STATE OF HIMACHAL PRADESH & ORS. v. RAJ KUMAR & ORS.

A conferred under Article 309 of the Constitution of India. Under the 1968 Act, the State Government was empowered to make Rules either prospectively or retrospectively to regulate the recruitment and condition of service of persons appointed to public services and posts in question with the Department of Industry and Commerce of the State of Kerala. B

23. In view of such delegation of power of the legislature to the State under the 1968 Act, the Special Rules framed by the State Government giving retrospective effect from 1-7-1983 cannot be held to be illegal or invalid. C ….

26. In the present case, we find that the appellants have not derived any benefit out of the old Government order which was in force at the time of advertisement. We, therefore, hold that no vested right or benefit accrued to the appellants have been taken away by sub-rule (2) of Rule 1 of the Special Rules.” 30.2 This is a case where the Government made rules which clearly applied retrospectively to facts that existed before and after the amendment. The Court held that no right subsists for consideration to the vacancies that existed prior to the commencement of the rules. 31.1 In State of Tripura v. Nikhil Ranjan Chakraborty,53 the Court considered a submission that additional posts in ‘Group A’ and ‘Group B’ of Schedule IV must be considered only on the basis of the rules that existed prior to the amendment on 24.12.2011. The Court found no difficulty in straight away applying the decision of this Court in Deepak Agarwal (supra) which distinguishes Rangaiah to hold as under: - “9. The law is thus clear that a candidate has the right to be considered in the light of the existing rules, namely, “rules in force on the date” the consideration takes place and that there is no rule of absolute application that vacancies must invariably be filled by the law existing on the date when they arose. As against the case of total exclusion and absolute deprivation of a chance to be considered as in Deepak Agarwalin the instant case certain additional posts have been

53 H State of Tripura v. Nikhil Ranjan Chakraborty (2017) 3 SCC 646.

STATE OF HIMACHAL PRADESH & ORS. v. RAJ KUMAR 891 & ORS. [PAMIDIGHANTAM SRI NARASIMHA, J.]

included in the feeder cadre, thereby expanding the zone of consideration. It is not as if the writ petitioners or similarly situated candidates were totally excluded. At best, they now had to compete with some more candidates. In any case, since there was no accrued right nor was there any mandate that vacancies must be filled invariably by the law existing on the date when the vacancy arose, the State was well within its rights to stipulate that the vacancies be filled in accordance with the Rules as amended. Secondly, the process to amend the Rules had also begun well before the Notification dated 24-11-2011.

10. In our view, the instant case is fully covered by the law laid down by this Court in Deepak Agrawal and the High Court was completely in error in allowing the writ petition and in dismissing the writ appeals. We, therefore, allow these appeals, set aside the judgment under appeal and dismiss Writ Petitions (Civil) Nos. 104, 105, 106, 153 and 181 of D 2012.” 31.2 The Court reiterated that there is no rule of absolute application that vacancies must be filled as per the law existing on the date when they arose. The Court held that there is neither an accrued right nor is there a mandate under the rules to fill the vacancies as per E the law that existed. The Court recognised the right of the Government to stipulate the vacancies in accordance with rules as amended. 32.1 By 2019 the perspective in which this Court has considered the decision in Rangaiah was clear. By this time, the Court recognized many exceptions to the principle. In Union of India v. Krishna F Kumar 54,this Court noted that, “the decision of this Court in Y.V. Rangaiah v. J. Sreenivasa Rao has been construed in subsequent decisions as a case where the applicable rule required the process of promotion or selection to be completed within a stipulated time- frame”. This case relates to a claim made by Havaldars for being considered for the post of Naib Subedar for the vacancies which occurred G prior to the changes that were made in the structure of Assam Rifles in

2011. The High Court accepted the submission and directed the applicants to be considered for the posts as per the pre-amended rules. Allowing the appeal this Court held as under:- 54 Union of India v. Krishna Kumar (2019) 4 SCC 319. H

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13. In view of this statement of the law, it is evident that once the structure of Assam Rifles underwent a change following the creation of the intermediate post of Warrant Officer, E persons holding the post of Havaldar would be considered for promotion to the post of Warrant Officer. The intermediate post of Warrant Officer was created as a result of the restructuring exercise. The High Court was, in our view, in error in postulating that vacancies which arose prior to the amendment of the Recruitment Rules would necessarily be governed by the Rules which existed at the time of the occurrence of the vacancies. As the decided cases noted earlier indicate, there is no such rule of absolute or universal application. The entire basis of the decision of the High Court was that those who were recruited prior to the restructuring exercise and were holding the post of Havaldars had acquired a vested right of promotion to the post of Naib Subedar. This does not reflect the correct position in law. The right is to be considered for promotion in accordance with the Rules as they exist when the exercise is carried out for promotion.”

