IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR TUESDAY, THE 25TH AUGUST 2009 / 3RD BHADRA 1931 WP(C).No. 5729 of 2008(F) ------------------------- PETITIONER(S): --------------- 1. K.S.MANIKANTAN, ASSISTANT MANAGER, KERALA STATE FINANCIAL ENTERPRISES LTD., KALLARA BRANCH, THIRUVANANTHAPURAM DISTRICT. 2. K.V.VENUGOPALAN NAIR, ASSISTANT MANAGER, KERALA STATE FINANCIAL ENTERPRISES LTD., PARASSALA BRANCH, THIRUVANANTHAPURAM DISTRICT. 3. B.S.VIJAYAKUMAR, ASSISTANT MANAGER, KERALA STATE FINANCIAL ENTERPRISES LTD., PAPPANAMCODE BRANCH, THIRUVANANTHAPURAM DISTRICT. 4. B.VISWARAJAN, ASSISTANT MANAGER, KERALA STATE FINANCIAL ENTERPRISES LTD., NEYYATTINKARA, THIRUVANANTHAPURAM DISTRICT. BY ADV. SRI.KRB.KAIMAL, SENIOR ADVOCATE SRI.B.MOHANLAL SRI.B.UNNIKRISHNA KAIMAL RESPONDENT(S): --------------- THE KERALA STATE FINANCIAL ENTERPRISES LTD., REPRESENTED BY ITS MANAGING DIRECTOR, REGISTERED OFFICE, 'BHADRATHA', MUSEUM ROAD, THRISSUR-20. ADV. SRI.E.K.NANDAKUMAR SRI.A.K.JAYASANKAR NAMBIAR SRI.K.JOHN MATHAI SRI.P.BENNY THOMAS SRI.ANIL D. NAIR THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 17/08/2009, THE COURT ON 25/08/2009 DELIVERED THE FOLLOWING: WP(C).No. 5729 of 2008(F) A P P E N D I X PETITIONER'S EXTS: EXT.P1 TRUE COPY OF THE NOTICE (RANK LIST) NO.4130/T DATED 6/1/2006 ISSUED BY THE RESPONDENT EXT.P2 TRUE COPY OF THE NOTICE NO.4130/T/ADMN. DATED 29/4/2006 ISSUED BY THE RESPONDENT EXT.P3 TRUE COPY OF THE NOTICE NO.4130/T DATED 24/7/2007 ISSUED BY THE RESPONDENT EXT.P4 TRUE COPY OF THE JUDGMENT DATED 20/9/2007 OF THIS COURT IN WPC 27146/2007 EXT.P5 TRUE COPY OF THE REPRESENTATION DATED 8/8/2007 SUBMITTED BY THE FINANCIAL ENTERPRISES EMPLOYEES ASSOCIATION TO THE CHAIRMAN OF THE RESPONDENT EXT.P6 TRUE COPY OF THE ORDER NO.38581 DATED 6/1/2006 ISSUED BY THE RESPONDENT \\TRUE COPY// P.A TO JUDGE T.R. Ramachandran Nair, J. - - - - - - - - - - - - - - - - - - - - - - - - W.P.(C) Nos.5729/08-F & 10151/08-H - - - - -- - - - - - - - - - - - - - - - - - - - - Dated this the 25th day of August, 2009. JUDGMENT The petitioners in these two writ petitions are working as Assistant Managers in the Kerala State Financial Enterprises. The main prayer in W.P.(C) No.10151/2008 is to quash Ext.P4 list published by the management for promotion to the post of Manager Grade IV. It is styled as a rank list. The petitioners in W.P.(C) No.5729/2008 are persons who are included in the rank list, but their grievance is concerned with the stipulation therein to the effect that the rank list will be valid for a period of two years from the date of publication. 2. As far as the petitioners in W.P.(C) No.10151/2008 are concerned, they are seeking promotion to the higher post in terms of the relevant provisions of the recruitment rules and the bilateral agreements, Exts.P2 and P3. Going by the relevant recruitment rules, all the Assistant Managers will be eligible for further promotion as Manager Grade IV after completion of three years of service. They will have to appear for a competitive test and based on that, promotion will be given. Ext.P1 is the relevant recruitment rules. The rule provides for filling up of 75% of vacancies by promotion by wpc 5729/08 & 10151/08 2 selection based on competitive written test and interview from qualified and suitable officers in the Junior Officers Cadre. 3. The substantial contention raised by the petitioners is that the number of vacancies to which the test is conducted, will depend upon the vacancies available in the department as on the last date of the month in which the examination is conducted. Therefore, they are aggrieved by the stipulation in the rank list that the list is valid for two years. According to them, once the number of vacancies is reckoned as on the last date of the month in which the examination is conducted, the list will be exhausted, after promotions are made to fill up such vacancies. The test will have to be conducted later for filling up vacancies which may arise during the subsequent periods. 4. The crucial test herein is one conducted in March, 2005 for those officers who were qualified for the post of Junior Manager Grade IV in the year 2004. The persons who are included in the list approached this court earlier complaining about the stipulation to limit the life of the list for two years. By Ext.P5 judgment, this court directed the management to consider the complaints. Thereafter, by Ext.P6 a fresh decision was taken by the management. Going by Ext.P6, it was decided to modify the validity of the wpc 5729/08 & 10151/08 3 rank list as two years and going by the modified provision, the list will be valid for a period of two years from the date of promotion of the last candidate in the existing rank list dated 6.1.2006. The petitioners have filed Ext.P7 representation against the same. 5. In W.P.