Sunday 24 August 2014

Whether employees have a right to seniority in service?

Chances of promotion are not conditions of service, but negation of even the chance of promotion certainly amounts to variation in the conditions of service attracting infraction of Articles 14 and 16 of the Constitution of India. No employee has a right to particular position in the seniority list but all employees have a right to seniority since the same forms the basis of promotion.
An employee has always an interest to seniority and a right to be considered for promotion. If after integration, only the chances of promotion are affected, it would have been only a case of heartburn of an individual or a few individuals which is only to be ignored, as held by the Hon’ble Apex Court in T.N. Education Department Ministerial and General Subordinate Services Association v. State of Tamil Nadu, (1980) 3 SCC 97.
In S.S. Bola v. B.D. Sardana, (1997) 8 SCC 522, it was held as under:

“A distinction between the right to be considered for promotion and an interest to be considered for promotion has always been maintained. Seniority is a facet of interest. The rules prescribe the method of recruitment/selection. Seniority is governed by the rules existing as on the date of consideration for promotion. Seniority is required to be worked out according to the existing rules. No one has a vested right to promotion or seniority. But an officer has an interest to seniority acquired by working out the rules. The seniority should be taken away only by operation of valid law. Right to be considered for promotion is a rule prescribed by conditions of service. A rule which affects chances of promotion of a person relates to conditions of service. The rule/provision in an Act merely affecting the chances of promotion “would not be” regarded as varying the conditions of service. The chances of promotion are not conditions of service. A rule which merely affects the chances of promotion does not amount to change in the conditions of service. However, once a declaration of law, on the basis of existing rules, is made by a constitutional court and a mandamus is issued or direction given for its enforcement by preparing the seniority list, operation of the declaration of law and the mandamus and directions issued by the court is the result of the declaration of law but not the operation of the rules per se.”
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 4371 OF 2008
Panchraj Tiwari

Versus
M. P. State Electricity Board and others

Citation;(2014) 5 SCC 101.
KURIAN, J.:

1. Whether
on
integration/merger/amalgamation,
is
it
permissible to have complete denial of promotion forever in
the integrated service, is the short question arising for
consideration in this case.
2. Appellant a graduate started his career as junior engineer on
23.09.1986 in the Rural Electricity Cooperative Society, Rewa.
During 1995, it appears a policy decision was taken by the
State Government to dissolve all such societies and merge
the same with Madhya Pradesh State Electricity Board

(hereinafter
referred
to
as
‘MPSEB’).
Accordingly,
the
Managing Committee of the Rural Electricity Cooperative
Society,
Rewa
was
superseded
in
May,
1995
and
a
Superintending Engineer of the MPSEB was appointed as
Officer
In-charge. However, it took a few years to
complete the formalities of the merger. Finally the Rural
Electricity Cooperative Society, Rewa was completely merged
with the MPSEB w.e.f. 15.03.2002.
3. The principles of merger were clarified by the MPSEB after
prolonged correspondence as per Annexure P-12 dated
15.06.2004. For the purpose of ready reference, we shall
extract the contents:
“Please refer to this office order cited under
reference. It is requested to issue necessary orders
for absorption of employees of REC societies falling
under your area of jurisdiction on the same terms &
conditions of the societies. The terms & conditions of
the societies may be obtained from DE (STC),
Jabalpur.
Further other terms & conditions of which
employees can be absorbed:-
1. The regular employees of the above societies
  shall be taken over on the same terms &
 conditions as existing in the Society except that
no deputation allowance shall be paid.
2. Their pay scale will be the same which they
  were getting before the absorption.

3. The above employees may not be transferred
  out of the circle concerned, so that no anomaly
 arises.
4. Their age of superannuation will be the same as
  applicable in the societies.
5. Pension/gratuity will be payable to the
  employees absorbed in the Board as per the
 rules/regulation of the concerned society.
6. Their designation will be maintained as it was in
  the society.”
(Emphasis supplied)
4. The principles of absorption as extracted above would clearly
show that the employees of the society have been taken over
and absorbed in the MPSEB. However, their pay-scale on the
date of absorption was protected, their designation was
maintained as it was in the society at the time of absorption
and the age of superannuation, pension and gratuity of such
employees were to be governed by the rules/bylaws of the
society concerned.
5. Though it may appear that there are some conditions which
are normally not found in the principles of integration, the
fact remains that the employees of the erstwhile society
which merged with the MPSEB, have been absorbed in the
service of MPSEB.

