IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. C.W.P.(T) No. : 14691 of 2008. Reserved on : 28.07.2010. Decided on: 20.09.2010. _________________________________________________________ Sridhar Sharma and others. …Petitioners. -Versus- State of H.P. and others. …Respondents. Coram: The Hon’ble Mr. Justice Rajiv Sharma, Judge. Whether approved for reporting?1 Yes. __________________________________________________________ For the petitioners. : Mr. P.P. Chauhan, Advocate. For respondents No. 1 to 4. : Mr. R.P. Singh, Assistant Advocate General. For respondents No. 5 to 9. : Mr. M.L. Sharma, Advocate. ---------------------------------------------------------------------------------------- Rajiv Sharma, Judge Petitioners have assailed the notification dated 10th January, 2007 (Annexure A-1), issued by the Principal Secretary (Transport), Government of Himachal Pradesh. Petitioner No. 1 was appointed as Clerk on 10.04.2000 through the agency of HPSSC. Petitioner No. 2 was inducted as Clerk on 24.03.2001. Petitioner No. 3 was appointed as Clerk on 11.09.1998. Petitioners No. 4 and 5 were promoted as Clerk on 28.06.2005. Petitioner No. 6 was appointed in the respondent-department on 11.04.2000 through HPSSC. Petitioner No. 7 was promoted from the post of Peon to the post of Clerk on 05.09.2005. Petitioner No. 8 was appointed in the respondent-department on 5.4.2000 through the agency of HPSSC. Petitioner No. 9 was promoted 1 Whether the reporters of the local papers may be allowed to see the judgment?. Yes. from the post of Peon as Clerk on 28.06.2005. Petitioner No. 10 was appointed in the respondent-department on 6.4.2000 through the agency of HPSSC. The appointment/promotion to the post of Clerk is regulated under the Recruitment and Promotion Rules called “The Himachal Pradesh Transport Department Clerk (Class-III Non-Gazetted) Recruitment and Promotion Rules, 1996”, notified on 21st December, 1996. Respondents No. 5 to 9 were appointed as Steno Typists. The conditions of service of Steno Typist in the respondent- department are regulated under the Recruitment and Promotion Rules for the post of Steno Typist (Non-Gazetted Class-III), Department of Transport, Himachal Pradesh (Annexure A-3). The respondent-department has issued the seniority list of Clerks vide Annexure A-2, as it stood on 31.03.2005. The final seniority of Junior Scale Stenographers/Steno Typists, as it stood on 01.01.2005, was issued on 25.02.2005. The respondent-state has issued the notification dated 10.01.2007. Text of the notification reads thus: “The Governor, Himachal Pradesh is pleased to order the merger of the cadre of Steno Typists comprising of 7 posts with the cadre of clerks in the Department of Transport with immediate effect in the public interest subject to the following conditions:- 1. The joint seniority list of Clerks and Steno Typists shall be determined with reference to date of appointment. 2. In case the date of appointment of a Steno Typist comes above the date of appointment of a Clerk in a particular year then the Steno Typist shall be placed immediately belost the last person appointed as Clerk in that particular year/batch. 3. Due to merger of Steno Typists cadre with the cadre of Clerks, the 7 posts of Steno Typists shall stand abolished. 4. The pay of Steno Typists in the present scale shall be protected, however, increments shall be admissible in the scale of Clerks.” 2. Mr. P.P Chauhan, learned counsel for the petitioner has strenuously argued that the notification dated 10.01.2007 is violative of Articles 14 and 16 of the Constitution of India. He further contended that the conditions of service of Clerks and Steno Typists are regulated by separate set of Recruitment and Promotion Rules framed under Article 309 of the Constitution of India and without any corresponding amendment carried out in the Recruitment and Promotion Rules, the notification dated 10.01.2007 could not be issued. He also contended that the decision to issue Annexure A-1, dated 10.01.2007 is actuated with legal malafides since according to him, respondent No. 4 is instrumental in issuance of notification dated 10.01.2007. He lastly contended that the vested/accrued rights acquired by the petitioners of seniority and consideration for promotion to the higher posts could not be destroyed by issuance of Annexure A- 1, dated 10.1.2007. 3. Mr. R.P. Singh, learned Assistant Advocate General and Mr. M.L. Sharma, learned counsel for respondents No. 5 to 9 have supported the issuance of Annexure A-1, dated 10.01.2007. Mr. R.P. Singh has submitted that a conscious decision has been taken to provide sufficient promotion avenues to the cadre of Steno-Typists. In addition to the submissions made by Mr. R.P. Singh, learned Assistant Advocate General, Mr. M.L. Sharma, learned counsel for respondents No. 5 to 9 has argued that to create, bifurcate and merge a cadre is a policy matter and the scope of judicial review is very limited. 