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Director-General of Employees' State Insurance Corporation Vs. K.A. Venkataraman (17.08.1976 - MADHC) - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtChennai High Court
Decided On
Judge
Reported in(1977)ILLJ351Mad
AppellantDirector-General of Employees' State Insurance Corporation
RespondentK.A. Venkataraman
Cases ReferredLalith Mohan v. Union of India
Excerpt:
.....considered for vacancies arising in the other regions. , outstanding',very good',and 'good',on the basis of merit as determined from their respective records of service. 16. the remaining officers should be classified as 'outstanding 'very good' and 'good' on the basis of merit as determined by their respective records of service. 20. the respondent's contention before the learned judge was that, the departmental promotion committee had not acted within its jurisdiction when it felt bound to follow, and admittedly followed, the home ministry's memorandum regarding the classification of the candidates as 'outstanding',very good' and 'good'.it was pointed out that this classification, or gradation, of merit was not authorised by the employees* state insurance corporation (recruitment)..........the next departmental promotion committee met in july and december, 1967. it produced a merit list of selected candidates in november, 1968, in implementation of this selection, and under the orders of the director general, the regional director of the appellant-corporation promoted the respondent as head clerk, and by order dated : 18-12-1968 actually posted him as head clerk in the corporation's local office at pondicherry, which was part of the madras region which was the region to which the respondent had opted. the respondent, however, by his letter dated 20-12-1968, declined this promotion expressing surprise that he was not posted in madras city. as vice-president of the trade union, he insisted on being posted, on regular promotion as head clerk, in madras city and in.....
Judgment:

P.S. Kailasam, C.J.

1. These appeals are from the judgment of K.N. Mudaliyar, J., allowing Writ Petition Nos. 1306 and 1307 of 1970. The appellant in both the writ appeals is the Director-General, Employee's State Insurance Corporation, New Delhi. One K A. Venkataraman who is the respondent in these appeals and the petitioner in the writ petitions joined service under the appellant Corporation as a lower division clerk on 27-1-1956. He was promoted as an upper division cleric on 2-10-1958. He was confirmed in that post in 1962. He was subsequently promoted as head clerk, but purely on a temporary basis.

2. The appellant-Corporation is an all-India body, and its services were organized on an all-India basis. Under its service regulations, there were two methods of recruitment of head clerks : (i) by direct recruitment and (ii) by promotion from the immediately lower cadre of upper division clerks. Promotion was to be by selection on the basis of merit with due regard to seniority. The selection was to be done by Departmental Promotion Committee to be constituted by the Director General from time to time.

3. A Departmental Promotion Committee was constituted for the first time in November, 1963. It prepared a select list of upper division clerks to be considered for promotion to the posts of head clerks on the basis of merit-cum-seniority. The respondent's name appeared in the list, although in point of rank, he was rated below some of his juniors in the cadre of upper division clerks. This list, however, was not pursued. Indeed, for administrative reasons, no promotions at all were made from upper division clerks to the posts of bead clerk, in the period 1963 to 1966.

4. In October, 1966 another Departmental Promotion Committee sat, and on 10-11-1966 it complied a fresh select list of upper division clerks for promotion as head clerks. The respondent's name found a place in this list as well. Pursuant to this list and on the recommendation of the Departmental Promotion Committee, the Regional Director of the appellant-Corporation wrote to the respondent on 15-12-1966 asking him to state in which region he was agreeable to be posted as head clerk on promotion. He was clearly informed that if in the exigencies of the service, he could not be posted in any of the regions for which he had exercised his option, he would not be considered for vacancies arising in the other regions. He was also told that under this system of region wise options, it might even happen that juniors might get promotion earlier than those above them.

5. The respondent wrote back in reply on21-12-l966 stating that he had carefully noted the conditions and consequences of exercise of the option. He proceeded to exercise his option by stating his preference to be posted in Madras, Mysore, Andhra Pradesh and Kerala, in that order. But by another letter of the same date he wanted to get a posting only in Madras. Since, however, there was no available post of bead clerk at Madras appropriate to his ranking in the select list, he could not be promoted following his option In April, 1967, he was once again asked to exercise his option, subject to the same terms and conditions as before To this communication also he replied on 22-4-l9o7, expressing his inability to opt for being posted as head clerk anywhere else excepting at Madras.

