THE HON'BLE MR JUSTICE J.CHELAMESWAR and THE HON'BLE MR JUSTICE M.VENKATESWARA REDDY WP Nos. 9422 & 9552 of 2005 COMMON ORAL ORDER : (per JC,J) These two writ petitions are filed by the respondents in OA Nos.11307 of 2002 and 4495 of 2004 on the file of the Andhra Pradesh Administrative Tribunal. OA No.4495 of 2004 was allowed by an order of the Andhra Pradesh Administrative Tribunal dated 21.4.2005. As the issue involved is the same, OA No.11307 of 2002 also came to be disposed of in the same way in terms of the decision in OA No.4495 of 2004. The parties are referred to in this judgment as they are arrayed in the OAs. The applicant in OA No.11307 of 2002 is appointed as a Regional Transport Officer by direct recruitment some time in the year 1990 and the applicant in OA No.4495 of 2004 was appointed as a Regional Transport Officer by promotion from the post of Motor Vehicle Inspector some time in the year 1997. The unofficial respondents in the above mentioned two OAs who are the writ petitioners before us were recruited by transfer as Regional Transport Officers from the service of the Secretariat, which is governed by the Rules called the Andhra Pradesh Secretariat Service Rules. Prior to their appointment as Regional Transport Officers, some of them were working as Section Officers and the others were working as Private Secretaries to the Secretaries of the Government of Andhra Pradesh. The post of Regional Transport Officer is one of the posts, which is part of a service called the “Andhra Pradesh Transport Service”. The constitution, method of appointment etc., of the said service are governed by a set of Rules called the Andhra Pradesh Transport Service Rules, 1990 framed by the Government of Andhra Pradesh, in exercise of the power conferred under Article 309 of the Constitution. Rule 3 of the said Rules postulates the method of appointment to the post of Regional Transport Officer as follows: “Rule 3. Method of appointment :- (a) Subject to the other provisions in these rules, the method of appointment for the several categories shall be as follows : 1. Xxx 2. Xxx 3. Xxx 4. Regional Transport Officer (i) By direct recruitment ii. By promotion from category 5. iii. By recruitment by transfer from among : a. Superintendents/Special Category Stenographers in A.P.Ministerial Service of the Office of the State Transport Authority. b. Superintendents in A.P. Ministerial Service of the Subordinate Offices of Transport Department. c. Section Officers/Private Secretaries to Secretaries to Govt. of the Secretariat Dept. except Finance and Planning (Finance Wing)/Law and Legislative Departments.” It further stipulates that such appointment, either by promotion or by transfer, is required to be made in a unit of ten vacancies in the following manner : “(b) Appointment by direct recruitment and by promotion or by recruitment by transfer to the category of Regional Transport Officers shall be made in a unit of ten vacancies as follows : 1st vacancy : Promotion from Motor Vehicle Inspectors 2nd vacancy : By recruitment by transfer from the category of Supdts/Special Category Stenographers in Andhra Pradesh Ministerial Service of the Office of the State Transport Authority. 3rd vacancy : Direct recruitment 4th vacancy : By recruitment by transfer from the category of Section Officers/Private Secretaries to Secretaries to Government of the Secretariat Departments except Finance & Planning (Finance Wing) Department, Law and Legislature Department. 5th vacancy : By recruitment by transfer from the category of Supdts. In Andhra Pradesh Ministerial Service of the Subordinate Offices of the Transport Department of the concerned Multizone. 6th vacancy : By promotion from Motor Vehicle Inspectors. 7th vacancy : Direct recruitment 8th vacancy : By recruitment by transfer from the category of Supdts. in Andhra Pradesh Ministerial Service of the Subordinate Offices of the concerned Multizone. 9th vacancy : By promotion from Motor Vehicle Inspectors. 10th vacancy : Direct recruitment.” The said Rule insofar as it provided for recruitment by transfer to the post of Regional Transport Officer was challenged unsuccessfully earlier. Eventually, the Supreme Court repelled the challenge in a case in GOVT. OF A.P. AND ANOTHER V. B.SATYANARAYANA RAO (DEAD) BY LRS. The substance of the challenge in the said decision was that such a provision for recruitment by transfer is violative of the Presidential Order issued pursuant to Article 371-D titled as “The Andhra Pradesh Public Employment (Organisation of Local Cadres and Regulation of Direct Recruitment) Order, 1975 (for short `Presidential Order). The Supreme Court in the said Judgment followed an earlier decision of the Court in STATE OF A.P. V. V.SADANANDA , wherein a similar