4. I have heard the learned counsel for the parties and gone through the pleadings carefully. 5. It is admitted by the respondents No. 1 to 4 in the reply that the conditions of service of Clerks are regulated under separate set of Recruitment and Promotion Rules and that of Steno Typists are also regulated under separate Recruitment and Promotion Rules. The department has issued separate seniority lists of Clerks and Steno Typists as per Annexures A-2 and A-4, respectively. 6. Mr. R.P. Singh, learned Assistant Advocate General has argued that the cadre of Steno Typists was not having any promotional avenue after the post of Senior Scale Stenographer was abolished vide notification dated 30.04.1997. He then contended that private respondents made a representation and the same was duly considered in accordance with law, which led to the issuance of notification dated 10.01.2007 (Annexure A-1). During the pendency of this petition, the private respondents have moved C.M.P.(T) No. 594 of 2009 seeking vacation of interim order dated 24th January, 2007. The respondent-State and the petitioners have filed replies to this application. Petitioners have placed additional material on record which they have obtained under Right to Information Act. The same has been placed on record by the petitioners alongwith the reply to C.M.P.(T) No. 594 of 2009 collectively as Annexure P-1. I have gone through the contents of Annexure P-1 as well. According to the pleadings, the meeting of the Clerks and Steno Typists was convened on 18th March, 2005, however, the same was deferred. Thereafter, the Additional Director, respondent No. 4 called objections from the private respondents on 3rd August, 2005. The respondent No. 4 has rejected the case of one of the Steno Typists on 30th March, 2005. The Administrative Department on 11th August, 2005 has done the spade work the manner in which the posts of Steno Typists and Clerks could be merged, however, the terms and conditions were not accepted by the Finance Department. This was turned down on 14th September, 2006. The Finance Department again reviewed the case on 7th October, 2006. The respondent No. 4 was transferred as Additional Secretary (Finance) in 2006. A bare perusal of the documents annexed with Annexure P-1, makes it abundantly clear that respondent No. 4 has taken undue interest in merging the posts of Steno Typists with Clerks. It is also apparent that certain departments like Department of Personnel, Department of Law and H.P. Public Service Commission were bypassed while taking a decision to merge the cadres. It is true, indeed, that the decision to create, bifurcate and merge the cadre is executive function, however, the same has to be taken in conformity with the provisions of Articles 14 and 16 of the Constitution of India. In the present case, the decision has been taken to merge the cadre of Clerks with Steno Typists without effecting any changes in the already existing Recruitment and Promotion Rules, notified for the post of Clerks and Steno Typists. The decision to merge these cadres has been taken merely by way of executive instructions. It is settled law by now that the executive orders cannot substitute the statutory rules. The statutory rules were required to be amended. The rules in position could not be diluted merely on the basis of executive orders. There is no merit in the submissions of Mr. R.P. Singh, learned Assistant Advocate General and Mr. M.L. Sharma, learned counsel for respondents No. 5 to 9 that the merger has been ordered to provide promotional avenues to the cadre of Steno Typists. The same could be achieved by providing them promotional avenues in their own stream instead of taking away the acquired rights of the petitioners of seniority and promotion. The petitioners were working in a separate cadre. A bare perusal of notification dated 10.01.2007 (Annexure A-1) makes it clear that the joint seniority list of Clerks and Steno Typists is to be determined as per the dates of their appointment. Admittedly, the Steno Typists joined their services before the petitioners and they will rank senior and will get prior right for promotion. While issuing the notification dated 10.01.2007 though as per condition No. 3, 7 posts of Steno Typists have been abolished, however, their present scale has been protected. The Court is of the considered view that respondent No. 4 has taken undue interest in the issuance of notification dated 10.01.2007 (Annexure A-1) while he was working as Additional Director (Transport) and also as Additional Secretary (Finance) in the year 2006. It is intriguing to note that the Finance Department earlier rejected the report, however, on 07.10.2006 reviewed the matter sue moto. It is also on record that the Additional Secretary (Finance) himself has directed on 10th October, 2006 to seek advise of the Department of Personnel. The grounds taken as per the noting portion placed on record by the petitioners, are not cogent and convincing. It is difficult to understand why, how and in what manner the decision to merge the cadres will be in the interest of an individual and the State Government. The best course available for the respondent-State, in these circumstances, was to give benefit to the cadre of Steno Typists of ACPS or by upgrading the posts or by creating more promotional avenues in their stream instead of taking away the acquired/vested rights of the petitioners. 