in unworkable price the Railways felt that they attempted to destroy the competition
Therefore they were not given larger share
Learned counsel relied on several authorities particularly touching the scope and ambit of Article 14 and the power of the court under Article 226 of the constitution of India
Mr Sibal also strongly contended that the High Court grossly erred in making certain observations against the Railways namely that the stand of the Railways that those three manufacturers formed a cartel is based on extraneous considerations and somewhat similar observations in respect of the decision or the Railways on the question of price fixation
The other counsel appearing for the nine smaller manufacturers in general supported these submissions and also highlighted certain aspects in their individual cases
Shri KK Venugopal
learned counsel appearing for the respondent namely Ms HDC submitted that the award of the contract for supply of bogies was vitiated by malafides and that disproportionate allotment of quota of bogeis and dual pricing were based on malafides and extraneous considerations violating Article 14 of the Constitution
tie further submitted that the reasons put forward on behalf of the Railways are disingenuous and bereft of rationale
The supported the finding of the High Court that the price should he fixed at Rs 67000 123 for every manufacturer
Shri Nariman learned counsel appearing for Ms Mukand another respondent submitted that the dual set of counter offers and allocation of disproportionate quantites are highly arbitrary and that the practice and policy of the past 10 years of placing orders on all manufacturers in respect of the quantities worked out on the basis of standard quantity formula at a uniform price gave rise to legitimate expectations among all bogie manufacturers and irrational departure from the existing policy is arbitrary and unreasonable
He further submitted that the making of law tender offers can not by itself be visited with punty consequences like dual pricing and reducing the allotment of legitimate quantities
Shri Shanti Bhaushan learned counsel appearing for Ms Bhartiya submitted that the Tender Committee erred in treating Ms Bhartiya also as a member of the cartel and that the allotment of quantities has been arbitrarily reduced
He however made one special submission namely that Ms Bhartiya never made an offer of Rs 67000 and there is nothing in writing to that effect and that merely because of the statement of the counsel during the proceedings before the High Court it should not be understood that they are willing to supply at the rate of Rs 67000 and that they should not be treated by treated differently from the other nine manufacturers
Taking all the aspects into consideration and for the purpose of giving our conclusions it may broadly be stated that Ms HDC and Mukand gave post tender offers at a low pride with the hope that they would get a larger quantity allotted
Ms Bhartiya also fell in line with them though did not specifically put it in writing
But during the course of the hearing of the writ proceedings it was represented on behalf of Ms Bharatiya that they would be willing to supply at Rs 67000 if the court fixes that price
This is noted by the High Court in its judgment
The Railways authorities however concluded that in the beginning itself these three have formed a cartel and the price quoted by them was only a cartel price
The note by the Financial Commissioner is somewhat elaborate on this aspect and the Minister for Railways the competent authority agreed with him and also directed that the quantities be suitably adjusted so that the cartel is broken
He also took into consideration the fact that some of the smaller units are sick and 124 therefore they should be given a larger quantity to enable them to rehabilitate
The other recommendations of the authorities were also accepted
However in giving any directions we must bear in mind that the contract period is going to end shortly and till now all the manufacturers have been manufacturing and supplying pursuant to the interim orders
We may indicate at this stage that we shall discuss all these aspects later in detail in our judgment
After due and careful consideration of all the aspects our conclusions are as follows 1 There is no enough material to conclude that Ms HDC Mukand and Bhartiya formed a cartel
Because of mere quoting identical tender offers by the said three manufacturers for which there is some basis the conclusion that the said manufacturers had formed a cartel does not appear to be correct
However since the offers of the said three tenders were identical and the price was somewhat lower the Tender Committee entertained a suspicion that a cartel had been formed and the same got further strengthened by the post tender attitude of the said manufacturers which further resulted in entertaining the same suspicion by the other authorities in the hierarchy of the decision making body including the Minister of Railways
Though there is no enough of material to establish formation of a cartel as is understood in the legal parlance but at the same time it cannot be contended that such an opinion entertained by the concerned authorities including the Minister was perse malicious or was actuated by any extraneous considerations
