Hariharan & Ors. v. Harsh Vardhan Singh Rao & Ors
ABHAY S. OKA, J.
1. Leave granted in Special Leave Petition (C) No.16161 of 2018.
Delay in filing Special Leave Petition (C) Diary No.12422 of 2022 is
condoned and leave is granted in the said Special Leave Petition as well.
2. In Civil Appeal arising out of SLP (C) No.16161 of 2018, the
appellants who are original respondents nos.11 to 14 before the High
Court of Gujarat, have challenged the judgment and order dated 11 th
May 2018 passed by a Division Bench of the High Court of Gujarat on
a writ petition under Article 226 of the Constitution of India f iled by
respondents nos.1 to 18.
FACTUAL ASPECTS IN CIVIL APPEAL ARISING OUT
OF S.L.P.(C) NO.16161 OF 2018
3. Few factual details will have to be noted. The dispute is a
typical dispute between promotees and direct appointees over inter-se-
seniority. Here, the dispute is about the posts of Inspectors in the Income
Tax Department in the State of Gujarat. On 7 th February 1986 and 3 rd
July 1986, Office Memoranda (for short, ‘OM’) were issued by the
Ministry of Personnel, Public Grievances and Pension. Both the OMs
record that the principle of rotation of quota will be followed for
determining the inter-se-seniority of promotees and direct recruits. It is
mentioned therein that when direct recruits are not available, the
promotees would be bunched together at the bottom of the seniority list
below the last position up to which it is possible to determine seniority on
the basis of rotation of quota with reference to the actua l number of
direct recruits who become available. It is provided therein that the unfilled
direct recruitment quota vacancies would be carried forward and added
to the corresponding direct recruitment vacancies of the next year. It is
also provided that these additional direct recruits selected against the
carried forward vacancies of the previous year, should be placed en
bloc below the last promotee or direct recruit, as the case may be, in the
seniority list based on the rotation of quota for that year. Prior to these
two OMs, there was an OM dated 22nd November 1959, which provided
for fixing the seniority of direct recruits and promotees based on the
rotation of quota.
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4. In the facts of the case, we may note here that the r elevant
Recruitment Rules of 1969 provided that the quota of departmenta l
promotees and direct recruits to the posts of Inspector will be 2:1. There
is no dispute that the rule of rotation of quota or rota and quota is applicable
for fixing their inter-se-seniority. On 7 th February 2000, Office Note
was issued by the Department of Personnel and Training (for sho rt,
‘DoPT’). By the said office note, it was directed that if the examination
is not held in the vacancy year, the seniority of the vacancy year cannot
be granted to direct recruits. There was a further clarificatory OM issued
on 3rd March 2008 by DoPT, which clarified that when the appointment
against unfilled vacancies is made in subsequent years either by direct
recruitment or promotion, the persons so appointed shall not get seniority
of the earlier year. However, they should be given the seniority of the
year in which they were appointed on a substantive basis.
5. On 26th June 2009, the Chief Commissioner of Income Tax,
Ahmedabad filled in 53 posts of Income Tax Inspectors by promotion on
the basis of the recommendations of the Departmenta l Promotion
Committee (DPC). By a communication dated 20th November 2009, the
Chief Commissioner of Income Tax, Ahmedabad forwarded a requisition
for making appointments to 46 direct posts (35 current and 11 carried
forward) enclosing therewith the details in the prescribed proforma. The
DoPT by the letter dated 15 th January 2010 granted NOC for 482
vacancies in the grade of Income Tax Inspector. Accordingly, by a letter
of the same date, the Department of Revenue of the Ministry of Finance
forwarded the said NOC to the Secretary of the Staf f Selection
Commission (SSC). However, the examination for recruitment was not
conducted to fill up the vacant posts of Income Tax Inspectors for the
recruitment year 2009-10 in the same year. Accordingly, SSC initiated
the process by holding a meeting with the officers for the conduct of the
Combined Graduate Level Examination, 2010 (short, ‘CGLE-2010’). The
Central Board of Direct Taxes (CBDT) proposed tentativ e vacancies
of 482 posts of Income Tax Inspectors for CGLE-2010 . An
advertisement was published on 30th January 2010 inviting applications
for CGLE-2010. On 26th April 2010, CBDT communicated to SSC that
vacancies for the recruitment year 2009-10 were included for selection
through SSC CGLE-2010. On 10 th May 2010 and 31 st July 2010,
examinations were conducted by SSC for Tier-I and Tier-II. On 27th
October 2010, CBDT finally submitted 846 vacancies as confir med
vacancies to SSC. Before the said letter was addres sed, the Chief
HARIHARAN & ORS. v. HARSH VARDHAN SINGH RAO &
ORS. [ABHAY S. OKA, J.]
Commissioner of Income Tax, Ahmedabad informed CBDT that total of
72 vacancies should be taken for the State of Gujarat. The result was
declared on 7th January 2011 and SSC recommended total 822 candidates.
On 27th November 2012, a decision of this Court in the case of Union of
India & Ors. v. N.R.Parmar & Ors. 1 was pronounced. This Court
dealt with a contingency where the requisition for filling in the vacancies
of direct recruits was issued in the same recruitmen t year and the
advertisement for recruitment was published in the same r ecruitment
year when the vacancies had arisen, but the examination coul d not be
conducted in the same recruitment year. This Court held that in such a
case, the direct recruits would be entitled to seniority in the recruitment
year when the requisition was made and advertisement was issued.
6. On 25 th May 2014, a draft seniority list of the Income Tax
Inspectors for the State of Gujarat was issued and on the b asis of the
draft seniority list, the final seniority list was issued on 29th May 2014.
Further, on 7th September 2016, a modified seniority list of the Income
Tax Inspectors in the cadre of the Gujarat region was issued. In the said
list, the direct recruits of CGLE-2010 were interspaced with promotees
of the year 2009-10. There were several representations made against
the said seniority list by the promotee candidates. On 17th January 2018,
CBDT issued a clarification stating that insofar as the fixing of inter-se-
seniority of CGLE-2010 direct recruits with promotee off icers was
concerned, the direct recruits may be interpolated with the promotees of
the same recruitment year in accordance with OMs issued on 3 rd July
1986 and 4th March 2014. The said clarification was communicated by
CBDT to all Principal Chief Commissioners of Income-Tax. O n the
basis of the said clarification, a revised seniority list dated 13th February
2018 was published. As per the said seniority list, the dire ct recruits
recruited against vacancies of the year 2009-10 were interspaced with
the promotees of the recruitment year 2010-11. Respondents nos.1 t o
18 who were direct recruits, filed a writ petition before the High Court
of Gujarat for challenging the said seniority list dated 13th February 2018.
