Civil Appeal No4094 of 1984
From the Judgment and order dated 971984 of the Punjab  Haryana High Court in Civil Writ Petition No5371 of 1981
PP Rao Sr
and Janendra lal for the appellants
SC Gupta Rajinder Sachhar Sudarshan Goyal Vivek Bhandari SCPatel mahabir Singh and CM Nayar NP for the Respondents
The Judgment of the Court was delivered by KRAMASWAMY J
The appellants and the proforma respondents thirty in number are employed in the Punjab Service of Engineers Class II
The Governor in exercise of the power under proviso to article 309 of the Constitution of India framed the Punjab Service of Engineers Class I PWD Road and Buildings Rules
1960 for short the Rules constituting the Punjab Service of 204 Engineers Class I PWD Roads and Buildings Branch After the formation of State of Haryana wef
November 1 1966 the rules are called Haryana Service of Engineers Class I PWD Roads and Buildings Branch
The services consist of Asstt
Executive Engineers Executive Engineers Superintending Engineers and Chief Engineers as may be specified by the Government of Haryana from time to time Rule 31
The recruitment to the service is made by the government as per Rule 51 a by direct recruitment b by transfer from any other services of the State Govt
or of the Union of India and c by promotion from Haryana Engineers Class II Service
The appellants for short the promotees from Class II Service were promoted as Executive Engineers by relaxing five years length of service as Class II Engineers in officiating capacity on various dates between January 6 1969 to May 29 1971 There of them namely AN Sehgal Raj Kumar and HC Sethi were confirmed as Executive Engineers wef July 11 1973 December 11 1974 and December 9 1975 respectively
The rest are yet to be confirmed
Raje Ram Sheoran was recruited and appointed directly as Asstt
Executive Engineer wef October 25 1971
He too was given relaxation of the length of service of five years as Asstt
Executive Engineer and was promoted as Executive Engineer on October 8 1973
He was confirmed wef December 22 1976
All the appellants except MR Gupta were further promoted as Superintending Engineers on different dates between 1980 to 1984 and Mr Sheoran was promoted as Superintending Engineer on March 4 1987 AN Sehgal was further promoted as Chief Engineer Equally Mr Sheoran was also promoted as Chief Engineer but the validity was challenged and it is not necessary to refer any further as it is subject matter of proceedings in the High Court
RR Sheoran who was shown junior to the appellants field Writ Petition No 537181 and sought a writ of mandamus directing the second respondent State Government to consider his case for promotion as Superintending Engineer from the date on which the respondents were promoted to quash the gradation list to assign the seniority over the appellants and the consequential reliefs
On reference a Division Bench of the High Court by its judgement dated July 9 1984 agreed with the ratio laid down in MS Mighlani vs State of haryana  Anr 1983 1 SLR 421 and held that RR Sheoran was a member of the service from the date of his initial appointment as Asstt
Executive Engineer and the appellants and the proforma respondents are not members of the service and directed the learned Single Judge to dispose of th matter on merit
This appeal on leave arises against the judgement of the Division Bench
205 The controversy centres round the inter se seniority of the appellants and RR Sheoran
For its determination the Rules need interpretation
The counsel for parties agreed that we should decide the principles on consideration of the Rules and leave the matter for the State Govt
to determine the inter se seniority by applying the law so for as the controversy relating to relaxation of the length of service is concerned it is set at rest by this Court in JC Yadav vs State of Haryana and KK Khosla V State of Haryana 1990 2 SCC 199 by a bench of three Judges to which one of us KN Singh J was a member
The only question which survives is as to when the appellants  and RR sheoran  become members of the respective services
Shri PPRao learned Senior Counsel for the appellants contends that the appellants were promoted as Executive Engineers against regular vacancies which were neither a stop gap arrangement nor fortuitous and they continued in service without any break from the respective dates of their promotion therefore they are members of the service in a substantive capacity as Executive Engineers from the respective dates of promotion
He further argued that since Raje Ram Sheoran was recruited as Asstt
Executive Engineer wef August 30 1971 along after the promotion of the appellants upto BL Goyal the appellants are senior to RR Sheoran as Executive Engineers
Proviso to Rule 52 entitles them to remain in a substantive capacity as Executive Engineers since requisite number of qualified Asstt
Executive Engineers were not available for promotion
In view of their continous officiation as Executive Engineers in terms of Rule 212a of the rules they must be deemed to be the members of the service from the dates of promotion and therefore they are seniors to RRSheoran 
Ms Sachhar learned counsel for the State and Gupta for RR Sheoran on the other hand contended that unless the appellants were appointed substantively to the cadre posts they could not be members of the service
RR Sheoran became member of the service from the date of his initial appointment as Asstt
Executive Engineer therefore he is senior to the appellants and proforma respondents and the High Court rightly interpreted rule 52
Since the High Court did not enter into the merits of the respective claims of the appellants and Sheoran we express no opinion on merits except as agreed by the parties we declare the law on the interpretation of the rules and leave it to the State Govt
to decide the inter se seniority on merits
It is necessary to have a look into the Rules regulating the 206 service
Rule 31 postulates that the service shall comprise of Assistant Executive Engineers Executive Engineers Superintending Engineers and Chief Engineers
Rule 32 read with appendix A  enjoins the State of Haryana to determine the cadre strength of service each year
Appendix A  lays down procedure to determine the cadre strength of service
The senior posts include Executive Engineers and above while junior scale posts include Asst
Executive Engineers 
Ex cadre posts also are contemplated in the respective senior posts and junior scale posts
Rule 51a posits recruitment to the service a by direct recruitment b by transfer and c by promotion from Class II service
Sub rule 4 of Rule 5 says that all direct appointments to the service shall be to the post of Asstt
Executive Engineer
Proviso therein gives power to the government to appoint by direct recruitment as Executive Engineers in exceptional circumstances for reasons to be recorded in writing
Rules 6 and 7 prescribe qualifications and method of appointment by direct recruitment 
Subrule 3 of Rule 7 states that appointment to the service shall be made according to the number of vacancies to be filled by direct recruitment strictly in the order of merit as indicated by the Public Service Commission
