Supreme Court Upholds Seniority Based on Absorption Terms: Govinda Chandra Tiria vs. Sibaji Charan Panda (2020)

Date of the Judgment: 05 February 2020

Citation: 2020 INSC 123

Judges: Sanjay Kishan Kaul, J. and K.M. Joseph, J.

Can an employee who agrees to specific terms of absorption, including a lower seniority, later claim a higher seniority based on previous service? The Supreme Court of India addressed this question in a service law dispute, clarifying the importance of adhering to agreed-upon terms of absorption. The Court ruled that when an employee is absorbed into a new department with specific conditions, their seniority is determined by those conditions, not by previous service. This judgment emphasizes the binding nature of contractual agreements in service matters. The bench comprised Justices Sanjay Kishan Kaul and K.M. Joseph.

Case Background

The case revolves around Shri Sibaji Charan Panda (Respondent No. 1), who was initially appointed as a Lower Division Clerk (LDC) in the Ministry of Environment & Forests, Government of India, New Delhi, on May 24, 1993. His appointment letter stipulated that while his headquarters was in New Delhi, he was liable to serve anywhere in India. After completing his probation, he applied for a transfer on deputation basis to the regional office in Bhubaneshwar, which was accepted. He joined the Bhubaneshwar office on May 10, 1994. After multiple extensions on deputation, he requested a permanent transfer to Bhubaneshwar citing family reasons. This request was eventually granted through an office memorandum dated November 13, 1996, which stipulated that he would be treated as a fresh appointee and ranked junior-most in the cadre of LDC in the Eastern Regional Office. He accepted these terms and joined the Bhubaneshwar office. A provisional seniority list was circulated on March 8, 2001, placing him below the appellant, Shri Govinda Chandra Tiria. Respondent No. 1 objected to this seniority, claiming it was in violation of government circulars. His objection was rejected, leading to the legal challenge.

Timeline

Course of Proceedings

The Central Administrative Tribunal, Cuttack Bench, initially dismissed Respondent No. 1’s challenge to the seniority list on October 17, 2003. The Tribunal upheld the government’s stance that the absorption was not in the public interest and thus, the latter part of the Office Memorandum No. 20020/7/80-ESTT(D) dated May 29, 1986, applied, placing him below all regularly appointed officers. Aggrieved by this decision, Respondent No. 1 filed a Writ Petition before the Orissa High Court. The High Court allowed the Writ Petition on August 22, 2008, directing a fresh gradation list to be drawn, reasoning that the condition of bottom seniority was not supported by any rule or circular. The High Court also held that the seniority of the respondent should be reckoned from the date he joined on deputation. This decision led to the current appeal before the Supreme Court by Shri Govinda Chandra Tiria, whose seniority was affected by the High Court’s order.

Legal Framework

The case primarily involves the interpretation of Office Memorandum No. 20020/7/80-ESTT(D) dated May 29, 1986, issued by the Ministry of Personnel, Public Grievance and Pensions, Department of Personnel & Training. This memorandum deals with the seniority of persons absorbed after being on deputation. It states that seniority should normally be counted from the date of absorption. However, it also provides that if the officer was already holding the same or equivalent grade on a regular basis in the parent department, such regular service should also be considered, subject to the condition that seniority would be counted from the date of deputation or the date of regular appointment in the parent department, whichever is later. This “whichever is later” clause was modified to “whichever is earlier” by the Supreme Court in the case of Sub-Inspector Rooplal & Anr. v. Lt. Governor Through Chief Secretary, Delhi & Ors [(2000) 1 SCC 644]. Additionally, the memorandum specifies that in cases where transfers are not strictly in the public interest, the transferred officers will be placed below all officers appointed regularly to the grade on the date of absorption. The Supreme Court in Sub-Inspector Rooplal & Anr. v. Lt. Governor Through Chief Secretary, Delhi & Ors [(2000) 1 SCC 644] struck down the clause “whichever is later” as it was discriminatory and arbitrary. The Court held that the deputationist should get the benefit of service in the equivalent post.

The relevant clauses of O.A. No.20020/7/80-ESTT(D) dated 29.05.1986 are:

“(iv)In the case of a person who is initially taken on deputation and absorbed later i.e. where the relevant recruitment rules provide for transfer on deputation/transfer, his seniority in this grade in which he be absorbed will normally be counted from the date of absorption. If he has, however, been holding already from the date of absorption), the same is equivalents grade on regular basis in parent department, such regular services in the grade shall also be taken into account in fixing his seniority, subject to the condition that he will be given seniority from
-the date he has been holding the post on deputation.
OR
-the date from which he has been appointed on a regular basis in the same or equivalent grade in his parent department.
Whichever is later.
The fixation of seniority of transferee in accordance with the above principle will not, however, affect any regular promotions to the next higher grade, made prior to the date of such absorption. In other words, it will be operative only in filling up of vacancies in higher grade taking places after such absorption.
In cases in which transfers are not strictly in public interest, the transferred officers will be placed below all officers appointed regularly to the grade on the date of absorption.”

