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PETITIONER:

P. MURUGESAN AND OTHERS

Vs.

RESPONDENT:

STATE OF TAMIL NADU AND OTHERS

DATE OF JUDGMENT03/02/1993

BENCH:

JEEVAN REDDY, B.P. (J)

BENCH:

JEEVAN REDDY, B.P. (J)

SHARMA, L.M. (CJ)

ANAND, A.S. (J)

CITATION:

1993 SCR (1) 405 1993 SCC (2) 340

JT 1993 (2) 115 1993 SCALE (1)423

ACT:

Civil Services-Madras Corporation Engineering Service Rules,

1969-Promotion to the posts of Assistant Executive Engineer-

Ratio 3:1 between graduate engineers (Assistant Engineers)

and diploma-holder engineers (Junior Engineers) Whether

violative of Articles 14, 16 of the Constitution.

Madras City Municipal Corporation Act, 1919-Section 87-

Vacancies arose prior to Madras Corporation Engineering

Service (Amendment) Rules, 1990-Whether to be filled

according to unmended Madras Corporation Engineering

Services Rules, 1969-Supreme Court's direction.

HEADNOTE:

Under the Madras Corporation Engineering Service Rules,

1969, the recruitment to the posts of, Assistant Engineers

was by (1) direct recruitment, (b) by promotion from the

category of Supervisors and (c) by appointment on

deputation.

The graduate Supervisors were required to put in a minimum

of five years service in the category of Supervisors for

becoming eligible for promotion, whereas the diploma-holder-

Supervisors were required to put in a minimum service of ten

years as Supervisors.

In the category of Supervisors, in the matter of pay scales

too, distinction was maintained between graduates and

diploma-holders; while the pay-scale of the category of

Supervisors was Rs. 325-650, the graduates were started at

the initial pay of Rs. 400. From 1972 onwards, the pay

scales prescribed for the graduates and the diploma-holders

were different.

In 1978, the diploma-holder-Supervisors were designated as

junior Engineers, while the degree-holder-Supervisors were

designated as Assistant Engineers. The Posts of Assistant

Engineers were redesignated as Assistant Executive

Engineers.

406

In 1978 certain promotions were made to the category of

Assistant Executive Engineers by applying the ratio of 3:1

between the graduate-engineers (Assistant Engineers) and the

diploma-holder-engineers (junior Engineers).

The respondents-Junior Engineers challenged the promotions

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in writ petitions in the High Court, which was dismissed by

a Single Judge.

On appeal, a Division Bench of the High Court quashed the

promotions holding that as the Madras Corporation

Engineering Service Rules, 1969 did not provide for any

ratio, the Corporation could not prescribe the ratio of 3:1

by a mere resolution or by an executive order.

The Special Leave Petition preferred against the judgment of

the Division Beach of the High Court was dismissed by this

Court on 25.1.1990.

The State Government thereafter amended the 1969 Rules in

1990 providing for the ratio of 3:1 between the degree-

holders and the diploma holders in the matter of promotion

to the posts of the Assistant Executive Engineers. The 1990

Amendment Rules also provided that a junior Engineer

(diploma-holder) who acquired an engineering degree or its

equivalent during his service would be eligible for

appointment as Assistant Executive Engineer, if he puts in

three years of service in the Corporation Engineering

Subordinate Service after obtaining the degree.

The diploma-holders questioned the validity of the 1990

Amendment Rules, in writ petitions before the High Court.

The Single Judge dismissed the writ petitions and upheld the

validity of the 3:1 ratio. On appeal, the Division Bench

quashed the amendment introducing the ratio of 3:1, against

which the present appeal was riled by he graduate Engineers.

The appellants contended that the Assistant Engineers and

the junior Engineers constituted different categories though

performing similar functions and discharging similar

responsibilities; that their payslips were different; that

the Statutory Rules of 1969 made a distinction, between the

two categories inasmuch as while only five years' qualifying

service was prescribed for the Assistant Engineers

(graduates), ten years

407

was prescribed for the Junior Engineers (diploma-holders);

that in such a situation imposing of an additional

restriction upon the promotional chances of Junior Engineers

by the 1990 Amendment Rules was neither incompetent nor

discriminatory, that Section 87 of the Madras City Municipal

Corporation Act was not mandatory but only directory.

The respondents-diploma-holders submitted that in the

category of Supervisors graduates were appointed by direct

recruitment and diploma-holders by promotion from the

category of Overseers; that the Assistant Engineers as well

as Junior Engineers performed identical functions and

discharged identical responsibilities; that they were inter-

transferable; that in such a situation prescription of a

quota between them for promotion to the higher category was

discriminative and was violative of Articles 14 and 16 of

the Constitution; that once the diploma-holders were

required to put in ten years' service as against five years'

service in the case of the graduates, in the category of

Supervisors for becoming eligible for promotion as Assistant

Executive Engineers, the eligible graduates and the eligible

diploma-holders became equals in all respects and there

should not be any distinction thereafter for the purpose of

promotion; that at any rates In view of the provisions in

Section 87 of the Madras City Municipal Corporation Act, the

vacancies which arose prior to the coming into force of the

1990 Amendment Rules should be filled up in accordance with

the unamended Rules, i.e. without reference to the quota.

Allowing the appeal, this Court,

HELD : 1.01. It is held by the constitution Bench in Triloki

Nath Khosa that a distinction made on the basis of academic

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qualification for the purpose of promotion to higher

category is not violative of Articles 14 and 16. In the

said case, a rule barring the non-graduate-engineers from

promotion to the category of executive engineers was upheld.