As per Rule 111 and direct recruit shall remain on probation for a period of two years or extended period upto maximum of three years
On satisfactory completion of probation the government may confirm under clause a of sub rule 3 of Rule 11 or to discharge him from service otherwise
The post of Asstt
Executive Engineer is a junior scale post
Under rule 123 they year of allotment of an Asstt
Executive Engineer shall be the calendar year in which the order of appointment is issued by the government
Rule 21 defines appointment to the service which includes an appointment made according to the terms and provisions of the rules to an officiating vacancy or to an ex cadre post provided that an officer so appointed shall not be deemed to have become a member of the service as defined in Clause 12 of Rule 2
The Asstt
Executive Engineer means a member of the service in the junior scale of pay Rule 22
Cadre post means permanent post in the service as per Rule 23
Class II Service  means the Punjab Service of Engineers Class II in the Buildings and Roads Branch and includes for purposes of promotion to and fixation of seniority in the Class I Service Temporary Asstt
engineers when a suitable Class II Officer is not available vide Rule 25
Direct appointment means an appointment by open competition but does not include a an appointment made by promotion b an appointment by transfer of an officer from the service of the State Government or of the Union Rule 27
Ex cadre 207 post means a temporary post of the same rank as a cadre post vide Rule 210
A member of the service means an officer appointed sub stantively to a cadre post and includes a in the case of a direct appointment an officer on probation or such an officer who having successfully completed his probation awaits appointment to a cadre post vide Rule 212a
A reading of the rules clearly indicates that an Asstt
Executive Engineer appointment by open competition to a substantive vacancy in a cadre post and put on probation is a member of the service
Equally such Asstt
Executive Engineer recruited by open competition and appointment to an ex cadre post and put on probation and who having successfully completed his probation and awaits appointment to a cadre post would also become a member of the service
The contention of Shri PPRao is that an officer appointed substantively to a cadre post is a direct recruit and the inclusive definition encompasses within its ambit the promotee and the phase such an officer who having successfully completed his probation and awaits appointment to the cadre post   is only referable to a promotee
So promotee is also a member of the service from the date of initial promotion
We may make it clear at this juncture that in normal service jurisprudence a direct recruit would always be recruited and appointed to a substantive vacancy and from the date he starts discharging the duty attached to the post he is a member of the service subject to his successfully completing the probation and declaration thereof at a later date and his appointment relates back to the date of initial appointment subject to his being discharge from service on failure to complete the probation within or extended period or termination of the service according to rules
Equally it is settle law that a promotee would have initial officiating promotion to a temporary vacancy or substantive vacancy and on successful completion and declaration of the probation unless reverted to lower posts he awaits appointment to a substantive vacancy
Only on appointment to a substantive vacancy he become a member of the service
But confirmation and appointment to a substantive vacancy always an inglorious uncertainty and would take unduly long time
Therefore the confirmation or appointment to a substantive capacity would not normally be a condition precedent to reckon the continuous length of service for the purpose of seniority
On the facts of the case and the settled legal position at first blush the argument of Shri PPRao carried weight that the appellants would get their seniority from the respective dates of the initial promotion as Executive Engineers
But we find that in the instant case the rules have made departure from the normal service jurisprudence as would 208 appear from the scheme under the rules
Para 11b of appendix A  read with Rule 32 while determining the cadre strength of the service adumbrates creation and appointment of Asstt
Executive Engineers direct recruit to an ex cadre junior scale post in each year
Therefore in a given situation a direct recruit appointed to an ex cadre post cannot be kept in lurch until he is appointed to a cadre post so as to become a member of the service
Obviously to avoid such a hiatus Rule 212a was introduced
The main part o Rule 212a declares that an appointee substantively to a cadre post ie permanent post is a member of the service
The inclusive definition brings an officer by direct appointment on probation  who having successfully completed probation and awaits appointment to a cadre post is also a member of the service
Take for instance if direct recruitment is made to fill in five posts of Asstt
Executive Engineers of which four are cadre posts and one ex cadre post and four persons are appointed to cadre posts in the order of merit and the last one to the ex cadre post
The first four officers appointed on probation to the substantive vacancies and they are covered by the main part of Rule 212a
The fifth one intended to cover the field of operation of the inclusive definition which says that and also includes an officer directly appointed on probation  and such an officer who having successfully completed his probation awaits appointment to a cadre post 
The words and such an officer  directly appointed  would obviously referable to an Asstt
Executive Engineer directly appointed to an ex cadre post who may be placed on probation and awaits appointment to a cadre post
By operation of the definition clause he also becomes the member of the service from the date of initial appointment
This view is further fortified by the definition the appointment to the service  in Rule 21 which says that appointment to the service includes an appointment made according to the terms and provisions of these rules to an officiating vacancy or to an ex cadre post
Rule 27 says that direct appointment means appointment by open competition but excludes promotee  or transferee 
So a promotee promoted to an officiating vacancy or on ex cadre post does not become member of the service unless he is appointed substantively to a cadre post
We therefore hold that a direct recruit appointed to an ex cadre post alone is a member of the service even while on probation and Rule 212a applies to them and it does not apply to promotee from Class II service
An Asstt
Executive Engineer on putting five years of service under rule 93a and passing the department examination as 209 required under rule 15 unless the qualifications are relaxed in exercise of the power under rule 22 of the rules becomes eligible for promotion as Executive Engineer
The State Govt
had relaxed the required length of five years service of the promotees as well as direct recruits
RRSheoran therefor became eligible to be considered for promotion