A prayer was made in the writ petition for setting aside the clarification
dated 17th January 2018 and the consequent seniority list dated 13 th
February 2018. A consequential prayer was made for re storing the
seniority list dated 7th September 2016. By the impugned judgment, the
seniority list dated 13th February 2018 was quashed and the seniority list
1 2012 (13) SCC 340
949
of 7th September 2016 was restored with a clarification that only those
direct recruits who were eligible and qualified in the rec ruitment year
2009-10, shall be interspaced with 53 promotees who were prom oted
vide DPC dated 29th June 2009.
7. On 13 th July 2018, notice was issued in the Special Leave
Petition no.16161 of 2018 which is the subject matter of the prese nt
Civil Appeal and by an interim order, the status quo as of that date was
ordered to be maintained. The appellants who were respondents in the
writ petition before the High Court, are the promotees who were promoted
vide DPC dated 29th June 2009.
SUBMISSIONS IN BRIEF
8. Mr. Huzefa Ahmadi, the learned senior counsel appearing for
the appellants firstly submitted that the decision of this Court in the case
of N. R. Parmar1 has been overruled by a larger Bench of three Hon’ble
Judges of this Court in the case of K. Meghachandra Singh & Ors. v.
Ningam Siro & Ors.2on 19th November 2019. However, it was clarified
that the decision will apply prospectively. His submissi on is that a
recruitment year is a calendar year and not a financial year. The learned
senior counsel submitted that in the present case, the advertisement for
recruitment was not issued in the year 2009 and the examina tion was
conducted in 2010. He pointed out that in the case of N.R. Parmar1, the
advertisement was issued in the same recruitment ye ar in which
vacancies arose. He pointed out that a requisition was sent on 21st January
2010 to SSC for 482 vacancies of Income Tax Inspectors for 2009-10.
However, in the next requisition letter dated 22nd November 2010 which
was for CGLE-2010, carried forward vacancies (482) of 2009-10 were
mentioned. This requisition was made for total 844 vacancies w hich
included even vacancies of the recruitment year 2010-11. Based on the
observations made in paragraph 33 of the decision in N. R. Parmar’s
case1, the learned senior counsel would submit that in terms of the said
decision, the vacancies arising during a particular year, should be reported
in the same year and the advertisement for recruitment should also be
published in the same year. He urged that in the present case, all these
conditions have not been fulfilled.
9. Inviting our attention to the decision of this Court in the case of
K. Meghachandra2, he submitted that now this Court has categorically
2 2020 (5) SCC 689
HARIHARAN & ORS. v. HARSH VARDHAN SINGH RAO &
ORS. [ABHAY S. OKA, J.]
held that the seniority of direct recruits will be reckoned only from the
date of appointment and not from the stage when the requisition for their
appointment was sent. The learned senior counsel also pointed out that
CBDT by the letter dated 27 th May 2019 clarified that in view of
subsequent decision of the High Court of Delhi, the decision in the case
of N.R. Parmar1 shall be implemented prospectively with effect from
27th November 2012. The learned senior counsel also pointed out that
when there was no advertisement and no requisition issu ed for the
vacancies of the year 2009, the vacancies of the year 2009 were combined
in CGLE-2010. Therefore, relative merit of selected candidates cannot
be determined for assigning the seniority in different recruitment years,
the reason being that there was only one merit list of CGLE-2010. He
also pointed out that the final position of vacancies was intimated to SSC
for the first time by the letter dated 27 th October 2010. Therefore, the
direct recruits who were recruited on the basis of CGLE-2010 from the
quota of earlier year, cannot be interspaced between the promotees of
the year 2009. He submitted that now seniority cannot be disturbed after
lapse of eleven or twelve years.
10. Mr. Nidhesh Gupta, the learned senior counsel appearing for
respondents nos.1 to 5, 7, 8, 10 to 13, 15 to 18 and 29 to 39 firstly submitted
that even the decision in the case of K. Meghachandra2 protects the
case of the said respondents (direct appointees) as it i s specifically
observed that the decision will apply prospectively and it will not affect
inter-se-seniority fixed on the basis of the decision of this Court in the
case of N. R. Parmar 1.
11. He pointed out that this Court in the case of K. Meghachandra2
held that seniority cannot be granted from the date when the candidate
was not born in the cadre. He submitted that it is a well settled position
of law that the said principle does not apply when the seniority is to be
determined in accordance with rotation of vacancies betwee n direct
recruits and promotees based on quota of vacancies reserved fo r both
the categories. He relied upon the decision of a Constitution Bench of
this Court in the case of Mervyn Coutindo & Ors. v. Collector of
Customs, Bombay & Ors3. He submitted that in the said decision, the
Court upheld rotational system of fixing seniority. He submit ted that
attention of the Bench of three Hon’ble Judges which decided the case
of K.Meghachandra2 was not invited to the case of Mervyn Coutindo3.
3 1966 (3) SCR 600
951
He would, therefore, submit that the decision of this Court in the case of
K. Meghachandra 2 is per incuriam. He submitted that the object of
rotational system of fixing seniority is to blend the talent with experience
and to augment the efficiency. He submitted that as held by this Court in
the case of Hon’ble Punjab & Haryana High Court at Chandigarh
v. State of Punjab & Ors.4, seniority has to be determined on the basis
of roster and not on the basis of the date of joining of a particular stream.
He pointed out that in the judgment of this Court in the case of Arvinder
Singh Bains v. State of Punjab & Ors. 5,it was held that making the
date of joining as the basis for determining seniority woul d lead to
discretion in the hands of the Government and the possibility of misuse.
The reason being that selection process of promotees is shorter as
compared to that of direct recruits. Therefore, injustice to the direct
recruits cannot be compounded by relegating them below the dir ect
recruits.
12. He relied upon various OMs starting from OM dated 3rd July
1986 till OM dated 13th August 2021, which clearly provide for seniority
to be determined according to the rotation of vacancies. The learned
senior counsel submitted that though a case is sought to be ma de out
that a recruitment year is a calendar year and not a financial year, even
the appellants have proceeded on the footing that it is the financial year.
He relied upon several documents in that behalf.
13. He submitted that the relevant year for determining seniority
is the year in which recruitment requisition is sent. He pointed out the
letter dated 20 th November 2009 enclosing therewith the requisite
proforma for requisition of Income Tax Inspectors which clearly included
35 current and 11 carried forward vacancies of the direct appointees.
He pointed out that the subsequent letter addressed to the Secretary of
SSC is of 21st January 2010 which was issued in recruitment year 2009-
10 itself which included vacancies of 2009-10. Even the advertisement
was issued in recruitment year 2009-10, as the same was issued on 30th
January 2010. He would, therefore, submit that the recruitment year in
the present case was 2009-10. He submitted that seg regation of
vacancies for 2009-10 and 2010-11 was already done as is appa rent
from the seniority list dated 7th September 2016.
14. He submitted that OM dated 7 th February 1986 cannot be
applied and the same will apply when there is an earlier examination or
4 2019 (12) SCC 496
5 2006 (6) SCC 673
HARIHARAN & ORS. v. HARSH VARDHAN SINGH RAO &
ORS. [ABHAY S. OKA, J.]
selection which is followed by a subsequent examination or selection.
