Supreme Court clarifies promotion eligibility for deputation employees: National Highway Authority of India vs. G Athipathi (2024)

Date of the Judgment: 09 December 2024

Citation: 2024 INSC 943

Judges: Justice Sudhanshu Dhulia and Justice Ahsanuddin Amanullah

Can prior service on deputation be counted towards promotion eligibility when an employee rejoins the same organization through direct recruitment after a break? The Supreme Court of India recently addressed this question in a case concerning the National Highways Authority of India (NHAI). The core issue was whether an employee’s previous deputation service could be considered for promotion after they had been repatriated to their parent department and subsequently re-joined NHAI through direct recruitment. The two-judge bench of Justice Sudhanshu Dhulia and Justice Ahsanuddin Amanullah delivered the judgment.

Case Background

The first respondent, Mr. G. Athipathi, initially worked as an Assistant Engineer for the Government of Tamil Nadu. On 27 May 2008, he was appointed by the National Highways Authority of India (NHAI) as Manager (Technical) on deputation for three years, effective from 21 May 2008. He continued in this role for six years until 13 June 2014, when he was repatriated to his parent department, the Highways & Minor Ports Department of the Government of Tamil Nadu.

On 15 March 2014, NHAI issued an advertisement for direct recruitment to the post of Manager (Technical). Mr. Athipathi applied for this position on 11 April 2014, after obtaining approval from his parent department. Following his repatriation, he took the written examination on 23 August 2014, and was subsequently selected. He rejoined NHAI as Manager (Technical) on 26 August 2015, with his appointment order dated 2 September 2015, effective from 26 August 2015.

The post of Manager (Technical) is a feeder cadre for promotion to Deputy General Manager (Technical). According to the National Highways Authority of India (Recruitment, Seniority and Promotion) Regulations, 1996, promotion to Deputy General Manager (Technical) requires at least four years of service as Manager (Technical). On 22 May 2017, NHAI issued a circular inviting applications for promotion to Deputy General Manager (Technical), which stated that deputation service as Manager (Technical) would be considered as regular service for promotion purposes.

Timeline:

Course of Proceedings

Initially, the Screening Committee of NHAI declared Mr. Athipathi ineligible for promotion. Following this, a promotion order was issued on 26 September 2017, promoting thirty-nine Managers (Technical) to Deputy General Managers (Technical), but excluding Mr. Athipathi. After his representations were not considered, he approached the Central Administrative Tribunal (CAT). The CAT directed NHAI to consider his representations in light of the circular.

NHAI, on 5 November 2019, rejected Mr. Athipathi’s claim, stating that his case was different from three other officers who had appeared for the direct recruitment exam while still in NHAI service. Aggrieved, Mr. Athipathi again approached the CAT. The CAT, on 30 December 2020, allowed Mr. Athipathi’s application, directing NHAI to count his deputation service from 21 May 2008 to 13 June 2014 for promotion to Deputy General Manager (Technical) with effect from 27 October 2017. NHAI complied with this order and promoted Mr. Athipathi on 7 June 2021.

NHAI challenged the CAT order in the High Court of Judicature at Madras, which dismissed the appeal on 1 March 2023, upholding the CAT’s decision. This led NHAI to appeal to the Supreme Court.

Legal Framework

The case revolves around the interpretation of the National Highways Authority of India (Recruitment, Seniority and Promotion) Regulations, 1996 (hereinafter referred to as the “Recruitment Regulations”). The relevant provision is regarding promotion to the post of Deputy General Manager (Technical), which states that promotion may be made from candidates holding the post of Manager (Technical) for at least four years.

The circular issued by the appellant on 22 May 2017 stated:

“6. It has also been decided to treat the deputation service (if any) rendered on the post of Manager (Technical) in NHAI as regular service for the purpose of promotion to the post of DGM (Technical). It has also been decided that the Manager (Technical), when found suitable for promotion, shall be promoted to the post of DGM (Technical) notionally with effect from the date they fulfil the eligibility criteria for the promotion, but not before the date of absorption and the date of promotion of applicants in OA 3696/2014 and 3762/2014 i.e. dated 29.12.2014, subject to recommendations of the Selection Committee. The actual promotion shall take effect from the date of assumption of charge against the post of DGM (Technical).”