If the diploma-holders can be barred altogether from

promotion as held in Triloki Nath Khosa, it is difficult to

appreciate how and why is the rule making authority

precluded from restricting the promotion. The rule making

authority may be of the opinion, having regard to the

efficiency of the administration and other relevant

circumstances that while it is not necessary to bar the

diploma-holders from promotion altogether, their chances of

promotion should be restricted. [416E, 417D]

1.02. There would be no justification in principle for

holding that the

408

rule-making authority has only two options namely either to

bar the diploma-holders altogether from promotion or to

allow them equal opportunity with the graduate engineers in

the matter of promotion. It must be remembered that the

power of rule-making under the proviso to Article 309 has

been held to be legislative in character. [419C]

1.03. If so, the test is whether such a restrictive view is

permissible vis-a-vis a legislature. If not, it is equally

impermissible in the case of the rule-making authority under

the proviso to Article 309. The only test that such a rule

has to pass is that of Articles 14 and 16. [419D]

1.04. Since 1969 the graduate supervisors and non-

graduate Supervisors were treated differently in the matter

of pay, designation and in the matter of promotion, though

they were discharging identical functions and duties. It is

thus clear that though they belonged to one class they

represented two different categories, while it is true, they

performed similar duties and discharged similar

responsibilities. [419G]

1.05. It cannot be said that it is not permissible to

the rule-making authority, if it thinks it necessary in the

interests of administration to limit the promotional chances

of non-graduates to one out of four vacancies, on the basis

of academic qualifications. [420B]

1.06. The distinction was also in the matter of

promotion and not for any other purpose. If that

distinction is not discrimination, it is difficult to see

how and why another distinction now created (quota rule) is

discriminatory. [422D]

B.S. Vadera v. Union of India, AIR 1969 SC 118; State of

Jammu & Kashmir v. Triloki Nath Khosa, [1974] 1 SCR 771;

State of Mysore & Anr. v. P. Narasing Rao, [1968] 1 SCR 407;

Union of India v. Dr. (Mrs.) S.B. Kohli, AIR 1973 SC 81 1;

Roop Chand Adlakha and Ors. v. D.D-4. and Ors., [1988] 3

Supp. SCR 253 and Shamkant Narayan Deshpande v. Maharashtra

Industrial Development Corporation & Anr., 1992 (2) Scale

857, referred to.

Mohammad Shujat Ali & Ors. etc. v. Union of India and Ors.

etc.,, [1975] 1 SCR 449, explained.

Roshan Lal Tandon v. Union of India, [1968] 1 SCR 185; Menyn

v. Collector of Bombay, AIR 1967 SC 52 = [1966] 3 SCR 600;

H.C. Sharma

409

and Others v. Municipal Corporation of Delhi and

Others,[1983] 3 SCR 372; Punjab State Electricity Board and

Anr. v. Ravinder Kumar Sharma and Ors., [1987] 1 SCR 72 and

N. Abdul Basheer & Ors. etc. etc. v. KK Karunakaran & Ors.,

[1989] 3 SCR 201, distinguished.

2.01. Section 87 of the Madras City Municipal

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Corporation Act does indicate and manifest the concern of

the Legislature that the vacancies occurring in the

Corporation Service should not be kept unfilled for a period

of more than three months. Sub-section (3) which provides

for the consequence of default on the part of the council to

abide by sub-section (1) emphasises the concern of the

Legislature. So also does sub-section (2). Sub-section (4)

says that if there is going to be any delay or if a suitable

or qualified person is not available, the council may

appoint a person on temporary basis. [424H, 425A]

2.02. The vacancies occurring prior to three months

before the date of commencement of the impugned amendment

ought to have been filled in accordance with the rules then

obtaining. [425B]

2.03. Having regard to the particular facts and

circumstances of the present case, it is directed that the

Corporation shall ascertain the vacancies in the category of

Assistant Executive Engineers, that have arisen three months

prior to the coming into force of the impugned amendment

(introducing the quota of 3:1 as between degree-holders and

diploma-holders ) and shall work out the vacancies which

would have gone to the diploma-holders if unamended Rules

had been followed. The Corporation shall also ascertain

which of the diploma-holders would have been promoted in

those vacancies. Such diploma-holders will be promoted in

the existing and future vacancies. Until these diploma-

holders are so promoted to the category of Assistant

Executive Engineers, no degree-holders shall be promoted.

After these diploma-holders are so promoted, it is obvious,

the amended Rules shall be applied and followed. As and

when a diploma-holder is promoted in pursuance of this

direction, his promotion shall be given effect to from the

date he ought to have been promoted. Such diploma-holder

promoters shall be entitled to the benefit of seniority and

pay-fixation flowing from such retrospective promotions, but

they shall not be entitled to the.arrears of 'difference in

salary for the period they have not actually worked as

Assistant Executive Engineers. [425E-H]

Ramgiah v. Srinivasa Rao, [1983] 3 SCC 284; P. Ganeshwar Rao

v.

410

State of Andhra Pradesh, [1988] Supp SCC 740; P. Mahendran

and Others v. State of Karnataka and Ors., [1990] 1 SCC 411

and Devin Katti & Ors. v. Kamataka Public Service

Commission and Others, [1990] 3 SCC 157, referred to.

JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 406 of 1993.

From the Judgment and Order dated 29.7.1992 of the Madras

High Court in Writ Appeal No. 518 of 1991.

M.K. Ramamurthi, Ms. Chandan Ramamurthi, M.A. Chainasamy and

Krishnamoorthy for the Appellants.

