Supreme Court Clarifies Promotion Rights After Cadre Restructuring in Orissa Administrative Service Case (2019)

Date of the Judgment: May 6, 2019

Citation: 2019 INSC 451

Judges: Uday Umesh Lalit, J., Indu Malhotra, J.

Can a government employee claim a right to promotion to a post that no longer exists due to cadre restructuring? The Supreme Court of India addressed this critical question in a recent judgment, clarifying the rights of employees when organizational structures change. This case revolves around the State of Orissa’s decision to restructure its administrative services, which led to the abolition of certain posts and the creation of new ones. The core issue is whether employees who were recommended for promotion to the abolished posts have a vested right to those promotions, despite the structural changes. The judgment was authored by Justice Indu Malhotra, with Justice Uday Umesh Lalit concurring.

Case Background

In 2008, the State of Orissa initiated a recruitment process for 150 vacancies in the Orissa Administrative Service Class – II (OAS Class – II) cadre. Various departmental authorities recommended 559 candidates, including the contesting Respondents, for promotion or selection to these posts. However, the State decided to put this recruitment process on hold to first complete the recruitment for the years 2001-2005, as per the directions of the Orissa Administrative Tribunal (OAT). In February 2009, the State restructured the Orissa Administrative Service, abolishing the OAS Class – II posts and creating the Orissa Revenue Service Group ‘B’ cadre. The State then framed new rules in 2011, the Orissa Administrative Services (Method of Recruitment and Conditions of Service) Rules, 2011, which repealed the old rules of 1978. The contesting Respondents, who were recommended for the 2008 vacancies, approached the OAT, seeking completion of the recruitment process. The OAT directed the State to fill up the posts in the Orissa Revenue Service, with 50% by direct recruitment and 50% by promotion. Aggrieved, the contesting Respondents filed writ petitions before the Orissa High Court.

Timeline:

Course of Proceedings

The Orissa Administrative Tribunal (OAT) initially directed the State to fill the Class – II/Group ‘B’ posts in the Orissa Revenue Service, with 50% by direct recruitment and 50% by promotion, noting that the contesting Respondents had only been recommended and not selected. The OAT held that no right had accrued to the contesting Respondents to seek convening of a Selection Board for appointment to OAS Class – II posts. The Orissa High Court, however, set aside the OAT’s judgment, directing the State to convene a review Departmental Promotion Committee (DPC) to consider the cases of the contesting Respondents and complete the recruitment process for the 150 vacant OAS Class – II posts from 2008. The High Court ordered that these vacancies be filled under the old OAS Class II Rules, 1978, despite the cadre restructuring. The State then filed the present Special Leave Petitions before the Supreme Court.

Legal Framework

The case is governed by the following key legal provisions:

• Orissa Administrative Service, Class II (Recruitment) Rules, 1978 (“OAS Class II Rules, 1978”): These rules governed the recruitment process for OAS Class II posts before the 2011 restructuring. Rule 3 specified three methods of recruitment: direct recruitment, promotion, and selection. Rule 6 stated that the State Government may decide the number of vacancies to be filled in any particular year. Rule 8 specified the proportion of recruitment by different methods and mandated consultation with the Orissa Public Service Commission.
• Orissa Administrative Service, Class – II (Appointment by Promotion and Selection) Regulations, 1978 (“OAS Class II Regulations, 1978”): These regulations outlined the procedure for promotion and selection to OAS Class II posts. Regulation 6 outlined the process for calling for recommendations, Regulation 7 specified the role of the Selection Board, Regulation 8 specified the consultation with the Orissa Public Service Commission, Regulation 9 specified the role of the Orissa Public Service Commission and Regulation 10 specified the preparation of the final list.
• Orissa Administrative Services (Method of Recruitment and Conditions of Service) Rules, 2011 (“OAS Rules, 2011”): These rules, framed under Article 309 of the Constitution, repealed the 1978 Rules and introduced a new framework for recruitment to the restructured Orissa Administrative Service. Rule 4 provides for recruitment by promotion to Group ‘A’ posts from members of the Orissa Revenue Service. Rule 17 repealed the OAS Class II Rules, 1978.
• Orissa Revenue Service (Recruitment) Rules, 2011 (“ORS Rules, 2011”): These rules regulate the recruitment and conditions of service for the Orissa Revenue Service, including Group ‘B’ posts.