He submitted that in the facts of the case, in the year 2 009-10, there
was no examination or selection conducted for direct recrui ts. The
expression ‘direct recruits do not become available’ used in OM dated
7th February 1986 means that though the selection process is held during
the relevant year, the candidates do not become available.
15. Lastly, he pointed out that as a matter of fact, a large number
of direct recruits have been promoted since then. He submitted that as
the decision of this Court in the case of K. Meghachandra 2 is per
incuriam, being contrary to the binding precedent of a larger Bench in
the case of Mervyn Coutindo3, the decision in the case of N.R. Parmar1
will prevail.
16. Mr. Vikramjit Banerjee, the learned Additional Solicitor General
representing the Income Tax Department and Union of India submitted
that a new OM has been issued on 13th August 2021 by DoPT, clarifying
that as the decision in the case of K. Meghachandra 2 will have
prospective operation, cases of inters-se-seniority of direct recruits and
promotees shall not be disturbed during the period between the date of
the decision in N.R. Parmar’s case 1 and the date of decision in K.
Meghachandra’s case2. He submitted that in view of the said OM, the
cases of inter-se-seniority between officers joined between 27 th
November 2012 and 18 th November 2019 shall be governed by the
provisions of OMs dated 7th February 1986/3rd July 1986 read with OM
dated 4th March 2014. He submitted that a departmental OM dated 26th
October 2021 has been issued as per OM of DoPT dated 13 th August
2021.
17. He submitted that Income Tax Department is adve rsely
affected due to the order of status quo,passed in this appeal, as162 out
of 486 sanctioned posts of Income Tax Officers (ITOs) are vacant. He
submitted that this had drastically affected service to the taxpayers. He
submitted that 109 Income Tax Inspectors are likely to be deputed for
election duty of Gujarat Assembly Elections. He submitted that non-
convening of DPC for ITOs is having cascading effects as there are
least number of promotions in Group ‘C’ cadre. He submitted that if this
Court is inclined to refer the question to a larger Bench, t he interim
order may be clarified or vacated as the functioning of the Department
is really affected by the interim order.
18. The learned senior counsel appearing for the appellants, b y
way of rejoinder, submitted that direct recruits are selected by SSC by
953
open examination which is conducted annually. Therefore, SSC follows
the calendar year as opposed to the financial year. He submitted that as
no recruitment occurred in 2009, the results of the 2010 examination will
determine the seniority of carried forward candidates. He also pointed
out various documents in support of his contention that a recrui tment
year will have to be taken as a calendar year.
CONSIDERATION OF SUBMISSIONS
19. We have carefully considered the submissions. The first issue
which arises for consideration is whether the decision of this Court in K.
Meghachandra’s case2 is per incuriam or in the alternative, whether it
requires reconsideration being in conflict with the dec ision of the
Constitution Bench in the case of Mervyn Coutindo3 and the decision
of a Bench of three Hon’ble Judges in the case of M. Subba Reddy &
Anr. v. A.P. State Road Transport Corporation & Ors6. The next issue
will be assuming that the decision of this Court in N.R. Parmar’s case1
stands overruled, in view of its prospective overruling, whether the inter-
se-seniority of the direct recruits and the promotees in the facts of this
case could be determined as per the decision in N.R. Parmar’s case1.
This is in the context of the fact that the seniority wa s fixed after the
decision in the case of N.R. Parmar1and before 19th November 2019
i.e. when the decision in K. Meghachandra’s case2 was rendered. The
third issue to be decided is whether the recruitment year is a financial
year or a calendar year. Lastly, a factual issue will have to be decided
whether, in the facts of this case, the process of recruitm ent of direct
recruits commenced in the very recruitment year in which the vacancies
arose.
THE CONCEPT OF RECRUITMENT YEAR
20. In the facts of the case, there is no dispute that as far as the
posts of Income Tax Inspectors are concerned, the principle of rota and
quota or rotation of quota will apply. The posts of Income Tax Inspectors
are being filled in by direct recruits and promotees in the proportion
already fixed. Therefore, a roster will apply where the points will be for
direct recruits and promotees as per the proportion fixed. Before we go
into various legal issues, which we have flagged above, i t will be
appropriate if we discuss the factual issues first. For the decision on the
factual issues, it is necessary to decide whether the recruitment/requisition/
6 2004 (6) SCC 729
HARIHARAN & ORS. v. HARSH VARDHAN SINGH RAO &
ORS. [ABHAY S. OKA, J.]
vacancy year is the same as the financial year. The appel lants have
tried to contend that a recruitment year will be a calendar year. We must
note here that no such case has been made out in the Civil Appeal arising
out of Special Leave Petition (C) No.16161 of 2018. In the synopsis on
pages F and G, the appellants themselves have referred to the financial
year while referring to the vacancies available in a particular year. The
appellants made a representation dated 25 th November 2016 in which
they described the recruitment years as the financial years i.e 2009-10
and 2010-11. The letter dated 3 rd August 2016 addressed by the
Directorate of Income Tax, New Delhi to the Princip al Chief
Commissioner of Income Tax, Ahmedabad treats a recruitment year as
a financial year. In fact, it incorporates a clarification issued by ITGOA
which in turn, refers to the recruitment year on the footing th at it is a
financial year. The appellants have annexed as ‘Annexure P-12’ to reply
affidavit in I.A.No.161060 of 2019, a clarification dated 7th November
2014 issued by the CBDT to All Principal Chief Commissioners of Income
Tax, which refers to vacancy years as financial years right from 1986-
87 till 2013-14. Along with the letter dated 3rd August 2010, the Office of
the Chief Commissioner of Income Tax forwarded to the CBDT, t he
details of the confirmed vacancies in the post of Income Tax Inspectors
as on 31st March 2011 in the prescribed proforma. In the prescribed
proforma, under the column ‘year’ (year of vacancies), financial years
2009-2010 and 2011-2012 have been mentioned. 35 vacancies of Income
Tax Inspectors have been shown against the year 2009-10. In the counter
affidavit of private respondents, reliance has been place d on the OM
dated 8th May 2017 issued by the DoPT. Paragraph 5 of the said OM
specifically records that in partial modification of the OM s issued on
10th April 1989, 16th June 2000 and 20 th May 2014, the vacancy year
may be shifted to a calendar year from the year 2018, wher ever the
vacancy year based on financial year was being followed. The documents
on record clearly show that as far as the posts of Income Tax Inspectors
are concerned, the vacancy or recruitment year was always reckoned
as the financial year.
21. The appellants have placed reliance on the advertisement of
CGLE-2010. We have perused the said advertisement. It does not refer
to any particular recruitment or vacancy year and it does not record
whether the examination is being held for the vacancies of a particular
recruitment year. Reliance is also placed on the fact that CGLE is always
referred to with reference to the calendar year and not the fin ancial
955
year. This is hardly of any relevance. SSC acts as per the requirements
of the concerned department. SSC is not concerned in any manner with
the recruitment year. Its job is to conduct the process of recruitment as
per the instructions of the concerned department. There is material on
record to show that the Income Tax Department always trea ted the
vacancy year or recruitment year as a financial year.
