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PETITIONER:

M.S.USMANI & ORS.

Vs.

RESPONDENT:

UNION OF INDIA & ORS.

DATE OF JUDGMENT14/12/1994

BENCH:

SAHAI, R.M. (J)

BENCH:

SAHAI, R.M. (J)

SINGH N.P. (J)

CITATION:

1995 SCC (2) 377 JT 1995 (1) 385

1994 SCALE (5)270

ACT:

HEADNOTE:

JUDGMENT:

1.The question of law that arises in these appeals directed

against order of Central Administrative Tribunal, Lucknow

Bench, is whether the appellants who were selected and

appointed by a competitive examination against 10% quota

reserved for graduates and were promoted even to a higher

scale of pay could have been revered subsequently, on

assumption that the entire process of selection and appoint-

ment was against the rules.

2.Facts as they emerge from the order passed by the Central

Administrative Tribunal and the affidavits filed by the

parties, more particularly the Railways, are narrated in

brief In 1968 the Railway Board introduced a scheme under

para 123 of the Indian Railway Establishment Manual in which

provision was made for recruitment of Traffic Apprentices to

the extent of 25% in various supervisory posts in the

Transportation Department of the Railway. In 1972 the

scheme of 25% was bifurcated pursuant to the decision taken

in the Departmental Council of the Ministry of Railways

under thee Joint Consultative Machinery Scheme and it was

decided to recruit the Traffic Apprentices by two methods-

15% through agency of the Railway Service Commission and 10%

from amongst the serving non-ministerial graduates of

Transportation Department, through open competition to be

filled on basis of Limited Departmental Competitive

Examination. It further provided that the departmental

examination was to be conducted strictly in order of merit

by subjecting candidates to written test and viva voce. On

22nd July 1975 the Railway Board issued another letter

communicating its decision that 10% of the annual vacancies

in the category of Section Controllers, Station Master

(SMs), and Assistant Station Masters (ASMS) grade-

Rs.470-700/- and Rs.455-700/- were to be filled in through

departmental competitive examination from Class-III non-

Ministerial Staff who were graduates and less than 33 years

of age. It was reiterated on 18th March 1976. The copy of

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the letter is extracted below:

"In terms of Railway Board's letter No.E(NG)

72 RRI/18 dated March,1972 circulated vide

this office letter NO.220E/172 Pt. XI(Rectt

)

dated June,1972, 10% of the annual vacancies

in the category of SM'S/ASM's/AYM'S and Sec-

tion Controllers gr.Rs 250-350(As) are to be

filled in through a departmental competitive

examination from Class-III

387

non-ministerial staff who are graduates and less than 33

years of age.

It has been decided that the staff selected against 10%

vacancies in the transportation Deptt. refereed to above

will be trained in a Special Course, the syllabus for which

is under compilation in this office in consultation with the

Principal Zonal Training School, Chandausi. The selected

staff may be booked for training courses as and when the

syllabus of the case is finalized and issued by this

office."

3.It is thus clear that the selection of Traffic Apprentices

for placing them in various supervisory posts came to be

extended to SM as well at least from 1975. The selection

against 10% quota to fill up the vacancies in the category

of SM/ASM/TI/ AYM and SCNL in the grade Rs. 455-700/- was

initiated on 31st July 1982. The break-up of the vacancies

for which the selection was held was:

"1. Station Master, Gr.Rs.455-700 (RS)- 11

2. Asstt, Station Master " " " " - Nil

3. Traffic Inspector Gr. Rs. One

4. Traffic Inspector One

5. Section Controller Rs.470-750 (RS) - Three

Total - Sixteen"

4.It is thus too late to claim, as has been attempted by the

private respondents, that the selection against 10%

reserved for graduates was not held or could not have been held

for the post of SM. The letter selecting the appellants on

27th September 1983 is extracted below:

"As a result of the Section held for the above on 2.2.83,

17.4.83 & 29.6.83, the following staff found suitable for

the posts shown against each have been placed on the

provisional panel of 10% graduate quota in accordance with

their merit position in respective categories:-

T.I

S.NO. Name Designation Category

earmarked

1. Shri R.C. Gupta ASH/LIJ T.I.

STATION MASTER

2. Shri M.S. Usmain ASM/MLJ S.M.

3. Shri Rejendra Pd.Singh ASM/BKSA S.M.

4. Shri J.R.Mourya ASM/FD S.M.

5. Shri S.J.Singh LR/ASM/LKD S.M.

6. Shri S.S.Singh ASM/DELD S.M.

7. Shri D.K.Kharey ASM/DELD S.M.

8. Shri Gyan Prakash

Srivastava ASM/LRD S.M.