6. Integration/merger
of
services
means
creation
of
a
homogenous service by the merger of service personnel
belonging to different services. Though it is difficult to have a
perfect coalescence of the services on such merger, the
principle of equivalence is to be followed while absorbing the
employees, to the extent possible.
7. Though integration of services thus postulates equation of
posts, it is not invariably necessary to prepare the seniority
list on the basis of the pay drawn by the incumbent in the
equated category. It is always open to the authority
concerned to adopt a just and the equitable principle on
fixation of seniority.
8. Once a service is merged with another service, the merged
service gets its birth in the integrated service and loses its
original identity. There cannot be a situation, where even
after merger, absorption or integration, such services which
were merged or absorbed, still retain their original status. If
so, it is not an absorption or merger or integration, it will only
be a working arrangement without any functional integration.

9. In the instant case, the undisputed factual and legal position
is that there is absorption of the employees of the Rural
Electricity Cooperative Society, Rewa with the MPSEB. The
Society has been deregistered, there is only one service
thereafter and thus there is functional integration. On the
basis of the protection of the designation and pay-scale, the
employees have to be posted in the equivalent category.
Since it is not specifically provided as to the position of such
employees in the integrated service, it is a settled equitable
principle that such employees are placed as junior to the
junior-most officer of the category concerned in the MPSEB on
the date of absorption, viz., 15.03.2002.
10.
It is provided in the conditions of service of the MPSEB
as per Circular dated 15.11.1990 that a graduate Junior
Engineer having satisfactory service of four years of regular
service can be considered for promotion to the post of
Assistant Engineer after appropriate training. The appellant
started his career as a graduate engineer in the Rural
Electricity Cooperative Society, Rewa in 1986. He also
claimed promotion on the basis of such circular. The Board of
Directors of the appellant’s society passed a Resolution on

27.12.1994 for his promotion as Assistant Engineer. By that
time the steps for dissolution of society, it appears had
already started. The Board of Directors was dissolved in May,
1995 and a Superintending Engineer of the MPSEB was
appointed as Officer In-charge of the society. The said officer
forwarded the proposal of promotion of the appellant as an
Assistant Engineer to the MPSEB.
11.
It appears, the Registrar of the Cooperative Societies as
well as MPSEB have taken the stand that the appellant had
not been duly selected for promotion as Assistant Engineer in
terms of Rule 18 of the Society. The Rule reads as follows:
“18. SELECTION AND APPOINTMENT
The selection of suitable candidate for filling-up a
post in the society as well as for making selection for
promotion of eligible candidates shall be made by a
selection committee to be constituted by the Board,
consisting of the Chairman, a member of the Board to
be elected by the Board, divisional Deputy Registrar
of Cooperative Society, Divisional Engineer, M.P.
Electricity Board and the Managing Director of the
Society.
Dearness allowances to employees borne on regular
establishment shall be admissible as applicable to
the employees of M.P.E.B. from time to time with
previous approved of the Registrar Cooperative
societies M.P.

Dearness allowances to employees borne on regular
estt. shall be admissible as sanctioned by the M.P.E.B.
to the similar categories of employees.”
(Emphasis supplied)
12.
It is the case of the appellant that since the Board of
Governors had already been dissolved and since it had been
decided to absorb the employees of the society in the Board,
there was no point in following the process of selection in
terms of the regulations of the society. Thus, the rejection
was challenged before the High Court.
13.
Learned Single Judge dismissed the writ petition on the
ground that writ against a cooperative society was not
maintainable. However, in appeal, it was admitted by the
Board that the society had already merged with the
Electricity Board and, hence, case was heard on merits before
the Division Bench. It is the stand of the High Court in appeal
that the principles of integration, as extracted above, cast no
obligation on the Electricity Board to give promotion to the
appellant. The obligation was only to absorb the appellant by
protecting the designation and pay-scale and continue as
such. In other words, since the appellant was absorbed as a
Junior Engineer, he should continue forever as Junior Engineer