6. The Select List prepared by the Departmental Promotion Committee on 10-11-1966 comprised 170 names of upper division clerks as approved for promotion. Out of this, 134 persons actually got postings as head clerks. The remaining 36 persons, of whom the respondent was one, did not opt for posting at places where there were vacancies available at that time. The implementation of the select list of 1966 was exhausted by June. 1967. These 36 persons were left out, for the reasons already mentioned. All their names, however, were carried forward to be considered for inclusion in the subsequent select list to be prepared by the Departmental Promotion Committee Meanwhile, the respondent was given a chance to accept his posting as head clerk in the West Bengal region. This order was made on 17-9-1968. But the respondent declined the transfer to West Bengal on promotion.

7. The next Departmental Promotion Committee met in July and December, 1967. It produced a merit list of selected candidates in November, 1968, In implementation of this selection, and under the orders of the Director General, the Regional Director of the appellant-Corporation promoted the respondent as head clerk, and by order dated : 18-12-1968 actually posted him as head clerk in the Corporation's Local Office at Pondicherry, which was part of the Madras region which was the region to which the respondent had opted. The respondent, however, by his letter dated 20-12-1968, declined this promotion expressing surprise that he was not posted in Madras City. As vice-president of the trade union, he insisted on being posted, on regular promotion as head clerk, in Madras City and in no other place.

8. Subsequently, a new post in the grade of head clerk was sanctioned for the city of 'Madras. The respondent was promoted as head clerk on regular basis and fitted in the newly sanctioned post in Madras City with effect from 21-5-1969.

9. Meanwhile, the appellant-Corporation compiled an 'All India Gradation List of head clerks'. This list contained the names of all head clerks appointed in the grade, at promoted to the grade, on a regular basis. The list was rendered upto 30-9-1963. The name of the respondent was not to be found in this list. This was only to be expected. For he was promoted as head clerk on a regular basis only later, i.e., with effect from 21-5-1969, following the recommendations and merit list rendered by the Departmental Promotion Committee in November, 1968.

10. The All India Gradation List of head clerks as on 30-9-1968 was circulated in July-August, 1969. The respondent's grievance against this list was that his name had been improperly omitted from it. According to the respondent, his name ought to have found a place therein, even as on 30-9-1968. The reasons adduced by him were: (i) that he had been promoted as head clerk, although in temporary vacancy, even in 1963 and (ii) that the Gradation List contained names of persons who were far junior to him, according to their respective years of entry into service

11. It was in the above circumstances that the respondent filed in this Court two writ petitions, W.P. No. 1307 of 1970 was for quashing the All-India Gradation List of head clerks as on 30-9-1968 circulated along with the memorandum of tii3 Corporation dated: 9-7-1969/20-8-1969. W.P. No. 1306 of 1970 was for the issue of a mandamus to the Director General of the appellant-Corporation directing him to include the respondents name in the seniority-cum-Gradation List of head clerks as on 30-9-1968, interposing his name immediately after the name of one R. Lakshmanan whose place was to be found in serial number 191 in the list. The writ petitions were admitted and rule nisi issued. The appellant-Corporation entered appearance, and showed cause against the issue of writs, by filing a detailed counter-affidavit sworn to by the Director-General.

12. The appellant's stand in the counter-affidavit was that while the respondent had been promoted as head clerk from his substantive post of upper division clerk even in 1963, the promotion was purely in a temporary capacity. Such promotions, it contended, would not entitle any one to a place in the All India Gradation List of head clerks. That list, as the respondent pointed out, comprised only the names of persons who had been either recruited directly or promoted, on a regular basis, It was true that even for purposes of regular promontions, the respondent's name had been included in the lists already prepared by the Departmental Promotion Committees, but the Corporation contended that merely on the strength of such inclusion the respondent could not claim any rank or seniority or even inclusion in the list as on 30-9-1968, so long as he had not been actually promoted, on a regular basis, to the substantive post of head clerk,

