Supreme Court Reinstates Promotions Based on 2002 Rules in BSNL Case: Medini C & Ors. vs. Bharat Sanchar Nigam Limited & Ors. (21 September 2021)

Date of the Judgment: 21 September 2021
Citation: Medini C & Ors. vs. Bharat Sanchar Nigam Limited & Ors. (2021) INSC 612
Judges: L. Nageswara Rao J., B.R. Gavai J., B.V. Nagarathna J.
Can an employer deny promotions based on rules that were in effect when vacancies arose? The Supreme Court recently addressed this question in a dispute involving Bharat Sanchar Nigam Limited (BSNL) employees. The court overturned a High Court decision, reinstating promotions based on the 2002 Recruitment Rules. This case highlights the importance of vested rights and the application of rules in effect at the time of vacancy.

Case Background

The case involves several appellants who were initially appointed to various positions within BSNL, such as Hindi Translators and Telecom Office Assistants, between 1988 and 1989. Some of these employees were later promoted on an ad hoc or officiating basis to the position of Assistant Director (Official Language) (OL) between 1993 and 2000.

In 2002, BSNL notified the Assistant Director (Official Language) Recruitment Rules, 2002 (2002 Rules), which superseded all previous instructions. These rules included a “one-time measure” to fill vacancies in the grade of Assistant Director (OL) by promoting existing Senior/Junior Hindi Translators and Group C officials who were already officiating in that role. Corrigenda were later issued in 2003 to revise eligibility criteria and remove pay restrictions.

Subsequently, in 2005, the Rajbhasha Adhikari Recruitment Rules, 2005 (2005 Rules) were notified, superseding the 2002 Rules. However, the 2005 Rules stated that existing local officiating arrangements/promotions should not be disturbed until regular appointments were made. Aggrieved by the lack of regular promotions, the appellants filed writ petitions in the Kerala High Court, which were later transferred to the Central Administrative Tribunal (Tribunal).

Timeline

Course of Proceedings

The Central Administrative Tribunal (Tribunal) initially ruled in favor of the appellants on April 8, 2010, directing BSNL to promote them according to the 2002 Rules. BSNL challenged this decision in the Kerala High Court, arguing that the 2002 Rules were never in effect. However, the High Court dismissed BSNL’s petitions on November 4, 2011, finding that the 2002 Rules were indeed implemented.

BSNL then filed special leave petitions in the Supreme Court, which were dismissed on March 23, 2017. Review petitions filed by BSNL were also dismissed on November 16, 2017. Following this, the appellants filed a contempt petition before the Tribunal. At this stage, BSNL filed review petitions in the High Court seeking to review its 2011 order, which were allowed on August 7, 2018. The High Court then dismissed the original petitions on October 10, 2019, leading to the current appeals before the Supreme Court.

Legal Framework

The case primarily revolves around the interpretation and application of two sets of recruitment rules:

• Assistant Director (Official Language) Recruitment Rules, 2002 (2002 Rules): These rules, notified on December 24, 2002, superseded all previous instructions. They provided a “one-time measure” to fill vacancies by promoting existing ad hoc Assistant Directors (OL) based on seniority-cum-fitness. Rule 10(iii) of the 2002 Rules stated that:
  
  “There are many Sr. Hindi Translators/Jr. Hindi Translators and Group ‘C’ officials who have been given ad hoc promotions to the grade of AD (OL) in field formations of BSNL. In order to avoid legal and administrative complications as a one time measure, it is provided that all the vacancies in the grade of AD (OL) in the first year of recruitment, irrespective of vacancies earmarked for promotional quota or direct quota, shall be filled up by promotion on seniority-cum-fitness basis, by following due procedures, amongst those officials who have been officiating as AD(OL) in BSNL subject to their fulfilling the basis qualifications and experiences as prescribed in column 12 of the Schedule annexed to these Rules.”
• Rajbhasha Adhikari Recruitment Rules, 2005 (2005 Rules): Notified on August 5, 2005, these rules superseded the 2002 Rules. They re-designated the post of Assistant Director (OL) as “Rajbhasha Adhikari.” However, it was also stated that local officiating arrangements/promotions already made should not be disturbed until regular appointments were made. Rule 10 of the 2005 Rules states:
  
  “Where the BSNL is of opinion that it is necessary or expedient so to do it may by order for reasons to be recorded in writing and with the approval of Management Committee or BSNL relax any of the provisions of these Rules in respect of any class or category or persons.”
• FR-35: This rule allows the government to fix the pay of an officiating government servant at an amount less than that admissible under the rules. The removal of the restriction of officiating pay under FR-35 implied that there was regular cadre promotion made as the employees became due for promotion and fell within the zone of consideration and fulfilled all qualifications prescribed for promotion.
  
