Supreme Court Sets Aside Retrospective Promotions for Excise and Taxation Officers: Sunaina Sharma vs. State of J&K (26 October 2017)

Date of the Judgment: 26 October 2017

Citation: (2017) INSC 915

Judges: Madan B. Lokur, J., Deepak Gupta, J.

Can an employee be promoted retrospectively to a position they never held? The Supreme Court of India addressed this critical question in a service law matter concerning Excise and Taxation Officers in Jammu and Kashmir. This case examines whether promotee officers can claim seniority from a date when vacancies existed, even if they had not yet worked in those higher positions. The judgment was delivered by a two-judge bench comprising Justice Madan B. Lokur and Justice Deepak Gupta, with the opinion authored by Justice Deepak Gupta.

Case Background

The case involves a dispute over the seniority of Excise and Taxation Officers (ETOs) in Jammu and Kashmir. The appellants were direct recruits appointed as ETOs on 23 July 2004, after clearing the J&K Combined Competitive Examination. The private respondents were promotees who were promoted to the post of ETOs on 6 December 2004, following recommendations from the J&K Public Service Commission. However, the promotees were granted retrospective promotions to various dates between 1 May 2002 and 1 January 2004, making them senior to the direct recruits. This retrospective promotion was the core issue of the dispute.

The direct recruits challenged this retrospective promotion, arguing that the promotees had not even been in the cadre of ETOs when the direct recruits were appointed. They also pointed out that the promotees had never worked as ETOs before their formal promotion, and in fact, had worked under the direct recruits for a few months. The promotees, on the other hand, relied on Rule 23 of the J&K Civil Service (CCA) Rules, 1956, which they claimed allowed for seniority to be assigned from the date a vacancy occurred in the promotees’ quota.

Timeline

Course of Proceedings

The appellants initially filed a writ petition in the J&K High Court challenging the retrospective promotions granted to the private respondents. The learned Single Judge ruled in favor of the appellants, holding that retrospective promotions could not be granted. However, the Division Bench of the High Court, in a common judgment dated 6 March 2014, overturned the Single Judge’s decision. The Division Bench relied on the Supreme Court’s judgment in Suraj Prakash Gupta and Others vs. State of J&K and Others [(2000) 7 SCC 561], concluding that promotees were entitled to promotion from a date prior to their actual appointment. This decision of the Division Bench was challenged in the Supreme Court.

Legal Framework

The case primarily revolves around the interpretation of the following rules:

✓ Rule 9 of the J&K Excise & Taxation (Gazetted) Recruitment Rules, 1977 (Excise Rules): This rule stipulates that a person appointed to the service, whether by direct recruitment or selection, shall be placed on probation for two years. The explanation to this rule specifies that appointments on probation will be made against substantive vacancies only, and any period of officiating appointment shall be counted as part of the probation period when a person is formally appointed to the service. The explanation reads as follows:

“Explanation –Appointments on probation will be made against substantive vacancies only. All other appointments will be on trial; Provided that any period of officiating appointment shall be reckoned as period spent on probation when a person appointed on trial is formally appointed to the service.”

✓ Rule 13 of the Excise Rules: This rule states that the seniority of members of the service shall be regulated under the J&K Civil Service (CCA) Rules, 1956.

✓ Rule 23 of the J&K Civil Service (CCA) Rules, 1956 (Civil Service Rules): This rule deals with the appointment of members of the service. It allows for the appointment of a probationer to the service with retrospective effect from a date when a substantive vacancy existed, provided the person was continuously on duty as a member of the service. The rule states:

“23. Appointments of members
(1) A probationer shall, if a substantive vacancy in the permanent cadre of the category for which he was selected exists, be appointed to the service at the earliest possible opportunity in order of seniority, and if such vacancy existed from a date previous to the issue of the order of appointment, he may be so appointed from the date of retrospective effect from such date or, as the case may be, from such subsequent date from which he was continuously on duty as a member of the service.
(2) Where recruitment to any service shall normally be both by direct recruitment and by transfer or promotion, the provision of sub rule (1) shall apply separately as regards :
(a) vacancies against which person have recruited direct; and
(b) other vacancies.
(3) No probationer shall be required to produce a medical certificate of physical fitness before appointment as member of service:
Provided that in case of a probationer who is not a member of any other service, the appointing authority may, if it has reason to believe that the probationers physical fitness has seriously deteriorated since he satisfied the authority under clause (c) of rule 17 require him to undergo a fresh medical examination. If on such examination he is found to be physically unfit for the service for which he was selected the appointing authority shall discharge him from the service.
(4) No person shall at the same time be a member of more than one service.”

✓ Rule 24 of the Civil Service Rules: This rule defines how seniority is determined. It states that seniority is determined by the date of first appointment to a particular service, class, category, or grade. The interpretation note to this rule clarifies that ‘date of first appointment’ means the date of first substantive appointment, which is either the date of permanent appointment or the date of first appointment on probation on a clear vacancy. The rule states:

“24. Seniority – (1) The seniority of a person who is subject to these rules has reference to the service, class, category or grade with reference to which the question has arisen. Such seniority shall be determined by the date of his first appointment to such service, class category or grade as the case may be.
Note: – The rule in this clause will not affect the seniority on the date on which these rules come into force of a member of any service, class, category or grade as fixed in accordance with the rules and orders in force before the date on which these rules come into force.
Interpretation – The words ‘date of first appointment’ occurring in the above rule will mean the date of first substantive appointment, meaning thereby the date of permanent appointment or the date of first appointment on probation on a clear vacancy, confirmation in the latter case being subject to good work and conduct and/or passing of any examination or examinations and/or tests:
Provided that the inter se -seniority of two or more persons appointed to the same service, class, category or grade simultaneously, will, notwithstanding the fact that they may assume the duties of their appointments on different dates by reason of being posted to different stations, be determined:
(a) In the case of those promoted by their relative seniority in the lower service, class, category or grade;
(b) In the case of those recruited direct except those who do not join their duties when vacancies are offered to them according to the positions attained by and assigned to them in order of merit at the time of competitive examination or on the basis of merit ability and physical fitness etc. in case no such examination is held for the purpose of making selections;
(c) As between those promoted and recruited direct by order in which appointments have to be allocated for promotion and direct recruitment as prescribed by the rules.”

Arguments

Arguments by the Appellants (Direct Recruits):

• The appellants argued that the promotees were not even part of the ETO cadre when the direct recruits were appointed on 23 July 2004.
• They contended that the promotees had never worked as ETOs on an officiating or stop-gap basis before their formal promotion.
• The appellants highlighted that the promotees had worked under the direct recruits for a few months before their promotion.
• They argued that service in a lower post could not be equated with service in a higher post, especially since the ETO post is a gazetted service.
• The appellants relied on the general principle that seniority should be reckoned from the date of entry into a service, not from a notional date when a vacancy existed.

Arguments by the Respondents (Promotees):

• The promotees contended that Rule 23 of the Civil Service Rules allowed for retrospective promotion from the date a vacancy occurred in their quota.
• They argued that they were members of the service from the date they were working on a pensionable post in the feeder category, and therefore, they satisfied the conditions of Rule 23.
• The promotees relied on the judgment in Suraj Prakash Gupta (supra), where the court had interpreted Rule 23 to allow for retrospective promotions.
• They also argued that they had passed departmental exams and were eligible for promotion much earlier, justifying the retrospective promotion.

Innovativeness of the argument: The promotees innovatively argued that being on a pensionable post in the feeder cadre was sufficient to be considered a “member of service” for the purpose of Rule 23, thereby qualifying them for retrospective promotion. This interpretation sought to broaden the scope of “member of service” beyond the specific cadre of ETOs.