22. We have, therefore, no manner of doubt that till the year 2018,
in relation to the recruitment and vacancies to the posts of Income Tax
Inspectors, the financial year was being treated as the recruitment year
or vacancy year.
COMMENCEMENT OF THE PROCESS FOR THE
RECRUITMENT YEAR 2009-10 FOR DIRECT RECRUITS
23. The letter dated 20th November 2009 addressed by the Chief
Commissioner of Income Tax, Ahmedabad to an officer of CBDT, refers
to the fact that there were 35 vacancies of direct recrui ts. The agency
for recruiting direct recruits to the post of Income Tax Insp ectors is
admittedly SSC. The Government of India addressed a letter to the
Secretary of SSC on 21st January 2010 stating that for CGLE-2009/10,
approximately 482 vacancies were available. Thus, the requisition issued
to SSC was for filling in 482 vacancies of the year 2009-10. The notice
of CGLE-2010 was published on 31 st January 2010. The last date for
filing applications was 2nd March 2010. The letter dated 3rd August 2010
addressed by the Chief Commissioner of Income Tax, Ahmedabad to
CBDT records that as on 31 st March 2011, there will be 35 backlog
vacancies for direct recruits for the year 2009-10. In this le tter, it was
stated that there were total 74 vacancies for the posts of Income Tax
Inspectors, out of which, 35 vacancies were of the year 2 009-10. The
same vacancy position has been mentioned in the letter dated 20 th
November 2009 referred above. The documents on record clearly indicate
that these 35 posts of direct recruits for the recruitment year 2009-10
were sought to be filled in on the basis of CGLE-2010 notified on 31 st
January 2010 which was held on 16th May 2010. The notice of CGLE-
2010 records that the last date for submitting applications was 2nd March
2010. The advertisement mentions that the applicants should be qualified
as on 2nd March 2010, which is a date within the recruitment/vacancy
year 2009-10. Thus, on facts, it can be concluded that the process of
recruiting direct recruits to 35 posts of Income Tax Inspect ors of the
vacancy/recruitment year 2009-10 commenced in the same year 2009-
10.
HARIHARAN & ORS. v. HARSH VARDHAN SINGH RAO &
ORS. [ABHAY S. OKA, J.]
CASES OF N.R.PARMAR 1 AND K. MEGHACHANDRA 2
24. Now, we turn to the decision in N.R. Parmar’s case1. This
Court dealt with the issue of inter-se-seniority between the promotee
Income Tax Inspectors and direct recruits. As noted in paragraph 9 of
the decision, the controversy pertained to the vacancies for the year
1993-94. The vacancies of promotees were filled in the same year. SSC
issued the advertisement in May/June 1993 for filling in the posts of
direct recruits for the year 1993-94. Though the wr itten test was
conducted in December 1993, viva-voce was conducted in October 1994.
The result was declared in June 1995 and the direct recruits joined in the
year 1995. The Administrative Tribunal held that the date on which the
SSC made the selection of the direct recruits, will be the material date
for fixing their seniority. The High Court interfered with the order of the
Tribunal by passing an order of remand. Ultimately, the direct recruits
succeeded before the Tribunal. The writ petitions challenging the order
of the Tribunal passed on remand were filed before the High Court. The
said petitions were transferred to this Court.
25. Perusal of the decision in the case of N.R. Parmar1 shows
that this Court considered and interpreted OMs dated 22 nd December
1959, 7th February 1986, 3rd July 1986 and 3rd March 2008. Apart from
these OMs, this Court considered various Office Note s as well as
correspondence. This Court held that the OM dated 3rd March 2008 has
to be ignored to the extent to which the same is in derogation of OMs
dated 7th February 1986 and 3rd July 1986. In paragraph 52, this Court
recorded its conclusions, which reads thus:
“52. Having interpreted the effect of the OMs dated 7-2-1986
and 3-7-1986 (in paras 25 to 29 hereinabove), we are satisfied,
that not only the requisition but also the advertisement for direct
recruitment was issued by SSC in the recruitment year in which
direct recruit vacancies had arisen. The said factual position, as
confirmed by the rival parties, is common in all matters b eing
collectively disposed of. In all these cases the advertised
vacancies were filled up in the original/first examination /
selection conducted for the same. None of the direct recr uit
Income Tax Inspectors herein can be stated to be occupying
carried-forward vacancies, or vacancies which came to b e
filled up by a “later” examination/selection process. The
facts only reveal that the examination and the sele ction
957
process of direct recruits could not be completed w ithin
the recruitment year itself. For this, the modifica tion/
amendment in the manner of determining the inter se
seniority between the direct recruits and promotees ,
carried out through the OM dated 7-2-1986, and the
compilation of the instructions pertaining to senior ity in
the OM dated 3-7-1986, leave no room for any doubt, that
the “rotation of quotas” principle would be fully applicable
to the direct recruits in the present controversy. The direct
recruits herein will therefore have to be interspaced with
promotees of the same recruitment year. ”
(emphasis added)
26. It is necessary to consider the findings rendered by the High
Court in the impugned judgment. The High Court has expressly relied
upon the decision of this Court in the case of N.R. Parmar1. By applying
the said decision to the facts of the case, the High Court held that:
i. Requisition for 35+11 vacancies for direct recruits was sent
to CBDT in the recruitment year 2009-10 itself;
ii. The recruitment for the said vacancies could not be held
during the recruitment year 2009-10 for the reasons for
which the candidates were not responsible;
iii. It is not the case that the eligible candidates for filling in the
posts of direct recruits were not available in the year 2009-
10;
iv. The seniority list dated 7 th September 2016 which was
prepared in terms of the decision of this Court in the case
of N.R. Parmar 1 was required to be restored with a
clarification that those direct recruits who were eligible in
the recruitment year 2009-10 should be interspaced with
53 promotees appointed during the year 2009-10; and
v. The seniority list dated 7th September 2016, which was the
final seniority list, could not be modified without giving an
opportunity of being heard to the affected candidates.
Therefore, the amended seniority list dated 13 th February
2018 was illegal.
27. Now, coming to the decision of the Bench of Hon’ble three
Judges in the case of K.Meghachandra 2, this Court was dealing with
HARIHARAN & ORS. v. HARSH VARDHAN SINGH RAO &
ORS. [ABHAY S. OKA, J.]
the Manipur Police Service Rules, 1965 (for short, ‘the MPS Rules’).
