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CASE NO.:

Appeal (civil) 5865 of 2007

PETITIONER:

UNION OF INDIA & ANR.

RESPONDENT:

NARENDRA SINGH

DATE OF JUDGMENT: 13/12/2007

BENCH:

C.K. THAKKER & J.M. PANCHAL

JUDGMENT:

J U D G M E N T

ARISING OUT OF SPECIAL LEAVE PETITION (C) NO. 2041 OF 2005

C.K. THAKKER, J.

1. Leave granted.

2. The present appeal is directed against

the order dated May 12, 2000 passed by the

Central Administrative Tribunal, Jabalpur, Camp

Indore (\021Tribunal\022 for short) in Original

Application No. 76 of 1997 and confirmed by the

Division Bench of High Court of Madhya Pradesh,

Jabalpur (Indore Bench) on August 26, 2004 in

Writ Petition No. 1329 of 2000.

3. Brief facts of the case are that the

respondent herein was working as Accountant in

the Office of the Accountant General, Madhya

Pradesh, Branch Office, Bhopal. By an order

dated January 1, 1990, he was mistakenly

promoted as Senior Accountant (Functional).

After about four years, the Department realized

that the promotion given to the respondent was

erroneous and he was not eligible to be

promoted. The mistake was, therefore, sought

to be corrected. A notice under Rule 31-A of

the Fundamental Rules, 1922 was issued to the

respondent informing him that he could not have

been promoted as Senior Accountant as he had

not passed Departmental Examination of

Accountants as required by law. He was, hence,

asked to show cause why the promotion given to

him erroneously should not be cancelled. By a

reply dated February 16, 1994, the respondent

contended that he was eligible and qualified

for getting promotion and accordingly he was

promoted. He also asserted that he was

performing his functions and discharging his

duties efficiently and there was no occasion to

revert him. According to him, there was no need

to clear Departmental Examination for

Accountants and the notice was required to be

discharged.

4. After considering the reply submitted

by the respondent, the Principal Accountant

General, vide his order dated March 29, 1994,

cancelled the promotion. The respondent

challenged the cancellation of promotion by

filing Original Application No. 275 of 1994 in

the Tribunal. The Tribunal, on March 12, 1996,

allowed the petition and directed the

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Authorities to reconsider the case of the

respondent.

5. In compliance with the order passed by

the Tribunal, the appellant considered the case

of the respondent and rejected his prayer.

Accordingly, by an order dated June 24, 1996,

the promotion was cancelled.

6. The respondent again challenged the

order of reversion by approaching the Tribunal

and the Tribunal allowed the petition. The

order was confirmed by the High Court. The said

decision is challenged in the present appeal by

the Union of India and the Accountant General.

7. Notice was issued and keeping in view

the fact that the respondent was due to retire

shortly, the Registry was directed to place the

matter for final hearing which was placed

before us on December 5, 2007.

8. We have heard learned counsel for the

parties.

9. Learned counsel for the appellants

submitted that the action taken by the

appellant could not be said to be illegal,

unlawful or otherwise improper. He stated that

the respondent was not qualified to be promoted

as Senior Accountant as he had not passed the

relevant examination required by law. It was

due to mistake on the part of the Department

that he was promoted in spite of his

ineligibility. The said mistake was, therefore,

corrected after issuing notice calling upon the

respondent to show cause why the mistake should

not be corrected. It was submitted that as per

the direction issued by the Tribunal, the case

of the respondent was considered and the

Department rejected the prayer. The action of

the appellant which was in consonance with law

could not have been set aside by the Tribunal.

By interfering with the said action, the

Tribunal had committed an error of law. The

High Court confirmed that order. Both the

orders, therefore, are liable to be set aside.

10. Learned counsel for the respondent, on

the other hand, supported the order passed by

the Tribunal and affirmed by the High Court.

According to him, the respondent was not

required to pas any examination. He had

sufficient experience. All those factors were

considered by the Department when he was

promoted as Senior Accountant. There is no

allegation that the respondent had concealed

facts or by playing fraud, got the promotion.

Even if it is assumed that there was mistake on

the part of the Department, the respondent

should not suffer. It was further urged that in

earlier litigation, directions were issued by

the Tribunal, but they had not been complied

with. The Comptroller and Auditor General of

India ought to have relaxed the condition as to

passing of examination. Moreover, the Tribunal

has merely directed to consider the case of the

respondent and there was no illegality in it.

