Supreme Court upholds differential promotion criteria based on educational qualifications: Chandan Banerjee vs. Krishna Prosad Ghosh (21 September 2021)

LEGAL ISSUE: Whether a classification based on educational qualifications for promotion to supernumerary posts within the same cadre is valid under Articles 14 and 16 of the Constitution of India. CASE TYPE: Service Law. Case Name: Chandan Banerjee & Ors. vs. Krishna Prosad Ghosh & Ors. Judgment Date: 21 September 2021

Date of the Judgment: 21 September 2021
Citation: Civil Appeal No 5582 of 2021 (Arising out of SLP (C) Nos. 11781 of 2019)
Judges: Dr. Dhananjaya Y. Chandrachud, J., Vikram Nath, J., Hima Kohli, J.

Can an employer differentiate between employees within the same cadre for promotion based on their educational qualifications? The Supreme Court of India recently addressed this question in a case concerning the Kolkata Municipal Corporation (KMC). The core issue was whether KMC could create separate eligibility criteria for promotion to supernumerary posts of Assistant Engineer (AE) based on whether the Sub-Assistant Engineers (SAE) held a diploma or a degree in engineering. The Supreme Court upheld the High Court’s decision, allowing the differential treatment.

Case Background

The Kolkata Municipal Corporation (KMC) has two main service cadres in its Engineering Department: Subordinate Engineering Service and Engineering Service. The entry-level post in the Subordinate Engineering Service is that of a Sub-Assistant Engineer (SAE), for which a diploma in engineering is the minimum qualification. However, those with a degree in engineering are also eligible. The first promotion from SAE is to the post of Assistant Engineer (AE), which is the entry-level post in the Engineering Service cadre. AEs can be recruited directly or through promotion of SAEs.

In 1994, the Calcutta Municipal Corporation Services (Common Cadres) Regulations were notified. These regulations provided for the management of common cadres, including seniority and recruitment. Initially, the regulations did not differentiate between diploma and degree holders for promotion from SAE to AE. However, subsequent modifications in 1997 and 2002 introduced quotas for promotion of degree-holder SAEs. In 2008, a career advancement scheme was introduced, awarding the basic pay scale of an AE to SAEs who had completed twenty years of satisfactory service. In 2012, KMC proposed creating supernumerary posts of AEs to address stagnation among SAEs. This proposal led to the impugned circular dated 3 July 2012, which created different eligibility criteria for promotion to these supernumerary posts based on educational qualifications: 25 years of service for diploma holders and 13 years (with 5 years as a degree holder) for degree holders.

Timeline:

Course of Proceedings

The appellants, who are diploma-holder SAEs, filed a writ petition in the High Court challenging the circular dated 3 July 2012 and the gradation list. A Single Judge of the High Court allowed the writ petition, holding the circular to be arbitrary and unconstitutional. The Division Bench, in a Letters Patent Appeal, reversed the Single Judge’s decision, upholding the classification based on educational qualifications for supernumerary appointments. The appellants then appealed to the Supreme Court of India.

Legal Framework

The case revolves around the interpretation of Articles 14 and 16 of the Constitution of India, which guarantee equality and equal opportunity in public employment. Article 16, however, does not bar reasonable classifications by the State for selection of employees. The Supreme Court considered the following legal principles:

• Article 14 of the Constitution of India: Guarantees equality before the law and equal protection of the laws.
• Article 16 of the Constitution of India: Guarantees equality of opportunity in matters of public employment.

The Court also referred to the Calcutta Municipal Corporation Services (Common Cadres) Regulations, specifically Rule 9, which provides the method of recruitment for the post of AE and SAE. The relevant portions of the regulations are as follows:

“Assistant Engineer (Civil/Mechanical/Electrical) 50% posts of the total cadre strength of Assistant Engineer shall be filled up by promotion from the posts borne in the Common Cadre for Sub- Assistant Engineer AND 50% posts of the said cadre strength shall be filled up by direct recruitment observing necessary formalities Qualifications for direct recruitment A degree in civil/Mechanical/Electrical Engineering of a recognised University or its equivalent.”

“Sub-Assistant Engineer (Civil/Mech./Electrical) Only by direct recruitment observing necessary formalities Qualifications for direct recruitment A diploma in Civil/Mechanical/Electrical Engineering from the state council for Engineering and Technical Education, West Bengal or its equivalent.”

Arguments

Submissions of the Appellants (Diploma Holder SAEs):

• The private respondents (degree holders) had joined the cadre of SAE despite the minimum qualification being a diploma. They already had a 15% reservation for promotion to AE as per the circular dated 20 February 2002.
• The KMC did not notify that an existing SAE could obtain a higher qualification to avail of the benefit of promotion by creating supernumerary posts. Thus, differential treatment is not justified.
• Once persons become members of a service, they are equals and cannot be differentiated for salary, seniority, promotion, and conditions of service.
• The High Court failed to appreciate the ratio of State of Jammu & Kashmir v. Trilokinath Khosa (1974) 1 SCC 19, where separate channels of promotion were upheld because the recruitment was through different channels. In this case, the selection was through a common channel.
• The draft gradation list dated 4 March 2021 indicates that diploma-holder SAEs will have no effective promotional avenue.
• A junior SAE holding a degree will be promoted faster than a senior SAE holding a diploma.

