Case: State of Maharashtra and Another Vs. Chandrakant Anant Kulkarni and Others

The High Court by its judgment, on a writ petition filed by Respondents I to S, who were STIs of the State of Bombay and passed the prescribed departmental examination for promotion as STOs Gr. III, has struck down the various resolutions and orders passed by the State Government from time to time relating to integration of services of these officers under sub-s. (7) of s. 115 of the Act, in compliance with the directives of the Central Government issued under sub-s. (5) of s. 115 of the Act. The main question in the appeal is whether the High Court was right in doing so. To appreciate the points involved, it is necessary to set out a few facts. On November 16, 1957, the State Government by its Resolution purported to direct that the ASTOs from Madhya Pradesh and Hyderabad should continue in their respective pay-scales until such of them were not appointed as STOs Gr. III under r. 7 of the Allocated Government Servants (Absorption, seniority, Pay and Allowances) Rules, 1957. Notes 3 and 6 appended to the said Resolution provided that for purposes of promotion, their inter se seniority shall be fixed on the basis of their service as STIs being counted together with their service as ASTOs in Madhya Pradesh and service as Accountants, if any, together with their service as ASTOs in Hyderabad.In accordance therewith, a provisional gradation list of those who were absorbed as STIs as on November 1, 1956 as also of those who continued as ASTOs in their respective posts with effect from that date was prepared and published by the State Government under r. 2 of the said Rules, on January 21, 1960 and objections thereto were invited within two months from the date of its publication. On February 3, 1960, the State Government substantially modified r. 7 and a new r. 7 was substituted which provided that generally the seniority of an allocated Government servant in the post or cadre of absorption shall, as on November 1, 1956, be determined by the length of continuous service etc. On instructions from the Central Government and in further consultation with it. the State Government clarified that the provisional gradation list as published would not be finalised until representations, if any, of the Government servants were decided by the Government of India in consultation with the Advisory Committee. Since there were no comparable posts of ASTOs in the former State of Bombay, the Central Government directed that the ASTOs from Madhya Pradesh and Hyderabad should not be equated with the post of STIs, but should be continued in an isolated category and their seniority should be fixed above the persons in the next lower grade.In accordance with the directive of the Central Government under sub-s. (S) of s. 115 of the Act, the State Government by its resolution dated September 10, 1960, modified Notes 3 and 6 referred to above and directed that the seniority as on November 1, 1956 of ASTOs from Madhya Pradesh and Hyderabad be fixed above all persons absorbed as STIs and that the inter se seniority of STOs from Madhya Pradesh and Hyderabad be fixed on the basis of their continuous service as ASTOs. It was further directed that the service rendered by the ASTOs from Madhya Pradesh as Excise Inspectors or Assistant District Excise officers in the Excise Department o f that State be counted as equivalent to service as STOs. On August 17, 1962, the State Government accordingly prepared a fresh provisional gradation list of ASTOs and STIs and invited objections thereto afresh. It appears that none of the respondent s raised any objection.