After a careful examination of the entire record and facts and circumstances of the case we are of view that all the Railway authorities including the Minister acted in a bonafide manner in taking the stand that the three manufactures formed a cartel
2 The current contract price based on the updated price is Rs 79305 The three manufacturers offered at Rs 776000 Faking into consideration the later concessions the Tender Committee decided that the price of Rs 76000 is reasonable
In the post tender correspondence Ms HDC and Mukand offered to supply at a price of Rs 67000 per bogie but no particulars as to how it would be reasonable were given
However they have come forward before us with some particulars
Ms Bhartiya did not gave any such offering writing but fell in line with them and did not choose to question the order of the High court fixing the price at Rs 67000 The Railways were of the view that 125 it is an unreasonable price an smaller manufacturers cannot supply at that price and consequently they will get extinguished resulting in a monopoly by the big manufacturers
The High court has directed that supply should be at Rs 67000 by everyone
Taking into consideration all these aspects we are of the view that the fixation of price at Rs 67000 per bogie straightaway without necessary and proper consideration and appraisal regarding the viability and other aspects by some experts is not just and fair from many points of view
A fresh consideration is called for particularly from the point of view of safeguarding the interests of the public exchequer and giving_ necessary protection to the smaller manufacturers
Consequently we set aside this direction of the High Court and direct the Tender Committee to reconsider the question of fixation of reasonable price
The Tender committee shall consider the offer of Rs 67000 made by Ms HDC and Mukand along with the data that would be given by them in support of that and the percentage of profits available to all the 3 manufacturers and other relevant aspects and then fix a reasonable price
at which the manufacturer would be able to supply
The Tender Committee shall within two weeks from today complete the process
3 At a belated post tender stage Railways authorities did not deem it fit to reconsider the question of fixation of price in the light of the post tender offers made by Ms HDC and Mukand as by then they were of the opinion that the three big manufacturers have formed a cartel and quoted a cartel price
The stand by the Railways to adopt dual pricing under these circumstances is bonafide and not malafide
However
dual pricing on principle may not appear to be rational since the railways have been following certain formula in fixing the price which is made applicable to all the manufacturers But under certain circumstances dual pricing may be reasonable
In the instant case M s HDC and Mukand came forward with firm offer of a price at Rs 67000 per bogie
Ms Bharatiya also got committed to supply at the same price
All the three of them did not even challenge the order of the High Court
These three big manufacturers just be deemed to be in a position to supply at the rate of Rs 67000 and thus they form a distinct category
The smaller manufacturers belong to a different category and if a different price is fixed for them it is not discriminatory
126 4 If the price that is to be fixed by the Tender Committee as directed by us happens to be more than Rs 67000 then that would be applicable to the smaller manufacturers only and not to Ms HDC Mukand and Bhartiya who on their own commitment have to supply at the rate of Rs 67000
5 The price thus fixed by the Tender committee which applies only to the smaller manufacturers shall he deemed to be final and the respective contracts shall be deemed to be concluded so for the price is concerned
6 Now coming to the allotment of quota of bogies the Tender Committee made recommendations on the basis of the existing practice
The Minister of Railways in his ultimate decision has made some variations taking into consideration tile recommendations of the Financial commissioner and other authorities
The has however not accepted these recommendations fully
In making these variations the Minister accepting ultimately reduced the allotment of quota to the said three tenderers substantially by way of reprisal
In view of our finding that the formation of an opinion that cartel was formed had no firm factual foundation such a reduction of quota by way of reprisal can not be justified
we are however not inclined to accept the contention made on behalf of Ms HDC Mukand and Bhartiya that no departure from the recommendations of the Tender committee is permissible in the absence of any established policy which was also known by the tenderers
From the records it appears that in the past also there have been such variations
In our view the Minister of Railways as the final authority
after considering various relevant factors may he justified in taking a particular decision in the matter of allotment of quota but such decision must be taken on objective basis
But in this case
it appears to us that all the smaller manufacturers deserving a favourable treatment in the matter of allotment of quota have not been equally treated in the sense that one or two of them got larger quantities
Though this does not appear to be a serious departure yet in these matters the Govt
is expected to be just and fair to one and all