13. The writ petitions were heard by K.N, Mudaliyar, J., The arguments before the learned Judge were mainly devoted to an examination of the validity of the procedure followed by the Departmental Promotion Committee in preparing Merit Lists of candidates for purposes of promotion. The procedure was described as under in the appellant's counter.affidavit :

Selection for promotion to the post of head clerk is done by a duly constituted Departmental Promotion Committee and strictly in accordance with the principles laid down by the Government of India, Ministry of Home Affairs O.M. No. 1/4 55-RPS dated 16-5-1957.... As per para 4 of that O.M. the officers who are found fit for promotion are classified in three categories, viz., 'outstanding', 'very good', and 'good', on the basis of merit as determined from their respective records of service. The 'Select List , is that prepared by placing the name in the order of the above three categories without disturbing the seniority inter se within each category....Promotions from the 'Select List' so prepared is made in the order in which the names are finally arranged as explained above.

14. The Home Ministry's memorandum dated: 16-5-1957 which had inspired the Departmental Promotion Committee's selections contained the following guide lines for promotion and appointment to selection posts and selection grades on the basis of merit with due regard to seniority:

The Departmental Promotion Committee or other selection.....authority should first decide the field of choice, i.e., the number of eligible officers awaiting promotion who should be considered for inclusion in the 'Select List....

Note : The field of choice, wherever possible, should extend to five to six times the number of vacancies expected within a year.

15. From among such officers, those who are considered unfit for promotion should be excluded.

16. The remaining officers should be classified as 'outstanding ', 'very good' and 'good' on the basis of merit as determined by their respective records of service.

17. The 'Select List' should then be prepared by placing the names in the order of those three categories, without disturbing the seniority inter se within each category.

18. Promotions should normally be made from the 'Select List' in the order in which the names are finally arranged.

19. The 'Select List' should be periodically reviewed.

20. The respondent's contention before the learned Judge was that, the Departmental Promotion Committee had not acted within its jurisdiction when it felt bound to follow, and admittedly followed, the Home Ministry's memorandum regarding the classification of the candidates as 'outstanding', 'very good' and 'good'. It was pointed out that this classification, or gradation, of merit was not authorised by the Employees* State Insurance Corporation (Recruitment) Regulations, 1965. According to the respondent, all that the Regulations-prescribed Was that selection for purposes of promotion must be based on merit with due regard for seniority.

21. In the course of arguments before the learned Judge, Regulation 22, was mentioned. That regulation empowered the Director General of the Corporation to prescribe from time to time the general procedure to be followed for recruitment and for holding competitive tests and interviews. It appears to have been argued before the learned Judge on behalf of the appellant that the Director General had authority to adopt the Home Ministry's guidelines for gradation of merit in matters of promotion of Officers of the Corporation, and he had power to apply those guidelines in virtue of Regulation 22. The learned Judge, however, rejected this contention holding that gradation of merit was not a matter of procedure, merely, but one relating to a matter of substance, going, as it did, to the root of the basis for selection by merit. He further held that Regulation 22 cannot be invoked for this purpose since it gave the Director General only a power to regulate procedure. In this view, the learned Judge held that the All India Gradation List of head clerks as on 30-9-1968 has been prepared and settled on a basis which it was not open to the Corporation to follow. He, accordingly, directed the issue of certiorari in W.P. No. 1307 of 1970 quashing the said List. He followed it up by issuing a mandamus in W.P. No. 1306 of 1970, directing the Corporation to fix the rank of the respondent in accordance with law.

22. In the appeals before us, Mr. Dolia, appearing for the appellant-Corporation, contended that the learned Judge was in error in quashing the Gradation List. He argued that there was nothing wrong in the Departmental Promotion Committee's adopting the Home Ministry guidelines for selecting candidates on the basis of merit. The power of selection on the basis of merit was conferred by the Regulations on the Departmental Promotion Committee. This being so, the Committee was at liberty, and quite within the ambit of its power to adopt any basis that was reasonable for applying the merit test.