question was considered. However, a similar provision, which enabled the posts of Assistant Inspector of Labour to be filled up through the recruitment by transfer of the UDCs of the Labour Department and Factories Department, was challenged and the legality of the relevant Rule was considered by the Supreme Court in a case in V.JAGANNADHA RAO V. STATE OF A.P.. Once again, on the same ground the Supreme Court sustained the challenge and declared that such a provision violates the Presidential Order. In the process, the Supreme Court had to consider the two decisions referred to earlier and came to the conclusion that the above mentioned two decisions did not lay down the correct legal position. It is necessary to mention here while the above mentioned two decisions were rendered by Division Benches consisting of two Judges each, JAGANNATHA RAO’S CASE (3 supra) was decided by a Bench consisting of three Judges. Armed with the declaration of law by a bigger bench of the Apex Court, the applicants approached the Administrative Tribunal by way of the above mentioned OAs from out of which these writ petitions arise. The prayer in the OAs, in substance, is that in view of the declaration of law made by the Supreme Court in JAGANNADHA RAO’s case (3 supra), the continuance of the writ petitioners herein in the posts of Regional Transport Officers, is illegal. The submission was accepted by the Tribunal. Hence, these writ petitions. The learned counsel for the petitioners, Sri Nuty Ram Mohan Rao, argued that: Rule 3 of the A.P. Transport Service Rules, 1990 was challenged earlier on the ground that it violates the Presidential Order, the matter went up to the Supreme Court and the constitutionality of the said Rule was upheld in SATYANARAYANA RAO’s case (1 supra), the petitioners were appointed as Regional Transport Officers in accordance with the above mentioned Rule (3) of the Rules under the third category i.e., recruitment by transfer, long before the decision of the Supreme Court in JAGANNADHA RAO’s case. The declaration of law made by the Supreme Court in the said case that SATYANARAYANA RAO’s case did not lay down the correct principle of law, is per incurium and at any rate cannot be invoked to unsettle the transactions that took place not only long before the declaration of law made by the Supreme Court in JAGANNDHA RAO’s case but also consistent with the declaration of law made by the Supreme Court in SATYANARAYANA RAO’s case. The other submission made by the learned counsel is that in SATYANARAYANA RAO’s case, the Supreme Court only followed the principle laid down by it earlier in SADANANDA’s case (2 supra). Therefore, the legal position that held the field for a period of almost one and half decades ought not to be displaced on the basis of a latter decision of the Supreme Court where the issue fell for enquiry collaterally. Lastly, the learned counsel argued that the law declared by the Supreme Court in JAGANNADHA RAO’s case is required to be applied prospectively. Before we examine these submissions, it is necessary to examine the relevant provisions of the Constitution and other instruments dealing with this aspect. Under the scheme of Constitution, equality of opportunity to all the subjects of the State in every sphere of the activity of the State is the norm prescribed under Articles 14. Article 16 emphasize the norm specifically in the context of public employment. Under Article 309 of the Constitution, the appropriate legislatures are authorised to make laws dealing with the various facets of employment under the State, such as, the method and manner of recruitment, conduct and discipline, etc. In other words, the Parliament and the appropriate State Legislatures are authorized to make laws dealing with the area of employment under the Union Government and under the State Government respectively. The Seventh Schedule of the Constitution indicates the fields of legislation assigned to either the Parliament or the Legislatures of the State. Article 246 describes the legislative competence of the above mentioned two bodies with reference to the entries contained in three lists of the Seventh Schedule. Entry 70 of List-I of the Seventh Schedule indicates the field of legislation as; “Union Public Services, All India Services, Union Public Service Commission”. Entry 41 of List-II indicates the field in the context of State Legislature as; “State Public Services, State Public Service Commission”. Article 309 further authorizes the President in the case of Union of India and the Governor in the case of a State to make appropriate Rules with regard to the employment under State until the legislature makes the law in that regard. By virtue of the declaration contained under Articles 14 and 16 of