The High Court, therefore, rightly did not

interfere with the said order. Finally, it was

submitted that the respondent was promoted on

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January 1, 1990 and thus he has completed about

seventeen years of service on the promoted

post. He will be retiring within a few days

i.e. after the office hours of December 31,

2007. Hence, even if this Court holds that his

promotion was not strictly legal, the Court may

not interfere with the said order and allow him

to continue on that post for few days more.

11. Having heard learned counsel for the

parties, in our opinion, the appeal deserves to

be partly allowed. So far as the promotion of

the respondent is concerned, it is not in

dispute that he was promoted as Senior

Accountant (Functional) on January 1, 1990. It

is not the allegation of the appellant that the

respondent had obtained such promotion by

concealing fact or by playing fraud.

12. At the same time, however, in our

opinion, the learned counsel for the appellants

is right in submitting that the respondent was

not eligible and qualified to be promoted to

the post of Senior Accountant. In this

connection, he invited our attention to Article

148 of the Constitution. Clause (1) of the said

Article declares that there shall be a

Comptroller and Auditor-General of India who

shall be appointed by the President by warrant

under his hand and seal. Clause (5) deals with

staff of Comptroller and Auditor-General of

India and reads thus:

(5) Subject to the provisions of

this Constitution and of any law

made by Parliament, the conditions

of service of persons serving in

the Indian Audit and Accounts

Department and the administrative

powers of the Comptroller and

Auditor-General shall be such as

may be prescribed by rules made by

the President after consultation

with the Comptroller and Auditor-

General.

13. In exercise of the power under

Clause (5) of Article 148, the President,

after consultation with the Comptroller and

Auditor General of India, framed rules

known as \021The Indian Audit and Accounts

Department (Senior Accountant) Recruitment

Rules, 1988\022 (hereinafter referred to as

\021the Rules\022). Rule 3 provides for method of

recruitment, age limit, qualifications,

etc. of Senior Accountants and reads as

under;

3. Method of recruitment,

age limit, qualifications etc.\027

The method of recruitment, age

limit, qualifications and other

matters relating to the said

post shall be as specified in

columns 5 to 14 of the said

schedule.

14. The Schedule to the Rule expressly

states that a person may be appointed as

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Senior Accountant \021by promotion, failing

which by transfer on deputation\022 (Column

11). Column 12 is material and relevant

part reads thus:

12. In case of recruitment by

promotion / deputation / transfer,

grades from which promotion/

deputation/transfer to be made :

Promotion : On seniority basis,

subject to rejection or unfit from

among Accountants in the grade of

Rs.1200-2040, with three year\022s

regular service in the grade having

passed the departmental examination

for Accountants.

(emphasis supplied)

15. Bare reading of Rule 3 with

Schedule thereof makes certain things

clear. Firstly, the Rules are framed by the

President of India in consultation with the

Comptroller and Auditor General of India in

exercise of power under Clause (5) of

Article 148 of the Constitution. The Rules

are thus statutory in nature. Secondly, the

Rules provide for mode of appointment to

the post of Senior Accountant by promotion,

failing which by transfer on deputation.

Thirdly, promotion is based on \021seniority\022

subject to rejection or unfit from among

Accountants, generally known as \021negative

test\022. Fourthly, an Accountant must have

three years regular service. Finally, such

Accountant must have passed Departmental

Examination for Accountants.

16. It is not the case of the

respondent that he had passed the

Departmental Examination for Accountants.

It is, thus clear that the respondent was

not qualified for promotion to the post of

Senior Accountant under the Rules.

17. The respondent, however, urged that

even if it is held that passing of

Departmental Examination was necessary, the

Authorities ought to have relaxed the rule

by exercising power under Rule 5. A

grievance was also made that the direction

of the Tribunal in earlier case had not

been complied with and the prayer of the

respondent was rejected mechanically.

18. We are unable to agree with the

submission of the learned counsel. Rule 5

confers discretionary power on the

Comptroller and Auditor General of India to

relax the provisions of the Rules. It is

relevant and may be reproduced:

5. Power to relax.\027Where the

Comptroller and Auditor General of

India is of the opinion that it is

expedient or necessary so to do, he

may by order and for reasons to be

recorded in writing, relax any of

the provisions of these rules with

respect to any class or category of

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persons\024.