R. Thyagarajan, S. Navaneethan, V. Balachandran, S.

Srinivasan, P.R. Seetharaman, R. Mohan, A.T.M. Sampath and

N. Kannadasan for the Respondents.

The Judgment of the Court was delivered by

B.P. JEEVAN REDDY, J. Heard the Counsel for the parties.

Leave granted.

The dispute is between the degree holders and the diploma

holders in the engineering service under the Madras

Municipal Corporation.

The Corporation of Madras is governed by the Madras City

Municipal Corporation Act, 1919. It employs a good number

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of engineers in connection with the discharge of its duties.

Till 1965, there was only one category of supervisors.

Recruitment to this category was by direct recruitment of

graduate engineers as well as by promotion from the lower

category of overseers. Diploma holders were not eligible

for direct appointment as supervisors; they were first

appointed to the category of overseers and then promoted as

supervisors. The category above the supervisors was that of

assistant engineers. Supervisors, whether directly

recruited (graduates) or promotees (diploma-holders) were

required to put in 20 years' service in the category of

supervisors lo become eligible for promotion to the category

of assistant engineers. No distinction was made as between

the degree holders (graduates) and diploma-holders in the

matter of promotion or in the matter of eligibility

criteria.

411

In the year 1965, say the appellants (who are all graduate

engineers), the Corporation resolved (on 7.8.65) to follow

the rule in vogue in State Government service and apply the

ratio of 3:1 between graduates and diploma-holders in the

matter of promotion to the category of assistant engineers.

The respondents who are all diploma-holders, deny that any

such resolution was passed. According to them it was only a

recommendation of the Ad-hoc Committee constituted by the

Corporation and that the said recommendation was never

accepted as such by the Corporation. The respondents rely

upon the Division Bench judgment dated 21.12.89 in writ

appeal No. 990 of 1984 etc. holding that no such ratio was

actually enforced in the Corporation Engineering Service.

Be that as it may, some time prior to 1969, the Act was

amended empowering the Government to frame rules regulating

the recruitment and conditions of service of the employees

of the Corporation. In exercise of the said power, the

Government of Tamil Nadu framed rules called Madras

Corporation Engineering Service Rules (contained in G.O.M.S.

No. 31 RD-LA dated 7.1.69). These rules applied only to

class 1A, 1B and class IT of engineering services under the

Corporation and not to other posts. The post of assistant

engineer was in category III in class-II. Recruitment to

this category was by (a) direct recruitment (b) promotion

from the category of supervisors and (c) by appointment on

deputation from the Government department. So far as

promotion is concerned, a distinction was made as between

degree-holders and diploma-holders. The graduate

supervisors were required to put in a minimum of five years

service in the category of supervisors for becoming eligible

for promotion, whereas the diploma-holder-supervisors were

required to put in a minimum service of ten years as

supervisors to become eligible for such promotion. At about

this time, a practice developed where under graduate-

supervisors were referred to as Junior engineers. The

diploma-holders-supervisors (who are necessarily promotees

in the category of supervisors) continued to be referred to

as supervisors.

In the year 1978 the Government of.Tamil Nadu altered the

designations of the categories relevant before us by

G.O.M.S. No. 954 dated 2.6.1978.Para-2 of the G.O. stated

that the diploma-holder-supervisors shall be designated as'

junior engineers while the degree-holders-supervisors (who

had come to be known as junior engineers meanwhile) would be

designated as assistant engineers. Consequently the

erstwhile post of assistant engineer was redesignated as

assistant executive engineer. By G.O.M.S. No. 907 dated

20.5.1981, this change in designation was given

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412

effect to and incorporated in the Statutory Rules issued in

1969 (Madras Corporation Engineering Service Rules).

The recruitment and conditions of service of assistant

engineers and juniors (formerly known together as

Supervisors) were governed by the by-laws made by the

Corporation. In the matter of pay scales too, a distinction

was being maintained between graduates and diploma-holders

even when they were in the same category of Supervisors.

The pay scale admissible to the category of supervisors was

325-650 but the graduates were given a higher start-their

initial pay was fixed at 400. No such treatment was given

to the diploma-holders. According to the appellants there

was yet another distinction from 1972 onwards; the pay-

scales prescribed for the graduate engineers and diploma-

holder-engineers were different as per the particulars

mentioned in para 33 of the S.L.P. They point out that in

the counter filed to the Special Leave Petition, the

respondents have not denied the said averment; they merely

stated in para 20 of their counter that the "allegations in

paragraphs 33 to 36 are of no avail to the petitioner."

Whether in pursuance of the Resolution of 1965 or otherwise,

certain promotions were made to the category of assistant

executive engineers, in the year 1978, applying the ratio of

3:1 as between graduate-engineers and diploma-holder-

engineers. We may refer to these two categories hereinafter

as assistant engineers and junior engineers, since that was

the designation given to them by G.O.M.S. No. 954 dated

2.6.1978. The said promotions were questioned by diploma-

holders in a batch of writ petitions 2810 of 1978 etc.) in

the Madras High Court. It was dismissed by a learned Single

Judge. On appeal, however, a Division Bench of that court

held judgment dated 21.12.1989 in Writ Appeal No. 990 of

1984 etc.) that inasmuch as the Statutory Rules framed in

1969 did not provide for any such ratio, it is not open to

the Corporation to prescribe such a ratio by a mere

resolution or by an executive order. Accordingly, the

Division Bench quashed the said promotions. A Special leave

petition preferred against he said judgment in this Court

was dismissed on 25.1.1990. It is then that he Government of

Tamil Nadu stepped in and amended the 1969 Rules providing

for the said ratio of 3:1 by way of G.O.M.S. No. 138

(Municipal Administration and Water Supply) dated 9th

February, 1990. So far as relevant herein, the said G.O.

prescribed the "ratio of 3:1 between the degree holders and

diploma holders" in the matter of promotion to the

413

assistant executive engineers. It was further provided that

a junior engineer (diploma-holder) who acquired an

engineering degree or its equivalent during his service as

junior engineer will be eligible for appointment as

assistant executive engineer if he puts in three years of

service in the Corporation Engineering Subordinate Service

after obtaining the engineering degree or its equivalent.

