Case: S. G. Jaisinghani Vs. Union Of India And Ors.(With Connected Writ Petition)

the number of officers recruited by the two methods of recruitment to Class I Service during the relevant years: Year UPSC Exam. Recruits War Service candidates Officers Selected from Class II. 1951 50 … … 1952 … 2 49 1953 52 … 38 1954 44 … 30 1955 45 … 24 1956 … … 25 It is not clear from the affidavit of Mr. R.C. Dutt whether the quota rule was strictly followed for the years in question. In the counter- affidavits of respondents 1 to 4 in Writ Petition No. 5 of 1966 there is however an assertion that the quota rule "has been substantially complied with."17. The Solicitor-General on behalf of respondents 1, 2, and 3 submitted that the quota rule was merely an administrative direction to determine recruitment from two different sources in the proportion stated in the rule and a breach of the quota rule was not a justiciable issue. The Solicitor-General said that there was, however, substantial compliance with the quota rule. But in the absence of figures of permanent vacancies in Class 1, Grade II for the relevant years the Solicitor-General was unable to say what extent there had been deviation from the rule. We are unable to accept the argument of the Solicitor-General that the quota rule was not legally binding on the Government. It is not disputed that rule 4 of the Income-tax Officers (Class 1, Grade II) Service Recruitment Rules is a statutory rule and there is a statutory duty cast on the Government under this rule to determine the method or methods to be employed for the purpose of filling the vacancies and the number of candidates to be recruited by each method. In the letter of the Government of India dated October 18, 1951 there is no specific reference to rule 4, but the quota fixed in their letter must be deemed to have been fixed by the Government of India in exercise of the statutory power given under rule 4.Having fixed the quota in that letter under rule 4, it is not now open to the Government of India to say that it is not incumbent upon it to follow the quota for each year and it is open to it to alter the quota on account of the particular situation (See Para 24 of the counter affidavit of respondents 1 to 3 in Writ Petition No. 5 of 1966). We are of opinion that having fixed the quota in exercise of their power under rule 4 between the two sources of recruitment, there is no discretion left with the Government of India to alter that quota according to the exigencies of the situation or to deviate from the quota, in any particular year, at its own will and pleasure. As we have already indicated, the quota rule is linked up with the seniority rule and unless the quota rule is strictly observed in practice , it will be difficult to hold that the seniority rule. i.e., rule 1(f) (iii) and (iv), is not unreasonable and does not offend Art. 16 of the Constitution. We are accordingly of the opinion that promotees from Class II, Grade III to Class I, Grade II Service in excess of the prescribed quotas for each of the years 1951 to 1956 and onwards have been illegally promoted and the appellant is entitled to a writ in the nature of mandamus commanding respondents 1 to 3 to adjust the seniority of the appellant and other officers similarly placed like him and to prepare a fresh seniority list in accordance with law after adjusting the recruitment for the period 1951 to1956 and onwards in accordance with the quota rule prescribed in the letter of the Government of India No. F. 24 (2). -Admn I. T./.51 dated October 18, 1951. We, however. wish to make it clear that this order will not affect such Class II Officers who have been appointed permanently as Assistant Commissioners of Income - tax. But this order will apply to all other officers including those who have been appointed Assistant Commissioners of Income-tax provisionally pursuant to the orders of the High Court.18. In this context it is important to emphasize that the absence of arbitrary power is the first essential of the rule of law upon which our whole constitutional system is based. In a system governed by rule of law, discretion, when conferred upon executive authorities, must be confined within clearly defined limits. The rule of law from this point of view means that decisions should be made by the application of known principles and rules and in general, such decisions should be predictable and the citizen should know where he is. If a decision is taken without any principle or without any rule it is unpredictable and such a decision is the antithesis of a decision taken in accordance with the rule of law. (See Dicey- "Law of the Constitution -Tenth Edn., Introduction cx). "Law has reached its finest moments," stated Douglas, J. in United States v. Wunderlich. (1951) 342 US 98, "when it has freed man from the unlimited discretion of some ruler........Where discretion is absolute man has always suffered. It is in this sense that the rule of law may be said to be the sworn enemy of caprice .Discretion as Lord Mansfield stated it in classic terms in the case of John Wilkes. (1770) 4 Burr 2528 at p. 2539 "means sound discretion guided by law. It must be governed by rule not by humour it must not be arbitrary, vague and fanciful."19. We should also like to suggest to the Government that for future years the roster system should be adopted by framing an appropriate rule for working out the quota between the direct recruits and the promotees and that a roster should be maintained indicating the order in which appointments are made by direct recruitment and by promotion in accordance with the percentages fixed under the statutory rule for each method of recruitment.20.