(C) No.5729/2008, mainly the complaint is that the stipulations in Ext.P3 which stands modified in Ext.P6 by fixing a period of two years for promotion and the like itself, is illegal. No time limit can be fixed, according to the petitioners. 6. Heard learned Senior Counsel Shri N.N. Sugunapalan appearing for the petitioners in W.P.(C) No.10151/2008 and learned Senior Counsel Shri K.R.B. Kaimal appearing for the petitioners in W.P.(C) No.5729/2008 and Shri Jayasankar Nambiar, learned Standing Counsel appearing for Kerala State Financial Enterprises Limited, Shri G.P. Shinod, Shri B. Mohanlal, Smt. Sreedevi Kylasanath, Shri Liju M.P. and Shri P.B. Krishnan, learned counsel appearing for the other respondents. 7. Learned Senior Counsel Shri N.N. Sugunapalan invited my attention to Clause n (iii) of Ext.P2 which is extracted below: “Appointment to the Supervisory cadre (Executive Assistants) based on the qualifying tests and to officers Gr.III (Branch Managers/Supdt.) from among eligible employees in the respective wpc 5729/08 & 10151/08 4 lower cadres will be done on the basis of their seniority position in the next lower cadre. The number of appointments to be made thus from among the eligible lists will be determined on the basis of the number of vacancies that are in existence as on the last date of the month in which the examinations are held.” Ext.P2 is the memorandum of settlement of the year 1977. Going by the above clause, the number of appointments to be made will depend upon the number of vacancies that are in existence as on the last date of the month in which the examinations are held. It is submitted that the management is bound to comply with this clause whenever the test is conducted. This is a general principle that applies to the preparation of the rank list and the consequent appointment. Ext.P3 is the bilateral settlement of the year 1985. Therein, the relevant clause is contained in para (iv) which is extracted below: “It is agreed between the parties that Sr. Assts. having a minimum of two years service in the cadre and special Gr. Assts. who have not passed the test are eligible to appear for the prescribed qualifying test for promotion to the position of Junior Executives and the promotion from the qualified special Grade Assistants will be based on seniority cum-merit subject to availability of vacancies. The Junior Executives/Executive Assts. who have put in a minimum service of 3 years in the cadre are eligible to appear for the prescribed wpc 5729/08 & 10151/08 5 competitive test and their promotion to the cadre of Junior Branch Managers will be based on the rank they secure in the competitive test subject to availability of vacancies.” Learned Senior Counsel therefore submitted that the stipulations made in Ext.P4 that the rank list will be in force for a period of two years, cannot be supported in the light of the relevant clauses in Exts.P2 and P3. They are binding on the management. The modified proceedings as per Ext.P6, also cannot be sustained. Along with I.A.No.10304/2009 Exts.P12 to P12(c) which are the settlements for various years, have also been produced. The averments contained in the counter affidavit filed by the management shows that they have also understood that the crucial clause in Ext.P2 will govern the matter. It is therefore contended that the stand taken by the management cannot be sustained. 8. Learned Standing Counsel appearing for the Kerala State Financial Enterprises, opposed these contentions by submitting that Ext.P2 will not govern the test for the year 2006, in the light of the subsequent long term settlements executed between the parties wherein the said clause, viz. clause n(iii) is no longer available. It is pointed out that even going by Ext.P3, the relevant clause in Ext.P2 stands varied. It is pointed out that Ext.P3 will show that the promotion to the cadre of Junior Manager will be based on wpc 5729/08 & 10151/08 6 the rank they secure in the competitive test subject to availability of vacancies. Therefore, the vacancies could be existing and arising vacancies and the stipulation contained in Ext.P2 cannot therefore apply to the test that is conducted here. It is submitted that nowhere in the counter affidavit it is admitted by the respondents that the stipulations in 1977 settlement will prevail. 