We hope that in future the authorities would make a proper consideration of the relevant factors in respect of each tenderer in an objective manner in allotting the quantities
127 7 In view of the interim orders during the pendency of writ petitions before the High Court and until now all the manufacturers have been supplying as per the allotments by the Tender Committee
The High Court in its judgment finally directed the Railways to reconsider the allocation on reasonable basis
It is submitted on behalf of the smaller manufacturers that they have made necessary manufac turing arrangements on the basis of the final allotment
On behalf of the Ms HDC Mukand and Bhartiya it is submitted that their legitimate quotas also are cut short and that they are entitled to larger quantities in view of the low price offered by them
Having considered the contentions made by all the manufacturers direct that the there manufacturers Ms HDC Mukand and Bhartiya should be allocated the quantities as per the recommendations of the Tender committee
We however
do not want to disturb at this stage the quantities finally allotted by the competent authority to the small manufacturers as that would cause great hardship to them
We leave it to the Railway authorities to make necessary adjustments next year in the matter of allocation of quantities to them taking into consideration these allotments given to them this year
To that extent we modify the order of the High Court
8 It will he open the Railways to exercise 30 option if not already exercised
9 Taking all the circumstances and the time factor into consideration the time to complete the supply is extended upto 3131993
Accordingly these Special Leave petitions are disposed of
There will he no order as to costs
V P R SL Ps disposed of


Summary:
The Orissa Public Service Commission through an advertisement dated 81064 Invited applications for admission of candidates to a competitive examination for selection to the posts of Orissa Forest Service Class II Service
The 18 selected candidates were sent for training at the Indian Forest College during the year 1965 67
One of the candidates who successfully completed the training was appointed to Class 11 Service
He filed a writ petition in the High Court as he was assigned in the list of gradation a rank junior to the promotees who were confirmed by Service Commission after his recruitment The High Court held that the recruitment to class II Service was complete only after successful completion of two years  training in the Forest College
The appeals by special leave flied against the High Courts 242 Judgment were dismissed by this Court
In 1979 the respondent No 1 in all the present appeals was directly recruited to the Orissa State Forest Service Class II by the State Commission
He was appointed as an Assistant Conservator of Forests after his completion of training for two years at the Forest Service College
Respondent No 1 moved the Administrative Tribunal challenging the seniority of the Forest Rangers who were members of the Orissa Subordinate Forest Service and were promoted as Assistant Conservators of Forests when the respondent was undergoing his training
Respondent contended before the Tribunal that the seniority of direct recruits vis a vis the promotees required to be decided on the basis of the Orissa Forest Service Class II Recruitment Rules 1959 that his services should be reckoned from the date of recruitment Itself and not from the date of actual appointment that the exclusion of the period of two years  training from the purposes of reckoning the seniority was illegal and that the appointment of the promotees in excess of the quota prescribed by the Rules and in the absence of any specific order of Government providing otherwise was illegal
Allowing the petition the Tribunal held that the respondent No1 in the present appeals was entitled to be treated as a direct recruit of 1979 and he be confirmed and promoted on being direct recruit of 1979 and his seniority to be fixed on the basis of being a direct recruit of 1979 within the 23rd quota for direct recruits
The present appeals by special leave were preferred by the aggrieved parties against the judgment of the Tribunal
The appellant in SLP C No 1604 of 1992 submitted that the respondent No1 was selected for undergoing superior Forest Service Course at the Forest Service College in 1979 that having regard to the terminology of the order which stated he was selected it could not be held that he could lay a claim to the post that the Tribunal had gone wrong in its interpretation of the rules that having held that both the direct recruits as well as the promotees were to undergo probation for a period of two years the period of training for the direct recruit could not count as service that the ratio of 23rd and 13rd between direct recruits 243 and promotees did not apply if the Government provided otherwise that the Civil List corrected upto 1982 was published in 1985 and that the judgment of the Tribunal resulted in unsettling the settled matters hence same to be reversed
The State adopted the arguments of the appellant in SLP C No 160492