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]In our opinion. it is not right to approach this problem as if it is a case of classification of one service into two classes for the purpose of promotion and as the promotion rule operating to the disadvantage of one of the two classes. It is really a case of recruitment to the Service from two different sources and then adjustment of seniority between the recruits coming form the two sources. So far as Art. 16 (I) is concerned, it cannot be said that the rule of seniority proceeds on an unreasonable basis. The reason for the classification is the objective of filling the higher echelons of the Income Tax Service by experienced officers possessing not only a high degree of ability but also first rate experience. Having regard to the particular circumstances of this case, we are of opinion that the seniority rule is not unreasonable when read with the quota rule which provides for a special reservation of a small percentage of posts for the promotees who are selected by a special Committee, which determines the fitness of the candidates for promotion after they have put in at least three. years of service as Income Tax Officers. A rule which gives seniority to outstanding officers with considerable experience, and selected on merit and limiting the promotion to a percentage not exceeding the prescribed limit cannot per se be regarded as unreasonable. As we have already pointed out, the direct recruits joining Class I, Grade II Service have to undergo a period of two years training and thereafter they become qualified for confirmation. A promotee having already undergone the very same training during the period of probation of Class II, Grade III, joins Class I, Grade with three years period of assessment and working experience of the Income-tax Department. It is necessary to add that the selection of a promotee to Class I is based on merit and great weight age is given by the Departmental Promotion Committee to outstanding qualifications, record of work and the ability of the candidate, so that those who come to Class I, Grade II are officers who have shown outstanding capability as Income-tax Officers in Class IT Service. The statement in Annexure 2 of the affidavit on behalf of respondents 1 to 4 in Writ Petition No. .5 of 1966 shows that the standards of selection are very stiff inasmuch as a very small proportion of officers considered for selection is actually promoted. The net effect of Rule,1(f) (iii) therefore is that three years of outstanding work in Class II is equated to two years of probation in Class I Service and on consideration of this aspect of the matter the promotee is given seniority over a direct- recruit completing the period of probation in the same year.The relevant law on the subject is well settled. Under Art. 16 of the Constitution, there shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State or to promotion from one office to a higher office thereunder. Article 16 of the Constitution- is only an incident of the application or the concept of equality enshrined in Art. 14 thereof. It gives effect to the doctrine of equality in the matter of appointment and promotion It follows that there can be a reasonable classification of the employees for the purpose of appointment or promotion. The concept of equality in the matter of promotion can be predicated only when the promotees are drawn from the same source. If the preferential treatment of one source in relation to the other is based on the differences between the said two sources, and the said differences have a reasonable relation to the nature of the office or offices to which recruitment is made, the, said recruitment can legitimately be sustained on the basis of a valid classification.Dealing with the extent of protection of Art. 16(1)) of theour opinion, there is no substance in the contention of the appellant. Once it is held that the rule of seniority enacted in rule 1 (f) (iii) is legally valid, the rule of promotion i. e. rule 4 of Ch 1X of the Central Board of Revenue Office Procedure Manual cannot be held to lead to any discrimination as between direct recruits and promotees. Rule 4 states that the prescribed minimum service for Class I, Grade II Officer in the matter of promotion to Grade I of that Service is five years gazetted service including one year in Class I, Grade II. For a promotee therefore the minimum period of service for promotion to Class I, Grade I is actually 4 years service in Class II, Grade III and one year service in Class I, Grade II. The object of the rule is really to carry out the policy of rule 1 (f) (iii) of the Rules of Seniority, and not allow it to be defeated by the requirement of five years service in Class I, Grade II itself before consideration for promotion to Class I, Grade I. The promotee is placed senior to a direct recruit who completes probation in the year in which the promotee is selected by the Departmental Promotion Committee. If it should be laid down that the past service as Income-tax Officer in Class II is not to be counted, then rule I (f) (iii) would be nullified, because directly recruited officers junior to the promotees would go to Grade I earlier than the promotee officers. For example, a promotee certified fit by the Departmental Promotion Committee in 1952 will be senior to the direct recruits who complete their probation in that year. And if it is to be laid down that the promotee officer shall not count his period