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SECTION CONTROLLER

9. Shri Vinod Kumar THC/LKO SCNL

10. Shri Krishna Pd.(SC) THC/BSB SCNL

The above staff should note that the

retention of their names on the panel is

subject to their work remaining satisfactory

during the currency of the panel and

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qualifying R.29A & B courses. Mere fact that

their names have been placed on the panel is

no guarantee that they will be offered the

post for which selected."

What is necessary to be mentioned is that this list itself

indicate the designation of candidates and the category for

which they were selected. For instance No. 1 was working as

ASM/LIJ and was selected for T.I. Similarly Nos. 2 to 8

working as ASM were selected for SM and Nos. 9 and 10 who

were THC ware selected for SCNL. The appellants according

to the counter affidavit of Railways were given training of

one year as provided by letter No.757E/ 102-(Elb) dated 17th

April 1976. They were appointed on 19th November 1984 on

various posts for which they were selected. Even in the

appointment letter the details were mentioned. For instance

Usmani was shown as Assistant Station Master/MNJ in existing

grade and in the column of new designation and station of

posting it is mentioned SM/UTR - Rs.455-700/-. The list

also contained names of those ASMs who were in the Scale of

Rs.425-640/- but as a consequence of selection they were

placed in the scale of Rs.455-700/- as SM. Many of the

appellants so selected and appointed were further promoted

as SMs/TI in the scale of Rs. 5 50-750/- (revised scale Rs.

1600-2660/ -). Some of them were even selected and sent to

Iraq for Iraq Rail India Technical Economic Services in

1988. The averments in the counter affidavit filed by

Railways is extracted below:

"It is however stated the the first part of

the panel of the aforesaid selection was

declared on 27.9.83 in which one person was

earmarked for the post of Traffic Inspector,

seven persons were earmarked for the post of

Station Master GR.RS. 455-700 (RS) and two

persons were earmarked for the post of Section

Controller in Gr.Rs.470-750 (RS). The 470-750

(RS). The remaining part of thee panel was

announced on 12.8.87 after getting the

approval of competent authority for de-

reserving the six posts of SC/ST quota.

The incumbents on the panel formed against 10%

graduate quota were imparted the pre-requisite

training and were posted in their respective

cadres after being declared successful and

were allowed to reckon the seniority from the

date of joining in the cadre in terms of para

302 of IRE. The applicants were promoted to

Gr.Rs. 1600-2660(RPS) by virtue of their

position in the cadre of Station Master whic

h

was assigned to them by operation of para 302

of IREM."

5. The eligibility of the appellants, their selection and

appointment as SM and further promotion as SM/Traffic

Inspector cannot be disputed. Nor it can be disputed that

they were given seniority in accordance with paragraph 302

of the Establishment Manual. But the Tribunal did not

accept the case of the appellants as in consequence of

restructuring of C & D posts the reservation of posts for

gradu-

389

ates came to an end and seniority of the appellants after

restructuring was contrary to Railway Establishment Code

302. Before proceeding further it is necessary to mention

that the respondents who were impleaded before the Tribunal,

at their own instance, relied vehemently on paragraph 123 of

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the Railway Manual and urged that the Traffic apprentices

could be selected for certain posts but not for the post of

SM. The claim proceeded on misapprehension as it did not

take note of the letter issued in 1972, 1975 copies of which

have been filled with the counter affidavit of the

Railways.n The selection in 1982 as is clear from the

affidavit of Railways was held for the posts earmarked for

SM. The Selection and appointment of the appellants,

therefore, could not be said to be against rules for this

reason. Another aspect which need be clarified is about

status promotion. According to respondents the appointment

of appellants could be made only in the grade of Rs. 425-

640/- and they could not be promoted in thee grade of

Rs.455-700/-. But that stands belied as the selection

Rs.455-700/-.

