Supreme Court Overrules Rangaiah: Appointments to Public Posts Governed by Existing Rules (20 May 2022)

Date of the Judgment: 20 May 2022

Citation: 2022 INSC 453

Judges: Uday Umesh Lalit, J., S. Ravindra Bhat, J., Pamidighantam Sri Narasimha, J.

Can a government change the rules of appointment after vacancies have arisen? The Supreme Court addressed this crucial question in a recent judgment, clarifying whether old or new rules apply when filling public sector jobs. The Court examined the long-standing debate surrounding the application of amended service rules to existing vacancies. This case involved a dispute over promotions to the post of Labour Officer in Himachal Pradesh, where the High Court had directed the State to consider promotions under the old rules, citing the principle laid down in Y.V. Rangaiah v. J. Sreenivasa Rao. The Supreme Court, however, overruled the Rangaiah principle, holding that appointments are governed by the rules existing at the time of consideration, not when the vacancies arose. The judgment was authored by Justice Pamidighantam Sri Narasimha, with Justices Uday Umesh Lalit and S. Ravindra Bhat concurring.

Case Background

The case originated from a dispute in Himachal Pradesh concerning the promotion of Labour Inspectors to Labour Officers. Initially, the Himachal Pradesh Recruitment and Promotion Rules, 1966, governed the appointment of Labour Officers, specifying that these posts were to be filled by promotion from the feeder categories of factory inspectors, labour inspectors, and secretariat superintendents. There were five such posts.

On 20 July 2006, the Labour and Employment Department sanctioned seven additional posts for Labour Officers, increasing the total number of posts to twelve. At this time, Respondents No. 1 to 3 were working as Labour Inspectors. Subsequently, on 25 November 2006, the 1966 Rules were amended, introducing the H.P. Labour and Employment Department, Labour Officers, Class-II (Gazetted) Ministerial Services R&P Rules, 2006. The new rules stipulated that 75% of the posts would be filled by promotion and 25% by direct recruitment. This meant that out of the twelve posts, nine were to be filled by promotion and three by direct recruitment.

Respondents No. 1 to 3 challenged the proposed direct recruitment, arguing that the vacancies had arisen before the new rules came into effect and should therefore be filled by promotion only under the old rules. The State Administrative Tribunal initially directed the government to consider their grievance as a representation. After the government rejected the representation, the respondents filed another application before the Tribunal.

While the matter was pending, the State Government proceeded with direct recruitment, appointing Respondents No. 4 to 6 to the three posts. Respondents No. 1 to 3 then filed a writ petition before the High Court of Himachal Pradesh, challenging these appointments. The High Court allowed the writ petition, directing the State to consider the case of the writ petitioners for promotion under the old rules. The State of Himachal Pradesh and the direct recruits then filed appeals before the Supreme Court.

Timeline

Course of Proceedings

The matter initially went before the Administrative Tribunal, where the respondents challenged the proposed direct recruitment to the posts of Labour Officer. The Tribunal directed the State Government to treat their application as a representation. After the government rejected this representation, the respondents filed another application before the Tribunal. While the matter was pending before the Tribunal, the State Government proceeded with the direct recruitment process. This led the respondents to file a civil writ petition before the High Court of Himachal Pradesh, which ruled in their favor, citing the principle in Y.V. Rangaiah v. J. Sreenivasa Rao. The State of Himachal Pradesh and the direct recruits then appealed to the Supreme Court.

Legal Framework

The Supreme Court examined the constitutional provisions related to services under the State, particularly Part XIV of the Constitution. Article 309 empowers the Union and State legislatures to make laws and rules to regulate recruitment and conditions of service, while Article 310 states that government employees hold office during the pleasure of the President or Governor. The Court noted that this power is subject to the express provisions of the Constitution. The Court also referred to Article 311, which provides safeguards against arbitrary dismissal, removal, or reduction in rank of civil servants.

The Court emphasized that the relationship between the State and its employees is governed by statute or statutory rules, which can be unilaterally altered by the government. The Court also referred to the doctrine of pleasure, which allows the government to terminate employment for public policy reasons, as explained in Union of India v. Tulsiram Patel. The Court also discussed the concept of ‘status’ in government employment, as explained in Roshan Lal Tandon v. Union of India, noting that the rights and obligations of government servants are determined by law and not by contract.

The Court also referred to the Himachal Pradesh Recruitment and Promotion Rules, 1966, and the amended H.P. Labour and Employment Department, Labour Officers, Class-II (Gazetted) Ministerial Services R&P Rules, 2006. The 1966 Rules provided for promotions from feeder categories, while the 2006 Rules introduced direct recruitment in addition to promotions.