The result of this amendment was that a two-fold distinction

came to be made between graduates and diplomaholders in the

matter of promotion to the post of assistant executive

engineers. In addition to the hitherto existing distinction

in the matter of length of qualifying period of service (10

years for diploma-holders/junior engineers as against 5

years for degree-holders/assistant engineers), the new

restriction imposed by the said amendment was that the

diploma holders/junior engineers were restricted to only one

out of four posts of assistant executive engineers; the

remaining three were reserved for graduates/assistant

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engineers. (Of course, according to the appellant such a

ratio was in vogue as a matter of fact since 1965. the

respondents deny this assertion. Be that as it may, the

ratio or quota, as it may be called was statutorily

imposed by the said amendment.

The validity of the 1990 amendments, in particular the

introduction of ratio of 5:1, was questioned by diploma-

holders in the Madras High Court in a batch of Writ

Petitions being Writ Petition 2943 of 1990 etc. A learned

Single Judge dismissed the batch by his Judgment and Order

dated 21.3.1991, upholding the validity of the said ratio.

On appeal, a Division Bench took a contrary view and quashed

the amendment introducing the ratio of 3:1. In this appeal

the correctness of the view taken by the Division Bench is

called in question.

Mr. M.K. Ramamurthy, learned counsel for the appellants'

submitted that classification on the basis of academic

qualifications is a well accepted basis. for the purpose of

promotion and that the Division Bench of the Madras High

Court was in error in holding otherwise. He submitted that

assistant engineers and junior engineers constituted

different categories though performing similar functions and

discharging similar responsibilities. Their pay-scales were

different-at any rate from 1972. Even earlier, the pay

fixation formula was different in the case of graduates.

Even the Statutory Rules of 1969 made a distinction between

the two categories inasmuch as while only five years'

qualifying service was prescribed for graduates, ten years'

qualifying service was prescribed for diploma-holders.

414

In such a situation imposing an additional restriction upon

the promotional chances of diploma holders by the impugned

amendment is neither incompetent nor can it be characterised

as discriminatory. He submitted that right from 1972

onward, a clear distinction was being observed between the

graduates and diploma-holders and that the impugned

amendment is but another step in the same process.

On the other hand the learned counsel for the respondents

holders submitted that whether graduates or diploma-holders,

they were all in the category of supervisors till the year

1981. There was only one category of supervisors to which

graduates were appointed by direct recruitment and diploma-

holders by promotion from the lower category of overseers.

They performed identical functions and discharged identical

responsibilities. They were inter-transferable. On some

occasions, graduates (assistant engineers) were posted to

assist a diploma holder (junior engineer) in discharging

certain duties. Even after 1978 when the graduates-

supervisors were designated as assistant engineers and

diplomaholders-supervisors were designated as junior

engineers, the same situation continued. In such a

situation prescription of a quota as between them for

promotion to the higher category is discriminatory and is

violative of Articles 14 and 16 of the Constitution.

Learned counsel submitted that in any event once the

diploma-holders were required to put in ten years' service

(as against five years' service in the case of graduates) in

the category of supervisors for becoming eligible for

promotion as assistant executive engineers, the eligible

graduates and the eligible diploma-holders became equals in

all respects. No distinction is permissible thereafter in

the matter of and for the purpose of promotion. Creating

such a distinction, imposing a disability upon the diploma-

holders, is not only unjust and inequitable, it is also a

clear case of hostile discrimination. Lastly and

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alternatively counsel submitted that the vacancies which

arose prior to the coming into the force of the impugned

amendment, at any rate, should be filled up in accordance

with the unamended Rules. It is pointed out that the

impugned amendment is only prospective in operation.

Section 87 of the Act is relied upon in this behalf.

It is true that theory of classification should not be

carried too far lest it may subvert, perhaps submerge, the

precious guarantee of equality, as pointed out by

Chandrachud, J. in State of Jammu & Kashmir v. Triloki Nath

Khosa, [1974] 1 SCR 771. Minute and microcosmic

classification

415

should not be permitted nor should the Court countenance

"mini classifications based on micro distinctions", as

pointed out by Krishna Iyer, J. in the same case. Looked at

from this broad angle, it may appear there is some force in

what the respondents contend viz., that once the graduate-

engineers and diploma-holder-engineers constitute one class,

perform same duties and discharge same responsibilities,

placing a restriction on the diploma holders alone (limiting

their chances of promotion to one out of four promotions, as

has been done by the impugned Amendment) is not justified

but this may be a too simplistic way of looking at the

issue. We cannot fail to take note of the fact that right

from 1974 i.e., since the decision of the Constitutions

Bench in Triloki Nath Khosa this Court has been holding

uniformly that even where direct recruits and promotees are

integrated into a common class, they could for purposes of

promotion to the higher cadre be classified on the basis of

educational qualifications.