6. The reason for reversion of the appellants may now be

examined and whether it was well founded. In August 1983 C

& D posts in the Northern Railway were restructured. It

came into effect on 1.8.1983. The restructuring was done

with reference to cadre strength as it existed on 1.8.1983.

It provided for grant of proforma benefit from 1.8.1982 to

the staff eligible for higher grade. The restructuring in

the category of SM/ASM was in two groups depending upon

whether existing cadres or SM/ASMs was separate or combined.

It was further provided that revised percentage would be

allotted depending upon whether the existing structure was

combined or separate, since different practices were in

vogue in different zones. In consequence of restructuring

it appears all those ASMs who were working in the grade of

Rs.330-560/- and were graduates and had worked earlier with

appellants but had not appeared in the competitive

examination or had appeared but failed stood upgraded and

were placed in scale of Rs.425-700/- for ASM.

7.Till 1987 there was no dispute and the Railway and the

employees both understood that those who had come by way of

selection against 10% quota in September 1983 and those who

came by way of restructuring were in their respective

positions and there was no occasion for grievance as each

was placed in the same scale of pay.

8. In 1987 the appellants were promoted in the higher

grade of Rs. 1600-2660/- (Rs.550-750/-). Some of them were

appointed as TIS. The appointment order of appellant No. 1

is extracted below:

"A. As the result of suitability test for the

post of Traffic-Inspector in grade Rs. 1600-

2660/-. The following two candidates have

been found suitable and are placed on this

select list in order of their seniority.

1. S/Shri M.S.Usmain, SM/LKO

2. S/Shri R.O. Jaiswai, SCNL/LKO

B. Consequent on the placement of above

named staff on the select list for the post of

Traffic-Inspector in grade Rs. 16002660/-,

S/Shri M.S. Usmani, SM/LKO and R.D. Jaiswal,

SCNL/LKD are promoted and posted as Traffic-

Inspector PBH & REL respectively in grade

Rs.1600-2660/-."

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9. At this stage when the appellants were selected and

placed in the scale of Rs.1600-2660/- (Rs.550-750/-) another

controversy arose which even though not relevant may be

mentioned as it probably furnished the occasion for

beginning of what ultimately led to the reversion order of

the appellants. In May 1987 the Railway Board issued a

circular that fresh recruits to the post of Traffic

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Apprentice would be placed in the scale of Rs. 1600-2660/-

Whereas those who were already serving shall be in the scale

of Rs.1400-2300/- (Rs.425-700/-). This resulted in

discrimination between the two classes of the same

employees. Therefore, many of the person affected

approached the Central Administrative Tribunal and different

tribunal in different States allowed their claim and

directed that all those Traffic Apprentices would be

entitled to be placed in the scale of Rs. 1600-2660/ - with

effect from 15th May 1987. The order of the Tribunal became

final as the Special Leave Petitions filled against some of

the orders passed by the tribunals were dismissed by this

Court. When the appellants thus became entitled for scale

of Rs. 1600-2660-/- with effect from 15th May 1987 those

ASMs who as a result of restructuring of the grade has been

placed in the same scale of ASM as was being drawn by the

appellants as SM approached after four years through

Railwaymen's Union and made a demand in 68th Permanent

Negotiating Meeting that the post of Station Master in grade

Rs. 1600-2660/ - may be filled by invoking the principle of

pro-rata, that is the ratio of 1,17. In other words I

should be promoted from the grade of SM and 17 should be

promoted from the grade of ASMS. This demand was rejected

by D.R.M., Lucknow as the pro-rata principle was not

applicable. The Union having failed at the divisional level

raised the issue at headquarters. What is significant to be

mentioned is that the Union never claimed that the selection

or appointment of the appellants was illegal or irregular.