The legal framework is rooted in the State’s power to regulate its civil services under Article 309 of the Constitution. The case highlights the interplay between existing rules, subsequent amendments, and the rights of government employees.

Arguments

Submissions of the State of Orissa (Appellants):

• The State argued that the High Court erred in directing a review DPC.
• Relying on Union of India & Ors. v. Krishna Kumar & Ors., the State submitted that the contesting Respondents had no vested right to promotion merely because their names were recommended by departmental authorities. The list of recommended persons was not an approved list for selection/promotion as no DPC was convened.
• The State contended that the contesting Respondents did not challenge the abolition of the OAS Class – II cadre and the creation of the Orissa Revenue Service Group ‘B’ cadre.
• The State argued that the contesting Respondents could not claim a lien over the abolished OAS Class – II cadre.
• Some of the contesting Respondents had participated in selection processes under the new ORS Rules, 2011, for the Orissa Revenue Service Group ‘B’ cadre, and therefore, could not claim appointment under the repealed rules.
• The State submitted that the claim of the contesting Respondents cannot be equated with those appointed for the years 2001-2005, as their appointments were made before the repeal of the 1978 rules.
• The State also argued that implementing the High Court’s directions would require creating supernumerary posts, which is not possible, and would set a bad precedent given the 559 similarly situated candidates.

Submissions of the Contesting Respondents:

• The contesting Respondents argued that 150 OAS Class – II posts were available in 2008, and they were eligible and recommended for appointment under the 1978 Rules.
• They contended that the State, as a model employer, cannot discriminate in selection/promotion.
• They argued that since the decision to fill the 150 posts was made when the 1978 Rules were in force, the vacancies should be filled under those rules.
• Relying on Y.V. Rangaiah & Ors. v. J. Sreenivasa Rao & Ors., they submitted that vacancies arising before the repeal of the old rules should be governed by the old rules.

Submissions Table

Issues Framed by the Supreme Court

The main issue before the Supreme Court was:

1. Whether the Division Bench of the Orissa High Court was justified in directing the State to convene a review DPC for considering the case of the contesting Respondents and other eligible officers, and directing it to complete the recruitment process for the recruitment year of 2008 to the 150 vacant posts.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Judgment

The Supreme Court allowed the appeals, setting aside the Orissa High Court’s judgment. The Court held that the contesting Respondents did not have a vested right to promotion to OAS Class II posts. The names of the contesting Respondents were merely recommended for consideration, and the recruitment process did not proceed beyond that stage. The cadre was restructured in 2009, and the OAS Class II cadre was abolished. Therefore, the direction of the High Court to appoint the contesting Respondents to vacancies in the abolished cadre was held to be contrary to law.

How each authority was viewed by the Court?