In the Kashmir Engineering Service, the post of assistant

engineer could be filled both by direct recruitment as well

as by promotion. There were degree-holders and also

diploma-holders in the category. By the Kashmir Civil

Services (Revised Pay) Rules, 1968 it was provided that a

diploma-holder-assistant engineer shall not cross the stage

of Rs. 610 in the scale of Rs. 300-30-540-EB-35-610-EB-35-

750, which was the scale applicable to assistant engineers.

In 1970, Jammu and Kashmir Engineering (Gazetted) Service

Recruitment Rules, 1970 were issued providing that the post

of executive engineer (the next higher post) shall be filled

only by promotion from among the assistant engineers, who

possessed a bachelor's degree in engineering or its

equivalent qualification provided they have put in seven

years' service in the assistant engineer's category.

Assistant engineers who were not degree-holders were thus

barred from promotion to the category of executive

engineers. Both the Rules, namely 1968 Pay Rules and 1970

Recruitment Rules were questioned by diploma-holders in the

J & K High Court. Though a learned Single Judge dismissed

the writ petition, his judgment was reversed in appeal by

the Division Bench. The Division Bench was of the opinion

that where the employees were grouped together and

integrated into one unit without reference to their

qualifications, they form a single class in spite of initial

disparity in the matter of their educational qualifications

and that no discrimination is permissible to be made between

them on the basis of such qualifications. On appeal this

Court reversed the Judgment of the Division Bench. Two

judgments were delivered, one by Chandrachud J. on behalf of

himself A.N. Ray, C.J. and

416

D.G. Palekar, and the other by Krishna Iyer, J. for himself

and Bhagwati J. Chandrachud J. while affirming the principle

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that a classification must be truely founded on substantial

differences which distinguished persons grouped together

from those left out of the group and that such differential

attributes must bear a just and rational relation to the

object sought to be achieved, stated the scope of the

Judicial scrutiny in such matters in the following words :

"Judicial scrutiny can therefore extend only

to the consideration whether the

classification rests on a reasonable basis

whether it bears nexus with the object in

view. It cannot extend to embarking upon a

nice or mathematical evaluation of the basis

of classification, for were such an inquiry

permissible it would be open to the courts to

substitute their own judgment for that of the

legislature or the rule-making authority on

the need to classify or the desirability of

achieving a particular object."

The learned Judge held that judged from the above stand-

point it was impossible to accept the proposition that the

classification of Assistant Engineers into Degree-Holders

and Diploma-Holders rests on any unreal or unreasonable

basis. They accepted the plea that the said classification

was brought about with a view to achieving administrative

efficiency in the Engineering services. The higher academic

qualifications, the learned Judge held, is atleast

presumptive evidence of a higher mental equipment. The

learned Judge said "what is relevant is that the object to

be achieved here is not a mere presence for an

indiscriminate imposition of inequalities and the

classification cannot be characterized as arbitrary or

absurd. That is the farthest that judicial scrutiny can

extend." The learned Judge referred to the earlier decision

of this Court in State of Mysore & Anr. v. P. Narasing Rao,

[1968] 1 SCR 407 and the Union of India v. Dr. (Mrs.) S.B.

Kohli, AIR 1973 SC 811 to demonstrate that a distinction

made on the basis of academic qualifications was always

upheld by this Court. Indeed, in the latter case, the

relevant rule required that a professor of orthopaedics must

have a post-graduate degree in the particular speciality.

It was upheld as a relevant requirement, The learned Judge

then explained the decision in Roshan Lal Tandon v. Union of

India (upon which substantial reliance was placed by the

respondents in that case) as an authority certainly for the

proposition that "no discrimination could be made between

promotees and

417

direct recruits by reference to the source from which they

were drawn" but that it does not bar a classification based

upon academic qualifications. In the words of Chandarchud.

J. Roshanlal Tandon's case is thus no authority for the

proposition that if direct recruits and promotees are

integrated into one class, they cannot be classified for

purposes of promotion on a basis other than the one that

they were drawn from different sources." Having thus

distinguished Roshanlal Tandon's case and Mervyn v.

Collector of Bombay, AIR 1967 S.C. 52, the learned Judge

concluded :

"We are therefore of the opinion that though

persons appointed directly and by promotion

were intregrated into a common class for

Assistant Engineers, they could, for purposes

of promotion to the cadre of Executive En-

gineers, be classified on the basis of

educational qualifications. The rule

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providing that graduates shall be eligible for

such promotion to the exclusion of diploma-

holders does not violate articles 14 and 16 of

the Constitution and must be upheld."

This decision clearly supports the appellants contention and

goes to sustain the validity of the impugned amendment. If

the diploma-holders can be barred altogether from promotion,

it is difficult to appreciate how and why is the rule making

authority precluded from restricting the promotion. The

Rule making authority may be of the opinion, having regard

to the efficiency of the administration and other relevant

circumstances that while it is not necessary to bar the

diploma-holders from promotion altogether, their chances of

promotion should be restricted. On principles, there is no

basis for the contention that only two options are open to a

rule making authority-either bar the diploma-holders

altogether or allow them unrestricted promotion on par with

the graduates. This aspect has been emphasised by

Venkatachaliah J. in Roop Chand Adlakha and Ors. v. D.D.A.

and Ors., [1988] 3 Supp. SCR 253 in the following words.