  “FR-35. The Central Government may fix the pay of an officiating Government servant at an amount less than that admissible under these rules”.

Arguments

Appellants’ Arguments:

• The appellants argued that the High Court erred in reviewing its earlier order of November 4, 2011, which had upheld the Tribunal’s decision. They contended that the 2002 Rules were indeed in operation and had been acted upon by BSNL, as evidenced by the removal of pay restrictions under FR-35 and the issuance of corrigenda.
• They submitted that the vacancies arose when the 2002 Rules were in operation, and therefore, they had a vested right to be promoted under those rules. They argued that the 2005 Rules should not affect their vested rights.
• The appellants emphasized that the judgment of the Supreme Court in BSNL vs. Mishri Lal & Ors. – (2011) 14 SCC 739 (Mishri Lal) was not applicable to their case, as the facts were different. They argued that the High Court misread the Mishri Lal judgment.

Respondents’ (BSNL) Arguments:

• BSNL argued that the High Court was justified in reviewing its earlier order, as the Supreme Court in Mishri Lal had held that the 2002 Rules were never in operation. They contended that no regular appointments were made under the 2002 Rules, thus the appellants had no right to be regularized.
• BSNL relied on the Mishri Lal judgment to assert that the 2002 Rules were never implemented, and therefore, the appellants could not claim any vested rights under those rules.

Submissions of Parties

Innovativeness of the argument: The appellants innovatively argued that the removal of pay restrictions under FR-35 was a clear indication of the implementation of the 2002 Rules, which was a key aspect of their argument that the rules were indeed in operation.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was:

1. Whether the 2002 Rules were given effect to by the respondents vis-a-vis the appellants herein or not.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

• BSNL vs. Mishri Lal & Ors. – (2011) 14 SCC 739 (Supreme Court of India): This case was relied upon by BSNL, arguing that the 2002 Rules were never in operation. However, the Supreme Court in the present case distinguished it, stating that the facts in Mishri Lal were different and that the 2002 Rules were not given effect to in that case.
• Y.V. Rangaiah & Ors. vs. J. Sreenivasa Rao – AIR 1983 SC 852 (Supreme Court of India): This case was cited by the High Court in its 2011 judgment to support the view that vacancies arising before the amendment of rules should be governed by the old rules.
• Rule 10(iii) of the Assistant Director (Official Language) Recruitment Rules, 2002: This rule provided for a “one-time measure” to fill vacancies by promoting existing ad hoc Assistant Directors (OL).
• Rule 10 of the Rajbhasha Adhikari Recruitment Rules, 2005: This rule allowed BSNL to relax any provisions of the rules.
• Rule 11 of the Rajbhasha Adhikari Recruitment Rules, 2005: This rule dealt with the initial constitution of the service.
• FR-35: This rule allows the government to fix the pay of an officiating government servant at an amount less than that admissible under the rules.

Authorities Considered by the Court

Judgment

The Supreme Court allowed the appeals, setting aside the High Court’s judgment and order. The Court directed BSNL to give effect to the High Court’s judgment of November 4, 2011, which had affirmed the Tribunal’s order of April 8, 2010. The Court also directed BSNL to recall any reversion orders and extend monetary benefits to the appellants. Additionally, the Court directed BSNL to consider the appellants’ cases under the Voluntary Retirement Scheme (VRS), if applicable.

Treatment of Submissions

How Authorities Were Viewed by the Court

The Supreme Court distinguished the case from Mishri Lal, stating that the facts in Mishri Lal were different. In Mishri Lal, the respondents were never regularly promoted, and the 2002 Rules were not given effect to. However, in the present case, the appellants were provisionally promoted, and the removal of pay restrictions under FR-35 indicated that the 2002 Rules were indeed implemented. The Court relied on Y.V. Rangaiah to support the view that vacancies arising before the amendment of rules should be governed by the old rules. The Court also relied on the 2002 Rules, specifically Rule 10(iii), which stated that as a “one-time measure” all the vacancies in the grade of Assistant Director (OL) in the first year of promotional quota or direct vacancies had to be filled by direct quota by following due procedure from amongst the officials who had been officiating as Assistant Director (OL).