till his retirement.
We are afraid that the stand cannot be
justified.
14. As held by this Court in R.S. Makashi and others v. I. M.
Menon and others1, the courts will not interfere with the
decision and principles of integration unless it is shown that
they are arbitrary, unreasonable or unfair. No doubt, there is
no vested right for an employee to have a particular position
in
the
integrated
or
merged
service.
On
equitable
considerations, it is always open to the authorities concerned
to lay down the principles with regard to the fixation of
seniority as held by this Court in S. S. Bola and others v.
B.D. Sardana and others2 and Prafulla Kumar Das and
others v. State of Orissa and others3. However, in the
instant case, equivalence has been decided since designation
and pay-scale was protected. What remains is only the
seniority.
15.
It is open to the authority concerned to lay down
equitable principles with regard to fixation of seniority in the
merged cadre. Once a service gets merged with another
1
2
3
(1982) 1 SCC 379
(1997) 8 SCC 522
(2003) 11 SCC 614

service, the employee concerned has a right to get
positioned appropriately in the merged service. That is the
plain meaning of ‘absorption’. The MPSEB, having absorbed
the appellant and other employees, cannot maintain a stand
that even after absorption they will retain a distinct identity
in the equated cadre without any promotion as enjoyed by
their compeers in the parent service. That is a plain infraction
of the equity clause guaranteed under Articles 14 and 16 of
the Constitution of India.
16.
Chances of promotion are not conditions of service, but
negation of even the chance of promotion certainly amounts
to variation in the conditions of service attracting infraction of
Articles 14 and 16 of the Constitution of India. No employee
has a right to particular position in the seniority list but all
employees have a right to seniority since the same forms the
basis of promotion.
17. An employee has always an interest to seniority and a right
to be considered for promotion. If after integration, only the
chances of promotion are affected, it would have been only a

case of heartburn of an individual or a few individuals which
is only to be ignored, as held by this Court in Tamil Nadu
Education
Department
Ministerial
and
General
Subordinate Services Association and others v. State
of Tamil Nadu and others4.
18. Instant is a case where there is complete denial of promotion
forever
which
constitutional
cannot
scheme
be
of
comprehended
Articles
14
and
under the
16 the
of
Constitution of India. In this context, we shall refer to a
beautiful discussion on this aspect in S. S. Bola case (supra)
at paragraph 153. The relevant portion reads as follows:
“153.

AB. A distinction between right to be considered for
promotion and an interest to be considered for
promotion has always been maintained. Seniority is a
facet of interest. The rules prescribe the method of
recruitment/selection. Seniority is governed by the rules
existing as on the date of consideration for promotion.
Seniority is required to be worked out according to the
existing rules. No one has a vested right to promotion or
seniority. But an officer has an interest to seniority
acquired by working out the rules. The seniority should
be taken away only by operation of valid law. Right to be
considered for promotion is a rule prescribed by
conditions of service. A rule which affects chances of
promotion of a person relates to conditions of service.
4
(1980) 3 SCC 97

The rule/provision in an Act merely affecting the
chances of promotion would not be regarded as varying
the conditions of service. The chances of promotion are
not conditions of service. A rule which merely affects
the chances of promotion does not amount to change in
the conditions of service. However, once a declaration
of law, on the basis of existing rules, is made by a
constitutional court and a mandamus is issued or
direction given for its enforcement by preparing the
seniority list, operation of the declaration of law and the
mandamus and directions issued by the Court is the
result of the declaration of law but not the operation of
the rules per se.”
(Emphasis supplied)
19.
In the above circumstances, we set aside the judgment
in appeal. The absorbed employees of the Rural Electricity
Cooperative Societies, having due regard to their date of
appointment/promotion in each category in the respective
societies, shall be placed with effect from the date of
absorption, viz., 15.03.2002 as juniors to the junior-most
employee of the Electricity Board in the respective category.
Thereafter, they shall be considered for further promotions as
per
the
rules/regulations
of
the
MPSEB.
All
other
principles/conditions of absorption shall remain as such.
However, it is made clear that on such promotions, in the
exigencies of service, the employee concerned would also be
liable to be transferred out of the circle, if so required.

20.
The
appellant
accordingly
shall
be
entitled
to
retrospective promotions at par with and with effect from the
dates on which the junior-most graduate engineer in the
parent service on the date of absorption obtained such
promotions. However, we make it clear that benefits till date
need to be worked out only notionally.
21.
The appeal is allowed as above. There is no order as to
costs.
..........................J.
(H. L.
GOKHALE)
..........................J.
(KURIAN
JOSEPH)
New Delhi;
March 4, 2014.

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