"If Diploma-Holders of course on the

justification of the job-requirements and in

the interest of maintaining a certain quality

of technical expertise in the cadre could

validily be excluded from the eligibility for

promotion to the higher cadre, it does not

necessarily follow as an inevitable

corollary that the choice of the recruitment

418

policy is limited only two choices, namely

either to consider them "eligible" or 'not

eligible.". State, consistent with the

requirements of the promotional-posts and in

the interest of the efficiency of the service,

is not precluded from conferring eligibility

on Diploma-Holders conditioning it by other

requirements which may, as here, include

certain quantum of service-experience. In the

present case, eligibility-determination was

made by a cumulative-criterion of a certain

educational qualification plus a particular

quantum of service experience. It cannot, in

our opinion, be said, as postulated by the

High Court, that the choice of the State was

either to recognise Diploma Holders as

"eligible" for promotion or wholly exclude

them as "not-eligible".

Counsel for the respondents however placed strong reliance

upon certain observations made by Bhagwati, J. in Mohammad

Shujat Ali & Ors. etc. v. Union of India and Ors. etc.,

[1975] 1 SCR 449. After referring to the facts of, and the

principles enunciated in, T.N. Khosa the learned Judge made

the following observations:

"But where graduates and non-graduates are

both regarded as fit and, therefore, eligible

for promotion, it is difficult to see how,

consistently with the claim for equal

opportunity, any differentiation can be made

between them by laying down a quota of

promotion for each and giving preferential

treatment to graduates over non-graduates in

the matter of fixation of such quota. The

result of fixation of quota of promotion for

each of the two categories of Supervisors,

would be that when a vacancy arises in the

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post of Assistant Engineer, which, according

to the quota is reserved for graduate

Supervisors, a non-graduate supervisor cannot

be promoted to that vacancy, even if he is

senior to all other graduate Supervisors and

more suitable than they. His opportunity for

promotion would be limited only to vacancies

available for non-graduate Supervisors. That

would clearly amount to denial of equal

opportunity to him."

419

On the basis of the above observations it is

argued that once the diploma-holders are also

held eligible for promotion, it is not

permissible for the rule-making authority to

make any distinction between graduates and

diploma-holders. We cannot agree. As a

matter of fact this court in Shujat Ali case

upheld the validity of the Andhra Pradesh rule

which made a distinction between the graduate

supervisors and non-graduate supervisors in

the matter of promotion to the higher

categories on the ground that in the erstwhile

States of Andhra and Hyderabad, graduate

supervisors were always treated as distinct

and separate from the non-graduate super-

visors, their pay scales were different; they

were never really integrated into one class

and graduate supervisors were called Junior

Engineers. Accordingly, it was held that

reducing the chances of promotion of non-

graduate supervisors vis-a-vis graduate

supervisors was not discriminatory. (As we

shall presently point out, the factual

situation in Madras Corporation Engineering

service is similar). The observations quoted

above cannot be read in isolation nor can they

be read as running counter to the ratio of TN.

Khosa. Both decisions were rendered by

Constitution Benches. In any event, the facts

and circumstances of the case before us are

akin to those in Shujat Ali. Secondly as

explained hereinbefore there would be no

justification in principle for holding that

the rule-making authority has only two options

namely either to bar the diploma-holders

altogether from promotion or to allow them

equal opportunity with the graduate engineers

in the matter of promotion. It must be

remembered that the power of rule-making under

the proviso to Article 309 has been held to be

legislative in character. Vader A.I.R. 1969

S.C. 118. If so, the test is whether such a

restrictive view is permissible vis-a-vis

legislature. If not, it is equally

imperviously in the case of the rule-making

authority under the proviso to Article 309.

The only test that such a rule has to pass is

that of Articles 14 and 16 and to that

aspect we may turn now.

The facts of this case, narrated hereinbefore,

clearly disclose that long prior to the

impugned amendment, a clear distinction was

being maintained between these two categories.

The 1969 Rules, as originally issued,

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prescribed a five years' qualifying service

for graduate engineers while prescribing ten

years' qualifying service for diploma holders,

though earlier it was twenty years for both

uniformly. No one ever questioned it. The

graduates were designated as Assistant

Engineers while Supervisors were designated as

junior engineers in the year 1978. This

distinctive designations were recognised by

and incorporated into the Statutory Rules

(1969 Rules) in the year 1981. No grievance

was made on that count. Even

420

when both of them were in the same pay scale, the graduates

were being given a higher start at Rs. 400 straightaway,

while no such benefit was given to a promote. Further, from

1972 onwards, it appears, their very payscales were

different. It is thus clear that though they belonged to

one class they represented two different categories, while

it is true, they performed similar duties and discharged

similar responsibilities. It is asserted by the

Respondent's counsel that there is also a common seniority

list but this fact is denied by the appellant. According to

them, there were two separate seniority lists till 1979 and

that when in 1979 a single seniority list was prepared, it

was objected to by the graduates, Be that as it 'may, the

question still remains whether it is not permissible to the

rule-making authority, if it thinks it necessary in the

interests of administration to limit the promotional chances

of non-graduate to one out or four vacancies, on the basis

of academic qualifications. In the light of the

Constitution Bench decision in Triloki Nath Khosa, we cannot

say that it is not permissible.

In Shamkant Narayan Deshpande v. Maharashtra

Industrial Development Corporation & Ors.,

1992 (2) Scale 857 a Bench consisting of P.B.

Sawant and G.N. Ray, JJ. took the same view as

we do in this case. We also agree with the

basis upon which the learned Judges

distinguished the decision in H.C Sharma and

Ors. v. Municipal Corporation of Delhi and Others, [1983] 3

SCR 372.