As per the procedure prescribed in this regard under rule 92 he was found fit and suitable and was promoted as an Executive Engineer wef October 8 1973
Though Ms Sachhar and Gupta contended that the direct recruit need not undergo the required probation ad Executive Engineer we find no force in the contention
The normal channel of appointment to the post of Executive Engineer a senior post is by way of promotion to which a direct recruit Asstt
Executive Engineer is entitled to be considered
On promotion he shall be on probation for a period of one year as per Rule 111a but the period spent on officiation as Executive Engineer shall be taken into account for purposes of completing the period of probation and on its successful completion he shall remain in service As Executive Engineer
On a conjoint reading of Rule 123 and 125 it is clear that the year of allotment of the Asstt
Executive engineer in the post of Executive Engineer shall be the calendar year in which th order of appointment as Asstt
Executive Engineer had been made
Thus his seniority as Executive engineer by fiction of law would relate back to his date of initial appointment as Asstt
Executive Engineer and in Juxta position to Class II officers  seniority as Executive Engineer is unalterable
The date of the seniority of Mr RRSheoran 1971
The question then is what is the date from which the seniority of a promotee as Executive Engineer shall be reckoned The contention of Shri PP Rao is that Rule 52 reserve 50 of the posts to the direct recruits but the proviso thereto makes a built in relaxation namely so long as the required number of direct recruits are not available to occupy those posts the promotees are entitled to hold those posts also
Admittedly except RR Sheoran no other direct recruit was available
The promotees are eligible to occupy all the cadre posts even in excess of their quota
The seniority has to be determined from the respective dates of initial officiating promotion
Shri Rao  further contention that the phrase such an officer appointed to an officiating post  has reference only to promotees cannot be accepted for the reasons given earlier
The officer appointed directly is referable only to Asstt
Executive Engineer and a promotee by operation of Rules 27 stands excluded until he is appointed substantively to a cadre post
210 When an officer is appointed substantively to a cadre post is the next question
It is settled law that all the rules should be harmoniously construed giving life force and effect to every part of the rule of clause or word so that no part would be rendered redundant ineffectual nugatory or otiose
Rule 51 regulates recruitment to the service from three sources namely direct recruitment by transfer and by promotion from Class II service
Sub rule 2 thereof prescribes the ratio between the promotees and others
It says that recruitment to the service shall be so regulated that the number of posts so filled by promotion from Class II service shall not exceed 50 of the number of posts in the service excluding the posts of Asstt
Executive Engineers provided that till such time the adequate number of Asstt
Executive Engineers who ar eligible and considered fit for promotion are available the actual percentage of officers promoted from Class II service may be larger than 50
A reading thereof clearly manifests the legislative animation namely that the promotees from Class II service shall not exceed 50 of the posts in the service
The word shall  indicates that it is mandatory that the remaining 50 shall be kept open only to the Asstt
Executive Engineers who were directly recruited but later were found eligible and fit for promotion as Executive Engineers
Therefore unless the government resorts exceptionally with prior permission of Public Service Commission vide Rule 10 to recruitment by transfer of an officer from other service of the State Govt
or of the Union the remaining 50 of the posts as Executive Engineers Superintending Engineers and Chief Engineers shall be occupied only by the direct recruit Asstt
Executive Engineers
It is settled law that prescription of quota for recruitment from different sources is constitutionally a valid rule
Rule 52 limits 50 posts to the promotees from Class II Service and no further but the proviso to the Rule lays down that till adequate number of Asstt
Executive Engineers are available the rigour of 50 quota may be relaxed and Class II officers may be promoted in excess of their quota
What is the intendment of the class the actual percentage of officers promoted from Class II service may be larger than 50 is the question
The mandate of Rule 52 is that the officers promoted from Class II service shall in no case exceed 50 of the number of posts in the service
Unless it is relaxed the appointment and occupation of the posts by promotee in excess thereof is irregular or illegal and the government have no power to promote persons from Class II service to fill in such posts of Executive Engineers Superintending Engineers and Chief Engineers
It is common knowledge that direct recruitment as Asstt
Executive Engineers 211 or Executive Engineer in exceptional circumstances is a tardy process and even after appointment they have to put in five years service
The balance 50 of the posts cannot be kept vacant
With a view to allow the wheels of the administration moving the proviso carves out an exception and allows the promotees to occupy temporarily the posts in excess of their quota
In this view the contention of Shri Rao that the seniority as Executive Engineer is to be counted from the date of initial temporary promotion cannot be accepted as it would allow the promotees to occupy 100 posts of Executive Engineers Superintending Engineers and Chief Engineers leaving little room for Rule 52 a to operate in full force
The exception would eat away the flesh and blood of Rule 52a freezing the channel of promotion to the direct recruits to senior posts for a very long time to come
In the absence of rule of rotation there may be no chance to a direct recruits to occupy the senior posts
That does not appear to be the intendment scope and operation of the proviso
The intendment appears to be that so long as the direct recruit Asstt
Executive Engineer eligible and considered fit for promotion is not available the promotee from Class II service in excess of the quota is eligible to occupy on officiating capacity the senior posts ie Executive Engineers and above
The moment direct recruits are available they alone are entitled to occupy 50 of their quota and the promotees shall give place to the direct recruits
It is a cardinal rule of interpretation that a proviso to a particular provision of a statute only embraces the field which is covered by the main provision
It carves out an exception to the main provision to which it has been enacted by the proviso and to no other
The proper function of a proviso is to except and deal with a cause which would otherwise fall within the general language of the main enactment and its effect is to confine to that case
Where the language of the main enactment is explicit and unambiguous the proviso can have no repercussion on the interpretation of the main enactment so as to exclude from it by implication what clearly falls within its express terms