This Court was dealing with the issue of the dispute over the seniority in
the cadre of Manipur Police Service, Grade-II Officers bet ween the
direct recruits and promotees. After referring to Rule 28 of the MPS
Rules, a finding was recorded that the Rule expressly provided that the
seniority shall be reckoned only from the date of appointment and not
from the stage when the requisition for the appointment was issued. In
paragraph 34, this Court held thus:
“34. The judgment in N.R.Parmar [2012 (13) SCC 340] is now
to be considered in some detail as this is heavily relied on by the
appellants’ counsel. At the outset, it must however be cleared
that the cited case had nothing to do with the MPS Rul es,
1965 and that litigation related to the Income Tax Inspectors
who were claiming benefits of various Central Governmen t
OMs (dated 22-12-1959, 7-2-1986, 3-7-1986 and 3-3-2008).
The judgment was rendered in respect of the Central
Government employees having their own Service Rules .
The applicable Rules for the litigants in the present case
however provide that the seniority in the service shall be
determined by the order in which appointments are made
to the service. Therefore, the memorandums concerne d
referred to in N.R. Parmar [2012 (13) SCC 340] which deal
with general principles for determination of senior ity of
persons in the Central Government service, should n ot
according to us, have any overriding effect for the po lice
officers serving in the State of Manipur.”
(emphasis added)
In paragraph 38, this Court held thus:
“38. At this stage, we must also emphasise that the Court
in N.R.Parmar [2012 (13) SCC 340] need not have observed
that the selected candidate cannot be blamed for
administrative delay and the gap between initiation of
process and appointment. Such observation is fallac ious
inasmuch as none can be identified as being a selec ted
candidate on the date when the process of recruitment had
commenced. On that day, a body of persons aspiring to b e
appointed to the vacancy intended for direct recruits w as
959
not in existence. The persons who might respond to a n
advertisement cannot have any service-related rights, not
to talk of right to have their seniority counted from the
date of the advertisement. In other words, only on
completion of the process, the applicant morphs int o a
selected candidate and, therefore, unnecessary observation
was made in N.R. Parmar [2012 (13) SCC 340] to the effect
that the selected candidate cannot be blamed for th e
administrative delay. In the same context, we may usefully refer
to the ratio in Shankarsan Dash v. Union of India [Shankarsan
Dash v. Union of India, (1991) 3 SCC 47 : 1991 SCC (L&S) 800]
, where it was held that even upon empanelment, an appointee
does not acquire any right.”
(emphasis added)
In paragraph 39, this court observed:
“39. The judgment in N.R.Parmar [2012 (13) SCC 340] relating
to the Central Government employees cannot in our opinion,
automatically apply to the Manipur State Police Officers, governed
by the MPS Rules, 1965. We also feel that N.R. Parmar 1 had
incorrectly distinguished the long-standing seniority determination
principles propounded in, inter alia, Jagdish Ch.Patnaik [Jagdish
Ch.Patnaik v. State of Orissa, (1998) 4 SCC 456 : 1998 SCC
(L&S) 1156], Suraj Parkash Gupta v. State of J&K [Suraj Parkash
Gupta v. State of J&K, (2000) 7 SCC 561 : 2000 SCC (L&S)
977] and Pawan Pratap Singh v. Reevan Singh [Pawan Pratap
Singh v. Reevan Singh, (2011) 3 SCC 267 : (2011) 1 SCC (L&S)
481] . These three judgments and several others wit h like
enunciation on the law for determination of seniority makes it
abundantly clear that under service jurisprudence, seniority cannot
be claimed from a date when the incumbent is yet to be borne in
the cadre. In our considered opinion, the law on the issue is correctly
declared in Jagdish Ch. Patnaik [Jagdish Ch. Patnaik v. State of
Orissa, (1998) 4 SCC 456 : 1998 SCC (L&S) 1156] and
consequently we disapprove the norms on assessment of inter se
seniority, suggested in N.R. Parmar [Union of India v. N.R.
Parmar, (2012) 13 SCC 340 : (2013) 3 SCC (L&S) 711] .
Accordingly, the decision in N.R. Parmar 1 is overruled.
However, it is made clear that this decision will not af fect
HARIHARAN & ORS. v. HARSH VARDHAN SINGH RAO &
ORS. [ABHAY S. OKA, J.]
the inter se seniority already based on N.R. Parmar 1 and
the same is protected. This decision will apply prospectively
except where seniority is to be fixed under the rele vant
rules from the date of vacancy/the date of advertisement.”
(emphasis added)
28. With the greatest respect to the Hon’ble Bench which dealt
with K.Meghachandra’s case2, we find that the attention of the Bench
was not invited to the binding decision of the Coordinate Bench in the
case of M. Subba Reddy6. This decision was rendered by a Bench of
three Hon’ble Judges. This Court in the case of M. Subba Reddy6 dealt
with the issue of the fitment of the promotees to the posts of Assistant
Traffic Manager and Assistant Mechanical Engineer in the in tegrated
seniority list. The majority judgment refers to the rele vant Service
Regulations which provide that seniority is reckonable from the date of
appointment to service or grade. Paragraphs 6 and 7 of the said decision
read thus:
“6. Mr Rakesh Dwivedi, learned Senior Counsel appearing on
behalf of the appellants submitted that the appellants had a right
to be promoted within their quota during the years 1981 to 1987,
when vacancies for promotees’ quota became available. During
this period, no direct recruits were available. Direc t recruits
became available in July 1988, November 1990 and June 1992.
Appellant M. Subba Reddy was regularised from 27-12-1986 vide
order dated 9-9-1988, when no direct recruits were available and,
therefore, it was improper for the Corporation to place di rect
recruits above the promotees. It is the case of the appellants
that the direct recruits cannot claim appointments from the
date of the vacancy in their quota before their selection . It
has been contended that Item 3 of Annexure ‘A’ (Sectio n B)
prescribes the method of recruitment in the manner in which
vacancy is allocated. According to the learned counsel it does not
involve rota for the purposes of seniority. It prescribes only quota,
therefore, rota cannot be implied. It was urged that seniorit y is
dealt with only by Regulation 3 of the Service Regulations, 1964
and not by Regulation 34 of the Recruitment Regulations, 1966.
Reliance was placed in this connection on Regulation 34 as
amended on 15-9-1995. It was submitted that in view of the said
amendments, Annexure ‘A’ refers to only allocation of vacancy
961
and not for determination of seniority. It was to be det ermined
only by Regulation 3 of the Service Regulations. The non-
availability of candidates in a particular category, it was
urged, may be on account of ban on recruitment or on any
other ground. Therefore, in the present case, where
promotees were regularised in the promotion quota when
direct recruits were not available, the quota in Item 3(1) of
Annexure ‘A’ will not apply. It was submitted that in a ny
event, allocation of vacancy under the said clause was not
rigid and it cannot be a basis for denying seniority to th e
promotees from the date of regularisation. Reliance was
placed on the judgment of this Court in the case of Direct Recruit
Class II Engg. Officers’ Assn. v. State of Maharashtra [(1990) 2
SCC 715 : 1990 SCC (L&S) 339 : (1990) 13 ATC 348 : AIR 1990
SC 1607].