STATE OF HIMACHAL PRADESH & ORS. v. RAJ KUMAR 893 & ORS. [PAMIDIGHANTAM SRI NARASIMHA, J.]

32.2 Apart from holding that there is no rule of universal application A to the effect that vacancies must necessarily be filled on the basis of the law that existed on the date when they arose, this Court also held that the right is to be considered for promotion in accordance with rules as they exist when the exercise is carried out for promotion. 33.1 In State of Orissa v. Dhirendra Sundar Das55, the Court B was concerned with appointment by promotion to Orissa Administrative Service, Class II Cadre. The employees contended that OAS Class II Rules, 1978 read with OAS Class II, Regulations, 1978 were in force at the time when the State decided to fill up the 150 OAS Class II posts on 28.4.2008. It was their contention that the subsequent restructuring cannot affect their right to be considered for the 150 posts as per the 1978 C Rules. For this purpose, reliance was placed on Rangaiah. Rejecting this contention, the Court allowed the appeal by holding: “9.14. Reliance placed by the counsel for the respondents on Y.V. Rangaiah v. J. Sreenivasa Raoin order to submit that the vacancies which had arisen under the old Rules would be D governed by the old Rules, is of no avail. 9.15. A similar submission was rejected by this Court in Deepak Agarwal v. State of U.P. [Deepak Agarwal v. State of U.P., (2011) 6 SCC 725 : (2011) 2 SCC (L&S) 175]… E ….

10. On the aforesaid grounds, we hold that the judgment of the Division Bench is liable to be set aside since the contesting respondents did not have a vested or fructified right of promotion to OAS Class II posts which had arisen during the recruitment year 2008. The names of the contesting respondents were merely recommended for consideration. In the meanwhile, in 2009 the State had restructured the cadre, and abolished the OAS Class II cadre. The reconstituted cadre viz. the Orissa Revenue Service Group ‘B’ cadre came in its place. Hence, the direction of the Division Bench to appoint the contesting respondents in the vacancies which had occurred in the abolished cadre, in accordance with the repealed 1978 Rules, was contrary to law, and liable to be set aside.” 55 State of Orissa v. Dhirendra Sundar Das, (2019) 6 SCC 270. H

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A 33.2 Following the line adopted in Deepak Agarwal v. State of U.P. (supra) this Court held that the respondents therein do not have a vested and fructified right and therefore held that the appointments need not be made as per the old rules. 34.1 In Rajasthan State Sports Council v. Uma Dadhich 56, the respondent therein was appointed under the Rajasthan State Sports Council on the posts of Coach Grade-III on 20.³.1986. She was promoted to Coach Grade-II in 1990 and Coach Grade-I in 1997. Promotion to the post of Sports Officer from the Cadre of Coach Grade- I was challenged by the respondent on the ground that the postsfell vacant in the year 2003-2004, for which the 2006 Rules changed the qualification from mere seniority to seniority-cum-merit could not be applied. Allowing the appeal this Court has held as under:- “5. There is merit in the submission which has been urged on behalf of the appellants that the respondent had no vested right to promotion but only a right to be considered in accordance with the rules as they existed on the date when the case for promotion was taken up. This principle has been reiterated in several decisions of this Court. (See H.S. Grewal v. Union of India [H.S. Grewal v. Union of India, (1997) 11 SCC 758], Deepak Agarwal v. State of U.P. [Deepak Agarwal v. State of U.P., (2011) 6 SCC 725], State of Tripura v. Nikhil E Ranjan Chakraborty [State of Tripura v. Nikhil Ranjan Chakraborty, (2017) 3 SCC 646] and Union of India v. Krishna Kumar [Union of India v. Krishna Kumar, (2019) 4 SCC 319]).

6. The judgment in Y.V. Rangaiah v. J. Sreenivasa Raodealt F with a situation where the rules required that the promotional exercise must be completed within the relevant year. Rangaiah case [Y.V.Rangaiah v. J. Sreenivasa Rao, (1983) 3 SCC 284], has hence been distinguished in the judgments noted above.

7. Rule 9(4) of the Rajasthan State Sports Council Service G Rules, 2006 on which reliance has been placed on behalf of the appellant does not indicate that the vacancies must be filled in on the basis of Rules as they prevail in the year in which they have occurred. Rule 9(4) is in the following terms: “9. (4) The appointing authority shall determine the vacancies 56 H Rajasthan State Sports Council v. Uma Dadhich (2019) 4 SCC 316.