19. Reading of the order dated June 24,

1996, passed by the Deputy Accountant

General (Administration), Gwalior, makes it

clear that the Deputy Accountant General

considered Rule 5 and observed that he did

not find any valid reason/ground to relax

Recruitment Rules in view of the facts

mentioned in the order. It was inter alia

observed that Rule 5 conferred power on the

Comptroller and Auditor General of India to

relax the Rules, if he is of the opinion

that it is expedient or necessary so to do

by recording reasons in writing. But he

proceeded to state that such power should

be exercised \021with respect to any class or

category of persons\022. Normally, the power

should be invoked if eligible candidates

are not available for promotion or for

similar valid grounds/reasons. The power,

however, should not be exercised to

perpetuate a mistake. Since the respondent

did not fulfill the condition of

Recruitment Rules and a large number of

Accountants who had passed Departmental

Examination were available and awaiting

promotion, it would be against their

interests to deprive them of promotion and

to continue the respondent who had not

passed the examination.

20. In our considered opinion, the

reasons recorded by the Deputy Accountant-

General were in conformity with the

Statutory Rules. The Tribunal, therefore,

should not have interfered with the well

reasoned order passed by the Deputy

Accountant-General. The Tribunal, while

dealing with this aspect, observed;

\023The reasons given for not

according relaxation to the

applicant is that the power to

relax is generally to be invoked

only in respect of class or

category of persons and is resorted

to only in cases when eligible

persons are not available for

consideration for promotion or for

any valid reasons/grounds, and the

power in not conferred to

perpetuates a mistake. We do not

think that the grounds taken for

rejection of the case of the

applicant are valid. This Court has

specifically directed with certain

observation to consider the case of

the applicant for relaxation under

the powers vested under rule 5 and

the respondent were duty bound to

consider it in accordance with the

order of this Tribunal\024.

21. We are unable to persuade ourselves

as to how the Authorities did not carry out

the order in letter and spirit as contended

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by the learned counsel for the respondent.

We are also unable to agree with the

Tribunal that the reasons recorded for

rejection of the case of the respondent

were not \021valid\022. On the contrary, in our

judgment, the Deputy Accountant General was

right in keeping in view relevant

considerations, such as, the power should

be exercised with respect to any \021class or

category of persons\022, normally there should

not be any relaxation in Recruitment Rules

unless the eligible and qualified

candidates are not available; relaxation

should not be exercised to perpetuate

mistake; a large number of Accountants who

are eligible and qualified but they could

not be appointed only because of non-

availability of sufficient vacancies.

22. In this connection, it may be

profitable to refer to a decision of this

Court in Keshav Chandra Joshi & Ors. v.

Union of India & Ors., (1992) Supp (1) SCC

272 where this Court was called upon to

consider the ambit and scope of relaxation-

clause in Recruitment Rules. Rule 27 of the

U.P. Forest Service Rules, 1952 invested in

the Government power of relaxation which

read thus:

\023Where the Governor is satisfied that

the operation of any rule regarding

'the conditions of service' of the

members of the service causes undue

hardship in any particular case, he

may, in consultation with the

Commission, notwithstanding anything

contained in the rules applicable to

the case, by order dispense with or

relax the requirements of that rule to

such extent and subject to such

conditions as he may consider

necessary for dealing with the case in

a just and equitable manner\024.

23. The Court held that such power should

be exercised to the extent as may be necessary

to ensure satisfactory working or removing

hardship in just and equitable manner but the

Government cannot consciously and deliberately

deviate from the Rules exercising the power of

relaxation.

24. Interpreting the relaxation-clause and

the power of the Governor, this Court observed;

\023Satisfaction of the Governor that the

operation of the rules regarding the

conditions of service would cause

undue hardship in a particular case or

cases and the need to relieve hardship

and to cause just and equitable

results is a pre-condition. Even

otherwise the court cannot substitute

its satisfaction for the satisfaction

of the Governor in exercise of the

power of deemed relaxation.\024

25. The counsel for the respondent, no

doubt, submitted that in the impugned order,

the Tribunal merely directed the authorities to

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consider the case of the respondent for

relaxation of Rules and no grievance could be

made by the appellants.

26. We are unable to uphold the

contention. Para 6 of the order issued by the

Tribunal is explicitly clear. It reads thus:

\0236. In view of aforesaid discussions,

we feel that this is fit case for

according relaxation under Rule 5.

