PETITIONER: UNION OF INDIA Vs. RESPONDENT: TUSHAR RANJAN [ENTITY]TY DATE OF JUDGMENT[SECTION]/07/1994 BENCH: [ENTITY] (J) BENCH: [ENTITY] (J) [ENTITY], S. (J) CITATION: 1994 SCC (5) 450 JT 1994 (4) 397 1994 SCALE (3)273 ACT: HEADNOTE: JUDGMENT:
The Judgment of the Court was delivered by [ENTITY], J.- [ACT] (the service) is governed by statutory rules called the [ACT] (the Rules). Respondents, in the appeal herein, are the members of the service. [ENTITY] ([ENTITY])-Respondent 1 belongs to the general category whereas Respondents 2 to 9 are members of the Scheduled Castes. Respondents 2 to 9 were promoted from Grade-IV to Grade-III in the service. They were promoted against the vacancies reserved for the Scheduled Castes and Scheduled Tribes under the instructions issued by the Government of India from time to time. [ENTITY], being senior to Respondents 2 to 9 in Grade-IV, challenged their promotions before the Central Administrative Tribunal, Calcutta Bench, (the Tribunal) on the ground that under the reservation, in respect of appointments to the service by promotion, was not permitted under the Rules. The Tribunal accepted the contention of [ENTITY] and came to the conclusion that promotion of Respondents 2 to 9 in supersession of the claim of [ENTITY] was against the Rules. The Tribunal, however, did not disturb the promotions already given to the respondents and directed that [ENTITY] be deemed to have been promoted to Grade-III from the same date when respondents were promoted and he be placed above the respondents in the seniority list of Grade- III. This appeal, by the [ENTITY], is against the judgment of the Tribunal.
2. We have no hesitation in holding that the Tribunal correctly interpreted the Rules as they existed on 28-11- 1988 when the Tribunal delivered its judgment. These Rules were, however, amended with effect from 27-11-1972 by the notification dated 20-2-1989 and the reservation for Scheduled Castes and Scheduled Tribes was provided even in the appointments made by way of promotion. It is contended on behalf of the [ENTITY] that in view of the amendment of the Rules with retrospective effect, the judgment of the Tribunal is liable to be set aside and the promotions of Respondents 2 to 9 to Grade-III of the service are to be upheld. [ENTITY] and other members of the general category have, however, challenged before us the validity of the retrospective amendment of the Rules. We shall state the grounds of challenge in the later part of the judgment.
3. [SECTION] and [SECTION] (before amendment) of the Rules are as under:
"8(1)(b) Grade-III (i) All the vacancies in this grade shall be filled by promotion from amongst Grade-IV officers who have completed not less than four years of service on a regular basis in that grade. Promotions shall be made in the order of seniority subject to rejection of the unfit by the Controlling Authority on the advice of the Board :
Provided that if any junior officer in Grade- IV is eligible and is considered for promotion all officers senior to him in that grade shall also be considered for promotion, notwithstanding that they may not have completed four years of service on a regular basis in that grade.
13. Reservation for Scheduled Castes and Scheduled Tribes etc.Appointments to the Service made otherwise than by promotion will be subject to orders regarding special representation in the Service for Scheduled Castes and Scheduled Tribes issued by the Government from time to time."
4. The [ACT] were framed under [SECTION] of the [ACT] and were published by the notification dated 20-2-1989. In the Rules, for [SECTION], the following rule was substituted:
" 13. Reservation for Scheduled Castes and Scheduled Tribes, etc.Appointments to the service shall be made subject to the orders relating to reservation for SCs and STs issued by the Central Government from time to time."
[SECTION] of these rules provided that "they shall be deemed to have come into force on 27-11-1972."
5. Executive instructions dated 27-11-1972 issued by the Government of India provide reservation for Scheduled Castes and Scheduled Tribes in the posts filled by promotion on the basis of seniority subject to fitness. The amended [SECTION] was made operative with effect from 27-11-1972 with a view to extend the benefit of reservation in promotional posts in the service in terms of the executive instructions of the Government dated 27-11-1972.