The scope of the proviso therefore is to carve out an exception to the main enactment and it excludes something which otherwise would have been within the rule
It has to operate in the same field and if the language of the main enactment is clear the proviso cannot be torn apart from the main enactment nor can it he used to nullify by implication what the enactment clearly says nor set at naught the real object of the main enactment unless the words of the proviso are such 212 that it is its necessary effect
In VB Badami etc
vs State of Mysore 1976 1SCR 815 dealing with the problem arising out of quota rule between promotees this Court observed that In working out the quota rule these principles are generally followed
First where rules prescribe quota between direct recruits and promotees confirmation or substantive appointment can only be in respect of clear vacancies in the permanent strength of the cadre
Second confirmed persons are senior to those who are officiating
Third as between persons appointed in officiating capacity seniority is to be counted on the length of continuous service
Fourth direct recruitment is possible only by competitive examination which is prescribed procedure under the rules
In promotional vacancies the promotion is either by selection or on the principle of seniority cum merit a promotion could be made in respect of a temporary post or for a specified period but a direct recruitment has generally to be made only in respect of clear permanent vacancy either existing or anticipated to arise at or about the period of probation is expected to be completed
Fifth if promotions ar made to vacancies in excess of the promotional quota the promotions may not be totally illegal but would be irregular
The promotees cannot claim any right to hold the promotional posts unless the vacancies fall within their quota
If the promotees occupy any vacancies which are within the quota of direct recruits when direct recruitment takes place the direct recruits will occupy vacancies within their quota
Promotees who were occupying the vacancies within the quota of direct recruits will either be reverted or they will be absorbed in the vacancies within their quota in the facts and circumstances of a case
With a view to have efficient and dedicated services accountable to proper implementation of Govt
policies it is open and is constitutionally permissible for the State to infuse into the services both talented fresh blood imbued with constitutional commitments enthusiasm drive and initiative by direct recruitment blended with matured wealth of experience from the subordinate services
It is permissible to constitute an integrated service of persons recruited from two or more sources namely direct recruitment promotion from subordinate 213 service or transfer from other services Promotee from subordinate generally would get few chances of promotion to higher echolans of services
Avenues and facilities for promotion to the higher services to the less privileged members of the subordinate service would inculcate in them dedication to excel their latent capabilities to man the cadre posts
Talent is not the privilege of few but equal avenues made available would explore common man s capabilities overcoming environmental adversity and open up full opportunities to develop one s capabilities to shoulder higher responsibilities without succumbing to despondence
Equally talented young menwomen of great promise would enter into service by direct recruitment when chances of promotions are attractive
The aspiration to reach higher echolans of service would thus enthuse a member to dedicate honestly and diligently to exhibit competence straightforwardness with missionary zeal exercising effective control and supervision in the implementation of the programmes
The chances of promotion would also enable a promotee to imbue involvement in the performance of the duties obviate frustration and eliminate proclivity to corrupt practices lest one would tend to become corrupt sloven and mediocre and a dead wood
In other words equal opportunity would harness the human resources to augment the efficiency of the service and under emphasis on either would upset the scales of equality germinating the seeds of degeneration
With a view to achieve this objective the rule making authority envisaged to appoint direct recruits as well as by promotion from Class II Service otherwise by transfer from other services
In interpreting the rules effect must be given to allow everyone drawn from these sources to have their due share in the service and chances of involvement of effectively discharge the duties of the posts honestly and efficiently with dedication
Any wanton or deliberate deviation in the implementation of the rules should be curbed and snubbed and the rules must be strictly implemented to achieve the above purpose
If wanton deviations are allowed to be repeated it would breed indiscipline among the service and amounts to undue favour to some and denial of equality for many for reasons known or unknown subverting the purpose of the rules
It is settled law that appointment to a post in accordance with the rules is condition precedent and no one can claim appointment to a post or promotion as of right but has a right to be considered in accordance with the rules
Appointment by promotion or direct recruitment therefore must be in accordance with the rules so as to 214 become a member of the service in a substantive capacity
Seniority is to be fixed in accordance with the principles laid down in the rules
Rule 8 prescribes procedure for appointment by promotion from Class II services
Rule 92 states that promotion would be made by selection on the basis of merit and suitability in all respect and no member of the service shall have any claim to such promotion as a matter of right by mere seniority
The committee as constituted under Rule 8 shall prepare the list of officers considered fit for promotion in the order of merit and on approval by the public Service Commission the State Govt
shall appoint the persons from the list in the order in which the names have been placed by the Commission Appointment by promotion may be made under Rule 812 to an excadre post or to any post in the cadre in an officiating capacity from the list prepared as aforesaid
On promotion as per Rule 111 officer shall be on probation for a period of one year but if the officer had been officiating as an Executive Engineer the period of officiation would be counted towards probation
Rule 114 provides the on satisfactory completion of the probationary period the Govt
confirms the officiating promotee and appoint him in a substantive capacity on a cadre post provided the post is available to him
If no cadre post is available the officer has to wait for an appointment to the cadre post
A promotee within quota under rule 52 gets his seniority from the initial date of his promotion and the year of allotment as contemplated in Rule 126 shall be the next below the junior most officer in the service whether officiating or confirmed as Executive Engineer before the former s appointment  counting the entire officiating period towards seniority unless there is break in the service or from the date of later promotion