7. We do not find any merit in the above arguments. The appellants
have not challenged the validity of the above regulations. As stated
above, it has been contended before us on behalf of the appellants
that Item 3(1) of Annexure ‘A’ (Section B) prescribes method of
recruitment and the manner in which vacancy is to be allocated,
which does not involve rotation for the purposes of seniority; that
Item 3(1) of Annexure ‘A’ (Section B) prescribes only quota and
rota cannot be implied. However, the appellants before the
High Court unequivocally submitted that under the above
regulations, promotions and direct recruitments wer e
required to be made in the ratio of 1:1 and that the sai d
regulations provided for a cycle in which vacancies were to
be rotated. (See affidavit of M. Subba Reddy dated 28-12-1994.)
In the said affidavit, it is further submitted that in the
absence of direct recruits, the slots reserved for direct
recruits were liable to be adjusted with the promot ees
immediately and subsequently arrived direct recruits should
be given their positions in the seniority list subs equently
in a bunch. In our view, the averments of the appel lants
before the High Court, if accepted, would result in complete
violation of the quota-and-rota rule embodied in the above
regulations, which cannot be permitted. As stated above, the
appellants were promoted originally subject to the condit ions
envisaged in Regulation 34 and, therefore, they cannot claim
HARIHARAN & ORS. v. HARSH VARDHAN SINGH RAO &
ORS. [ABHAY S. OKA, J.]
seniority by ignoring the said regulations and on the basis of their
officiating services. They were promoted temporaril y under
Regulation 30 which provides for ad hoc promotions. Regulation
34 ensures induction of qualified direct recruits. But for Regulation
34, candidates from feeder posts would be temporarily promoted
to the slots reserved for direct recruits and on their regularisation,
the quota prescribed for direct recruits will be defeated. Regulation
34 has been enacted to protect quota prescribed for direct recruits.
As stated above, Regulation 3 of the Service Regulations has to
be read with Regulations 30 and 34 of the said Recruit ment
Regulations. The appellants were promoted on temporary basis
under Regulation 30 with the clear understanding that the period
of officiation will not give them any right over direct recruits in
future. It is for this reason that Regulation 30(6) states that if a
temporary promotee is subsequently promoted in accordance with
the regulations, his probation will commence in the higher category
only from the date of subsequent promotions. For the same reason,
Regulation 34 states that revertees shall be subseq uently
considered for repromotion against the quota of vacancies reserved
for being filled by promotion. Therefore, Regulation 34 protects
the quota prescribed for direct recruits. On reading Regulation
3 of the Service Regulations with Regulations 30 and 34 of
the Recruitment Regulations, it becomes clear that neith er
the date of promotion nor the date of selection is the
criterion for fixation of seniority. The fixation of se niority
under the above regulations depends upon the number of
vacancies falling in a particular category. Therefore, t he
rule of rota is inbuilt in the quota prescribed for d irect
recruits and for promotees in terms of Item 3 of Annexur e
‘A’ (Section B) to the Recruitment Regulations. In the
present case, the above regulations prescribe a quo ta of
1:1, which leads to rota for confirmation. The fixation o f
seniority under the above regulations depends upon t he
number of vacancies against which promotees became due
for promotion. In the case of Devendra Prasad Sharma v. State
of Mizoram [(1997) 4 SCC 422 : 1997 SCC (L&S) 1053] Rule
25(iii) stated that the relative seniority of direct r ecruits and of
promotees shall be determined according to rotation of vacancies
between direct recruits and promotees based on the quot a of
963
vacancies reserved for direct recruitment and promotion. Rule
25(iii) is similar to Item 3(1) of Annexure ‘A’ (Section B). It was
held by this Court that in cases where there is rotation of
vacancies between direct recruits and promotees base d on
quota of vacancies, the rotation has to be consider ed in
accordance with the vacancies as and when they accru e
under the rules. Therefore, the quota rule needs to be
strictly adhered to, if not, it would lead to absurdity. If the
contention of the appellants is accepted, it would mean t hat
the entire group of direct recruits will have to be pla ced
below the entire group of promotees. We are of the opini on
that having fixed the quota between the two sources of
recruitment, there is no discretion with the Corporation to
alter the quota or to deviate from the quota. In the
circumstances, there is no merit in the argument of the appellants
that Item 3(1) of Annexure ‘A’ (Section B) prescribes only quota
and not rota and that the said item was not for determination of
seniority. In the case of S.G. Jaisinghani v. Union of India [AIR
1967 SC 1427] this Court held that having fixed the quota between
two sources of recruitment, it is not open to the Governm ent to
alter the quota or to deviate from the quota. In the case of Union
of India v. S.D. Gupta [(1996) 8 SCC 14 : 1996 SCC (L&S) 811
: AIR 1996 SC 3325] the respondents were promotee Ex tra
Assistant Directors (Class III) in Central Water Co mmission
Engineering Class I Service. The Recruitment Rules were made
w.e.f. 15-10-1965. In the earlier litigation, the Tribunal found that
one Shri V.P. Misra, Extra Assistant Director was promoted on ad
hoc basis on 31-3-1978 and he was required to be confirmed with
effect from the date on which vacancy was available to him in
the quota of promotees. The vacancy had admittedly arisen in the
quota of promotees on 3-5-1979. Shri V.P. Misra was fitted in
that vacancy. While doing so, the Department applied the principle
of rota and quota and determined the inter se senio rity of
promotees and direct recruits. Consequently, the promotees were
pushed down in the order of seniority which led to the second
round of litigation. The question which arose for determination
before this Court was whether fitment of seniority determined by
the Department was in accordance with the rules. The Court
found that 60% of the vacancies were to be filled by direct recruits
HARIHARAN & ORS. v. HARSH VARDHAN SINGH RAO &
ORS. [ABHAY S. OKA, J.]
and 40% by promotees. Among the 40% quota, there was a further
demarcation in the ratio of 25% and 15% between promotees
and transferees. Admittedly, the promotees were entitled to their
fitment within 25% quota. Vacancies for the promotees had arisen
on 3-5-1979 and, therefore, V.P. Misra was entitled to that vacancy
which arose on that date. However, as stated above, in the
integrated list, the promotees were pushed down. It was
contended on behalf of the promotees that the direc t
recruits were not borne in the service when the promote es
were promoted and equity requires that the promotee s
cannot be pushed down. This Court rejected the said
argument by observing that the object of direct recruitment
is to blend talent and experience. So long as the s ystem
continues, consequences are inevitable. Although the di rect
recruits were recruited later, their fitment in the order of
seniority had to be determined with reference to rota and
quota prescribed under the rules. In such a case, ther e was
no illegality even when promotees were pushed downwards
in the order of seniority. In our view, the judgment of this Court
in S.D. Gupta case [(1996) 8 SCC 14 : 1996 SCC (L&S) 811 :
AIR 1996 SC 3325] squarely applies to the facts of the pres ent
case.”