23. Mr. K.V. Sankaran, appearing for the respondent, conceded that the Corporation's Recruitment Regulations might very well provide for guideline to ascertain and even classily merit, the Regulations might also delegate to the Director General the power to lay down principles and guidelines in this regard. But what he maintained was that, at the material time, the Regulations did not contain any such provisions. Mr. Sankaran pointed out, by way of contrast, the amendments subsequently introduced in the Regulations. Regulation 29(2) introduced in 1975 provided, for a first time, that in regard to promotions by selection on merit, with due regard to seniority, the Standing Committee of the Corporation may issue such instructions from time to time in regard to choice of candidates, preparation of select list, determination of merit, the size of the panel of the selected candidates, etc. It further provided that such selection shall be regulated 'by general instructions issued by the Director General from time to time'. The point urged by Mr. Sankaran was that a provision such as the one introduced in the Regulations in 1975 was not there at the time when the impugned list was prepared, and, therefore, the Director General had no power to issue instructions to the Departmental Promotion Committee in regard to the field of choice, preparation of select list, determination of merit, the size of the panel of select candidates, etc., Mr. Sankaran argued that the only power that the Director General had, at the material time, was the power to regulate procedure in matters of recruitment.

24. Regulation No. 22, which had figured so much m the discussion before us as well as before the learned Judge, it in the following terms:

22. The Director General may, subject to instructions issued by the Standing Committee, prescribe from time to time, the general procedure to be followed for recruitment and for holding competitive tests and interviews.

25. Prima facie, it would be seen that the power under this regulation is limited only to the prescription of general procedure in matters of recruitment. It is, however, unnecessary for us to enter our considered opoinion on the construction of this Regulation 22. Nor is it necessary to decide the further question whether the gradation or Sub-classification of merit into outstanding', 'very good' and 'good' is a matter of substance or of procedure. For Mr. Dolia for the appellant, in this arguments before us, did not rely on Regulation 22. He relied, rather, on two other regulations, Regulation No,29 and Regulation No. 28.

Regulation 29 reads as under:

All promotions shall be made on the recommendations of a duly constituted Departmental Promotion Committee.

Regulation No. 28(1) read thus:

The promotions to the following grades shall be made on the basis of selection on merits with due regard to seniority.

26. Mr. Dolia urged that when the Regulations insisted that promotions should be made on the recommendations of the Departmental Promotion Committee and when the Regulations imposed on that body the duty to make selections on the basis of merit with due regard to seniority, it was implicit in the Regulations that the Promotion Committee should properly instruct itself on the question as to how best to make the selection on the basis of merit subject to seniority. Mr. Dolia granted that at the material time the Regulations themselves did not contain any guidelines to enable the Departmental Promotion Commit tee to apply any particular merit tests for purposes of selection. It was in this context, according to learned Counsel, that the Home Ministry's Notification came in as a ready reference. The Home Ministry's directives were by no meats binding on the Corporation or the Director General or the Departmental Promotion Committee. But Acting under Regulation 28, the Departmental Promotion Committee had to fulfil its allotted task of selecting candidates on merit, and for doing so. it could adopt any legitimate and reasonable standards to discover and act on merit. According to learned Counsel, the gradation of merit into 'outstanding', 'very good' and 'good' adopted under the Home Ministry's memorandum was after all, a well-known and well-accepted method of gradation of merit. In addition, it was also a reasonable basis to adopt in the context of the requirements in the Regulations for selection by merit. There was, therefore, nothing wrong in the Promotion Committee adopting this three-fold classification.

27. Mr. Sankaran vehemently argued that Regulation 28 only put before the selection body the criterion of merit. This meant that the Promotion Committee could classify candidates into those who had merit and those who had none. The concept of merit, as found in Regulation 28 did not lend itself to any sub-classification such as 'outstanding', ''very good' and 'good. The Departmental Promotion Committee was in error in persuading itself to believe that there were gradations of merit.