Such promotee by necessary implication would normally become senior to the direct recruit promoted later
Combined operation of sub rules 3 to 5 of Rule 12 makes the direct recruit a member of the service of Executive Engineer from the date of year of allotment as an Asstt
Executive Engineer
The result is that the promotee occupying the posts within 50 quota of the direct recruits acquired no right to the post and should yield to direct recruit though promoted later to him to the senior scale posts ie Executive Engineer Superintending Engineer and Chief Engineer
The promotee has right to confirmation in the cadre post as per Rule 114 if a post is available to him within his quota or at a later date under rule 52 read with 114 and gets appointment under section 811
His seniority would be reckoned only from the date of the date of the availability of the post and the year of allotment he shall be next below to his immediate 215 senior promotee of that year or the junior most of the previous year of allotment whether officiating or permanent occupying the post within 50 quota
The officiating period of the promotee between the dates of initial promotion and the date of the availability of the cadre post would thus be rendered fortuitous and stands excluded
A direct recruit on promotion within his quota though later to the promotee is interposed in between the periods and interjects the promotee s seniority shaps the links in the chain of continuity and steals a march over the approved promotee probationer
Harmonious construction of rule 21 23 27 210 212a 52a 892 11 123 125 to 127 would yield to the above result lest the legislative animation would be defeated and the rules would be rendered otiose and surpluses
It would also adversely effect the morale and efficiency of the service
Mere officiating appointment by promotion to a cadre post outside the quota continuous officiation therein and declaration of probation would not clothe the promotee with any right to claim seniority over the direct recruits
The necessary conclusion would therefore be that the direct recruit shall get his seniority with effect from the date of the year of the allotment as Asstt
Executive Engineer which is not alterable
Whereas the promotee would get his seniority wef
the date of the availability of the posts within 50 quota of the promotees
The year of allotment is variable and the seniority shall be reckoned accordingly
Appointment to the cadre post substantively and confirmation thereof shall be made under rule 811 read with Rule 114 of the rules
A promotee Executive Engineer would only then become member of the service Appointed substantively  within the meaning of Rule 212 a shall be construed accordingly
We further hold that the seniority of the promotee from Class II service as Executive Engineer shall be determined with effect from the date of which the cadre post was available to him and the seniority shall be determined accordingly
In KCJoshi  Ors etc
vs Union of India  Ors 19902 Scale 951 a Bench of three Judges to which one of us K Ramaswamy J was a member considered similar question
In that case UP Forest Service Rules 1952 provides two sources of recruitment to the post of Asstt
Conservators of Forest
The petitioners therein were Forest Range Officers in UP Forest Subordinate Service
The respondents were direct recruits as Asstt
Conservators of Forest
The rules prescribed ratio between direct recruits and promotees
Due to delay in recruitment as Asstt
Conservators of Forest the Forest Rangers were promoted in excess of their quota as Asstt
Conservators of Forest temporarily and continued in service without any break for 5 to 12 216 years
The promotees claimed seniority from the date of their initial promotion
Considering the scope of the rules and rights acquired by the petitioners therein and the direct recruits the Court held that When promotion was outside the quota the seniority would be reckoned from the date of the vacancy within the quota rendering the pervious service fortuitous
The previous promotion would be regular only from the date of the vacancy within the quota and seniority shall be counted from that date and not from the date of his earlier promotion or subsequent confirmation
In order to do justice to the promotees it would not be proper to do injustice to the direct recruits
The rule of quota being a statutory one must be strictly implemented and it is impermissible for the authorities concerned to deviate from the rule due to administrative exigencies of expediency
The result of punishing down the promotees appointed in excess of the quota may work hardship but it is unavoidable and any construction otherwise would be illegal nullifying the force of statutory rules and would offend articles 14  161
Therefore the rules must be carefully applied in such a manner as not to violate the rules or equality assured under article 14 of the Constitution
This Court interpreted that equity is an integral part of article 14
So every attempt would be made to minimise as far as possible inequity
Disparity is inherent in the system of working out integration of the employees drawn from different sources who have legitimate aspiration to reach higher echolans of service
A feeling of hardship to one or heart burning to either would be avoided
At the same time equality is accorded to all the employees
Shri PP Rao urged that the cadre posts in Rule 212 must include not only the permanent posts but also temporary posts continued for more than three years and notional posts which may have existed for short spells during preceding three years taking into account the number of months and days for which each post had existed as per the formula prescribed in appendix A  read with Rule 3 of the rules
He further urged that the promotees appointed to such posts should be treated to be members of the service  interms of Rule 212a and that their promotion should be retrospectively declared to have been promoted wef
the dates on which the posts were created
We are unable to accept this contention
Rule 3 read with 217 appendix A  confers power and also imposes duty on the State Govt
to determine the cadre posts from time to time and in the first five years on the first day of each year
This exercise should be done in the light of the criteria prescribed in appendix A 
The present controversy does not concern itself with the method and manner of determination of th cadre posts though determination of seniority hinge upon it
Therefore for determining seniority the State Govt
should undertake the exercise interms of Rule 3 read with appendix A 
The rules postulate that substantive appointment to a cadre post is a condition precedent to become a member of the service
A class II officer shall be promoted to a temporary post or in an officiating capacity to a cadre post if vacancy exist  when he occupies a vacancy in a substantive post and continued uninterruptedly it would be open to the appointing authority to put the promotee Executive Engineer on probation