7. Their lordships of the Hon’ble Supreme Court in Sanjay Singh and another Versus U.P. Public Service Commission, Allahabad and another (2007) 3 Supreme Court Cases 720 have held that there can be no doubt about the principle that the courts will be slow to interfere with the matters affecting policy. However, manifest arbitrariness and irrationality is an exception to the said principle. Their lordships have held as under: “50. Learned counsel for the Commission also referred to several decisions in support of its contention that courts will be slow to interfere with matters affecting policy requiring technical expertise and leave them for decision of experts. (State of U.P. V. Renusagar Power Co., Tata Iron & Steel Co. Ltd. V. Union of India, Federation of Rly. Officers Assn. V. Union of India.) There can be no doubt about the said principle. But manifest arbitrariness and irrationality is an exception to the said principle. Therefore, the said decisions are of no avail. 8. Their lordships of the Hon’ble Supreme Court in B.N. Nagaranjan and others etc. Versus State of Karnatka and others etc., AIR 1979 Supreme Court 1676 have held that act done in exercise of executive power of Government cannot override Rules under Article 309 of the Constitution of India. Their lordships have held as under: “5. The first order appointing promotees as Assistant Engineers is dated the 15th of November, 1958 (Exhibit A). That order made it clear that all the promotees covered by it were appointed officiating Assistant Engineers and were to hold office until further orders. The promotion was also made subject to review after the finalisation of the inter-State seniority list of Supervisors and the Recruitment Rules. The notification went on to state that in the case of 94 of the officers promoted under it, their appointment as Assistant Engineers was being made on a purely temporary basis inasmuch as they would have to vacate the posts against which they were being fitted, as soon as candidates were available through a process of direct recruitment. The language employed leaves no doubt that the promotion of the 167 officers was not substantively made, the tenture being specifically stated to be either "officiating" or "purely temporary" which expressions clearly militate against a substantive appointment. Orders made by the State Government later on and right up to the 31st of October, 1961 when the direct recruits were appointed Assistant Engineers did not improve the position of any of of the promotees in any manner. Those orders were either silent on the point of the nature of the tenture of the promotees as Assistant Engineers, or stated in no uncertain terms that the promotees would hold the posts of Assistant Engineers on a temporary or officiating basis. That us why Dr. Chitley and Mr. Sen, learned counsel for the promotees, mainly placed their reliance on the two notifications dated the 27th of February, 1962, and order exhibit D dated the 6th of October, 1962, the combined effect of which was to promote the said 107 officers as Assistant Engineers with effect from the 1st of November, 1956 "on a regular basis." It was argued that the regularisation of the promotion gave it the colour of permanence and the appointments of the promotees as Assistant Engineers must therefore be deemed to have been made substantively right from the 1st of November, 1956. The argument however is unacceptable to us for two reasons. Firstly the words "regular" or "regularisation" do not connote permanence. They are terms calculated to condone any procedural irregularities and are meant to cure only such defects as are attributable to the methodology followed in making the appointments. They cannot be construed so as to convey an idea of the nature of tenture of the appointments. In this connection reference may with advantage be made to State of Mysore v. S. V. Narayanappa, (1967) 1 SCR 128 and R. N. Nanjundappa v. T. Thimmaiah, (1972) 2 SCR 799. In the former this Court observed: "Before we proceed to consider the construction placed by the High Court on the provisions of the said order we may mention that in the High Court both the parties appear to have proceeded on an assumption that regularisation meant permanence. Consequently it was never contended before the High Court that the effect of the