the Constitution of India, either the legislature or the executive, in exercise of the power under Article 309, is required to make a law or the Rules, as the case may be, providing equality of opportunity more specifically without any reference to or preference on the ground of religion, race, caste, sex, place of birth, residence, etc. However, for various historical reasons, the details of which may not be necessary at this juncture, an exception to the Rule contained under Articles 14 and 16 in the context of employment under the State came to be incorporated in the Constitution by the Constitution (Thirty-second Amendment) Act 1973. The said Act introduced a new Article 371-D to the Constitution. The said Article recognizes certain disparities among the various regions in the matter of employment under the State and authorizes the President to make appropriate orders in that regard. Article 371-D, insofar as the same is relevant for the present purpose, reads as follows: 1. The President may, by order made with respect to the State of Andhra Pradesh provide, having regard to the requirements of the State as a whole, for equitable opportunities and facilities for the people belonging to different parts of the State, in the matter of public employment and in the matter of education, and different provisions may be made for various parts of the State. 2. An order made under clause (1) may, in particular,- (a) require the State Government to organize any class or classes or posts in a civil service of, or any class or classes of civil posts under, the State into different local cadres for different parts of the State and allot in accordance with such principle and procedure as may be specified in the order the persons holding such post to the local cadres so organized. (b) specify any part or parts of the State which shall be regarded as the local area- i. for direct recruitment to posts in any local cadre (whether organized in pursuance of an order under this article or constituted otherwise) under the State Government; ii. for direct recruitment to posts in any cadre under any local authority within the State; and iii. xxxxxx. (c ) specify the extent to which, the manner in which and the conditions subject to which, preference or reservation shall be given or made- i. in the matter of direct recruitment to posts in any such cadre referred to in sub-clause (b) as may be specified in this behalf in the order; ii. xxxxxxxxx. to or in favour of candidates who have resided or studied for any period specified in the order in the local area in respect of such cadre, University or other educational institution, as the case may be. Xxxxxxxxxxxxxxxx Xxxxxxxxxxxxxxxx Xxxxxxxxxxxxxxxxx (10) The provisions of this article and of any order made by the President thereunder shall have effect notwithstanding anything in any other provision of this Constitution or in any other law for the time being in force. (Emphasis supplied) The Article expressly authorizes the President to make different provisions for different parts of the State of Andhra Pradesh. An obvious departure for the Rule contained under Article 16 that the factum of residence of a seeker of employment under the State, is an irrelevant factor in the matter of public employment. Pursuant to the said amendment, the President of India made the Presidential Order referred to earlier in this Judgment. The said order is divided into various paragraphs. Para 2 contains definitions of the various expressions that occur in the order. Para 3 mandates the State Government to organize classes of posts in Civil Services and classes of Civil Posts under the State into different local cadres for different parts of the State to the extent and in the manner provided thereunder. Under para 6 of the Presidential Order, the State is divided into various local areas. The description of the local area is relative to certain classes of posts, expressly enumerated under para 6. Broadly, the local areas are the District, (which is once again defined to be the revenue district) zones specified in Schedule-II to the order. Para 8 mandates that a certain percentage of posts are required to be reserved in favour of local candidates in the matter of direct recruitment to the various posts enumerated in the para. The percentages vary depending upon the class of the post. As a broad Rule, we can state the higher the post in the hierarchy of the administration, the percentage of the reservation is lesser. The minimum percentage prescribed is 60 and the maximum is 80. Para 7 lays down the principles, by which the question whether a candidate is a local candidate with reference to any particular post or not is to be decided. We are not concerned in the present case with the other provisions