The learned counsel for respondents relied

upon the decision in Punjab State Electricity

Board and Anr. v. Ravinder Kumar Sharma and Ors., [1987] 1

SCR 72, a decision rendered by a Bench comprising A.P. Sen

and B.C. Ray, JJ. the category of line-men in the service of

the Punjab State Electricity Board comprised both diploma-

holders and others who may be referred to as non-diploma-

holders. They constituted one single category having a

common seniority list. By means of the Rules issued under

the proviso to Article 309, a quota was prescribed for

diploma-holders, the result of which was that diploma-

holders who were far junior to the non-diploma-holders were

promoted ignoring the non-diploma-holders. The rule was

held to be bad by the learned Subordinate Judge, Patiala.

On appeal, the Additional District Judge, Patiala affirmed

the judgment. It was affirmed by the High Court as well.

The matter was brought to this Court. This court affirmed

the judgment of the High Court. A persual of the judgment

shows that the attention of the Bench was not drawn either

to TN. Khosa or to other decisions. Reference was made

only to the obser-

421

vations in Shujat All quoted hereinbefore and

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it was held that the distinction made between

the diploma-holders and non-diploma-holders

was discriminatory and bad. Apart from the

distinction on facts between that case and the

case before us, it is evident that non-

consideration of the T.N. Khosa and other

decisions relevant under the subject has led

to the laying down of a proposition which

seems to run counter to T.N. Khosa. With

great respect to the learned Judges who

decided that case, we are unable to accept the

broad proposition flowing from the case.

The counsel for the respondents then relied

upon N. Abdul Basheer & Ors. etc. etc. v. KK Karunakaran &

Ors., [1989] 3 SCR 201 a decision of a Bench of three

learned Judges. On an examination of the facts of that

case, it was held by Pathak, C.J. speaking for the Bench,

that the history of the evolution of the Kerala Excise and

Prohibition Subordinate Service does not show that the

graduates and non-graduates were treated as two separate

categories. The following observations bring out the

factual position found in that case.

"The history has varied with the circumstances

prevailing before and after the reorganisation

of the State on 1 November, 1956. Originally

when more emphasis was laid on the induction

of graduates, the ratio of graduate to non-

graduate officers was maintained at 3:1 but

from 9 September, 1974 the ratio was changed

inversely to 1:3. More non-graduates were now

inducted into the Service. The trend shows,

if anything, that it ran in favour of

absorbing more non-graduates. The conditions

pertaining to the service, and respecting

which the constitution of the service varied

from time to time, showed fluctuations. A

consistent or coherent policy in favour of

graduates was absent. This is not a case

where the cadre of officers was kept in two

separate divisions. It was a single cadre,

and they were all equal members of it. There

is no evidence that graduate Preventive

Officers enjoyed higher pay than non-graduate

Preventive Officers. The High Court has noted

that the nature of the duties of Preventive

Officers whether graduate or non-graduate was

identical, and both were put to field work.

Non-graduate Preventive Officers were regarded

as competent as graduate Preventive Of-

422

ficers. There is no evidence of any special

responsibility being vested in graduate

Preventive Officers. Once they were promoted

as Excise Inspectors there was no distinction

between graduate and non-graduate Excise

Inspectors.'

It is thus clear that the facts of that case were entirely

different and it is those facts which influenced the

decision holding that no distinction can be made between

graduates and non-graduates inspectors in the matter of

promotion. The said decision, however, cannot be read as

containing any proposition contrary to T.N. Khosa. We are,

therefore, of the opinion that the principle of the said

decision cannot help the respondents. So far as the factual

situation is concerned, the facts of the case before us do

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show, as discussed hereinbefore, that since 1969 the

graduate supervisors and non-graduate supervisors were

treated differently in the matter of pay, designation and in

the matter of promotion though they were discharging

identical functions and duties.

It may also be noticed in this connection that in the

government service, the ratio of 3:1 as between graduates

and diploma-holders has been in vogue since prior to 1965

and the corporation has been trying to implement the said

ratio in its service too.

Another argument urged by the learned counsel for the

Respondents is that by prescribing a longer qualifying

period of service for diplomaholders, they have been equated

with the graduates and that thereafter no further

distinction is permissible. We cannot agree. The

distinction aforesaid was also in the matter of promotion

and not for any other purpose. If that distinction is not

discrimination, it is difficult to see how and why another

distinction now created (quota rule) is discriminatory.

Suppose, if these two requirements (i.e., longer qualifying

service and quota rule) had been introduced at the same

time, there could have been no room for the present

argument. The rule would have been good. How does it

become bad, if they are introduced at different times?

Both relate to their eligibility and chances of promotion.

To wit, the basic question is if they can be barred

altogether from promotion, a& held in T N. Khosa, why can't

their chances of promotion be restricted, curtailed or

hedged in.

Sri Thyagarajan, learned counsel for

respondents 3 to 8 (diploma-holders) raised an

alternative contention based upon Section 87

of the

423

Madras City Municipal Corporation Act.

Section 87 reads as follows

"87. TIME WITHIN WHICH VACANCY IN CERTAIN

POSTS MUST BE FILLED UP:

(1) If a vacancy occurs in any office

included in Class I-B or Class II, or any new

office in Class I-B or Class II is created,

the council shall within three months appoint

any qualified and suitable person to hold such

office.

(2) If the State Government refuse to

confirm the appointment so made, the council

shall appoint some other qualified and

suitable person within forty-five days from

the receipt of the order refusing

confirmation.

(3) In default of any appointment being made

in accordance with sub-section (1) or sub-

section(2), as the case may be, the State

Government may appoint a person who in their

opinion, is qualified and suitable to hold the

office and such person shall be deemed to have

been appointed by the council.

(4) Pending an appointment under sub-section

(1) or sub-section (2), the council may

appoint a person to hold the office

temporally and assign to him such salary as it

may think fit :

Provided always that the salary so assigned

shall not exceed the maximum fixed by the

State Government by rules in respect of the

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office."