6. Seniority list of Grade-IV of the service was published on 8-5-1986. In the said list, [ENTITY] was shown senior to Respondents 2 to 9. On 24-11-1987, Respondents 2 to 9 were promoted to Grade-III in the service. [ENTITY] submitted a representation requesting the Cadre Controlling Authority to consider his case for promotion under the proviso to [SECTION] of the Rules as his juniors had been promoted without declaring him unfit. The representation was rejected by the order dated 11-2-1988 on the ground that Respondents 2 to 9 had been promoted on the basis of reservation policy. [ENTITY] challenged the promotion of Respondents 2 to 9 before the Tribunal. As mentioned above, the Tribunal allowed the application of [ENTITY] and, as such, this appeal.
7.It is stated by [ENTITY] in his counter-affidavit that the reservation was for the first time introduced on 22-5-1986 and thereafter on 1-9-1987. According to him, the said two orders did not affect him. The order applying reservation quota was issued on 24-11-1987 when Respondents 2 to 9 were promoted and the same was successfully challenged by [ENTITY] before the Tribunal. It has been categorically stated by [ENTITY] that until 22-5-1986 the reservation policy was not made applicable by the Cadre Controlling Authority in the service and in fact no Scheduled Caste or Scheduled Tribe officer was given out of turn promotion superseding the general category officers. These averments have not been specifically denied by the [ENTITY] in its rejoinder.
8. On behalf of [ENTITY] and other general category members of the service, the following contentions have been raised:
1. The retrospective operation of amended [SECTION] takes away the vested rights of the general category candidates senior to Respondents 2 to 9. It is settled proposition of law that the vested rights cannot be abrogated by retrospective legislation.
2.The retrospective operation of amended [SECTION] is arbitrary and, as such, violative of [SECTION] and [SECTION] of the [ACT].
3. That the judgment of the Tribunal was delivered on 28-
11-1988 and [SECTION] was amended on 20-2-1989. On that date neither the [ENTITY] nor any of the Respondents 2 to 9 had filed special leave petition against the judgment of the Tribunal in this Court. The only purpose of bringing in the retrospective amendment was to wash away the effect of the judgment of the Tribunal. The legislature was not competent to override the judgment without enacting the validation clause. 4. The Government instructions dated 27-11-1972 are applicable to those posts which are filled by promotion on the basis of "seniority subject to fitness". Under [SECTION] promotions are to be made in the order of seniority subject to rejection of the unfit. The instructions meant for promotions on the basis of "seniority subject to fitness" cannot be made applicable to the promotions based on "seniority subject to rejection of the unfit".
5. [ENTITY] having been promoted to Grade- III prior to 20-2-1989, he is entitled to the benefit of the explanatory memorandum added under [SECTION] to the effect that the benefit of promotion actually enjoyed by any person belonging to the general category shall not be withdrawn.
6. Proviso to [SECTION] states that if any junior officer in Grade IV is eligible and is considered for promotion, all officers senior to him in that grade shall also be considered for promotion. Even if a reserve category officer who is junior to the general category officer is considered for promotion all officers senior to him in the general category shall have to be considered for promotion along with the junior Scheduled Caste candidate.