application of the said order would mean only regularising the appointment and no more and that regularisation would not mean that the appointment would have to be considered to be permanent as an appointment to be permanent would still require confirmation. It seems that on account of this assumption on the part of both the parties the High Court equated regularisation with permanence." In Nanjundappa's case also the question of regularisation of an appointment arose and this Court dealt with it thus:- "..... Counsel on behalf of the respondent contended that regularisation would mean conferring the quality of performance on the appointment whereas counsel on behalf of the State contended that regularisation did not mean performance but that it was a case of regularisation of the rules under Article 309. Both the contentions are fallacious. If the appointment itself is in infraction of the rules or if it is violation of the provisions of the Constitution illegality cannot be regularised. Ratification or regularisation is possible of an act which is within the power and province of the authority but there has been some non- compliance with procedure or manner which does not go to the root of the appointment. Regularisation cannot be said to be a mode of recruitment. To accede to such a proposition would be to introduce a new head of appointment in defiance of rules or it may have the effect of setting at naught the rules." Apart from repelling the contention that regularisation connotes permanence, these observations furnish the second reason for rejection of the argument advanced on behalf of the promotees and that reason is that when rules framed under Art. 309 of the Constitution of India are in force, no regularisation is permissible in exercise of the executive powers of the Government under Art 162 thereof in contravention of the rules. The regularisation order was made long after the Probation Rules, the Seniority Rules and the Recruitment Rules were promulgated and could not therefore direct something which would do violence to any of the provisions thereof. Regularisation in the present case, if it meant permanence operative from the 1st of Nov. 1956, would have the effect of giving seniority to promotees over the direct recruits who, in the absence of such regualrisation, would rank senior to the former because of the Seniority Rules read with the Probation Rules and may in consequence also confer on the promotes a right of priority in the matter of sharing the quota under the Recruitment Rules. In other words, the regularisation order, in colouring the appointments of promotees as Assistant Engineers with permanence would run counter to the rules framed under Art 309 of the Constitution of India. What could not be done under the three sets of Rules as they stood, would thus be achieved by an executive flat. And such a course is not permissible because an act done in the exercise of the executive power of the Government, as already stated, cannot override rules framed under Art. 309 of the Constitution. The case has, for both the above reasons, to be decided on the footing that all through the relevant period the promotees held appointments as Assistant Engineers in a non-substantive capacity i.e., either on an officiating or a temporary basis. This being the position, they would all rank junior to the direct recruits who, from the very start, held appointments made "substantively in clear vacancies." 6. We may here make it clear that this order does not cover such officers as were holding the posts of Assistant Engineers on a substantive basis prior to the 1st of Nov. 1956 when the new State of Mysore now known as Karnataka came into being. Nor would it adversely affect the case of any Assistant Engineer who acquired a substantive status prior to the promulgation of the Recruitment Rules and the appointment of the direct recruits. Persons falling within these two categories will first have to be accommodated in the clear vacancies available and only the remaining vacancies will have to be utilized for fitting in the direct recruits and the Assistant Engineers who have disputed their claim in these proceedings. It may also be mentioned that the quota rule will not stand in the way of the Government giving effect to this arrangement which has been taken care of in the amendment (promulgated on the 23rd of Oct., 1961) to the Recruitment Rules. The relevant portion of that amendment is contained in item 3 thereof which is reproduced below: "3. To R. 2 the following proviso shall be added and shall be deemed always to have been added, namely- "Provided that in respect of direct recruitment of Assistant Engineers for the first time under these rules the percentages relating to direct recruitment and recruitment by promotion specified in column 2 of the Schedule shall not be applicable and the minimum qualifications and the period of probation shall be the following namely- "Qualifications:....." It is common ground between the parties that the posts comprised in the cadre of Assistant Engineers constituted by the Recruitment Rules have yet to be filled in for the first time. The proviso extracted above therefore will apply fully to the utilization of those vacancies as stated above. It goes without saying that all questions of seniority shall be decided in accordance with the Seniority Rules and that the Recruitment Rules, as amended from time to time, shall be fully implemented as from the date of their enforcement, i.e., 1st of March, 1958. 