9. In the counter affidavit filed on behalf of respondents 1 and 2, it is stated in para 3 that the rank list prepared for a particular year used to be exhausted before operating the rank list for the subsequent year. In other words, the rank list for a particular year did not cease to operate on the commencement of the rank list for the subsequent year. It is also submitted that it used to be the practice followed by respondents 1 and 2 to exhaust the rank list published in respect of each year in spite of publication of a new rank list for the subsequent year. As regards the subsequent years, it is explained in para 4 that the test could not be conducted in 2006 and 2007 in view of the fact that no validity period was fixed for the rank list in respect of the examination conducted till the year 2005. For the rank list in respect of the examination for the year 2005 conducted in July 2006, two year validity period was fixed. It is also stated that the notification for conduct wpc 5729/08 & 10151/08 7 of promotion test did not specify any time limit for the rank list. If an employee included in the rank list is not promoted in view of the limitation imposed, the same would be de-motivating. In para 11 it is submitted that promotions by way of conduct of competitive tests are held in accordance with settlement dated 12.9.1985 entered into between the management and workmen. Going by the same, tests would be held every year preferably in the month of November. In para 13 it is averred that it has been the consistent practice followed by the respondents to exhaust the list published for the post of Manager Grade IV before operation of the new list. 10. Learned counsel further submitted that the reliance placed on Exts.P12 to P12(c) cannot help the case of the petitioners in the light of the fact that the 1977 settlement cannot govern them also. 11. Therefore, the crucial question is whether Ext.P2 will govern the competitive test held in the year 2005. Going by Ext.P2, it can be seen that the said settlement was finalised at in the final conference held on 9.4.1977 and the terms of settlement are thus arrived at. Going by the recitals of the case in Ext.P3, it can be seen that it is pursuant to an industrial dispute between the management and the workers of the K.S.F.E. over the renewal of the long term settlement which expired on 30.6.1984. The final wpc 5729/08 & 10151/08 8 conference was held by the Labour Commissioner, in his office on 12.9.1985 and the final settlement was arrived at on the terms noted therein. It is clear that the crucial term, i.e. clause n(iii) in Ext.P2 is no longer there in Ext.P3. It is substituted by paragraphs (iv) and (vi). The above paragraphs cannot be treated as an addition to para n(iii) in Ext.P2, since going by the terms of Ext.P3, it is a final settlement which was arrived at on the specific terms provided in Ext.P3 itself. There is nothing in the recruitment rules, to be applied as a general rule in respect of future settlements. In that view of the matter, the contention that the clauses in 1977 settlement will govern the competitive test no longer survives. Going by paragraphs (iv) and (vi) of Ext.P3, the promotion in the cadre of Junior Managers will be based on the rank secured in the competitive test subject to availability of vacancies. The test will be conducted once in a year, preferably in the month of November. Therefore, it is evident that in the absence of a specific period for validity of the rank list and in the absence of any express provision to limit the promotion to existing vacancies as on November of the year, the persons included in the list will have a right to get promotion in existing/arising vacancies. Nothing prevents the respondents from considering the claim of persons included in the list in wpc 5729/08 & 10151/08 9 arising future vacancies. Otherwise, a period for validity of the list would have been specified in Ext.P3 or in any subsequent settlements. For example, if 100 persons are included in the list, then if only 10 vacancies are available in November the list can be operated only for promotion of 10 persons and the remaining persons may have to compete in a test conducted in future, if the contentions of the petitioners are to be accepted. Such a situation is not contemplated in paragraphs (iv) and (vi) of Ext.P3. 