of the Presidential Order except para 14 of the Order which reads as follows: “Para 14. Saving – Nothing in this Order shall apply to – a. any post in the Secretariate of the State Government b. any post in an Office of the Head of a Department; c. any post in a Special Office or Establishment; d. Any post in a State-level office or institution; e. Any post other than a post belonging to any of the non-gazetted categories in the ministerial and technical services in a Major Development Project; and f. Any post of Police Officer as defined in clause (b) of Section 3 of the Hyderabad City Police Act, 1348 F. In substance, para 14 says, with reference to the various posts enumerated in para 14, the Presidential Order has no application. In other words, the requirement of filling up of those posts on the basis of a reservation in favour of the local candidates is not made applicable. An analysis of the language of Article 371-D and para 8 of the Presidential Order makes it clear that the reservation provided (in favour of the local candidates) therein is confined only to the process of filling up of a post by direct recruitment. The long history of services under the State in this country, undoubtedly, demonstrates that there is more than one method of filling up of a post under the State. Filling up of a post can either be by way of a direct recruitment i.e. recruitment from open market of eligible candidates, (2) filling up of the posts by way of promotion from an inferior post to a superior post, and (3) filling up of a post by transfer of an employee from one particular class of post to another (See RAMPRAKASH v. STATE OF HARYANA AIR 1993 SC 1974) . Strictly, such a mode of filling up is not called a promotion in the jargon of service law as the expression ‘promotion’ is always used in service law to indicate an appointment to a higher post from a lower where both the posts are created and governed under the same set of Rules constituting one service. Recruitment by transfer, though factually it can be called a ‘promotion’ in the sense that the post to which the recruitment is made normally carries a higher status in terms of emoluments and other benefits attached to it. The post of Regional Transport Officer is classified as a multi-zonal post. The expressions either ‘multi-zone’ `multi-zonal post’ are not defined either in the Presidential Order or under the Constitution, but it is in vogue as indicative of a post contemplated under para 3, sub-para (5) of the Presidential Order. The said sub-paragraph enables the State Government whenever it considers expedient to organize the post referred to in sub-paragraphs (3) and (4) of the para 3 which are otherwise required to be organized into cadres with reference to the zones specified in Schedule-II to be organized unit-wise consisting of more than one or two contiguous zones. Such units organized under para 5, popularly came to be called as multi-zones and the State of A.P., in fact, organized the State with reference to some of the posts into two such multi- zones comprising zones I to IV, mentioned in the Second Schedule into multi zone I and zones V and VI in multi-zone II. The learned counsel for the petitioner, Sri Nuty Ram Mohan Rao argued that the Presidential Order carves out an exception to the Rule contained under Articles 14 and 16, thereby relieving the State of its obligation to accord equal treatment to all its citizens unmindful of their birth, place of birth etc. It enables the State to take the geographical relationship of a person to a part of the State as a criterion in the matter of employment under the State. He further argued that the Presidential Order does not impose any fetter on the State to make a policy choice in the matter of recruitment for public service, whether any particular post or class of posts are required to be filled either only by the mode of direct recruitment or some other legally approved mode. The various modes of recruitment indicated earlier have been approved otherwise to be constitutionally permissible modes of recruitment to service under the State. Therefore, the learned counsel argued that there is no obligation on the part of the State to resort exclusively to direct recruitment ignoring the other well- established modes of recruitment i.e., recruitment by promotion and recruitment by transfer. The Presidential Order does not either expressly or by necessary implication stipulate otherwise. In the absence of any such stipulation, Rule 3 of the A.P. State Transport Rules, 1990, which provides for the three modes of recruitment to the posts of Regional Transport Officers cannot be categorized to be a Rule (insofar as it provided for a recruitment by transfer) conflicting with the mandate of the