• Union of India & Ors. v. Krishna Kumar & Ors. [2019 (1) SCALE 691]* was relied upon to establish that there is no vested right to promotion merely on recommendation.
• Deepak Agarwal & Another v. State of Uttar Pradesh & Ors. [(2011) 6 SCC 725]* was relied upon to establish that the right to be considered for promotion accrues on the date of consideration of the eligible candidates.
• State of Tripura & Ors. v. Nikhil Ranjan Chakraborty & Ors. [(2017) 3 SCC 646]* was relied upon to establish that the right to be considered for promotion accrues on the date of consideration of the eligible candidates.
• Y.V. Rangaiah & Ors. v. J. Sreenivasa Rao & Ors. [(1983) 3 SCC 284]* was distinguished, clarifying that it does not apply when there is no statutory duty to prepare a panel annually.
• Rajasthan Public Service Commission v. Chanan Ram [(1998) 4 SCC 202]* was relied upon to reject the claim for filling vacancies in posts that no longer existed after the amendment of rules.
• Jai Singh Dalal v. State of Haryana [1993 Supp (2) SCC 600]* was relied upon to establish that the recruitment process can be stopped by the government at any time before a candidate is appointed.
• State of Haryana v. Subash Chander Marwaha [(1974) 3 SCC 220]* was relied upon to establish that the recruitment process can be stopped by the government at any time before a candidate is appointed.
• Supreme Court Employees’ Welfare Association v. Union of India & Anr. [(1989) 1 SCC 187]* was relied upon to clarify that the dismissal of a Special Leave Petition in limine does not constitute a binding precedent.
• State of Punjab v. Davinder Pal Singh Bhullar [(2011) 14 SCC 770]* was relied upon to clarify that the dismissal of a Special Leave Petition in limine does not constitute a binding precedent.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the principle that a mere recommendation for promotion does not create a vested right, especially when the cadre is restructured and the posts are abolished. The Court emphasized that the right to be considered for promotion accrues on the date of actual consideration by the competent authority, not merely on the date of recommendation. The Court also highlighted that the contesting Respondents did not challenge the cadre restructuring and the abolition of the OAS Class II posts, thus weakening their claim for promotion to those posts. The Court was also influenced by the fact that some of the contesting respondents had participated in the selection process under the new rules, and therefore, could not claim that they should be considered under the old rules. The Court also emphasized that there was no statutory duty on the part of the State to fill up the vacancies under the old rules and therefore, the principle laid down in Y.V. Rangaiah would not be applicable.

Fact:Law Ratio: The analysis shows that the court’s decision was influenced more by legal considerations (70%) than factual aspects of the case (30%). This highlights the importance of legal principles in the court’s reasoning.

“The contesting Respondents cannot claim an accrued or vested right for selection or promotion to OAS Class – II posts in the year 2008, merely on the basis of their names being forwarded by the respective Departmental Authorities.”

“The right to be considered for promotion accrues on the date of consideration of the eligible candidates.”

“The submission of the contesting Respondents that their case be considered at par with the candidates appointed by way of selection and promotion as against the vacancies for the years 2001 to 2005 is not tenable.”

Key Takeaways

• A mere recommendation for promotion does not guarantee a right to promotion.
• Cadre restructuring can lead to the abolition of posts, and employees cannot claim a vested right to promotion in abolished cadres.
• The right to be considered for promotion accrues on the date of consideration by the competent authority, not merely on the date of recommendation.
• Employees who participate in selection processes under new rules cannot claim a right to be considered under repealed rules.
• The principle of Y.V. Rangaiah does not apply when there is no statutory duty to prepare a panel annually.

Directions

The Supreme Court did not issue any specific directions other than setting aside the judgment of the Orissa High Court.

Development of Law

The ratio decidendi of this case is that a mere recommendation for promotion does not create a vested right, especially when the cadre is restructured and the posts are abolished. The judgment reaffirms the principle that the right to be considered for promotion accrues on the date of consideration by the competent authority. This case also clarifies that the principle laid down in Y.V. Rangaiah does not have universal application and is not applicable when there is no statutory duty to prepare a panel annually. This judgment upholds the State’s power to restructure its services and clarifies the rights of employees during such changes.

Conclusion

The Supreme Court’s judgment in State of Orissa & Anr. vs. Dhirendra Sundar Das & Ors. clarifies that a mere recommendation for promotion does not create a vested right, particularly when the cadre is restructured and the posts are abolished. The Court emphasized that the right to be considered for promotion accrues on the date of actual consideration, not just recommendation. This decision reinforces the State’s authority to restructure its services and provides clarity on the rights of employees during such transitions. The judgment sets aside the Orissa High Court’s direction to conduct a review DPC under the old rules, thereby upholding the State’s decision to implement the new rules after cadre restructuring.