Though confirmation is an inglorious uncertainty depending neither on the efficiency of the officer nor generally on the availability of the post the mandate of Quota of 50 in Rule 52 should be adhered to
Declaration of probation and confirmation to a cadre post if available under Rule 114 shall be made
Seniority of such approved or confirmed promotee should be counted from the date of either initial officiating promotion of continous later officiation from the date of availability of the cadre post however should be next below his senior promotee or the junior most of the preceding year of allotment within the quota
If no post is available till such date of the availability the entire period of continuous officiation would be rendered fortuitous
The contention therefore that the promotion would relate back retrospectively to the date of creation of the post and the appointment to the vacancy shall be with reference to the date of the creation of the post would result anomalies and render Rule 52 to the direct recruits surplusage
Shri PP Rao s further contention that the de facto promotion and the retrospective declaration of cadre post would make the Class II officers as de jure members of the service from the very date of temporary appointment wef
the date of initial appointment also lacks force for the same reasons
The principles laid down in RP Khanna vs SAF Abbas  Ors 19733 SCR 548 at 557 C J 
is not applicable to the facts of this case
In that case the certain posts in State services were required to be declared as senior cadre posts in the All India Service but before such declaration could be made some of the promotee officers officiated in the senior cadre post
In that context the Court observed that 1the promotee could not get the benefit of officiation unless the post was declared a equivalent to a senior cadre 218 post before the promotee was appointed to officiate him would defeat the policy of the government  and held that they are entitled to the benefit of the retrospective declaration in the absence of things practical as well as reasonable
The scheme of the rules made a definite departure to the normal service jurisprudence and the operation of the scheme in the rules must be given full effect
In the instant case under the Rules determination of seniority would be  made only after the promotee becomes a member of the service
Therefore the year of allotment must be determined having regard to i availability of the cadre post within quota ii satisfactory completion of the probation and iii appointment to the post in the substantive capacity in term of Rules 126 and 7 read with 114 and Rule 812
Any other construction would be contrary to the avowed object of the rules as a whole
The inclusive definition of Rule 212 a must be interpreted liberally and not restrictively
Undoubtedly the inclusive definition always receives liberal interpretation to bring within its ambit cognate but unforeseen similes
But the rules envisage only three sources of recruitment namely direct recruitment appointment by promotion and in exceptional cases with prior approval of the Public Service Commission as per Rule 10 the appointment by transfer from other services of the State or Central Govt
Until the ex cadre posts are declared to be cadre posts they remain ex cadre posts
The promotion to the ex cadre post is temporary or to a cadre post could be only on officiating basis
It may be open to the government to abolish at any time the ex cadre posts
Determination of cadre strength is a condition precedent for Rule 52a to operate
Till a promotee is confirmed in a substantive capacity as Executive Engineer he continues to retain line in Class II service
The interpretation that the promotion to the temporary post or ex cadre post within the meaning of Rule 210 should also be deemed to be an appointment to a substantive post would do violence to the language of the relevant rules and the scheme
It is true that this Court in Baleshwar Dass  Ors
vs State of UP  Ors
 1981 1 SCR 449 at 463 held that there cannot be probation for a government servant who is not to be absorbed substantively in the service on completion
The ratio therein does not apply to the facts of this case for the reason that the Govt
itself did not understand the scope and operation of the rules properly as is amply demonstrated from their mutually irreconcilable inconsistent stand taken in the counter affidavits filed by the State Govt
in the High Court and in this Court
That apart it would appear that in the instant case after the formation of the State of Haryana adequate number of officers were 219 not available to hold the posts
The length of service and passing of prescribed tests were relaxed enmass
In view of the above peculiar and special facts merely because the promotee Class II Officers were put on probation and the same was declared it does not clothe them with any right to deemed appointment to substantive vacancies in excess of their quota with retrospective effect from the date of initial promotion to the cadre posts
The year of allotment of a direct recruit is always the year in which he is appointed to the junior scale post of Asstt
Executive Engineer but the year of allotment to the promotee is variable depending on the availability of the cadre post within quota of 50 and subject to taking the seniority next below the junior most promotee of the preceding year of allotment or immediate senior of the same year
If the contention of Shri PP Rao is accepted is accepted it would render Rule 811 mutually inconsistent with Rule 52w read with Rules 27 and 212 and Rule 21
No countenance could be given to the contention that the officers put on probation in terms of Rule 111 irrespective whether they occupied declared posts but also posts which ought to have been declared as such from time to time and have continuously remained in service entitle them to become member of service and that as and when the posts occupied by them are declared as cadre posts with retrospective effect they are entitled to be treated as members of the service wef
the due dates
In other words it amounts to put a premium on the inaction on the part of the State Govt
to declare the cadre posts in terms of Rule 32 read with appendix A  defeating the scheme of the Rules
The contention that our interpretation renders Rule 212 arbitrary and discriminatory violating articles 14 and 16 is also not tenable
A direct recruit by operation of Rule 212 a read with Rules 21 and 210 though appointed to an ex cadre post by fiction of law becomes a member of the service from the date of his initial appointment since being a fresh recruit
On his satisfactory completion of the prohibition and on availability of the cadre post as Asstt
Executive Engineer he becomes a confirmed Asstt
Executive Engineer
While a promotee Executive Engineer continues to retain his line on the posts as Class II officers still he is appointed substantively to Class I service
There is reasonable classification and discernable distinction drawn between the direct recruit and the promotee
The nexus is to treat direct recruit Asstt
Executive Engineer appointed to the cadre posts as well as ex cadre post at par as members of the service and the deeming clause is to serve this purpose