The respondent No1 submitted that recruitment was different from appointment that when an officer was recruited to Class 11 Service if did not mean that only from the date of appointment his seniority was to be reckoned that the argument that the period of training to be excluded merely because both the direct recruits as well as the promotees undergo probation was untenable that when rules specifically prescribed the quota as 23rd and 13rd the Government could not wriggle out of the situation that a saving provision was made which was factually not so in this case that the point relating to laches which was never argued before the Tribunal could not be raised before the Court
Allowing the appeals this court HELD 101
The term recruitment connotes and clearly signifies enlistment acceptance selection or approval for appointment Certainly this Is not actual appointment or posting in service
In contradistinction the word appointment  means an actual act of posting a person to a particular office
253E 102
Recruitment is just an initial process Mat may lead to eventual appointment in service
But that cannot tantamount to an appointment
No doubt Rule 5 talks of recruitment to Class 11 Service
253E 103
Nowhere in the Recruitment Rules of 1959 it is specified that the services of a direct recruit under the Government shall be reckoned from the date of selection in the competitive examination
On the contrary Regulation 12c is very clear that the period of training is not to be reckoned as Government service
253F 104
Under Regulation 12 the finally selected candidates are required to undergo two years training
During the period of pendency  consolidated monthly allowance of Rs 150 as stipend is paid
Under clause b of that Regulation he is required to execute a bond provided for 244 in Appendix A Regulation 12 c in unmistakable terms says the period of training will not count as service under Government
Such service will count only from the date of appointment to the service after successful completion of the course of training
253B C 105
After the successful completion of training when the appointment order Is issued the direct recruits are put on probation
Similar Is in the case of the promotees
Both of them undergo probation
253G 106
The seniority of direct recruits will have to be reckoned only from the date of appointment and not from the date of recruitment
253G 201
The Government had clearly taken a decision to increase the number of posts to be filled up by promotion in excess of the 13rd of total posts in the cadre on administrative grounds connected with nationalisation of Kendu Leaf Trade in 1972 73 in the interest of public due to non availability of direct candidates trained In the Indian Forest College Dehradun
256G 202
It is not correct to say that Government have decided that the quota of direct recruitment which will be encroached upon by the promotees will be released as and when direct recruits are available
256H 203
Hence to contend that the promotees would obviously have to yield to direct recruits who came in subsequently within their quota and would consequently also not be eligible for seniority above direct recruits is untenable
257D 204 Me promotions given in excess of 13rd quota are valid
There is no justification to push down the promotees in seniority
The promotion in excess of the prescribed quota was necessitated by the exigencies and in the intersest of the public
It is supported by a conscious decision of the Government which is permissible under Rule 53
258D Keshav Chandra Joshi and Ors
vs Union of India 1990 Supp 2 SCR 573 at page 586 distinguished
Direct Recruit Class II Engineering Officers Association and Ors
vs State of Maharashtra and Ors
  at page 938 SLP C No 1624 of 1988 Disposed of on 180189 CA
2051 52 of 1974 Disposed of on 7188 referred to
245 301
By the operation of deeming clause it only enables appointments made under 1959 Rules to be continued under 1984 Rules
Certainly by the repeal of 1959 Rules It cannot mean all those appointments cease
Nor again the substantive provision of Rule 16 would govern
Therefore Rule 24 has no application
256A B 302
Since the appointments in question have been made under 1959 Rules 1984 Rules will be inapplicable
The 1984 Rules came into force only when they were published in the Official Gazette on December 21 1984
Explanation under Rule 16 is a substantive provision
Therefore it cannot be retrospective
As regards Rule 24 the proviso clearly states that the Rules cannot be construed as affecting on invalidating the appointments already made
Therefore if any right has been acquired or any privilege had accrued that would remain unaltered
Therefore these appointments which are governed by the 1959 Rules will continue not withstanding the repeal
254H 255A B 303
Since the appointments in question are regulated under Orissa Forest Service Class 11 Recruitment Rules the Indian Forest Service Appointment by Promotion Regulations of 1966 have no application
The Orissa Rules were framed under proviso to Article 309 of the Constitution of India and have statutory and binding force
258F GP Singh Principles of Statutory Interpretation Fourth Edition 1988 at page 208 referred to
There have been laches on the part of the direct recruits in seeking the remedy
When the list was published in 1985 nothing prevented them to approach earlier
This is the point to be put against them
258G 402
The gradation list has been in operation over several years
There is no reason to unsettle the settled position
256E Direct Recruit Class II Engineering Officers  Association vs State of Maharashtra and others   referred to