Arguments

Submissions by the Appellant (NHAI):

• NHAI argued that promotion to Deputy General Manager (Technical) requires four years of continuous service as Manager (Technical).
• Mr. Athipathi’s deputation service ended on 13 June 2014, and he rejoined on 26 August 2015, creating a break in service. Thus, his prior deputation service cannot be counted.
• The circular of 22 May 2017 was meant to benefit those who were in service at the time of the circular and had completed four years of service and not those who had a break in service.
• Mr. Athipathi was not in service as Manager (Technical) on the date of the direct recruitment examination (23 August 2014), unlike three other candidates who were considered for promotion.
• The decision of the Executive Committee on 12 October 2017, only condoned a 20-day absence for administrative reasons and did not regularize the entire period from 13 June 2014 to 26 August 2015.
• The circular was based on a Delhi High Court order which did not involve any gap in service.
• Promotion is a selection process and not based on seniority, and the Screening Committee rightly rejected Mr. Athipathi’s application.

Submissions by Respondent No. 1 (Mr. Athipathi):

• The Recruitment Regulations and the circular do not require continuous service without a break for promotion.
• Mr. Athipathi served six years on deputation, exceeding the four-year requirement.
• He had to return to his parent department as the maximum deputation period was over and rejoined at the earliest opportunity through direct recruitment.
• Denying him promotion despite his prior service is arbitrary and unfair.
• NHAI granted the benefit of the circular to three other candidates who were junior to him, making his exclusion discriminatory.
• The concept of ‘break in service’ is inapplicable as he met the four-year service requirement.
• The circular does not specify that the person must continue to be on deputation or be absorbed for that service to be considered.

Issues Framed by the Supreme Court

The Supreme Court framed the following issues for consideration:

1. What are the criteria for considering one-time promotion to the post of Deputy General Manager (Technical) as per the circular dated 22 May 2017?
2. Does Mr. Athipathi fulfill these criteria on the relevant date?

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

Cases

• National Highways Authority of India v Sanjeev Kumar Sharma [2016 SCC OnLine Del 2698] – High Court of Delhi: The Delhi High Court observed that the petitioners therein had no gap in service.
• Indu Shekhar Singh v State of Uttar Pradesh [(2006) 8 SCC 129] – Supreme Court of India: The Supreme Court held that past services can be considered only when rules permit or in special situations.

Regulations

• National Highways Authority of India (Recruitment, Seniority and Promotion) Regulations, 1996: The regulations specify the criteria for promotion to the post of Deputy General Manager (Technical), requiring at least four years of service as Manager (Technical).

Judgment

How each authority was viewed by the Court?

• National Highways Authority of India v Sanjeev Kumar Sharma [2016 SCC OnLine Del 2698]: The Court used this case to highlight that the circular was based on a situation where there was no break in service, thus implying that the circular was not intended to cover cases with a break in service.
• Indu Shekhar Singh v State of Uttar Pradesh [(2006) 8 SCC 129]: The Court relied on this case to emphasize that past services can be considered only when rules permit or in special situations, which was not the case here.

The Court noted that the language of Clause 6 of the circular clearly stipulates that a person’s deputation service, if any, rendered on the post of Manager (Technical) in the appellant shall be treated as regular service for the purposes of promotion to the post of Deputy General Manager (Technical). However, the Court clarified that this benefit was intended for persons who were in service at the time of consideration and not those who had a break in service due to repatriation. The Court reasoned that Mr. Athipathi’s repatriation to his parent department and subsequent direct recruitment meant that his service had to be reckoned afresh from 26 August 2015.

The Court emphasized that the benefit was a one-time measure to end prolonged litigation and ensure fairness to candidates who chose to face direct recruitment. It was not intended to cover cases where there was a significant break in service due to repatriation.

The Court stated, “…past services can be taken into consideration only when the Rules permit the same or where a special situation exists, which would entitle the employee to obtain such benefit of past service.” The Court found that the present case did not qualify as a special situation.

The Court also clarified that the ‘etc.’ in ‘fulfilling administrative formalities e.g. submission/ acceptance of technical resignation / retirement etc’ would not cover the situation of Mr. Athipathi, who was absent from service not for administrative formalities but due to repatriation to his parent department.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the interpretation of the circular and the regulations, emphasizing the need for continuous service for promotion eligibility. The Court also focused on the specific facts of the case, particularly the break in service due to repatriation and subsequent direct recruitment. The Court was also influenced by the fact that the circular was intended to benefit those who were in service at the time of consideration and not those who had a break in service.