STATE OF HIMACHAL PRADESH & ORS. v. RAJ KUMAR 895 & ORS. [PAMIDIGHANTAM SRI NARASIMHA, J.]

of earlier years, year-wise which were required to be filled in by promotion, if such vacancies were not determined and filled earlier in the year in which they were required to be filled in.” 34.2 The Court considered a large number of decisions that distinguished Rangaiah’s case and held as a matter of principle that rules that exist on the date when the case for promotion was taken up would hold the field. The Court further observed that there is no rule which specifically mandates that the vacancies prior to the amendment must be filled as per the rules that existed and not the new rules. This is a complete reversal of the principle set to have been laid down in Rangaiah’s case. C

35. Finally,the case of D. Raghu v. R. Basaveswarudu57, is yet another decision that has not followed the principle in Rangaiah’s case. The Court held as under:- “129.8. The High Court was in error in holding that it has to be necessarily held that the vacancies which arose prior to the revised Recruitment Rules coming into force has to be filled up under the then existing Rules (the 1979 Rules) relying upon case law includingRangaiah. There was a conscious decision taken to not fill up vacancies based on the restructuring, and what is more, letters dated 28-10-2002 and 14-11-2002 show that promotion to the post of Inspector was to be effected based on the new Recruitment Rules.” Analysis:

36. A review of the fifteen cases that have distinguished Rangaiah would demonstrate that this Court has been consistently carving out exceptions to the broad proposition formulated in Rangaiah. The findings in these judgments, that have a direct bearing on the proposition formulated by Rangaiah are as under:

1. There is no rule of universal application that vacancies must be necessarily filled on the basis of the law which existed on the date when they arose, Rangaiah’s case must be understood in the context of the rules involved therein.58 G

2. It is now a settled proposition of law that a candidate has a right to be considered in the light of the existed rules, which 57 D. Raghu v. R. Basaveswarudu, (2020) 18 SCC 1. 58 Deepak Agarwal v. State of U.P., (2011) 6 SCC 725, Para 26; Union of India v. Krishna Kumar, (2019) 4 SCC 319, Para 10. H

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A implies the “rule in force” as on the date consideration takes place. The right to be considered for promotion occurs on the date of consideration of the eligible candidates59.

3. The Government is entitled to take a conscious policy decision not to fill up the vacancies arising prior to the amendment of the rules. The employee does not acquire any vested right to being considered for promotion in accordance with the repealed rules in view of the policy decision taken by the Government.60 There is no obligation for the Government to make appointments as per the old rules in the event of restructuring of the cadre is intended for efficient working of the unit.61 The only requirement is that the policy decisions of the Government must be fair and reasonable and must be justified on the touchstone of Article 14.62

4. The principle in Rangaiah need not be applied merely because posts were created, as it is not obligatory for the appointing authority to fill up the posts immediately.63

5. When there is no statutory duty cast upon the State to consider appointments to vacancies that existed prior to the amendment, the State cannot be directed to consider the cases. 64 E 37.1 The above-referred observations made in the fifteen decisions that have distinguished Rangaiah’s case demonstrate that the wide principle enunciated therein is substantially watered-down. Almost all the decisions that distinguished Rangaiah hold that there is no rule of universal application to the effect that vacancies must necessarily be filled on the basis of law that existed on the date when they arose. This F only implies that decision in Rangaiah is confined to the facts of that case. 59 Deepak Agarwal v. State of U.P., (2011) 6 SCC 725, Para 26; Union of India v. Krishna Kumar, (2019) 4 SCC 319, Para 10. 60 K. Ramulu v. Suryaprakash Rao, (1997) 3 SCC 59, Paras 12 and 13, Shyam Chandra Das v. State of Orissa, (2003) 4 SCC 218, Para 9, State of Punjab v. Arun Kumar G Aggarwal, (2007) 10 SCC 402, Para 38; Deepak Agarwal v. State of U.P., (2011) 6 SCC 725, Para 28. 61 G. Venkateshwara Rao v. Union of India, (1999) 8 SCC 455, Para 4. 62 Rajasthan Public Service Commission v. Charan Ram, (1998) 4 SCC 202, Para 15; K. Ramulu v. Suryaprakash Rao, (1997) 3 SCC 59, Para 15. 63 In Delhi Judicial Services Association v. Delhi High Court, (2001) 5 SCC 145, Para 5. H 64 Deepak Agarwal v. State of U.P., (2011) 6 SCC 725, Para 25.