The contention of the learned counsel is this: sub-section

(1) of Section 87 obligates the council to fill up a vacancy

within three months of occurrence of a vacancy by a

qualified and suitable person. Sub-section (3) provides the

consequence of the default of the council in making an

appointment within the time prescribed by sub-section (1).

In such eventuality the State Government becomes entitled to

appoint a person, who in their opinion is qualified and

suitable for such office and the person so appointed shall

be deemed to have been appointed by the council. Sub-

424

section (4) empowers the council to make a temporary

appointment pending an appointment under section (1) or sub-

section (2). Sub-section (2) says that if the State

Government refuses to confirm the appointment made by the

council under sub-section (1), the council shall have to

appoint some other qualified and suitable person within

forty-five days from the date of receipt of the order of the

Government refusing confirmation. The counsel contends that

in view of the said provision, the vacancies which arose

three months prior to the date of the commencement of the

impugned amendment should be filled according to the

unamended rules i.e., without reference to the quota. He

relies upon the decisions of this Court in Rangiah v.

Srinivasa Rao, 119831 3 SCC 284; P. Ganeshwar Rao v. State

of Andhra Pradesh, [1988] Supp. SCC 740; P. Mahendran and

Others v. State of Karnataka and Ors., [1990] 1 SCC 411 and

Devin Katti & Others v. Karnataka Public Service Commission

and Others, [1990] 3 SCC 157.

On the other hand the learned counsel for the appellant

submits firstly, that this argument was not raised before

the High Court and should not be allowed to be raised at

this stage for the first time, secondly, he says Section 87

is not mandatory but only directory. The learned counsel

also argues that in pursuance of the judgment of the learned

Single Judge dated 21.3.1991 (upholding the validity of the

impugned amendment and giving certain directions in the

matter of making promotions to the post of assistant

executive engineer) and also because stay was refused by the

Division Bench of High Court in the Writ Appeals preferred

against the said judgment, the Corporation promoted thirty

degree-holders including six appellants on 5.6.1991. In

fact, it is stated, by an order dated 30.4.1991, the

Division Bench allowed the Corporation to make promotions

pending the Writ Appeals, of course, subject to the result

of the writ appeals. It is submitted further that by

another Order passed in May, 1992, the Corporation promoted

another twelve degree-holders and three diploma-holders. It

is also brought to our notice that in the Special leave

petition preferred against the judgment of the Division

Bench, this Court stayed the reversion of the

appellants/petitioners by its order dated 14.9.1992 which

order was continued by another order dated 21.9.1992. It is

submitted that in the above circumstances a direction of the

nature sought for by respondents 3 to 8 will mean the

reversion of the appellants who have been promoted in

pursuance of the order of the learned Single Judge. It is

pointed out if this

425

Court is upholding the impugned amendment, it would not be

just to permit the reversion of degree-holders on the ground

urged by the respondents for the first time in this appeal.

In our opinion Section 87 does indicate and manifest the

concern of the Legislature that the vacancies occurring in

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the Corporation Service should not be kept unfilled for a

period of more than three months. Sub-section (3) which

provides for the consequence of default on the part of the

council to abide by sub-section (1) emphasises the concern

of the Legislature. So also does sub-section (2). Sub-

section (4) says that if there is going to be any delay or

if a suitable or qualified person is not available, the

council may appoint a person on temporary basis. The said

provision is, therefore, analogous to, and indeed more

specific than rule 4 of the Andhra Pradesh Registration and

Subordinate Service Rules considered in Rangiah v. Srinivasa

Rao. Accordingly it must be held that the learned counsel

for respondents 3 to 8 is right in his submission that the

vacancies occurring prior to three months before the date of

commencement of the impugned amendment ought to have been

filled in accordance with the rules then obtaining. At the

same time we cannot fail to recognise the force in the

argument of the learned counsel for the appellants that the

respondents not having raised the said contention in the

High Court i.e., before the learned Single Judge or the

Division Bench should not be allowed to raise the same in

this Court for the first time. On a balancing of the

contending equities, we are of the opinion that the

following direction would be the appropriate one in the

particular facts and circumstances of this case. The

direction is this :

The Corporation shall ascertain the vacancies in the

category of Assistant executive engineers, that have arisen

three months prior to the coming into force of the impugned

amendment (introducing the quota of 3:1 as between degree-

holders and diploma-holders) and shall work out the

vacancies which would have gone to the diploma-holders if

unamended Rules had been followed. The Corporation shall

also ascertain which of the diploma-holders would have been

promoted in those vacancies. Such diploma-holders will be

promoted in the vacancies that may be existing as on today

and those that may arise in future. Until these diploma-

holders are so promoted to the category of Assistant

Executive Engineers, no degree-holders shall be promoted.

After these diploma-holders are so

426

promoted and thereafter, it is obvious the amended Rules

shall be applied and followed. It is further directed that

as and when a diploma-holder is promoted in pursuance of

this direction, his promotion shall be given effect to from

the date he ought to have been promoted. Such diploma-

holders promotees shall be entitled to the benefit of

seniority and pay-fixation flowing from such retrospective

promotions, but they shall not be entitled to the arrears of

difference in salary for the period they have not actually

worked as Assistant Executive Engineers.

For the reasons recorded hereinabove the appeal is allowed

subject to the direction made in the preceding paragraph.

The Order of the Division Bench of the Madras High Court in

Writ Appeal No. 518 of 1991 is set aside. There shall be no

orders to costs.

V.P.R.

Appeal allowed.

427