Submissions of the Respondent (KMC):

• The Recruitment Regulations provide that educational qualification is a criterion for recruitment and promotion in the Engineering Service of KMC.
• The purpose of the impugned circular was to open promotional avenues for stagnating SAEs, without granting substantive promotional posts or financial benefits, but only a designation of AE for efficient administrative functioning.
• KMC is entitled to create a differentiation for effective discharge of duty.
• Even where persons with different qualifications are given a promotional opportunity, absolute equality cannot be maintained.

Submissions of the Respondent (Degree Holder SAEs):

• None of the contesting respondents held engineering degrees at the time of recruitment and had acquired them during service.
• The first circular providing a quota for promotion from SAE to AE on the basis of educational qualifications was dated 7 August 1997, which has remained unchallenged.
• The present case is similar to Roop Chand Adlakha v. Delhi Development Authority 1989 Supp (1) SCC 116, where different lengths of qualifying service for promotion were upheld.

Issues Framed by the Supreme Court

The core issue framed by the Supreme Court was:

1. Whether persons drawn from a common source who have been integrated into a cadre can be differentiated on the basis of educational qualifications for the purpose of promotion to supernumerary posts.

Treatment of the Issue by the Court

Authorities

Cases Relied Upon by the Court:

• State of Jammu & Kashmir v. Trilokinath Khosa (1974) 1 SCC 19 (Supreme Court of India): Upheld the classification based on educational qualifications for promotion, emphasizing that higher qualifications are presumptive evidence of higher mental equipment.
• Mohammed Shujat Ali v. Union of India (1973) 3 SCC 76 (Supreme Court of India): Clarified that classification based on educational qualifications must be reasonable and related to the nature of the job.
• Roop Chand Adlakha v. Delhi Development Authority 1989 Supp (1) SCC 116 (Supreme Court of India): Upheld different eligibility conditions for promotion based on educational qualifications and experience.
• State of Uttarakhand v. SK Singh (2019) 10 SCC 49 (Supreme Court of India): Upheld different eligibility conditions for accelerated promotions for graduate Junior Assistants.
• State of Mysore v. P Narasing Rao AIR 1968 SC 349 (Supreme Court of India): Upheld classification based on educational qualifications for pay scales.
• Ganga Ram v. Union of India (1970) 1 SCC 377 (Supreme Court of India): Upheld classification based on educational qualifications.
• Union of India v. Dr (Mrs) SB Kohli (1973) 3 SCC 592 (Supreme Court of India): Upheld classification based on specialized educational qualifications.

Cases Distinguished by the Court:

• Roshan Lal Tandon v. Union of India AIR 1967 SC 1889 (Supreme Court of India): Distinguished on the ground that it dealt with source of recruitment, not educational qualification.
• Union of India v. Atul Shukla (2014) 10 SCC 432 (Supreme Court of India): Distinguished as it dealt with source of recruitment.
• Co. AS Iyer & Ors. v. Bala Subramanyan & Ors. (1980) 1 SCC 634 (Supreme Court of India): Distinguished as it dealt with source of recruitment.
• Punjab State Electricity Board & Anr. v. Ravinder Kumar Sharma & Ors. (1986) 4 SCC 617 (Supreme Court of India): Distinguished as it dealt with source of recruitment.
• Maharashtra Forest Guards and Foresters Union v. State of Maharashtra (2018) 1 SCC 149 (Supreme Court of India): Distinguished as it dealt with a complete restriction of promotion to a class.
• Food Corporation of India v. Om Prakash (1998) 7 SCC 676 (Supreme Court of India): Distinguished as there was no nexus between the rule and the objective of achieving higher efficiency.

Legal Provisions Considered:

• Articles 14 and 16 of the Constitution of India: The court examined these articles to determine whether the classification was constitutional.
• Calcutta Municipal Corporation Services (Common Cadres) Regulations: The court examined the regulations to understand the recruitment and promotion process.

Judgment

How each authority was viewed by the Court?