of service in Class II for the purpose of promotion to Grade I, Class I he will have to wait till 1957 or 1958 to go to Grade I, Class I, While direct recruits who completed their probation in 1952 or 1953 would have gone to Grade I, Class l in 1955 or 1956. counting the five years period from the date; on which they were placed on probation. To remove this anomaly the promotion rule has been framed and we are unable to accept the argument of the appellant that there is any discrimination in the working of this rule. The rule of promotion is inextricably linked with the rule of weightage and seniority in Grade II. If in the rule of promotion the service in Grade III is not to be taken into account, seniority in Grade II would be an empty formality.There was also the further consideration that if rule I (f) (iv) did not exist there was no incentive to a promotee of this type to sit for the competitive examination. It should also be taken into account that if the service of the promotees in Class II, Grade III is entirely ignored and if they join the Class 1, Grade II Service as direct recruits they might well find themselves becoming junior to those who were left behind in Class II Grade III. Service by the operation of rule 1 (f) (iii).We are accordingly of the opinion that rule 1 (f) (iv) is based on a reasonable classification and does not offend the guarantee under Art. 14 or Art. 16 (1) of theare of opinion that having fixed the quota in exercise of their power under rule 4 between the two sources of recruitment, there is no discretion left with the Government of India to alter that quota according to the exigencies of the situation or to deviate from the quota, in any particular year, at its own will and pleasure. As we have already indicated, the quota rule is linked up with the seniority rule and unless the quota rule is strictly observed in practice , it will be difficult to hold that the seniority rule. i.e., rule 1(f) (iii) and (iv), is not unreasonable and does not offend Art. 16 of the Constitution. We are accordingly of the opinion that promotees from Class II, Grade III to Class I, Grade II Service in excess of the prescribed quotas for each of the years 1951 to 1956 and onwards have been illegally promoted and the appellant is entitled to a writ in the nature of mandamus commanding respondents 1 to 3 to adjust the seniority of the appellant and other officers similarly placed like him and to prepare a fresh seniority list in accordance with law after adjusting the recruitment for the period 1951 to1956 and onwards in accordance with the quota rule prescribed in the letter of the Government of India No. F. 24 (2). -Admn I. T./.51 dated October 18, 1951. We, however. wish to make it clear that this order will not affect such Class II Officers who have been appointed permanently as Assistant Commissioners of Income - tax. But this order will apply to all other officers including those who have been appointed Assistant Commissioners of Income-tax provisionally pursuant to the orders of the High Court.In this context it is important to emphasize that the absence of arbitrary power is the first essential of the rule of law upon which our whole constitutional system is based. In a system governed by rule of law, discretion, when conferred upon executive authorities, must be confined within clearly defined limits. The rule of law from this point of view means that decisions should be made by the application of known principles and rules and in general, such decisions should be predictable and the citizen should know where he is. If a decision is taken without any principle or without any rule it is unpredictable and such a decision is the antithesis of a decision taken in accordance with the rule of law. (See Dicey- "Law of the Constitution -Tenth Edn., Introduction cx). "Law has reached its finest moments," stated Douglas, J. in United States v. Wunderlich. (1951) 342 US 98, "when it has freed man from the unlimited discretion of some ruler........Where discretion is absolute man has always suffered. It is in this sense that the rule of law may be said to be the sworn enemy of caprice .Discretion as Lord Mansfield stated it in classic terms in the case of John Wilkes. (1770) 4 Burr 2528 at p. 2539 "means sound discretion guided by law. It must be governed by rule not by humour it must not be arbitrary, vague and fanciful.We should also like to suggest to the Government that for future years the roster system should be adopted by framing an appropriate rule for working out the quota between the direct recruits and the promotees and that a roster should be maintained indicating the order in which appointments are made by direct recruitment and by promotion in accordance with the percentages fixed under the statutory rule for each method ofPetition No. 5 ofThe questions arising for determination in this case are similar in character to the questions which have been the subject matter of consideration in Civil Appeal No. 1038 of 1965. For the reasons given in that case, we hold that this petition should be allowed and writ in the nature of mandamus under Art. 32 of the Constitution should be granted commanding respondents l to 3 to adjust the seniority of the petitioner and other officers similarly placed like him and to prepare a fresh seniority list in accordance with law after adjusting the recruitment for the period 1951 to 1956 and onwards in accordance with the quota rule prescribed in the letter No. F. 24 (2) Admn. I.T./51 dated October 18, 1951 of the Government of India. There will be no order as to costs.