Case: Reserve Bank Of India Vs. N. C. Paliwal &amp; Others

The Reserve Bank of India is the appellant in Civil Appeal No. 1231 of 1973. This appeal, on certificate, is directed against a judgment of the High Court of Delhi allowing Writ Petition No. 690 of 1972 filed by some of the employees of the Reserve Bank challenging the validity of the combined seniority Scheme issued by the Reserve Bank of India by its Circular dated 13th May, 1972. This judgment of the High Court is also assailed by the All India Reserve Bank Employees Association (hereinafter referred to as the Association) by preferring Civil Appeal No. 1408 of 1974 after obtaining certificate from the High Court. Both these appeals have been heard together since they are directed against the same judgment and all the arguments raised on behalf of the appellants are also common except one additional argument advanced on behalf of , the Association in Civil Appeal No. 1408 o f 1974. The facts giving rise to these two appeals are a little important and it is necessary to state , them in order to appreciate the questions arising for determination in themay be pointed out that though the Optee Scheme of 1965 was originally intended to be operative only up to 30th June, 1970, it was continued right up to the time that the Combined seniority Scheme came into force. The effect of the Combined Seniority Scheme was .that it superseded the Optee Scheme of 1965. The petitioners were , aggrieved by the Combined Seniority Scheme since according to them it affected their chances of confirmation and promotion an d placed them in a disadvantageous position and accordingly they filed Civil Writ No. 690 of 1972 in the Delhi High Court challenging the validity of the Combined Seniority Scheme on various grounds relatable to Articles 14 and 16 of the Constitution. These grounds of challenge found favour with the Division Bench of the Delhi High Court which heard the petition and the Division Bench quashed and set aside the Combined Seniority Scheme on the view that it was violative of Articles 14 and 16 of the Constitution. The three main grounds on which the Division Bench found fault with the Combined Seniority Scheme were first, that it discriminated against the petitioners vis-a-vis. the others who had opted under the Optee Scheme of 1965 and who had obtained promotion as Grade I Clerks in their respective Specialised Departments before the introduction of the Combined Seniority Scheme; secondly, it discriminated against the petitioners in relation to the clerical staff in the General Departments who either did not exercise the option under the Optee Scheme of 1965 or having exercised the option, were not selected and thirdly, it treated alike the non-clerical staff as well as the clerical staff by integrating them together in one cadre with a combined seniority list, though they formed two distinct and separate classes unequal to each other. The Division Bench accordingly allowed the petition and struck down the Combined Seniority Scheme. Two appeals were thereupon preferred to this Court after obtaining a certificate of fitness from the Delhi High Court, Civil Appeal No. 1231 of 1973 by the Reserve Bank and Civil Appeal No. 1408 of 1974 by the Association. Both the Reserve Bank and the Association seek to sustain the validity of the Combined Seniority Scheme in these appeals substantially on the same grounds.We will assume for the purpose of these appeals that the Reserve Bank is a "State" within the meaning of Article 12 of the Constitution and hence subject to the limitations imposed by Article 14 and 16. It was in fact so held by the Delhi High Court and this view was not seriously assailed before us on behalf of t he Reserve Bank. The question which, therefore, requires to be considered is whether the Combined Seniority Scheme in any way falls foul of Articles 14 and 16. The Delhi High Court relied on three grounds for invalidating the Combined Seniority Scheme under Articles 14 and 16 and the same three grounds were also canvassed before us in these appeals, but we do not think there is any substance in them. We shall examine these grounds in the order in which they were advanced before us.

Court's reasoning:
This was the anomalous and unjust result brought about by the Combined Seniority Scheme and that, according to the petitioners, introduced a serious infirmity. This argument, we are afraid, is more an argument of hardship than of law and we do not think we can accept it.When the petitioners opted to be transferred to the Specialised Departments under the Optee Scheme of 1965, they obviously did so as they thought that they would have quicker chances of promotion in the Specialised Department than in the General Departments. But it appears that before their turn for promotion as Grade I Clerks in the Specialised Departments could come, some vacancies occurred in the cadre of Grade I Clerks in the General Departments and naturally they were filled up by promotion of Grade II Clerks in the General Departments. Some of these Grade II Clerks who were promoted were junior to the petitioners, but they got an opportunity for promotion as the petitioners went out of the General Departments by exercising the option to be transferred to the Specialised Departments. This was a wholly fortuitous possibly not anticipated by the petitioners or perhaps the petitioners might have thought that they would have an advantage in the matter subsequent promotions to posts higher than Grade I Clerks. Be that as it may, the fact remains that this was the position which obtained at the date when the Combined Seniority Scheme was introduced by the Reserveis now well settled, as a result of the decision of this Court in Kishori Mohanlal Bakshi v. Union of India (A.I.R. 1962 S.C. 1139) that Article 16 a fortiori also Article 14 do not forbid the creation of different cadres for government service. And if that be so, equally these two Articles cannot stand in the way of the State integrating different cadres into one cadre. It is entirely a matter for the State to decide whether to have several different cadres or one integrated cadre in its services. That is a matter of policy which does not attract the applicability of the equality clause. The integration of non-clerical with clerical services sought to be effectuated by the Combined Seniority Scheme cannot in the circumstances be assailed as violative of the constitutional principle ofonly enquiry which the Court can make is whether the rule laid down by the State is arbitrary and irrational so that it results in inequality of opportunity amongst employees belonging to the same class. Now, here, employees from non-clerical cadres were being absorbe d in the clerical cadre and, therefore, a rule for determining their seniority vis-a-vis those already in the clerical cadre had to be devised. Obviously, if the non-clerical service rendered by the employees from non-clerical cadres were wholly ignored, it would have been most unjust to them. Equally, it would have been unjust to employees in the clerical cadre, if the entire non-clerical service of those coming from non-clerical cadres were taken into account, for non-clerical service cannot be equated with clerical service and the two cannot be treated on the same footing. Reserve Bank, therefore, decided that one-third of the non-clerical service rendered by employees coming from non-clerical cadres should be taken into account for the purpose of determining seniority. This rule attempted to strike a just balance between the conflicting claims of non-clerical and clerical staff and it cannot be condemned as arbitrary or discriminatory. Vide: Anand Parkash Saksena v. Union of India.([1968] 2 S.C.R. 611, 622.)The last contention of the petitioners was that seniority is a civil right and the State cannot interfere with it to the prejudice of an employee without giving an opportunity to him to be heard and since the Combined Seniority Scheme adversely affected the seniority of the petitioners in the clerical cadre without giving them an opportunity to represent against it, it was void and inoperative. There are two answers to this contention and each is, in our opinion, fatal. In the first place, we do not find from the judgment of the High Court that this contention was at any time advanced before the High Court and, in the circumstances, we do not think it would be fight to permit it to be raised for the first time before this Court. Secondly, even if this contention were allowed to be raised, we do not think it can be sustained. Here, there was no question of any existing seniority being disturbed by change in the rule of seniority. The problem was of fitting into the clerical cadre employees coming from non-clerical cadres and for that purpose, a new rule was required to be made which would determine the seniority of these new entrants vis-a-vis those already in the clerical cadre. Such rule did not affect seniority and hence there could be no question of giving the petitioners an opportunity to make representation againstwere the only contentions urged before us against the constitutional validity of the Combined Seniority Scheme and since there is no substance in them, we think that the High Court was in error in striking down the Combined Seniority Scheme.