Arguments

Submissions on behalf of the Appellant-State:

• The State argued that there was no challenge to the legality of the New Rules, and therefore, the Respondents cannot seek a relief that is contrary to these rules.
• The inter-departmental letter dated 20.07.2006, followed by the notification dated 02.01.2007, creating the posts, was in furtherance of the new policy brought into effect by the amendments to the Rules.
• There is no vested right to promotion, only a right to be considered for promotion as per the rules in force at the time of such consideration.
• The recruitment exercise undertaken by the State is completely based on the policy consideration of the State, which the High Court failed to take into account.
• The High Court erred in applying the decision of Rangaiah, which was a case of promotion, while the present case involves direct recruitment to the post of Labour Officers.

Submissions on behalf of the Respondents:

• The 7 new posts were created before the promulgation of the New Rules, and there was no governmental policy regarding the retrospective applicability of the New Rules.
• There is no evidence to show that the State made a conscious decision to keep the posts vacant to be filled as per the New Rules.
• The communication dated 20.07.2006, sanctioning the creation of the posts, stated that they must be filled on a regular basis.
• The High Court was right in applying the decision of Rangaiah, which settled the law on appointments to posts falling vacant before the amendment of the rules, holding that they must be governed by the old rules and not the new rules.
• To apply the New Rules to the pending vacancies, the appointing authority must demonstrate that they had (i) taken a conscious decision not to fill the vacancies until the promulgation of the new rules, and (ii) such a decision must be for a good and a valid reason.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was:

1. Whether the vacancies that arose before the promulgation of the new rules are to be filled only as per the old rules and not as per the amended rules.

Treatment of the Issue by the Court

The following table demonstrates how the Court decided the issue:

Authorities

The Supreme Court considered a wide range of authorities, including:

Cases:

• Y.V. Rangaiah v. J. Sreenivasa Rao (1983) 3 SCC 284 – Supreme Court of India: This case was the primary point of contention, with the High Court relying on it. The Supreme Court overruled the principle laid down in this case.
• Union of India v. Tulsiram Patel (1985) 3 SCC 398 – Supreme Court of India: This case was referred to explain the concept of holding public employment at the pleasure of the President or Governor.
• Roshan Lal Tandon v. Union of India (1968) 1 SCR 185 – Supreme Court of India: This case was cited to explain that government employment is a matter of status, not contract, and that service conditions are governed by rules.
• P. Ganeshwar Rao v. State of A.P. 1988 Supp SCC 740 – Supreme Court of India: This case followed Rangaiah but was distinguished on the facts of the case.
• N.T. Devin Katti v. Karnataka Public Service Commission (1990) 3 SCC 157 – Supreme Court of India: This case was distinguished as it concerned an advertisement prescribing certain qualifications.
• State of Rajasthan v. R. Dayal (1997) 10 SCC 419 – Supreme Court of India: This case followed Rangaiah.
• B.L. Gupta v. M.C.D. (1998) 9 SCC 223 – Supreme Court of India: This case followed Rangaiah.
• Arjun Singh Rathore v. B.N. Chaturvedi (2007) 11 SCC 605 – Supreme Court of India: This case followed Rangaiah.
• State of Bihar v. Mithilesh Kumar (2010) 13 SCC 467 – Supreme Court of India: This case followed Rangaiah.
• Kulwant Singh v. Daya Ram (2015) 3 SCC 177 – Supreme Court of India: This case followed Rangaiah.
• Richa Mishra v. State of Chhattisgarh (2016) 4 SCC 179 – Supreme Court of India: This case followed Rangaiah.
• Union of India v. S.S. Uppal (1996) 2 SCC 168 – Supreme Court of India: This case distinguished Rangaiah.
• State Bank of India v. Kashinath Kher (1996) 8 SCC 762 – Supreme Court of India: This case distinguished Rangaiah.
• K. Ramulu v. S. Suryaprakash Rao (1997) 3 SCC 59 – Supreme Court of India: This case distinguished Rangaiah and held that the Government can take a conscious decision not to fill up the vacancies.
• Rajasthan Public Service Commission v. Chanan Ram (1998) 4 SCC 202 – Supreme Court of India: This case distinguished Rangaiah and held that the State can stop a recruitment process at any time.
• G. Venkateshwara Rao v. Union of India (1999) 8 SCC 455 – Supreme Court of India: This case distinguished Rangaiah and upheld the restructuring of the cadre.
• Delhi Judicial Services Association v. Delhi High Court (2001) 5 SCC 145 – Supreme Court of India: This case distinguished Rangaiah and held that there is no obligation to fill vacancies immediately.
• Shyama Charan Dash v. State of Orissa (2003) 4 SCC 218 – Supreme Court of India: This case distinguished Rangaiah and upheld the policy decision of the Government.
• State of Punjab v. Arun Kumar Aggarwal (2007) 10 SCC 402 – Supreme Court of India: This case distinguished Rangaiah and upheld the conscious decision of the Government not to fill the vacancies.
• Deepak Agarwal v. State of U.P. (2011) 6 SCC 725 – Supreme Court of India: This case distinguished Rangaiah and held that the rules in force at the time of consideration apply.
• M.I. Kunjukunju v. State of Kerala (2015) 11 SCC 440 – Supreme Court of India: This case distinguished Rangaiah and held that no right subsists for consideration to the vacancies that existed prior to the commencement of the rules.
• State of Tripura v. Nikhil Ranjan Chakraborty (2017) 3 SCC 646 – Supreme Court of India: This case distinguished Rangaiah and held that there is no rule of absolute application that vacancies must be filled as per the law existing on the date when they arose.
• Union of India v. Krishna Kumar (2019) 4 SCC 319 – Supreme Court of India: This case distinguished Rangaiah and held that 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 Orissa v. Dhirendra Sundar Das (2019) 6 SCC 270 – Supreme Court of India: This case distinguished Rangaiah.
• Rajasthan State Sports Council v. Uma Dadhich (2019) 4 SCC 316 – Supreme Court of India: This case distinguished Rangaiah.
• D. Raghu v. R. Basaveswarudu (2020) 18 SCC 1 – Supreme Court of India: This case distinguished Rangaiah.