Accordingly, this O.A. is disposed of

with a direction to the respondents to

consider the case of the applicant for

promotion to the post of Senior

Accountant by relaxing the condition

of qualifying in the examination and

if found suitable, promote him to the

post of Senior Accountant within a

period of three months from the date

of receipt of this order, subject to

availability of vacancy. In case the

said vacancy is not available, he

shall be promoted immediately after

the vacancy is made available.

However, in case there are persons who

are senior to the applicant and who

have already qualified the examination

of Senior Accountant, the case of the

applicant shall be considered

immediately after the promotion of

such persons or such persons are

promoted\024. (emphasis supplied)

27. Plain reading of the above direction

leaves no room for doubt that the Tribunal

\021concluded\022 that it was a \021fit case for

according relaxation under Rule 5\022. Moreover,

the Tribunal directed the appellants to promote

the respondent, if found suitable, within the

stipulated period. The Tribunal further stated

that if there is no vacancy, the respondent

should be promoted after the vacancy is

available. There is, therefore, no doubt that

the question as to relaxation of rule was

\021finally decided\022 and the directions were to be

carried out by the Authorities on the basis of

such conclusion. It, therefore, cannot be said

that direction was limited to \021consideration\022

of the case of the respondent and to take an

appropriate decision in accordance with law.

28. It is true that the mistake was of the

Department and the respondent was promoted

though he was not eligible and qualified. But,

we cannot countenance the submission of the

respondent that the mistake cannot be

corrected. Mistakes are mistakes and they can

always be corrected by following due process of

law. In Indian Council of Agricultural Research

& Anr. v. T.K. Suryanarayan & Ors., (1997) 6

SCC 766, it was held that if erroneous

promotion is given by wrongly interpreting the

rules, the employer cannot be prevented from

applying the rules rightly and in correcting

the mistake. It may cause hardship to the

employees but a court of law cannot ignore

Statutory Rules.

29. As observed by us, Statutory Rules

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provide for passing of Departmental Examination

and the Authorities were right in not relaxing

the said condition and no fault can be found

with the Authorities in insisting for the

requirement of law. In the circumstances, the

action of the Authorities of correcting the

mistake cannot be faulted.

30. True it is that before such an action

is taken and a person is actually reverted, he

must be given an opportunity to show cause why

the proposed action should not be taken. He may

be able to satisfy the Authorities that there

was no such mistake. But even otherwise,

principles of natural justice and fair play

require giving of such opportunity to him. But

as observed earlier, in the instance case, in

accordance with Rule 31-A of the Fundamental

Rules, notice was issued to the respondent-

employee, explanation was sought and thereafter

the order was passed. The said order, in our

considered view, was just, proper and in

consonance with law and it ought not to have

been set aside by the Tribunal or by the High

Court. To that extent, therefore, the orders

impugned in this appeal deserve to be set

aside.

31. The last prayer on behalf of

respondent, however, needs to be

sympathetically considered. The respondent is

holding the post of Senior Accountant

(Functional) since last seventeen years. He is

on the verge of retirement, so much so, that

only few days have remained. He will be

reaching at the age of superannuation by the

end of this month i.e. December 31, 2007. In

our view, therefore, it would not be

appropriate now to revert the respondent to the

post of Accountant for very short period. We,

therefore, direct the appellants to continue

the respondent as Senior Accountant

(Functional) till he reaches the age of

superannuation i.e. upto December 31, 2007. At

the same time, we hold that since the action of

the Authorities was in accordance with

Statutory Rules, an order passed by the Deputy

Accountant-General canceling promotion of the

respondent and reverting him to his substantive

post of Accountant was legal and valid and the

respondent could not have been promoted as

Senior Accountant, he would be deemed to have

retired as Accountant and not as Senior

Accountant (Functional) and his pensionary and

retiral benefits would be fixed accordingly by

treating him as Accountant all throughout.

32. For the foregoing reasons, the appeal

is partly allowed. Though the respondent is

allowed to continue on the post of Senior

Accountant (Functional) till he reaches the age

of retirement i.e. December 31, 2007 and salary

paid to him in that capacity will not be

recovered, his retiral benefits will be fixed

not as Senior Accountant (Functional) but as

Accountant. In the facts and circumstances of

case, there shall be no order as to costs.