9.We take up the first and the second contentions together for consideration. It is obvious from the plain language of [SECTION] that all Grade-IV officers who have completed four years of service on regular basis are entitled to be considered for promotion to Grade-III on the basis of their seniority provided they are not found unfit by the Controlling Authority. The rule gives a statutory right to Grade-IV officers to be considered for promotion in the order of their seniority. The said right is further strengthened by the proviso to [SECTION]. The proviso makes it obligatory that when a junior officer in Grade-IV is eligible and is considered for promotion all officers senior to him in that grade shall also be considered for promotion. Even otherwise, "to be considered for promotion"
is a guaranteed right under [SECTION] of the [ACT]. It is, therefore, clear that [ENTITY] and other senior general category Grade-IV officers had a vested right under the Rules as also under [SECTION] of the [ACT] to be considered for promotion when persons junior to them were being considered and in fact promoted. Respondents 2 to 9 were admittedly junior to [ENTITY] and as such they could not be promoted, without considering the case of [ENTITY]. [SECTION] of the Rules before its amendment did not permit any reservation in respect of appointments to be made by way of promotion. There can, therefore, be no dispute that on 24-11-1987 when Respondents 2 to 9 were promoted to Grade-III, [ENTITY] and other general category candidates,senior to him had a vested right to be considered for promotion. Whether such a right can be rendered nugatory by retrospective legislation? The question is not res integra. There are several pronouncements of this Court on the subject.
10. In [PRECEDENT] this Court had an occasion to deal with the question as to whether the status as civil servant conferred on the Panchayat employees could be taken away by retrospective 1 (1983) 2 SCC 33 : 1983 SCC (L & S) 231 operation of amended law. The [ACT] aimed at democratic decentralisation of important governmental functions by vesting such functions in Gram, Nagar, Taluqa and District Panchayats and by enabling the State Government to transfer other powers, functions and duties to the Panchayat institutions. The dispute having arisen regarding the status of the Panchayat employees, some of them filed a writ petition before the Gujarat High Court seeking various reliefs. The High Court allowed the writ petition holding that the members of the Panchayat service belonging to the local cadre were government servants and issued consequential directions for equation of posts, revision of pay scales and payment of salaries. The State Government filed appeal against the judgment of the High Court before this Court, but during the pendency of the appeal, the [ACT] was enforced with a view to nullify the basis of the decision of the High Court. The employees filed writ petitions under [SECTION] of the [ACT] before this Court challenging the constitutional validity of the [ACT]. The State appeal and the writ petitions were heard together by a [ACT] Bench of this Court. This Court held that the [ACT] was arbitrary, unreasonable and unconstitutional on the following reasoning: (SCC p. 62, para 52) "The law must satisfy the requirements of the [ACT] today taking into account the accrued or acquired rights of the parties today. The law cannot say, 20 years ago the parties had no rights, therefore, the requirements of the [ACT] will be satisfied if the law is dated back by 20 years. We are concerned with today's rights not yesterday's. A legislature cannot legislate today with reference to a situation that obtained 20 years ago and ignore the march of events and the constitutional rights accrued in the course of the 20 years. That would be most arbitrary, unreasonable and a negation of history. It was pointed out by a [ACT] Bench of this Court in [PRECEDENT]. [ENTITY], C.J., speaking for the Court held: (SCC headnote) 'Since the Governor exercises the legislative power under the proviso to [SECTION] of the [ACT], it is open to him to give retrospective operation to the rules made under that provision. But the date from which the rules are made to operate must be shown to bear either from the face of the rules or by extrinsic evidence, reasonable nexus with the provisions contained in the rules, especially when the retrospective effect extends over a long period as in this case.' Today's equal cannot be made unequal by saying that they were unequal 20 years ago and we will restore that position by making a law today and making it retrospective. [ACT]al rights, constitutional obligations and constitutional consequences cannot be tampered with that way. A law which if made today would be plainly invalid as 2 1980 Supp SCC 524: 1981 SCC (L & S) 343 : (1981) 1 SCR offending constitutional provisions in the context of the existing situation cannot become valid by being made retrospective. Past virtue (constitutional) cannot be made to wipe out present vice (constitutional) by making retrospective laws. We are, therefore, firmly of the view that the [ACT] is unconstitutional, as it offends [SECTION] and [SECTION] and is arbitrary and unreasonable."