28. We do not agree with Mr. Sankaran's contentions. The direction and scope of Regulations 28 and 29 are quite clear. The Departmental Promotion Committee is invested with authority to make recommendations for promotion. For making such recommendations, the criterion for selection is merit with due regard to seniority. Obviously, the power under the Regulations is meant to be exercised effectively, for the effective exercise of this power, the Departmental Promotion Committee apparently found it necessary to make gradations of merit, on the lines suggested in the Home Ministry Memo, randum. We cannot understand how this body was prevented from taking note of the existence, in the administrative polity of our country, of service rules and regulations and guidelines which although not binding on them, nevertheless were eminently fit for adoption on the basis of their inherent reasonableness as well as on the basis of their having stood the test of time. It is common knowledge that promotion to selection posts in any Government department, both Central and State, have for a long time been founded on the gradation of merit as 'outstanding', 'very good1' and 'good'. We are of the view that in adopting these tests in the matter of selection by merit, the Departmental Promotion Committee and the Director General had not run counter to Regulations 28 and 29. On the contrary, it was well within the contemplation of these regulations. In this view it is unnecessary for us to go into the question whether the amendment of Regulation 29 by the insertion of Sub-regulation (2) in 1975 was a mandatory or clarificatory.

29. Mr. Doha referred us to certain observations of the Supreme Court of a general character in two decisions. The first was, Sani Ram Sharma v. State of Rajasthan 1968 11 L.L.J. 830. In this case, the Court held that while the Government cannot amend or supersede statutory rules by administrative instructions, the Government can fill up the gaps and supplement the rules and issue administrative instructions not inconsistent with the rules already framed, if the rules are silent on any particular point. The other decision is reported as Lalith Mohan v. Union of India : AIR1972SC995 , in which the, same principle was restated. It seems to us that it is unnecessary to invoke the principle of these decisions in the present case. For we have upheld the validity of the selections made by the Departmental Promotion Committee in this case, on the ground that it was implicit in Regulation 29 that the Committee should have before it reasonable and relevant criteria of merit and in that context it was quite within its power to adopt the standards laid down in the Home Ministry's memorandum. We did not read Regulation 29 as having left any material gaps which needed to be filled In by resort either to the Home Ministry Notification or to any administrative instructions by the Director General himself.

30. In the result, the only ground on which the learned Judge had quashed the list and granted the writ petitions in favour of the respondent must fail.

31. Mr. Sankaran requested that he might be permitted to support that order of the learned Judge on other grounds put forward by the respondent in the writ petitions. We permitted him to do so. Mr. Sankaran first contended that the withholding of regular promotion to the respondent in the selection grade was solely because of his trade union activities. This allegation, we find, has been categorically denied by the appellant. We are satisfied that the respondent was left behind not because the Corporation disliked his trade union activities. The whole thing was brought upon his head owing to his own obstinacy in declining the offer of posting to any place other than Madras City. It is this which contributed to his name being passed over in more than one selection. The fact that ultimately he was posted, on regular promotion, as head clerk in Madras would belie the allegation of victimisation.

32. Mr. Sankaran then urged that the respondent has been declared fit for the post of head clerk by his having been promoted to officiate as such much earlier and hence his name cannot be excluded from the merit list. The answer to this submission is that the impugned list is not a list of individuals who were found fit for promotion as head clerks, but it is a list of persons who had been actually appointed either by direct recruitment or by promotion in the regular course to the post of head clerk and holding the post as on 31-9-1968. A person, such as the respondent, who had not been appointed to the substantive post of head clerk, as on that date can have no claim to be included in the list.

33. Mr. Sankaran also argued, basing himself on general principles relating to the promulgation or subordinate legislation, that before the Departmental Promotion Committee proceeded to apply the tests of 'outstanding', 'very good' and 'good' as a basis of selection of merit, it ought to have published or otherwise given notice to the candidates of its intention to follow this procedure. We do not think that these general considerations call for examination in the present case, in the view we have taken, as a matter of pure construction, of the true scope and implications of the powers of the Departmental Promotion Committee under Regulations 28 and 29.

34. In the circumstances, we allow the writ appeals and dismiss the writ petitions, with costs. Counsel's fee Rs. 250 on set.


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