(emphasis added)
It was held that although certain direct recruits were rec ruited
subsequent to the promotees, their fitment in the order of seniority had
to be determined with reference to rota and quota or ‘rotation of quota’
prescribed under the Rules. It was held that there was no illegality when
the promotees were pushed downwards in the order of seniorit y. This
Court quoted with approval its earlier judgment in the case of Union of
India & Ors. v. S.D. Gupta & Ors 7. In this case, by applying the
principle of rota and quota, the inter-se-seniority of the promotees and
direct recruits was fixed. This Court, in the said case, held that though
direct recruits were recruited subsequent to the appointment of promotees,
the fitment of direct recruits and promotees must be deter mined with
reference to the rota and quota prescribed. In paragraph 8, this Court
dealt with an argument that the direct recruits were not born in the
service when the promotees were promoted and therefore, the promotees
should not be pushed down. In paragraph 8, this Court held thus:
7 1996 (8) SCC 14
965
“8. It is then contended that the direct recruits were not born i n
the service when the promotees were promoted and equity requires
that they cannot be pushed down. The object of direct
recruitment is to blend talent and experience to aug ment
efficiency when direct recruits, though came from g reen
pastures, were imbued with dedication and honesty. So long
as system continues, consequences are inevitable. T he
question of equity does not arise. Shri Krishnamani then
contended that direct recruits are shown temporary and so they
cannot be similar to promotee substantive appointees. The quota
of 60% of direct recruits is to substantive vacancies, though their
initial appointment is temporary; on completion of per iod of
probation they become substantive appointees. That is the settled
principle of law in this behalf. The Tribunal, therefore, is not right
in giving direction to consider their fitment vis-à-vis the order
passed by this Court in their quota above the direct recruits.”
(emphasis added)
29. Now, we turn to the decision of the Constitution Bench in the
case of Mervyn Coutindo3. This Court decided a petition under Article
32 of the Constitution of India filed by the Appraisers in the Customs
Department. The Constitution Bench noted that the sys tem which
prevailed for recruitment to the posts of Appraisers was that 50% of
posts were reserved for direct recruits and the remaining 50% were
filled in by promotion from sub-ordinate officers i n the Customs
Department. The contention raised in the petition was that this system
had resulted in discriminatory treatment to the promotees in as much as
the promotees who had rendered much longer service in the ca dre of
Appraisers were put in seniority below the direct recruits with much
shorter service. There was one more grievance in the petition with which
we are not concerned. The Apex Court referred to the circula r/OM
dated 12 th September 1959 which is referred in the OMs dated 7 th
February 1986 and 3rd July 1986. After considering the submissions, the
Constitution Bench held thus:
“6. Before we come to what has been done in 1963 in the matter
of fixing seniority of Appraisers, we may refer to two other
circulars. The first is a circular of the Board issued in 1953. That
circular in our opinion has nothing to do with the question of fixing
of seniority as between direct recruits and promotees. It s main
HARIHARAN & ORS. v. HARSH VARDHAN SINGH RAO &
ORS. [ABHAY S. OKA, J.]
value is that it emphasises that the proportion fixed for direct
recruits and promotees should be rigidly maintained. It also directs
that promotion to higher grades should be made on the basis of a
combined seniority list of both direct recruits and promotees. Then
there is another circular of 1955. That circular again emphasises
the rotational system and says that it has been decided that
“inter se seniority of direct recruits and promotees in t he
grade of Appraisers should be determined in the order in
which the vacancy in that grade is filled by a direct recru it
or by a promotee according to the quota fixed for s uch
appointments”. Stress has been laid on behalf of th e
petitioners on the words “is filled” in this circular, and it is
urged that this means that until the direct recruit is actually
recruited and fills the vacancy meant for a direct recrui t he
cannot get seniority from before the date he fills the vacancy
merely on the ground of rotational system of fixing seniority.
We do not think that this is the meaning of the words “is
filled” used in this circular. We have already said that t his
circular also emphasises the rotational system in the matt er
of fixing of seniority and all that it means is that vacanci es
should be filled either by direct recruits or by prom otees
according to the quota fixed for such appointments.
7. This brings us back to the circular of 1959, and the main question
in that connection is the meaning to be assigned to the words
“seniority determined accordingly”, in the explanation to principle
6 relating to relative seniority of direct recruits and pr omotees.
As we read these words, their plain meaning is that seniority
as between direct recruits and promotees should be
determined in accordance with the roster, which has also
been specified, namely, one promotee followed by one direct
recruit and so on. Where therefore recruitment to a cadre
is from two sources, namely, direct recruits and promotee s
and rotational system is in force, seniority has to be fixed
as provided in the explanation by alternately fixin g a
promotee and a direct recruit in the seniority list. We do
not see any violation of the principle of equality of
opportunity enshrined in Article 16(1) by following the
rotational system of fixing seniority in a cadre half of which
consists of direct recruits and the other half of prom otees,
and the rotational system by itself working in this way cannot
967
be said to deny equality of opportunity in governme nt
service. The anomalies which have been referred to in the
petition arise not on account of there being anything opposed
to equality of opportunity in government service by the use
of the rotational system; they arise out of the fortu itous
circumstance that in this particular service of Apprais ers,
for one reason or another, direct recruitment has fallen short
of the quota fixed for it. It is merely because of this
fortuitous circumstance that anomalies to which reference
has been made in the petition have arisen. There is no doubt
that if direct recruitment had kept pace with the quota fixed
therefor there would have been no anomalies in fixing the
seniority list. The question therefore narrows down to this: Can
it be said that there is denial of equality of opportunity which arises
out of this fortuitous circumstance and which is not a vice inherent
in the rotational system? We are not prepared to say t hat the
rotational system of fixing seniority itself offends equalit y of
opportunity in government service. Any anomalies which may have
resulted on account of insufficient recruitment of direct recruits
in the past cannot in our opinion be a ground for striking down the
rotational system, which, as we have said, does not itself amount
to denial of equality of opportunity in the matter of employment in
government service. It is regrettable that some anomalies
have appeared because of insufficient recruitment of di rect
recruits in the past in this particular service. Bu t that in
our opinion can be no reason for striking down the seniority
list prepared in 1963 which is undoubtedly in stric t
accordance with the rotational system based on the fi xed
quotas for recruitment of direct recruits and promo tees.
The order of the Board of 1963 on the basis of which the
impugned seniority list of Appraisers has been prepa red
clearly lays down that “the principle of determination of
seniority of the direct recruits and the promotees inter se
in the prescribed ratio of 1:1 should be worked out”. T his
order is in accordance with the circular of 1959 and as we
have said already, there is no inherent vice in the princip le
of fixing seniority by rotation in a case where a service is
composed in fixed proportion of direct recruits and
promotees.”
(emphasis added)
HARIHARAN & ORS. v. HARSH VARDHAN SINGH RAO &
ORS. [ABHAY S. OKA, J.]