Reasoning:
Rules 2(d) of the Departmental Examination Rules of Sales Tax officers and Assistant Sa les Tax officers issued by the Finance Department of the former Hyderabad Govt. under their Notification number 1118/3 S. T. dated the 24th January, 1956 lays down that Inspecting officers, Sales Tax Officers (Class I and II) and Assistant Sales Tax Officers who are not confirmed in their respective posts, should pass the examination within the period specified in clause (c) of Rule 2 of the said Rules failing which they would be reverted to their substantive post. In accordance with this Rule Government have reverted some Sales Tax officers from the former Hyderabad State for not having passed the Departmental Examination within the prescribed time. The Government of Andhra Pradesh has brought to the notice of this Government the instructions contained in Ex-Hyderabad, Finance Department, Letter No. 7851/ Admn. dated the 31st October 1956 according to which officers and the staff of the Sales Tax Department of the former Hyderabad State, even though they have not passed the prescribed Departmental Examination ate to be con firmed, if they are otherwise found deserving of con firmation on the basis of their confidential records, efficiency and seniority. The said letter dated 31st October 1955 of the Hyderabad Finance Department, also laid down that such confirmed personnel should not be promoted to higher A posts until such times as they complete the prescribed Departmental ExaminationAs the Central Government was of the opinion that the Bombay Departmental Examination Rules should not be made applicable to the allocated ASTOs from Madhya Pradesh and Hyderabad to their disadvantage, all the ASTOs from Madhya Pradesh and Hyderabad who were compelled earlier to appear for the said examination and who had failed to pass it were reinstated as STOs. As a direct consequence of this, the Respondents l and 2 who had been promoted to officiate as STO, Gr. III were reverted as STls by orders dated April 28, 1965 and June 30, 1965. Since the amendment made to rule I (b) (ii) on January 20, 1961 operated to the disadvantage of STIs from Bombay, the State Government b y its orders dated October 1, 1965, suspended the said amendment to the Recruitment Rules until further orders. In view of these changes, the State Government reviewed the cases of all the ASTOs and STIs from the three regions, and those who were otherwise found suitable were according to their seniority promoted to the post of STO Gr. III even though they had not passed the STO examination. On January 6, 1966, the State Government published a revised gradation list of ASTOs and STIs and invited objections thereto. None of the respondents except Respondent 4 filed any objection. That representation, on being forwarded by the State Government, was duly considered by the Government of India, who rejected the samePrior to the reorganisation of the States, a Conference of the Chief Secretaries of the States that were to be affected by the reorganisation was held at Delhi on May 18 and 19, 1956 for the purpose of the formulation of the principles upon which integration of services was to be effected. The Government of India by their letter dated April 3, 1957 informed the State Government that the work of integration of services should be dealt with by them in the light of the general principles already settled at the Chief Secretaries Conference. This has been construed to be a valid delegation of powers to prepare the preliminary and final gradation lists under the direction and with the sanction of the Central Government. The Government of India by its Circular dated May 11, 1957 to all the State Governments stated inter alia that it agreed with the views expressed on behalf of the States representatives that it would not be appropriate to provide any protection in the matter of departmental promotionOn merits, if the duties of Assistant Sales Tax officers of those two States and those of Insp ectors are compared in the light of the minutes contained in Ex.2 (Memorandum of the Government of Maharashtra, Finance Department. dated November 21, 1964) the difference is not much. We enquired about the nature of work they are doing today and we are told on instructions by the States counsel that they are doing the work that the Sales Tax Inspectors are doingIn our opinion, the question does not really arise. There can be no dispute with the proposition that a rule framed under the Proviso to Ar t. 309 of the Constitution cannot be modified by an executive order. But the question is whether that principle is attracted to the facts and circumstances of the present case. The Resolution and the Memorandum referred to above, undou btedly do not have the status of a rule framed under the Proviso to Art. 309 of the Constitution. They merely conveyed the decision of the State Government that the allocated ASTOs from Madhya Pradesh and Hyderabad should be considered eligib le for promotion to the post of STO, Gr. IlI without passing the departmental examination for STO, Gr. III. The State Government had not by its Resolution dated June 13, 1964, or by its Memorandum dated Nov. 21, 1964, brought about a change in the conditions of service by an executive order. All that was done was to rectify a mistake that had been committed in the past in subjecting the ASTOs from Madhya Pradesh and Hyderabad to the Departmental Examination Rules framed b y the former State Government of Bombay i.e. to a rule which did not form part of conditions of their service and, therefore, was not applicable to them. We find no infirmity in these two documents. The decisions reached by the Government on the representations made by ASTos from Madhya Pradesh and Hyderabad were strictly in conformity with the recruitment rules framed by the former State of Madhya Pradesh and