Thus there is nether invidious discrimination nor arbitrariness in Rule 212a offending articles 12  16
The differentiation drawn between direct recruit and the 220 promotee bears rational relation to the object of Rule 212 the ratio of the Constitution Bench in BS Yadav vs State of Haryana and The Direct Recruit Class II Engineering Officers  Association vs State of Maharashtra  Ors  at 745 cannot be imported bodily and applies to the ficts of the case in the light of the operation of the rules in question
The further contention that Rule 12 adumbrates that not only a member of the service but even an officer officiating as an Executive Engineer before becoming a member of the service is entitled to an year of allotment because the rules nowhere say that only members of service are entitled to year of allotment is devoid of substance
As already discussed a promotee cannot be given year of allotment before he becomes a member of the service and his seniority cannot be fixed arbitrarily with reference to the date of his initial promotion to an ex cadre post or continuous officiating in a cadre post without break as the case may be
We accordingly direct the Government of Haryana to determine the cadre posts if not already done regularly from time to time including the post created due to exigencies of service in terms of Rule 32 read with appendix A  and allot the posts ineach year of allotment as contemplated under rule 12 read with Rule 52a and issue orders appointing substantively to the respective posts within the quota and determine the inter se seniority between the appellants promotees and RR Sheoran direct recruits in the respective quota cadre posts of Executive Engineers etc
within four months from the date of receipt of this judgment
The inter se seniority of promotees and direct recruits shall be determined accordingly
All the inpugned promotions or those pending proceedings in the High Court or in this Court shall be subject to the above determination and the status quo would continue till the appointments according to the rules are made and seniority is determined in the light of the law declared inthis judgment
The appeals is disposed of accordingly
In the circumstances parties are directed to bear their respective costs


Summary:
was enacted with a view to provide for institution of provident fund for employees in factories and other establishments and was made applicable to every establishment which came within the meaning of 939 factory 
The Central Government under section 5 of the Act framed the Employees  Provident Fund Scheme in 1952 for establishment of provident funds for the employees of the establishments governed by the Act
Management of such establishments had to contribute to the provident fund of its employees in accordance with section 6
Contravention or default in complying with section 6
was punishable under s 14
Under section 17 the appropriate government was empowered to grant exemption from the operation of the 1952 Scheme provided the concerned establishment had Instituted its own provident fund scheme and the rules in this respect were not less favourable than those specified in section 6 and the employees were also in the enjoyment of other provident fund benefits
The Act underwent major amendments in 1971 and thereafter
The appellants were in the management of an establishment governed by the Act
By a notification dated 17101957 the Central Government granted exemption under section 17 tothe said establishment subject to the conditions specified in Schedule II to the notification
Condition No 1 was to the effect that the factory was to have a provident fund scheme in force the rules of which with respect to the rates of contribution should not be less favourable than those specified in section 6 of the Act and the employees should also be in the enjoyment of other provident fund benefits provided under the Act
Consequently the 1952 Scheme did not apply to the company as it created a trust and the management was making contributions of provident fund to the said trust
In SeptemberOctober 1975 the Inspector Provident Fund filed complaints that the appellants being incharge of the management of the establishment failed to pay contributions to the provident fund trust in 1974 and thereby committed offences punishable under sections 141A 142 142A 14Al 14A2 of the Act and Paragraph 76 of the 1952 Scheme the appellants also received notice dated 1591975 threatening to cancel the exemption granted under section 17
In September 1975 the company was closed and liquidation proceedings were initiated
The appellant filed applications before the Metropolitan Magistrate before whom the complaints were pending contending that section 6 of the Act was not applicable to establishments exempted under section 17 and no proceedings under section 14 could be initiated against them and prayed for their acquittal and for dropping of the proceedings
The application were rejected
The appellants thereupon filed revision applications which were dismissed by the Addl
Sessions Judge holding that section 6 covered all the establishments Including the exempted one that even an exempted 940 establishment was required to make full contribution to the provident fund as provided by section 6 and failure to pay contributions amounted to contravention of section 6 and attracted section 141A and that since the conditions subject to which exemption was granted under s17 were violated section 142A was also attracted
In appeal to this Court it was contended by the appellants that since the establishment was exempted under section 17 it was governed neither by the 1952 Scheme nor by section 6 of the Act that cancellation of exemption under section 174 was a penalty provided by or under the Act that if the word contribution  was construed strictly as defined in section 2 failure by an exempted establishment in not paying provident fund contributions to the trust was not a contravention of s6 and that before the introduction of s171A by the Amendment Act 33 of 1988 the penal provisions including section 141A and 142A were not applicable to establishment exempted under section 17
On the questions whether 1 for contravention of the provisions of the  criminal proceedings could be instituted under section 14 of the Act against an establishment exempted under section 17 and 2 failure by the establishment in question to pay the provident fund contributions to the trust attracted the prosecution or only warranted cancellation of the exemption under section 174
Disposing of the appeals this Court HELD 11 An exempted establishment has to provide for its employees the benefits which are in no way less favourable than those provided under the and the Employees  Provident Fund Scheme 1952
Under section 17 the appropriate government may by notification and subject to such conditions as may be specified in the said notification exempt an establishment from operation of the 1952 Scheme if it is satisfied that the establishment makes contribution to the provident fund which can be called a provident fund scheme of its own and the rules governing such scheme are not less favourable than those specified in section 6