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for determination:

1. Whether the private respondents, who are promotee Excise and Taxation Officers (ETOs), could be granted retrospective promotion from the dates when the vacancies occurred in the promotion quota.

Treatment of the Issue by the Court

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

Authorities

The Supreme Court considered the following authorities:

On Retrospective Promotion and Seniority:

• Suraj Prakash Gupta and Others vs. State of J&K and Others [(2000) 7 SCC 561] – Supreme Court of India: The Court analyzed this case in detail, noting that it dealt with the same rules but under different factual circumstances. While Suraj Prakash Gupta allowed retrospective promotion for those who had worked in higher posts on an ad hoc basis, the present case involved promotees who had not worked in the higher post.
• State of Bihar vs. Akhouri Sachindra Nath & Ors. [(1991) Supp.1 SCC 334] – Supreme Court of India: The Court cited this case to reiterate the principle that no person can be promoted with retrospective effect from a date when they were not born in the cadre.
• Kaushal Kishore Singh vs. Dy. Director of Education [(2002) 9 SCC 634] – Supreme Court of India: This case was cited to emphasize that seniority is determined in a particular grade or cadre and is not dependent on seniority in another grade or cadre.
• State of Uttaranchal vs. Dinesh Kr. Sharma [(2007) 1 SCC 683] – Supreme Court of India: The Court referred to this case to support the view that the year in which a vacancy accrues does not determine seniority, and no retrospective effect can be given to an appointment order.
• Jagdish Ch. Patnaik vs. State of Orissa – Supreme Court of India: This case was cited in State of Uttaranchal vs. Dinesh Kr. Sharma to support the view that the year in which a vacancy accrues does not determine seniority.
• Sheikh Abdul Rashid & Ors. vs. State of J&K & Ors. [(2008) 1 SCC 722] – Supreme Court of India: This case, which also dealt with the J&K Civil Service Rules, was cited to reinforce the principle that seniority is reckoned from the actual date of appointment.
• State of Uttar Pradesh and Others vs. Ashok Kumar Srivastava and Another [(2014) 14 SCC 720] – Supreme Court of India: The Court cited this case to reiterate that seniority should be reckoned from the actual date of appointment and that retrospective seniority is generally not permissible.

On Exceptions to the Rule of Seniority from Date of Appointment:

• U.D. Lama and Others vs. State of Sikkim and Others [(1997) 1 SCC 111] – Supreme Court of India: The Court noted that this case was decided on its peculiar facts and did not overrule the normal principle that seniority should be considered from the date of appointment.
• Asis Kumar Samanta and Others vs. State of West Bengal and Others [(2014) 10 SCC 357] – Supreme Court of India: Similar to U.D. Lama, the Court observed that this case was decided on its unique circumstances and did not deviate from the general rule of seniority from the date of appointment.

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• Suraj Prakash Gupta and Others vs. State of J&K and Others [(2000) 7 SCC 561]*: The Court distinguished this case, stating that it applied to a situation where promotees had actually worked in the higher post on an ad hoc basis, unlike the present case.
• State of Bihar vs. Akhouri Sachindra Nath & Ors. [(1991) Supp.1 SCC 334]*: The Court followed this case to reiterate that retrospective promotion from a date when the person was not in the cadre is not permissible.
• Kaushal Kishore Singh vs. Dy. Director of Education [(2002) 9 SCC 634]*: The Court followed this case to emphasize that seniority is determined within a specific cadre.
• State of Uttaranchal vs. Dinesh Kr. Sharma [(2007) 1 SCC 683]*: The Court followed this case to support the view that the year in which a vacancy arises does not determine seniority.
• Sheikh Abdul Rashid & Ors. vs. State of J&K & Ors. [(2008) 1 SCC 722]*: The Court followed this case to reinforce that seniority is reckoned from the actual date of appointment.
• State of Uttar Pradesh and Others vs. Ashok Kumar Srivastava and Another [(2014) 14 SCC 720]*: The Court followed this case to support the view that seniority should be reckoned from the actual date of appointment.
• U.D. Lama and Others vs. State of Sikkim and Others [(1997) 1 SCC 111]*: The Court distinguished this case, stating that it was decided on its peculiar facts and did not overrule the normal principle of seniority from the date of appointment.
• Asis Kumar Samanta and Others vs. State of West Bengal and Others [(2014) 10 SCC 357]*: The Court distinguished this case, stating that it was decided on its unique circumstances and did not deviate from the general rule of seniority from the date of appointment.