11. This Court in [PRECEDENT] declared ultra vires retrospective amendments made to the [ACT] as applicable to Haryana. Under the [ACT] ex-emergency commissioned officers were entitled to the benefit of their military service on their reappointment in the State Civil Service against the vacancies reserved for ex-army officers. The Haryana Government by a notification dated 9-8-1976 amended the definition of the expression "Military Service" in the 1965 Rules thereby restricting the benefit of military service only up to 10-1-1968 with the result that the petitioners before this Court were deprived of their army service for the purpose of fixation of seniority in the civil service for the period 1969-1971. The amendment was challenged on the ground that it was ultra vires the [ACT] insofar as it affected prejudicially persons who had acquired vested rights. This Court following the [ACT] Bench in [PRECEDENT] struck down the amendment on the following reasonin-: (SCC p. 292, para 22; p. 295, para 23) "The question, however, has been pointedly considered recently by a [ACT] Bench of this Court in [PRECEDENT] In view of this latest pronouncement by the [ACT] Bench of this Court, the law appears to be well settled and the Haryana Government cannot take away the accrued rights of tile petitioners and the appellants by making amendment of the rules with retrospective effect.
For the foregoing discussion the writ petitions as well as the appeals are allowed and the orders of the High Court dated 10-10- 1980 are quashed and the impugned [SECTION] of the [ACT], as amended by the Haryana Government Gazette Notification No. GSR 77/Const./Art. 309/Amend/(1)/76 dated 22-3-1976 and the Notification No. GSR 182/Const./Art. 309/Amend/(2)/76 dated 9-8- 1976 amending the definition of the expression 'military service' in [SECTION] are declared to be ultra vires the [ACT], insofar as they affect prejudicially persons who had acquired rights as stated above."
12. In [ENTITY] v. State of Haryana4 three petitioners [ENTITY], [ENTITY] and [ENTITY], who were diplomaholders, were working 3 (1984) 3 SCC 281 : 1984 SCC (L & S) 520: (1984) 3 SCR 623 4 1986 Supp SCC 584 :(1987) 2 ATC 595 :(1987) 1 SCR 584 as Sub-Divisional Officers on regular basis under the unamended [SECTION] of the [ACT]. They were eligible for promotion as Executive Engineers in Class I service despite the fact that they did not possess a degree in engineering. By the notification dated 22-6-1984, [SECTION] was amended and it was provided that a degree in engineering was an essential qualification for promotion of Assistant Engineers (Irrigation Branch) to Class I service and thereby the petitioners were rendered ineligible for promotion to the post of Executive Engineer in Class I service. The amendment was challenged in this Court by way of a petition under [SECTION] of the [ACT]. This Court came to the conclusion that the retrospective effect given to the amendment was violative of [SECTION] and [SECTION] of the [ACT] on the following reasoning: (SCC p. 595, para [SECTION]) "It is well settled that the power to frame rules to regulate the conditions of service under the proviso to [SECTION] of the [ACT] carries with it the power to amend or alter the rules with a retrospective effect: B.S. Vadera v. [ENTITY]5, Raj Kumar v. [ENTITY]6, [PRECEDENT] and [PRECEDENT] 8. It is equally well-settled that any rule which affects the right of a person to be considered for promotion is a condition of service although mere chances of promotion may not be. It may further be stated that an authority competent to lay down qualifications for promotion, is also competent to change the qualifications. The rules defining qualifications and suitability for promotion are conditions of service and they can be changed retrospectively. This rule is however subject to a wellrecognised principle that the benefits acquired under the existing rules cannot be taken away by an amendment with retrospective effect, that is to say, there is no power to make such a rule under the proviso to [SECTION] which affects or impairs vested rights."