12. The contention emphatically advanced by the learned Senior Counsel Shri N.N. Sugunapalan is that Ext.P2 will govern all the other settlements and the substitution is only in respect of various clauses which may appear differently in other settlements and the general clauses will have application throughout. It is therefore submitted that a reference to Exts.P12 onwards which are settlements of various years, show that the substitution of clauses have been made only in respect of certain clauses alone, thus retaining the general clauses contained in Ext.P2. It is pointed out that Ext.P14, the counter affidavit filed by the management in W.P.(C) No.24647/2007 also supports the said plea of the petitioners. Reference is made to paragraphs 5 and 6 of the counter affidavit, Ext.P14. wpc 5729/08 & 10151/08 10 13. Paragraph 5 only refers to the practice which was prevailing and in that context it is stated that the candidates so selected would be accommodated in the vacancies arising till the notification of the next year's examination. Again, in para 6 reference is made to settlement dated 9.4.1977. True that the averments therein explain the position as regards the settlement dated 9.4.1977, but that cannot be treated as a concession that the clauses in the said settlement will continue to operate. Further, it is well settled that even a concession on a legal issue can be withdrawn in subsequent proceedings. What is relevant is the stand taken in the counter affidavit filed in this case. If that be so, the relevant clauses in Ext.P3 alone can apply. 14. The contention therefore that vacancies which were there as on the date of conduct of the test alone could be filled up, cannot be sustained. In that view of the matter, no relief can be granted to the petitioners in W.P. (C) No.10151/2008 as regards the challenge against Ext.P4 list. The list will have to be operated in respect of arising vacancies also. 15. In W.P.(C) No.5729/2009, the challenge is against the fixing of two year period in Ext.P3 which stands modified in Ext.P6 to the effect that the validity period of the list will be a for a period of two years from the wpc 5729/08 & 10151/08 11 date of promotion of the last candidate in the existing rank list. 16. Even though justification is sought for fixing a two year period, that cannot have any support from the express provisions of the settlement. The settlement does not empower the management to fix such a limit for the rank list. Persons are competing in a test conducted for filling up of vacancies. What is provided as a qualification is that persons having three years service can compete for the test. Once they are included in the rank list based on their performance, there cannot be any specification like a validity period as now provided, in the absence of any enabling clause either in the recruitment rules or in the long term settlement. In that view of the matter, the period fixed in Exts.P3 and P6 to operate them, cannot be sustained. 17. Learned counsel appearing for the management submitted that only few candidates are remaining to be promoted and the list will be exhausted by the appointment of the last candidate within a few months. The said submission is recorded. So far, the tests have not bee conducted for the years 2006, 2007 and 2008. Therefore, the tests will have to be conducted within a time frame. 18. In the result, W.P.(C) No.10151/2008 is dismissed. W.P.(C) wpc 5729/08 & 10151/08 12 No.5729/2008 is allowed to the extent of setting aside the life period fixed in Ext.P3 which stands modified in Ext.P6. It is declared that the list will be in operation till the last candidate is appointed to the promotion post of Manager Grade IV. There will be a further direction that the management will conduct the tests for the years 2006, 2007 and 2008 separately, within a period of three months from the date of receipt of a copy of this judgment. The said lists will be operated after appointing candidates from the present list. After exhausting the list for 2006, the list for 2007 will be operated and after exhausting candidates in 2007 list, the list of 2008 will be operated. The writ petitions are accordingly disposed of. No costs. (T.R. Ramachandran Nair, Judge.) kav/