What weighed in the mind of the Court?

The Supreme Court’s decision was heavily influenced by the principle that retrospective promotions should not be granted to individuals who were not part of the cadre during the period for which the promotion is sought. The Court emphasized the importance of actual service in the higher post for the purpose of probation and seniority. The Court also highlighted that the rules require a person to have worked against the post to be considered for retrospective promotion. The Court noted that the promotees were not members of the ETO service until their formal promotion. The Court also considered the potential violation of Articles 14 and 16 of the Constitution if retrospective promotions are granted at the cost of another group.

Fact:Law Ratio:

Logical Reasoning:

The Court considered alternative interpretations of the rules, particularly the interpretation that being on a pensionable post in the feeder category was sufficient to be considered a “member of service” under Rule 23. However, the Court rejected this interpretation, emphasizing that the ETO post is a distinct gazetted post in a different cadre. The Court held that the promotees were not members of the ETO service until their formal promotion. The final decision was based on a combined reading of Rule 9 of the Excise Rules and Rules 23 and 24 of the Civil Service Rules, which the Court interpreted to mean that retrospective promotion could only be granted if the promotee had actually worked against the post prior to their regular appointment. The Court also considered the potential violation of Articles 14 and 16 of the Constitution if retrospective promotions are granted at the cost of another group.

The Court’s decision was based on the following reasons:

• The promotees were not members of the ETO service until their formal promotion.
• Rule 9 of the Excise Rules requires actual work on the post for probation.
• Rule 23 of the Civil Service Rules requires continuous duty as a member of service, which means actual work in the post.
• Retrospective promotion without actual service violates the principles of equality under Articles 14 and 16 of the Constitution.

“It is well settled that no person can be promoted with retrospective effect from a date when he was not born in the cadre so as to adversely affect others.”

“The whole concept of probation is to judge the suitability of the candidate appointed to the post. There can be no objective assessment if the person is not actually working on the post.”

“Therefore, on a combined reading of Rule 9 of the Excise Rules and Rule 23 and 24 of the Civil Services Rules, we are clearly of the view that promotion can be granted on retrospective basis to promotee officers from a date on which the clear-cut vacancy in the promotional cadre has occurred subject however to the conditions that the promotee should have worked against that post prior to his regular appointment.”

There were no dissenting opinions in this case. The judgment was delivered by a two-judge bench comprising Justice Madan B. Lokur and Justice Deepak Gupta, with the opinion authored by Justice Deepak Gupta.

Key Takeaways

• Retrospective promotions cannot be granted merely based on the existence of vacancies.
• Actual work in the higher post is essential for claiming seniority from an anterior date.
• Being on a pensionable post in a feeder category does not qualify one as a member of the higher service.
• The judgment reinforces the principle that seniority is reckoned from the date of actual appointment to a particular service, class, category, or grade.
• This decision clarifies the interpretation of service rules related to retrospective promotions and will likely impact similar cases in the future.

Directions

The Supreme Court set aside the judgment of the Division Bench of the High Court dated 06.03.2014 and restored the judgment of the learned Single Judge dated 07.05.2013.

Specific Amendments Analysis

There were no specific amendments discussed in the judgment.