13. Finally this Court considered the effect of retrospective legislation on the vested rights of the affected persons in [PRECEDENT] Under the [ACT], the Assistant Engineers substantively appointed against temporary vacancies became members of the service and were entitled to seniority on the basis of continuous length of service. The Rules were amended in the years 1969 and 1971 wherein it was provided that the Assistant Engineers would only become members when they are selected and appointed against the quota meant for them and their seniority would be determined only from the date of order of appointment in substantive 5 (1968) 3 SCR 575 AIR 1969 SC 11 8 : (1970) 1 LLJ 499 6 (1975) 4 SCC 13 : 1975 SCC (L & S) 198 : (1975) 3 SCR 7 (1985) 1 SCC 523 1985 SCC (L & S) 280 8 (1974) 1 SCC 19 : 1974 SCC (L&S) 49: (1974) 1 SCR 771 9 (1987) 3 SCC 622: 1987 SCC (L&S) 310: (1987) 4 ATC 272 vacancies. These amendments were made with retrospective effect thereby taking away the vested rights of the Assistant Engineers appointed against temporary posts. The High Court held the retrospective amendment of the rules to be arbitrary and unconstitutional. This Court upheld the judgment of the High Court on the following reasoning: (SCC p. 637, para [SECTION]; p. 638, para 18; p. 639, para 18) "It has been urged that Government has the power to amend rules retrospectively and such rules are quite valid. Several decisions have been cited of this Court at the bar.
Undoubtedly, the Government has got the power under proviso to [SECTION] of the [ACT] to make rules and amend the rules giving retrospective effect. Nevertheless, such retrospective amendments cannot take away the vested rights and the amendments must be reasonable, not arbitrary or discriminatory violating [SECTION] and [SECTION] of the [ACT] As has been stated hereinbefore, the Assistant Engineers who have already become members of the Service on being appointed substantively against temporary posts have already acquired the benefit of 1936 Rules for having their seniority computed from the date of their becoming member of the service. 1969 and 1971 Amended Rules take away this right of these temporary Assistant Engineers by expressly providing that those Assistant Engineers who are selected and appointed in permanent vacancies against 50 per cent quota provided by [SECTION] of the Amended 1969 Rules will only be considered for the purpose of computation of seniority from the date of their appointment against permanent vacancies. Therefore the temporary Assistant Engineers who are not only deprived of the right that accrued to them in the matter of determination of their seniority but they are driven to a very peculiar position inasmuch as they are to wait until they are selected and appointed against permanent vacancies in the quota set up for this purpose by the amended [SECTION] These amendments are not only disadvantageous to the future recruits against temporary vacancies but they were made applicable retrospectively from 1-3- 1962 even to existing officers recruited against temporary vacancies through Public Service Commission. As has been stated hereinbefore that the Government has power to make retrospective amendments to the Rules but if the Rules purport to take away the vested rights and are arbitrary and not reasonable then such retrospective amendments are subject to judicial scrutiny if they have infringed [SECTION] and [SECTION] of the [ACT]."
[SECTION]. The legislatures and the competent authority under [SECTION] of the [ACT] have the power to make laws with retrospective effect. This power, however, cannot be used to justify the arbitrary, illegal or unconstitutional acts of the Executive. When a person is deprived of an accrued right vested in him under a statute or under the [ACT] and he successfully challenges the same in the court of law, the legislature cannot render the said right and the relief obtained nugatory by enacting retrospective legislation.
15. Respectfully following the law laid down by this Court in the judgments referred to and quoted above, we are of the view that the retrospective operation of the amended [SECTION] cannot be sustained. We are satisfied that the retrospective amendment of [SECTION] of the Rules takes away the vested rights of [ENTITY] and other general category candidates senior to Respondents 2 to 9. We, therefore, declare amended [SECTION] to the extent it has been made operative retrospectively to be unreasonable, arbitrary and, as such, violative of [SECTION] and [SECTION] of the [ACT]. We strike down the retrospective operation of the rule. In the view we have taken on the point it is not necessary to deal with the other contentions raised by [ENTITY].
[SECTION]. The appeal is dismissed with cost. We quantify the cost as Rs 10,000 to be paid by the [ENTITY] to [ENTITY] - Respondent 1.