30. The argument made before us is that the decision in the case
of K. Meghachandra2 will have to be ignored on the ground that it is
per incuriam as the attention of the Bench which decided the case was
not invited to the binding decisions of the Constitution Bench in the case
of Mervyn Coutindo3 and a Coordinate Bench in the case of M. Subba
Reddy6. Prima facie, we find substance in the argument that the attention
of the Bench which decided the case of K. Meghachandra2 was not
invited to the aforesaid binding precedents. Therefore, we a re of the
view that the appropriate course of action will be to refer the question to
a larger Bench. We are dealing with a case where the ‘rotation of quota’
or rota and quota system is being followed. If the promotees are recruited
in the relevant recruitment year, but the process of recr uitment of the
direct recruits which commenced in the same recruitment y ear could
not be completed in the same year, the direct recru its appointed
subsequently will have to be interspaced between the promotees of the
same recruitment year. In such a case, it cannot be said that direct
recruits were not available during the recruitment year. Their appointment
could not be made during the same year, though the process of
appointment commenced in the same year. But, if the process of
recruitment of the direct recruits is completed in the same re cruitment
year but an adequate number of candidates could not be selected, the
shortfall should be carried forward to the next recruitment year. In such
cases, the candidates who are selected against shortfall va cancies will
have to be bunched below the promotees of the earlier year s. Unless
such a procedure is followed, the rotation of quota system will be defeated.
31. Coming to the facts of the case, though process of recruitment
of direct recruits to the post of Income Tax Inspectors commenced in
the recruitment year 2009-10, the same could not be completed in the
same recruitment year. This is not a case where an adequate number of
direct recruits could not be recruited even though the recru itment was
done in the recruitment year itself. In this case, those who were eligible
for direct recruitment were deprived of the opportunity as the process
of recruitment could not be completed during the same recruitment year
2009-10 due to no fault on their part. The documents annexed to the
counter affidavit show that the segregation of vacancies for 2009-10
and 2010-11 has been properly made.
32. In any event, the decision in the case of K. Meghachandra2
has a prospective operation. The seniority list of 7 th September 2016
969
was made in terms of the decision in the case of N. R. Parmar1. Hence,
the same could not have been altered on 13 th February 2018 when the
said decision was in force.
33. Thus, our conclusion can be summarised as under:
i. The decision in the case of K. Meghachandra 2 requires
reconsideration by a larger Bench in view of the fact that
the binding decision of a Constitution Bench in the case of
Mervyn Coutindo 3 and another binding decision of a
Coordinate Bench in the case of M. Subba Reddy 6were
not placed for consideration before the Bench which decided
the case of K. Meghachandra 2 ;
ii. Even assuming that the case of K. Meghachandra 2 was
correctly decided, paragraph 39 of the decision shows that
the decision in the case of N.R. Parmar 1 has been
prospectively overruled by observing that the decision will
not affect the inter-se-seniority already fixed on the ba sis
of the case of N.R. Parmar1 and the same was protected.
It is also held that the decision will apply prospectively except
where seniority is to be fixed under the relevant Rules from
the date of vacancy / the date of advertisement. In this
case, as on the date when the case of N.R. Parmar1 was
decided, there was no rule which required that the inter-se-
seniority of direct recruits and promotees to the post of
Income Tax Inspectors should be fixed from the date on
which a person is born in the cadre. In the facts of the
case, the seniority list was correctly published on 7 th
September 2016 in terms of the decision in the case of N.R.
Parmar1 by interspacing those direct recruits who were
eligible in the recruitment year 2009-10 and were appointed
against the vacancies of the said year with 53 promotees
who were promoted vide DPC dated 29 th June 2009. The
seniority list was later on modified on 13th February 2018
without giving an opportunity of being heard to the affected
direct recruits.
34. At this stage, we may note here the factual aspect s stated in
the affidavit dated 12 th October 2022 filed by Shri Anurag Chandra,
Deputy Commissioner of Income Tax in the Office of the Principal Chief
HARIHARAN & ORS. v. HARSH VARDHAN SINGH RAO &
ORS. [ABHAY S. OKA, J.]
Commissioner of Income Tax, Gujarat. The affidavit refers to the interim
order dated 13th July 2018 in the Civil Appeal arising out of S.L.P. (C)
No.16161 of 2018, by which status quo as of that date with respec t to
the posts held, was ordered to be maintained. The affidavit notes that as
a result of the interim order, the promotion to the cadre of Income Tax
Officers from the cadre of Income Tax Inspectors could not take place.
As a result, 33.33% of posts in the cadre of Income Tax Offic ers are
vacant as the same cannot be filled in. As noted earlier, the decision in
the case of K.Meghachandra 2 applies prospectively i.e. from 19 th
November 2019. Prima facie, the seniority fixed based on the decision
in the case of N.R. Parmar1 has to be given effect. Therefore, while
we are recommending a reference to a larger Bench, interim relief will
have to be vacated and seniority will have to be fixed on the basis of the
impugned judgment, subject to the final outcome of the appeal or the
decision of the larger Bench, as the case may be.
35. Hence, we pass the following order:
i. We are of the considered view that the following questions
need to be decided by a larger Bench of five Hon’ble Judges:
a. Whether the decision in the case of K. Meghachandra 2
can be said to be a binding precedent in the light of the law laid
down by the Constitution Bench in the case of Mervyn
Coutindo3 and the law laid down by a Coordinate Bench in the
case of M. Subba Reddy 6?
b. In absence of specific statutory rules to the contrary, when
the ‘rotation of quota’ rule is applicable, whether the seniority
of direct recruits who were recruited in the recruitment process
which commenced in the relevant recruitment year but ended
thereafter, can be fixed by following ‘rotation of quota’ by
interspacing them with the direct recruits of the s ame
recruitment year who were promoted earlier during the same
year?
ii. We direct the Registry to place this petition before Hon’ble the
Chief Justice of India for appropriate orders.
iii. The interim relief granted on 13 th July 2018 stands vacated.
Effect shall be given to the impugned judgment subject to the final
outcome of this appeal or reference, as the case may be. We also
clarify that the seniority of promotees and direct recruit s who
971
may be appointed hereafter will be subject to the final outcome of
the decision of this appeal or the decision in reference, as t he
case may be. Accordingly, concerned persons shall be informed
in writing by the Income Tax Department.
36. In the Civil Appeal arising out of Special Leave Petition (C)
Diary No.12422 of 2022, the challenge is to the judgment and ord er
dated 6th February 2018 passed by the High Court of Judicature at Patna
which follows the decision in the case of N.R. Parmar1 dealing with the
issue of appointment of Income Tax Inspectors perta ining to the
recruitment year 2009-10. This appeal be heard along with the main
appeal.
Devika Gujral Directions issued.
(Assisted by : Mr. Shubhanshu Das, LCRA)
HARIHARAN & ORS. v. HARSH VARDHAN SINGH RAO &
ORS. [ABHAY S. OKA, J.]