Statutes and Rules:

• Himachal Pradesh Recruitment and Promotion Rules, 1966
• H.P. Labour and Employment Department, Labour Officers, Class-II (Gazetted) Ministerial Services R&P Rules, 2006
• Article 309 of the Constitution of India
• Article 310 of the Constitution of India
• Article 311 of the Constitution of India

Judgment

How each authority was viewed by the Court?

• Y.V. Rangaiah v. J. Sreenivasa Rao [CITATION]: The Supreme Court specifically overruled the principle laid down in this case, stating that it does not reflect the correct position of law governing services under the State. The Court held that the observation in Rangaiah that posts which fell vacant prior to the amendment of Rules would be governed by old Rules and not by new Rules does not reflect the correct position of law.
• Union of India v. Tulsiram Patel [CITATION]: The Court relied on this case to explain the doctrine of pleasure and the public policy considerations behind it.
• Roshan Lal Tandon v. Union of India [CITATION]: The Court cited this case to emphasize that government employment is a matter of status, not contract, and that service conditions are governed by rules which may be unilaterally altered.
• Other cases were either followed or distinguished based on their specific facts and whether they aligned with the principle that the rules in force at the time of consideration should apply.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the constitutional framework governing services under the State and the need for flexibility in public administration. The Court emphasized that government employees do not have a vested right to promotion based on old rules and that the State has the power to alter service conditions in public interest. The Court also noted that the principle in Rangaiah had been consistently distinguished in subsequent cases, leading to confusion and uncertainty. The need for clarity and certainty in the law was a significant factor in the Court’s decision to overrule Rangaiah.

Fact:Law Ratio

Logical Reasoning

The Court considered alternative interpretations and rejected them. The court observed that the principle in Rangaiah had been consistently distinguished in subsequent cases, leading to confusion and uncertainty. The Court emphasized that government employees do not have a vested right to promotion based on old rules and that the State has the power to alter service conditions in public interest. The Court then concluded that the rules in force atthe time of consideration should apply, overruling Rangaiah to establish a clear and consistent rule.

Conclusion

The Supreme Court’s judgment in State of Himachal Pradesh & Ors. vs. Raj Kumar & Ors. marks a significant departure from the long-standing principle established in Y.V. Rangaiah v. J. Sreenivasa Rao. By overruling Rangaiah, the Court has clarified that appointments to public posts are governed by the rules existing at the time of consideration, not when the vacancies arose. This decision brings much-needed clarity and consistency to the law governing public services. The Court emphasized that government employees do not have a vested right to promotion based on old rules and that the State has the power to alter service conditions in public interest. This ruling has significant implications for future appointments and promotions in government services.