• State of Jammu & Kashmir v. Trilokinath Khosa (1974) 1 SCC 19*: The Court followed this case, emphasizing that classification based on educational qualifications is valid for promotion, as higher qualifications are presumptive evidence of higher mental equipment.
• Mohammed Shujat Ali v. Union of India (1973) 3 SCC 76*: The Court used this case to clarify that such classifications must be reasonable and related to the job’s nature.
• Roop Chand Adlakha v. Delhi Development Authority 1989 Supp (1) SCC 116*: The Court relied on this to justify different eligibility conditions for promotion based on educational qualifications and experience.
• State of Uttarakhand v. SK Singh (2019) 10 SCC 49*: The Court followed this case to uphold different eligibility conditions for accelerated promotions for graduate Junior Assistants.
• State of Mysore v. P Narasing Rao AIR 1968 SC 349*, Ganga Ram v. Union of India (1970) 1 SCC 377*, and Union of India v. Dr (Mrs) SB Kohli (1973) 3 SCC 592*: These were cited to support the validity of educational qualifications as a basis for classification.
• Roshan Lal Tandon v. Union of India AIR 1967 SC 1889*, Union of India v. Atul Shukla (2014) 10 SCC 432*, Co. AS Iyer & Ors. v. Bala Subramanyan & Ors. (1980) 1 SCC 634*, Punjab State Electricity Board & Anr. v. Ravinder Kumar Sharma & Ors. (1986) 4 SCC 617*, Maharashtra Forest Guards and Foresters Union v. State of Maharashtra (2018) 1 SCC 149*, and Food Corporation of India v. Om Prakash (1998) 7 SCC 676*: These cases were distinguished as they dealt with source of recruitment or lacked a nexus between the rule and the objective.

What weighed in the mind of the Court?

The Supreme Court’s decision was influenced by several key factors. The Court emphasized that the classification based on educational qualifications was not arbitrary but was linked to the objective of enhancing administrative efficiency. The Court noted that KMC had consistently differentiated between degree and diploma holders for promotion since 1997, and the creation of supernumerary posts was aimed at reducing stagnation among SAEs. The Court also considered that these supernumerary posts were to be adjusted against permanent vacancies, and the regular promotion avenues were not affected. The Court also noted that the diploma holders were not completely restricted from promotions and were given an opportunity to advance in their careers. The Court also held that in matters of public policy and public employment, the legislature or its delegate must be given sufficient room to decide the quality of individuals it seeks to employ as against different positions, and unless the decisions are arbitrary, the Court must refrain from interfering in the policy domain.

The Court’s reasoning was primarily based on legal precedents and principles, with a lesser emphasis on the specific factual aspects of the case. The analysis was primarily based on the legal framework and the reasonableness of the classification made by the KMC.

Logical Reasoning

The Court considered alternative interpretations but rejected them, emphasizing that the classification was not arbitrary and was linked to the purpose of enhancing administrative efficiency. The Court also noted that the diploma holders were not completely restricted from promotions and were given an opportunity to advance in their careers. The Court also held that in matters of public policy and public employment, the legislature or its delegate must be given sufficient room to decide the quality of individuals it seeks to employ as against different positions, and unless the decisions are arbitrary, the Court must refrain from interfering in the policy domain.

The Supreme Court’s decision was that the impugned circular and the subsequent gradation list did not suffer from arbitrariness or discrimination. The Court upheld the decision of the Division Bench of the High Court and dismissed the appeal.

The Court stated, “Judicial scrutiny can therefore extend only to the consideration whether the classification rests on a reasonable basis and whether it bears nexus with the object in view. It cannot extend to embarking upon a nice or mathematical evaluation of the basis of classification…”

The Court also stated, “On the fact of the case, classification on the basis of educational qualifications made with a view to achieving administrative efficiency cannot be said to rest on any fortuitous circumstance…”

Further, the Court noted, “In matters of public policy and public employment, the legislature or its delegate must be given sufficient room to decide the quality of individuals it seeks to employ as against different positions. As long as these decisions are not arbitrary, this Court must refrain from interfering in the policy domain.”

There were no dissenting opinions in this case.

Key Takeaways

• Educational qualifications can be a valid basis for classification for promotion within the same cadre.
• Employers can create different eligibility criteria for promotion to supernumerary posts based on educational qualifications.
• Such classifications must be reasonable and linked to the objective of enhancing administrative efficiency.
• Courts will generally not interfere with policy decisions of the legislature or its delegate in matters of public employment unless they are arbitrary.

Directions

No specific directions were given by the Supreme Court in this judgment.

Development of Law

The ratio decidendi of this case is that educational qualifications can be a valid basis for classification for promotion, even within the same cadre, if the classification is reasonable and linked to the objective of enhancing administrative efficiency. This case reinforces the principle established in Trilokinath Khosa and provides further clarity on the extent to which employers can differentiate between employees based on educational qualifications. There is no change in the previous position of law.

Conclusion

The Supreme Court’s judgment in Chandan Banerjee vs. Krishna Prosad Ghosh upholds the validity of differential promotion criteria based on educational qualifications. The Court emphasized that such classifications are permissible if they are reasonable and linked to the objective of enhancing administrative efficiency. This decision provides clarity on the scope of Articles 14 and 16 of the Constitution in the context of service law and reinforces the importance of administrative efficiency in public employment.

Category

• Service Law
  • Promotion
  • Educational Qualification
  • Supernumerary Posts
  • Article 14, Constitution of India
  • Article 16, Constitution of India