What Weighed in the Mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• Implementation of the 2002 Rules: The Court found that the removal of pay restrictions under FR-35 and the issuance of corrigenda indicated that the 2002 Rules were implemented by BSNL concerning the appellants. This was a key factor in distinguishing the case from Mishri Lal.
• Vested Rights: The Court recognized that the appellants had a vested right to be promoted under the 2002 Rules, as the vacancies arose when those rules were in effect. The Court held that the 2005 Rules should not affect these vested rights.
• Distinction from Mishri Lal: The Court emphasized that the facts in Mishri Lal were different. In Mishri Lal, the employees were never regularly promoted, and the 2002 Rules were not given effect to. In contrast, the appellants in this case had been provisionally promoted, and the 2002 Rules were implemented.
• Rule 10(iii) of 2002 Rules: The Court emphasized that Rule 10(iii) of 2002 Rules stated that as a “one time measure” all the vacancies in the grade of Assistant Director (OL) in the first year of promotional quota or direct vacancies had to be filled by direct quota by following due procedure from amongst the officials who had been officiating as Assistant Director (OL).

Sentiment Analysis of Reasons

Ratio of Fact:Law

The Supreme Court’s decision was influenced more by the factual aspects of the case (60%), such as the implementation of the 2002 Rules and the specific circumstances of the appellants, than by legal considerations alone (40%).

Logical Reasoning Flowchart

The Court considered alternative interpretations but rejected them based on the factual evidence and the legal principles of vested rights. The Court reasoned that the High Court misapplied the ratio of Mishri Lal without considering the specific facts of the present case. The final decision was reached by carefully analyzing the evidence, distinguishing the facts from previous cases, and applying the relevant legal principles.

The Court’s reasoning was that the 2002 Rules were indeed implemented and the appellants had a vested right to be promoted under those rules. This was supported by the removal of pay restrictions under FR-35, which indicated that the promotions were regularized. The Court also emphasized that the facts of the present case were different from those in Mishri Lal, where the 2002 Rules were not implemented.

The majority opinion was delivered by Justice B.V. Nagarathna, with Justices L. Nageswara Rao and B.R. Gavai concurring.

“In our view the judgment in Mishri Lal cannot be applied to the present case as the facts that obtained in the said case are distinct.”

“But in the instant case the facts are totally distinct inasmuch as these appellants were provisionally promoted while in the Telecom Department as Assistant Director (OL) as early as on 15.05.1994 but they were not regularised and hence they approached the Tribunal seeking an order of regularisation.”

“When such being the factual and legal position, we find that the High Court has misread the ratio of the judgment of this Court in Mishri Lal and has applied it to the case of the appellants herein in a straight-jacket manner without being mindful of the aforesaid crucial aspects of the case.”

Key Takeaways

• Vested Rights: Employees have a vested right to be considered for promotions under the rules in effect when the vacancies arose. Subsequent changes in rules should not affect these rights.
• Implementation of Rules: Actions such as removing pay restrictions and issuing corrigenda can indicate that rules are being implemented, even if no formal orders are issued.
• Distinguishing Precedents: Courts must carefully analyze the facts of each case and not apply precedents in a “straight-jacket manner” without considering the unique circumstances.
• Importance of Factual Analysis: The Court’s decision was influenced more by the factual aspects of the case than by legal considerations alone.

This judgment could impact future cases involving disputes over promotions and the application of recruitment rules. It reinforces the principle that employees have a right to be considered for promotions under the rules in effect when the vacancies arose, and that employers cannot deny these rights by relying on subsequent changes in rules.

Directions

The Supreme Court directed BSNL to:

• Give effect to the High Court’s judgment dated 04.11.2011, which had affirmed the Tribunal’s order dated 08.04.2010.
• Recall any reversion orders issued to the appellants.
• Extend monetary benefits to the appellants.
• Consider the appellants’ cases under the Voluntary Retirement Scheme (VRS), if they have applied and if their applications are in order.

Development of Law

The ratio decidendi of this case is that employees have a vested right to be considered for promotion under the rules in effect when the vacancies arose, and any subsequent changes in rules should not affect this right. This judgment clarifies that the implementation of rules canbe inferred from actions taken by the employer, such as the removal of pay restrictions, and it emphasizes the importance of a thorough factual analysis in each case. It also clarifies that the ratio of a judgment cannot be applied in a straight-jacket manner without considering the specific facts of the case.