STATE OF HIMACHAL PRADESH & ORS. v. RAJ KUMAR 897 & ORS. [PAMIDIGHANTAM SRI NARASIMHA, J.]

37.2 The decision in Deepak Agarwal (supra) is a complete departure from the principle in Rangaiah,in as much as the Court has held that a candidate has a right to be considered in the light of the existing rule.That is the rule in force on the date the consideration takes place. This enunciation is followed in many subsequent decisions including that of Union of India v. Krishna Kumar (supra). In fact, in Krishna Kumar Court held that there is only a “right to be considered for promotion in accordance with rules which prevail on the date on which consideration for promotion take place.” 37.³ The consistent findings in these fifteen decisions that Rangaiah’s case must be seen in the context of its own facts, coupled with the declarations therein that there is no rule of universal application to the effect that vacancies must necessarily be filled on the basis of rules which existed on the date which they arose, compels us to conclude that the decision in Rangaiah is impliedly overruled. However, as there is no declaration of law to this effect, it continues to be cited as a precedent and this Court has been distinguishing it on some ground or the other, as we have indicated hereinabove. For clarity and certainty, it is, therefore, necessary for us to hold; (a) The statement in Y.V. Rangaiah v. J. Sreenivasa Rao that, “the vacancies which occurred prior to the amended rules would be governed by the old rules and not by the amended rules”, does not reflect the correct proposition of law governing services under the Union and the States under part XIV of the Constitution. It is hereby overruled. (b) The rights and obligations of persons serving the Union and the States are to be sourced from the rules governing the services. Application of the principle to the facts of the present case: F 38.1 Returning to the facts of the present case, we have noticed that the High Court has proceeded on the premise that the vacancies occurring before the amendment of the Rules on 25.¹¹.2006 must be governed by the 1966 Rules. The decision of the High Court took within its sweep even the 7 new posts of Labour Officers that were sanctioned G by an inter-departmental letter dated 20.07.2006, which included even the 3 posts allocated for direct recruitment. The direction of the High Court to encompass even the 3 posts allocated for direct recruitment was on the ground that the posts were sanctioned on 20.07.2006, which is prior to the amendment of the Rules on 25.¹¹.2006. H

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A 38.2 We have already held that there is no right for an employee outside the rules governing the services. We have also followed and applied the Constitution Bench decisions in Union of India v. Tulsiram Patel (supra) and more particularly the decision in Roshan Lal Tandon v. Union of India (supra) that the services under the State are in the nature of a status, a hallmark of which is the need of the State to B unilaterally alter the rules to subserve the public interest. The 2006 rules, governing the services of the Respondents came into force immediately after they were notified. There is no provision in the said rules to enable the Respondents to be considered as per the 1966 Rules. The matter must end here. There is no other right that Respondents no. 1 to 3 can claim for such consideration. C 39.1 The alternative plea of the Government based on its policy decision to restructure the cadre by creating additional posts and also providing for direct recruitment by amending the rules, as a justification for not filling up the vacancies that arose prior to the amendment is fully supported by the following decisions of this Court. 65 D 39.2 The material placed on record shows that the additional posts of Labour Officers are created on 20.07.2006 and immediately thereafter the 12 labour zones were created. This is followed by amendment to the Rules with effect from on 25.¹¹.2006 restructuring the cadre. The facts fully justify the alternative submission made by the State and we have no hesitation in accepting the said submission. E

40. For these reasons stated above we set aside the judgment of the High Court in CWP No. 3028 of 2008 dated 28.12.2009 and allow Civil Appeal No. 9746 and Civil Appeal No. 9747 of 2011. There shall be no order on cost.

F Nidhi Jain Appeals allowed. (Assisted by : Tamana, LCRA)

65 K. Ramulu v. S. Suryaprakash Rao, (1997) 3 SCC 59;Rajasthan Public Service G Commission v. Chanan Ram, (1998) 4 SCC 202; G. Venkateshwara Rao v. Union of India, (1999) 8 SCC 455;Shyama Charan Dash v. State of Orissa, (2003) 4 SCC 218;State of Punjab v. Arun Kumar Aggarwal, (2007) 10 SCC 402;Deepak Agarwal v. State of U.P., (2011) 6 SCC 725;State of Tripura v. Nikhil Ranjan Chakraborty, (2017) 3 SCC 646;Union of India v. Krishna Kumar (2019) 4 SCC 319;State of Orissa v. Dhirendra Sundar Das, (2019) 6 SCC 270;Rajasthan State Sports Council v. Uma H Dadhich, (2019) 4 SCC 316.