953A c 12 Contravention or non compliance of any of the conditions subject to which exemption was granted under section 17 is punishable under section 142A if no other penalty is elsewhere provided by or under the Act
The essentials of the provisions are that there should be a contravention 941 or default in complying with the provisions of the Act or any of the conditions subject to which exemption was granted under section 17 and that there should be no other penalty elsewhere provided by or under the Act for such contravention or non compliance
954F G 13 In the instant case the default in making the provident fund contributions to the trust by the company amounted to contravention of the rules and consequently condition no1 mentioned in Schedule II to the notification dated 17101957 subject to which the exemption was granted was clearly violated
956D E 21 In common parlance the word penalty  is understood to mean a legal or official punishment such as a term of imprisonment
In some contexts it is also understood to mean some other form of punishment such as fine or forfeiture for not fulfilling a contract
But in gathering the meaning of this word the context in which it is used is significant
956G H 957A 22 Section 14 of the Act dealing with penalties shows that every contravention or non compliance mentioned in each of the sub sections is punishable with imprisonment andor fine and for some offences minimum punishment is also made compulsory
The penalties mentioned in this connection would indicate that the Legislature envisaged that a penalty should necessarily mean imprisonment or at least imposition of fine
Having regard to the object underlying the Act the expression penalty  in the context in which it is used in s14 including section 142A only connotes imposition of imprisonment or fine
957A B 31 It is true that all the penal statutes should be construed strictly and the court must see that the thing charged as an offence is within the plain meaning of the words used but it must also be borne in mind that the context in which the words are used is important
The legislative purpose must be noted and the statute must be read as a whole
The is a welfare legislation and section 14 including sections 142A and 17 are part of it and they should be interpreted in such a way so that the purpose of the legislation is allowed to be achieved
963B D MS International Ore and Fertilizers India Pvt Ltd vs Employees  State Insurance Corporation   relied on
Seaford Court Estates Ltd vs Asher 1949 2 All ER 155 referred to
942 32 Taking into consideration the object underlying the Act and on reading sections 14 and 17 In full it becomes clear that cancellation of exemption does not amount to a penalty within the meaning of section 142A
It cannot be said that mere cancellation of an exemption granted under s17 amounts to a penalty particularly expected to be stringent as contemplated under section 14
963C 957E State of Uttar Pradesh through the Provident Fund Inspector UP vs Lala Ram Gopal Gupta and three Others 1973 Allahabad Law journal 355 approved
Notwithstanding the exemption granted the appropriate government does not lose its hold over the scheme framed by the establishment and there are built in safeguards like section 174 to protect the interests of the employees
Section 17 is a self contained provision dealing with the power to grant exemption and the consequent obligation
The exemption is granted for getting better benefits and to ensure their continuance for the employees with a view to avoiding duplication in framing a scheme by the appropriate government on the lines as framed by the establishment itself and the purpose of the exemption is only to ensure such a scheme better than the one under section 6The procedural aspect of section 174 provides for cancellation of such exemption by which only the privilege granted is being withdrawn by an executive order
Such a cancellation does not penalise the management and consequently does not result in any punishment that is normally allowed in respect of an offence
960A B 961B C Mohmedalli and Others vs Union of India and Another 1963 Suppl
1 SCR 993 relied on
34 So far as unexempted establishments are concerned there are several other penal provisions like sections 141 142 and 14AA and also in particular Paragraph 76 of the 1952 Scheme
There are other legal provisions also which apply to unexempted establishments
Therefore under the Amendment Act No 33 of 1988 the Legislature wanted to make as far as possible these existing legal and penal provisions which are applicable to unexempted establishments applicable also to exempted establishments
That does not mean that there were no penal provisions earlier applicable to exempted establishments
971E F 4
The subject matter and the context in which a particular word is used are of great importance and it is axiomatic that the object underlying the Act must always be kept in view in construing the con 943 text in which a particular word is used
The concept which prompted the legislature to enact this welfare law should also be borne in mind in interpreting the provisions  Due weight ought to be given to the words unless the context otherwise requires occurring in section 2 which show that restricted meaning in the definitions should not be applied and the words contribution  scheme  fund  occurring in the said section should in the context be otherwise interpreted as to apply to a private scheme also and if there is a default in contribution by the exempted establishment the same amounts to contravention of section 6 punishable under section 141a
968G H 969A 970D F Commissioner of Expenditure Tax Gujarat Ahmedabad vs Darshan Surendra Parekh   Bennet Coleman  Co P Ltd vs Punya Priya Das Gupta   Organo Chemical Industries and Another vs Union of India and Others   Kanwar Singh vs Delhi Administration   State of Gujarat vs Chaturbhuj Maganlal and Another  and Vanguard Fire  Gen Ins Co vs Fraser  Ross   relied on
Parekh cotton Mills P Ltd vs State of Bombay  referred to
Sections 141A and 142A of the Act are attracted to the facts in the instant case and it cannot be said that there is no prima facie case and consequently the accused cannot claim acquittal even before the conclusion of the trial under Chapter XX Cr
PC dealing with trial of summons cases
972G H 973A Besides sections 14Al and 14A2 of the Act not being applicable section 142 dealing with family pension scheme and insurance scheme is not relevant in the instant case
Similarly Paragraph 76 of the 1952 Scheme is also not attracted as the establishment in question is exempted from operation of the said scheme
953G H 954A 973A R vs Smith   People ex rel Risso vs Randall   City of Fort Wayne vs Bishop  547  City of Cincinnati vs Wright 361 77 Ohio App 261 R vs Clyne ex p Harrap  at 201 Tolaram vs State of Bombay   SK Gupta and Another vs KP Jain and Another 19791 3 SCC 54 State Bank of India etc
vs Yogendra Kumar Srivastava and Others etc   Knightbridge Estates Trust Ltd vs Byrne and Others 1940 2 All and National Buildings Construction Corporation vs Pritam Singh Gill and Others   referred to
Collins English Dictionary Butterworths  Words and Phrases Legally defined 3rd Edn
page 345 Principles of Statutory Interpretation by GP Singh Fourth Edition1988 referred to