It agitated for applicability of pro-rata principal for

promotion to the higher post. It appears on the

representation made by the Union comments were invited from

the D.R.M., Lucknow who apprised the headquarters that

promotion as SM through selection against 10% reserved for

graduates was due from 1979. It was further pointed out

that the cadre of ASM grade Rs. 14002300/- and SM Rs. 1600-

2660/- were separate. The respondents did not accept the

claim of Union of granting promotion to the higher scale on

pro-rata basis. But they held that the entire selection of

the appellants in September 1983 was illegal as the

restructuring having been done on 1st August 1983 the

appointment of appellants in September 1984 was contrary to

restructuring. It was in consequence of this decision that

the appellants were reverted from the post of SM/TI grade

Rs.1600-2660/-to the post of ASM grade Rs. 1400-2330/- and

placed below all the ASM in panel on 1st August 1989 for the

purposes of seniority.

10. On these facts and in the circumstances of the case two

question arise for adjudication one, whether selection and

appointment of the appellants in pursuance of examination

held in 1983 could be said to be illegal or against the

rules in view of restructuring of grade C & D staff and

second, whether even if it was so could the appellants be

reverted even though they had moved higher in the hierarchy

and had been promoted to higher scale of SM or Tls. It was

submitted by the

391

learned counsel for appellants that the appellants having

been selected and appointed as Station Masters through a

competitive examination in which others either did not

appear or failed they could not have been reverted to post

below the post in which they had been regularized. It was

urged that even though the appellants had been selected for

the post of SM in the grade of Rs. 455-700/- (revised scale

- Rs.1400-2330/-) but they having been appointed in the

higher grade of Rs.470-759/- (revised scale Rs. 16002660/-)

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after suitability test the Railways were not justified in

either reverting them or setting aside selection after a

lapse of nearly six years. It was urged that even if for

any reason the appellant were reverted from the higher post

they could not be pushed down below the ASMs and their

placement below all the ASMs promoted as a result of

restructuring was arbitrary. This according to appellant

has resulted even in disturbing the original seniority of

the appellants as ASM prior to selection which was contrary

to the rules. It was forged that the respondents wrongly

construed the restructuring circular as what was provided

therein was that a panel of non-selection post would lapse

in consequence of restructuring. But this could not apply

to the selection of SMs which was a selection post both

before and after restructuring. It was also urged that in

any case the appellants having moved up higher in hierarchy

the setting aside of their selection and appointment which

was otherwise in accordance with law only because of the

restructuring G.O. relating to grade C & D, railways was

unfair.

11. Restructuring was done to upgrade certain percentage of

posts in each grade of ASM and SM. The percentage was to

be worked out on the cadre in each category as it existed on

1st August 1983. This upgradation had nothing to do with

10% graduate quota. But some difficulty does arise as

paragraph 3 of the restructuring order provided that

vacancies arising after July 1983 would be filled in

accordance with the procedure provided in the circular.

This gave rise to arguable issue whether the vacancies for

which selection was held in 1982 and all processes of

selection had been completed in June 1983 except the

declaration of panel could be said to be available on 31st

July 1983. Much was said and could be said on behalf of the

appellants but it is not necessary to express any opinion on

various issues touching upon the applicability of the

circular to the vacancies other than those arose out of

restructuring. Nor it is necessary to express any opinion

on the clarification issued in August 1984 regarding 10%

graduate quota and whether it could be confined to only

those who had been sent for training prior to 1.8.1983 or it

could be extended even to those who had been selected prior

to this date as thee appeal is liable to succeed on other

ground.

12. The reversion order issued by the Railways appears not

only to be unjust but vitiated by error of law. It was

passed without affording any opportunity of hearing to the

appellants. The appellants had been selected through a

competitive merit examination. Their selection was not

challenged. They had been regularized and been promoted to

even higher grade on basis of suitability test. Reverting

such persons after a lapse of six year from the date of

there selection, five years from the date of their

appointment, and two years from the date of their promotion

in the higher scale, was not warranted. The ap-

392

pellants having been regularized as SMs and promoted further

as TIs it was not open either for Railways to re-open the

selection held earlier or for other employees to agitate

that the selection held in 1982 was vitiated as the panel

was announced after the cadre had been restructured.

13. Therefore, without deciding the large issue and not as

precedent we are of opinion that the appeals are liable to

succeed. The order passed by the Tribunal is set aside and

the order issued by the Railway in 1989 reverting the

appellants is quashed. They shall be entitled to continue

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in their respective posts and shall also be entitled to

consequential benefits.

14. No Costs.

393