Hyderabad under the Proviso to Art. 309 of the Constitution. It is quite obvious that STIs from Bombay were not entitled to the above concession, as the passing of the STOs examination had been made a condition precedent for their promotion as STO Gr.e was a marked distinction between the recru itment rules framed by the former State Governments of Bombay and Madhya Pradesh and Hyderabad for appointment as STOs. In the former State of Bombay, eligibility for the promotion of STIs to the post of STO Gr. III depended upon their passing the departmental examination for the non-gazetted staff of the Sales Tax Department under r. 1(b) (ii) of the Recruitment Rules for the S.T.Os. Gr. III. Under r. 3, preference was to be given to an Inspector who had passed the departmental examination prescribed for STOs over those who had not. By the amendment of January 20, 1961 made by the State Government, the words "and also the departmental examination for STOs were added after the words "time for promotion". The effect of t his amendment was to make the passing of the STO examination a condition precedent for promotion of STIs as STO Gr. III. Further, the amendment deleted r. 3 which laid down a rule of preference. In the former States of Madhya Pradesh and Hyde rabad, neither such condition nor any rule of preference was there. Under r. 1 of the Rules for Departmental Examination framed by the former State Government of Madhya Pradesh, ASTOs who were promoted as STOs were required to pass the depar tmental examination within two years from the date of such promotion. Rule 4 provided that they would not be confirmed till they pass the said examination and on their failure to do so, they would be reverted to the substantive post of ASTO s. Similarly, under r. 2(c) of the Rules framed by the former Hyderabad State, ASTOs who were prompted as STOs were required to pass the departmental examination within three years from the date of commencement of the rules failing which their gra de increment was to be withheld till they pass such examination. Rule 2 (d) provided that STOs Cl. 1 and II who had not been confirmed in their respective posts, were required to pass the said examination within the said period failing which they were to be reverted to their substantive posts. According to the general Circular issued by the State Government of the reorganised State of Bombay dated April 29, 1960, pending unification of the recruitment rules framed by the State Government of Bombay, Madhya Pradesh and Hyderabad, the recruitment to the various posts and services was to be regulated A according to the rules framed by the State Governments and not according to the Bombay Civil Service (Classification and Recruitment) Rules. It is not disputed that the Departmental Examination Rules framed by the former State Governments of Madhya Pradesh and Hyderabad for promotion to the post of STOs formed part of the conditions of service of ASTOs from Madhya Pradesh ande chances of promotion are not conditions of service and the fact that there was reduction in the chances of promotion did not tantamount to a change in the conditions of service. A right to be considered for promotion is a term of service, but mere chances of promotion are not. Under the Departmental Examination Rules for STOs, 1954, framed by the former State Government of Madhya Pradesh. as amended on January 20, 1960, mere passing of the departmental ex amination conferred no right on the STIs of Bombay, to promotion. By passing the examination, they merely became eligible for promotion. They had to be brought on to a select list not merely on the length of service, but on the basis of meri t-cum-seniority principle. It was, therefore, nothing but a mere chance of promotion. In consequence of the impugned orders of reversion, all that happened is that some of the STIs who had wrongly been promoted as STOs Gr. III had to be reverted a nd thereby lost a few places. In contrast, the conditions of service of ASTOs from Madhya Pradesh and Hyderabad, at least so far as one stage of promotion above the one held by them before the reorganisation of States, could not be altered without the previous sanction of the Central Government as laid down in the Proviso to sub-s. (7) of s. 115 of the ActWe are unable to agree with the High Court in its opinion that ASTOs from Madhya Pradesh and Hyderabad on th eir allocation to the new State of Bombay, who had wrongly been put at par with STIs from Bombay, had to pass the departmental examination prescribed by the former State Government of Bombay, for promotion to the post of STO Gr. III before the y could be actually so promotedThere was thus no alternative for the State Government but to suspend the operation of the amendment made on January 20, 1961 to r. 1(b) (ii) of the recruitment rules, by its order dated October 1, 1965, which made the passing o f the STO examination a condition A precedent for promotion of STIs to STO Gr. III. There can be no doubt that the State Governments Resolution dated June 13, 1964 and its Memorandum of November 21, 1964, clarifying that the ASTOs from Madhya Prades h and Hyderabad were entitled for promotion to the post of STO Gr. III without passing the departmental examination, placed STIs from Bombay at a disadvantage. To ensure fair and equitable treatment, the State Government rightly dispensed with the requirement of passing the departmental examination in the case of STIs from the former State ofn the end, reverting back to the main question. On an overall view of things, we are satisfied that the State Government acted with t he best of intentions. It endeavoured to strike a balance between the competing claims to relative seniority. When sub-s. (5) of s. 115 of the Act speaks of "fair and equitable treatment", obviously it envisages a decision which is fair and equitable to all.