9. In K. Kuppusamy and another Versus State of T.N. and Others (1998) 8 Supreme Court Cases 469, their lordships of the Hon’ble Supreme Court have held that the statutory rules cannot be overridden by executive orders or executive practice. “3. The short point on which these appeals must succeed is that the tribunal fell into an error in taking the view that since the government had indicated its intention to amend the relevant rules, its action in proceeding on the assumption of such amendment could not be said to be irrational or arbitrary and, therefore, the consequential orders passed have to be upheld. We are afraid this line of approach cannot be countenanced. The relevant rules, it is admitted, were framed under the proviso to Article 309 of the Constitution. They are statutory rules. Statutory rules cannot be overridden by executive orders or executive practice. Merely because the government had taken a decision to amend the rules does not mean that the rule stood obliterated. Till the rule is amended, the rule applies. Even today the amendment has not been effected. As and when it is effected ordinarily it would be prospective in nature unless expressly or by necessary implication found to be retrospective. The tribunal was, therefore, wrong in ignoring the rule. 10. In Punjab Water Supply and Sewerage Board Versus Ranjodh Singh and Others (2007) 2 Supreme Court Cases 491, their lordships of the Hon’ble Supreme Court have held that a scheme issued under Article 162 cannot prevail over statutory rules or Article 309. Their lordships have further held that if terms and conditions of service are governed either by statutory rules or Article 309 proviso rules, any policy decision adopted by State Government under Article 162 would be illegal and without jurisdiction. Their lordships have held as under: “14. Once it is held that the terms and conditions of service including the recruitment of employees were to be governed either by the statutory rules or rules framed under the proviso to Article 309 of the Constitution of India, it must necessarily be held that any policy decision adopted by the State in exercise of its jurisdiction under Article 162 of the Constitution of India would be illegal and without jurisdiction. In A. Umarani vs. Registrar, Cooperative Societies & Ors. [(2004) 7 SCC 112], a Three Judge Bench of this Court has opined : "No is, thus, permissible in exercise of the statutory power conferred under Article 162 of the Constitution if the appointments have been made in contravention of the statutory rules." It was further held : "It is trite that appointments cannot be made on political considerations and in violation of the government directions for reduction of establishment expenditure or a prohibition on the filling up of vacant posts or creating new posts including of daily-waged employees. (See Municipal Corpn., Bilaspur v. Veer Singh Rajput)." 11. In Mahadeo Bhau Khilare (Mane) and others Versus State of Maharashtra and Others, (2007) 5 Supreme Court Cases 524, their lordships of the Hon’ble Supreme Court have held that a scheme framed by way of administrative instruction, in violation of statutory rules cannot be sustained. Their lordships have held as under: “7. Indisputably, the State of Maharashtra has framed recruitment rules. Any scheme by way of an executive instruction in terms of Article 162 of the Constitution of India, if violative of such statutory rules would not be legally sustainable. [See A. Umarani v Registrar, Cooperative Societies and Others, (2004) 7 SCC 112].” 10. In terms of the said Scheme, Steno- typists, Typists on the IIIrd grade or similar posts of the Revenue Department could be absorbed in the State service. We would assume that the said scheme was valid in law, although it was not in view of the decision of this Court in Umarani (supra). Appellants were appointed by Talathis as their assistants. They only used to assist the Talathis in their day to day work. They were never appointed as Talathis. No such post of Assistant to Talathis had been created and/or sanctioned by any competent authority. No recruitment rule therefor was framed. Therefore, their appointments were illegal. The State had also imposed a ban on appointment of such persons. In any event, they were appointed