Logical Reasoning:

The Court considered alternative interpretations, but rejected them, stating that the circular was not intended to cover cases with a break in service due to repatriation. The Court held that the benefit was intended for persons who were in service at the time of consideration and not those who had a break in service due to repatriation. The Court also held that the ‘etc.’ in ‘fulfilling administrative formalities e.g. submission/ acceptance of technical resignation / retirement etc’ would not cover the situation of Mr. Athipathi.

The Supreme Court overturned the High Court and CAT’s decisions, ruling that Mr. Athipathi’s prior deputation service could not be counted towards promotion eligibility due to the break in service. The Court held that his service should be counted from the date of his direct recruitment, i.e., 26 August 2015.

The Court stated, “The respondent no.1 clearly on 22.05.2017 had not completed 4 years as that in law has to be counted afresh from 26.08.2015 and not from a previous date.”

The Court further stated, “The persons already working with the appellant on the day of consideration and having completed more than four years of service on the post of Manager (Technical) were only required to be considered.”

The Court also clarified, “…past services can be taken into consideration only when the Rules permit the same or where a special situation exists, which would entitle the employee to obtain such benefit of past service.”

Key Takeaways

• Deputation service may not be counted towards promotion eligibility if there is a break in service due to repatriation and subsequent direct recruitment.
• The interpretation of circulars and regulations must be based on the intention of the issuing authority and the specific language used.
• A break in service due to repatriation is not considered an administrative formality that can be condoned for promotion purposes.
• Past services can be considered only when the rules permit or in special situations.

Directions

The Supreme Court directed that Mr. Athipathi shall be considered for promotion(s) in terms of the Recruitment Regulations and the Circular and the discussions made in this order. All consequential benefits of service (including pension etc., if and as applicable) shall be reckoned treating his date of entry into service of the appellant as 26 August 2015. However, no recovery/adjustment shall be made of excess payment(s) made to Mr. Athipathi, if any.

Development of Law

The ratio decidendi of this case is that deputation service cannot be counted towards promotion eligibility if there is a break in service due to repatriation and subsequent direct recruitment. This judgment clarifies that a break in service due to repatriation is not considered an administrative formality that can be condoned for promotion purposes. This case also reinforces the principle that past services can be considered only when the rules permit or in special situations. The Supreme Court has upheld the interpretation of the circular and regulations by the National Highways Authority of India, thereby settling the position of law in this regard.

Conclusion

The Supreme Court allowed the appeal filed by the National Highways Authority of India, setting aside the orders of the High Court and the Central Administrative Tribunal. The Court held that Mr. Athipathi’s prior deputation service could not be counted towards promotion eligibility due to a break in service caused by his repatriation and subsequent direct recruitment. The Court clarified that the circular of 22 May 2017 was meant to benefit those who were in service at the time of the circular and had completed four years of service and not those who had a break in service. The Court directed that Mr. Athipathi’s service should be counted from the date of his direct recruitment, i.e., 26 August 2015, for future promotions.

Category

• Service Law
  • Promotion
  • Deputation
  • Recruitment
  • Seniority
• National Highways Authority of India
  • National Highways Authority of India (Recruitment, Seniority and Promotion) Regulations, 1996

FAQ

Q: Can my previous deputation service be counted for promotion if I rejoin the same organization after repatriation?

A: No, according to this Supreme Court judgment, if you are repatriated to your parent department and then rejoin the same organization through direct recruitment, your previous deputation service will not be counted towards promotion eligibility.

Q: What is considered a break in service?

A: A break in service occurs when you are repatriated to your parent department and are no longer in the service of the organization where you were on deputation. Rejoining through direct recruitment is considered a fresh appointment.

Q: Does this judgment apply to all government organizations?

A: While this judgment specifically pertains to the National Highways Authority of India, the principles and reasoning used by the Supreme Court may be applicable to similar cases in other government organizations. It is important to refer to the specific rules and regulations of your organization.

Q: What is the significance of the circular dated 22 May 2017 in this case?

A: The circular stated that deputation service would be considered as regular service for promotion purposes. However, the Supreme Court clarified that this benefit was intended for those who were in service at the time of consideration and not those who had a break in service due to repatriation.

Q: What does ‘ratio decidendi’ mean in this context?

A: Ratio decidendi refers to the legal principle or rule that is the basis of the court’s decision. In this case, the ratio decidendi is that deputation service cannot be counted towards promotion eligibility if there is a break in service due to repatriation and subsequent direct recruitment.