Presidential Order. The learned counsel submitted that the petitioners, who were initially appointed to various posts, the details of which are mentioned earlier, governed by the A.P. Secretariat Service Rules are also made eligible by Rule 3 of the A.P. Transport Service Rules, 1990 to compete for the appointment to the post of Regional Transport Officer. In view of the express provision contained in para 14 of the Presidential Order, the special scheme contained in the Presidential Order has no application in the matter of recruitment to the various posts indicated in para 14 of the Presidential Order. The fact that the petitioners do not belong to a service which is subject to the regime of the Presidential Order does not disqualify them from being considered for appointment to some other post which is subject to the regime of the Presidential Order by the mode of recruitment by transfer. The learned counsel therefore argued that there is neither any illegality nor unconstitutionality in continuing the petitioners in the post of RTOs. The learned counsel further submitted that the decision of the Supreme Court reported in V.SADANANDA’s case (2 supra), which was followed by later Bench in B.SATYANARAYANA RAO’s case (1 supra) laid down the correct principle of law and the decision of the Supreme Court in V.JAGANNADHA RAO’s case (3 supra) is per incuriam, and therefore, does not provide the legal basis for granting the relief sought for by the respondents herein and granted by the Tribunal. I n V.SADANANDA’s case (2 supra), the constitutionality of Rule-3 of A.P. Treasury and Accounts Subordinate Service Rules, 1963, as being inconsistent with the Presidential Order, was in issue. The said Rule provided for filling up of the posts of Head Accountants and Sub-Treasury Officers, inter alia, by transfer from among the U.D. Clerks in the Finance Department of the Secretariate. The decision is required to be examined in the background of the various submissions made in the case. The State took a definite stand that making a provision for recruitment by transfer is justified under Paragraph-5(2)(a) of the Presidential Order, which submission was rejected by the Tribunal. Dealing with this aspect, the Supreme Court held at para 14 as follows: “14. In the first place, we must point out that the Tribunal has failed to construe Para 5(2) of the Presidential Order in its proper perspective and give full effect to the powers conferred thereunder on the State Government to make provisions contrary to the scheme of local cadres prescribed under Para 5(1). The words of sub-para (2) of Para 5 viz. nothing in this order shall prevent the State Government from making provision for" sets out the overriding powers given to the State Government under the sub-para. Such over-riding powers have been given to the State Government in express terms in recognition of the principle that public interest and administrative exigencies have precedence over the promotional interests of the members belonging to local cadres and zones. Since para 5(2) also forms a part of the Presidential Order, it forms part of the scheme envisaged for creating local cadres and zones. The Tribunal was, therefore, in error in taking the view that if the State Government was to exercise its powers under Para 5(2) and make provision for promotion of UD Assistants in the Directorate and Assistant Section Officers in the Secretariat to be transferred to posts in Zones I to IV, it will be the very negation of the creation of cadres and zones under Para 5(1) and it will be destructive of the scheme underlying the Presidential Order. In fact the Tribunal has realised the operative force of Para 5(2) to some extent but it has failed to give full effect to its realisation of the scope of Section 5(2). In para 12 of its judgment in R.P. No. 1595 of 1983 the Tribunal has stated that since the amended rule refers to para 5(2) of the Presidential Order "it will no longer be open to the petitioners to attack the amendment as was done in respect of the earlier amendment in the previous RP". The Tribunal has thus noticed that the amended Rule has been brought about by the Government in exercise of its powers under Para 5(2) but it has failed to draw the logical inference following therefrom.” Apart from that, the Supreme Court also held that the mode of recruitment and the category from which the recruitment to a service should be made are all matters, which are exclusively within the domain of the executive and not for the judicial bodies. At para 16, the Supreme Court held as follows: “…… We need only point out that the mode of recruitment and the category from which the recruitment to a service should be made are all matters which are exclusively within the domain of