Development of Law

The ratio decidendi of this case is that retrospective promotion cannot be granted to an employee unless the employee has actually worked in the post prior to the date of regular appointment, even if vacancies existed. This judgment clarifies that the mere existence of vacancies in the promotional quota is not sufficient for granting retrospective promotion. It also clarifies that being a member of service means being a member of the specific service to which the promotion is being sought, not merely being in a pensionable post in a feeder cadre. The judgment reinforces the principle that seniority is reckoned from the date of actual appointment to a particular service, class, category, or grade. This decision clarifies the interpretation of service rules related to retrospective promotions and will likely impact similar cases in the future. The Court distinguished the judgment in Suraj Prakash Gupta (supra), clarifying that retrospective promotion is permissible only when the person has actually worked in the higher post on an ad hoc or temporary basis.

Conclusion

In conclusion, the Supreme Court held that retrospective promotions for the promotee ETOs were not valid because they had not worked in the higher posts before their regular appointment. The Court emphasized that the existence of vacancies alone is not sufficient for granting retrospective promotion, and actual service in the higher post is a prerequisite. The Court set aside the Division Bench’s judgment and restored the judgment of the Single Judge, thereby upholding the rights of the direct recruits.

Category

Parent Category: Service Law

Child Category: Retrospective Promotion

Child Category: Seniority

Child Category: J&K Civil Service Rules

Parent Category: J&K Civil Service Rules, 1956

Child Category: Rule 23, J&K Civil Service Rules, 1956

Child Category: Rule 24, J&K Civil Service Rules, 1956

Parent Category: J&K Excise & Taxation (Gazetted) Recruitment Rules, 1977

Child Category: Rule 9, J&K Excise & Taxation (Gazetted) Recruitment Rules, 1977

FAQ

Q: Can an employee be promoted and given seniority from a date when they were not actually working in that position?

A: Generally, no. The Supreme Court has clarified that retrospective promotions and seniority can only be granted if the employee has actually worked in the higher position, even if on a temporary basis, before their regular appointment. The mere existence of a vacancy is not sufficient.

Q: What does it mean to be a ‘member of service’ for the purpose of retrospective promotion?

A: According to this judgment, beinga ‘member of service’ means being a member of the specific service or cadre to which the promotion is being sought. It’s not enough to simply be in a lower, pensionable post in a related department.

Q: What is the significance of Rule 23 of the J&K Civil Service (CCA) Rules, 1956?

A: Rule 23 allows for retrospective appointment if a vacancy existed and the person was ‘continuously on duty as a member of service’. However, this judgment clarifies that ‘continuously on duty’ means actually working in the higher post, not just being in a related service.

Q: What is the significance of Rule 24 of the J&K Civil Service (CCA) Rules, 1956?

A: Rule 24 defines how seniority is determined. It states that seniority is determined by the date of first appointment to a particular service, class, category, or grade. The interpretation note to this rule clarifies that ‘date of first appointment’ means the date of first substantive appointment, which is either the date of permanent appointment or the date of first appointment on probation on a clear vacancy.

Q: What is the significance of Rule 9 of the J&K Excise & Taxation (Gazetted) Recruitment Rules, 1977?

A: Rule 9 stipulates that a person appointed to the service, whether by direct recruitment or selection, shall be placed on probation for two years. The explanation to this rule specifies that appointments on probation will be made against substantive vacancies only, and any period of officiating appointment shall be counted as part of the probation period when a person is formally appointed to the service. This rule was used by the Supreme Court to emphasize that probation requires actual work on the post.

Q: How does this judgment affect other employees in India?

A: While this case specifically deals with J&K service rules, the principles laid down by the Supreme Court regarding retrospective promotions and seniority are applicable across India. It emphasizes that actual work in the higher post is essential for claiming seniority from an earlier date.

Q: What is the main takeaway from this judgment?

A: The main takeaway is that retrospective promotions and seniority cannot be granted merely based on the existence of vacancies. Actual work in the higher post is essential for claiming seniority from an anterior date. This judgment clarifies the interpretation of service rules related to retrospective promotions and will likely impact similar cases in the future.