Arguments

Appellant’s Submissions:

• The appellant argued that the terms of Respondent No. 1’s absorption clearly stipulated that his seniority would rank below others. Respondent No. 1 had accepted these terms and conditions and cannot later resile from them to the detriment of the appellant’s seniority.
• The High Court erred in observing that the office memorandums dated May 29, 1986, and March 27, 2001, would prevail and that there was nothing in those memorandums that would affect Respondent No. 1’s seniority from his initial date of appointment in Delhi.
• The crucial aspect of the Office Memorandum dated May 29, 1986, was not considered, specifically that such seniority would not be available in cases where transfers are “not strictly in public interest.” The department wanted Respondent No. 1 to return to his parent cadre, and it was his insistence that led to his absorption on the specified terms. Thus, his absorption was not in public interest.
• The appellant relied on the judgment of the Supreme Court in Mrigank Johri & Ors. v. Union of India & Ors. [(2017) 8 SCC 256], which held that the benefit of past service rendered in a cadre is usually reckoned for the purpose of seniority. However, in this case, the conditions were categorically stated that the absorption would be deemed as a new recruitment, and the previous service would be counted for all purposes except seniority.
• The appellant contended that the present case is not one of transfer but of deputation, and thus, the principle of a person moving to another cadre would squarely apply. Such a depute would also have to be governed by the terms and conditions of such absorption.

Respondent’s Submissions:

• Respondent No. 1 contended that his seniority should be counted from his initial date of joining in Delhi, relying on the judgment of the Supreme Court in Sub-Inspector Rooplal & Anr. v. Lt. Governor Through Chief Secretary, Delhi & Ors [(2000) 1 SCC 644].
• He argued that the conditions imposed at the time of his absorption were not in accordance with the office memorandum dated May 29, 1986, and March 27, 2001.
• He argued that he should be given the benefit of service of equivalent post as per the judgment in Sub-Inspector Rooplal & Anr. v. Lt. Governor Through Chief Secretary, Delhi & Ors [(2000) 1 SCC 644].

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section, but the core issues can be summarized as:

1. Whether the terms of absorption, which stipulated that the respondent would be treated as a fresh appointee and ranked junior-most in the cadre, were binding on the respondent.
2. Whether the High Court was correct in holding that the respondent’s seniority should be reckoned from the date he joined on deputation, despite the terms of absorption.
3. Whether the absorption of the respondent was in the public interest, and if not, whether the relevant clause of the Office Memorandum dated May 29, 1986, would apply.

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:

Cases:

• Sub-Inspector Rooplal & Anr. v. Lt. Governor Through Chief Secretary, Delhi & Ors [(2000) 1 SCC 644] – This case was considered to understand the interpretation of O.M. No.20020/7/80-Esst(D), dated 29.05.1986. The Supreme Court in this case had struck down the clause “whichever is later” as it was discriminatory and arbitrary. The Court held that the deputationist should get the benefit of service in the equivalent post.
• Mrigank Johri & Ors. v. Union of India & Ors. [(2017) 8 SCC 256] – This case was cited to support the principle that past service in a cadre is usually reckoned for seniority. However, the Court distinguished this case by stating that in the present case, the terms of absorption clearly stated that the previous service would not be counted for seniority.

Legal Provisions:

• Office Memorandum No. 20020/7/80-ESTT(D) dated May 29, 1986 – This memorandum deals with the seniority of persons absorbed after being on deputation. It states that seniority should normally be counted from the date of absorption, but also provides for consideration of regular service in the parent department under certain conditions.
• Office Memorandum No. AB-140171/89-Est(RR) dated 03.10.1989 – This was the O.M. that the respondent relied on, but the Court held that the conditions of absorption would prevail.
• Office Memorandum dated 27.03.2001 – This O.M. arose from the judgment of the Supreme Court in Sub-Inspector Rooplal & Anr. v. Lt. Governor Through Chief Secretary, Delhi & Ors [(2000) 1 SCC 644]. This was also considered by the High Court.

Authority Table

Judgment

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

How each authority was viewed by the Court?

• Sub-Inspector Rooplal & Anr. v. Lt. Governor Through Chief Secretary, Delhi & Ors [(2000) 1 SCC 644]: The Court distinguished this case, stating that the facts were different. In that case, the deputationists were not given the benefit of service of equivalent post, and that they should have been so conveyed in order to make an informed choice of whether to seek or not to seek permanent absorption. The present case was a case of request for absorption, and the respondent was fully aware of the terms of absorption.
• Mrigank Johri & Ors. v. Union of India & Ors. [(2017) 8 SCC 256]: The Court distinguished this case, stating that while past service is usually counted for seniority, the specific terms of absorption in this case clearly stated that previous service would not be counted for seniority.
• Office Memorandum No. 20020/7/80-ESTT(D) dated May 29, 1986: The Court interpreted this memorandum to mean that while seniority is normally counted from the date of absorption, it is subject to the condition that if the transfer is not in public interest, the transferred officer will be placed below all regularly appointed officers.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the principle that an employee is bound by the terms and conditions of their absorption, especially when those terms are clearly communicated and accepted. The Court emphasized that the respondent, having willingly accepted the condition of being treated as a fresh appointee with the lowest seniority, could not later claim seniority based on previous service. The Court also noted that the respondent’s absorption was not in public interest, as the department had initially wanted him to return to his parent cadre. The court emphasized on the binding nature of the terms and conditions of the absorption, which were accepted by the respondent. The court also considered that the respondent had persisted with his request for absorption, and thus, the absorption was not in public interest.

The Court’s reasoning was also influenced by the need to maintain the sanctity of agreements and to ensure that employees do not unilaterally alter the terms of their employment after accepting them. The Court also noted that the respondent had not challenged the terms of absorption at the time of absorption, and only challenged the seniority list, which was an oblique manner of challenging the terms of absorption.

The Court also considered the fact that the respondent had been promoted in the meantime, and thus, a direction of demotion would be harsh. Therefore, the court directed the creation of a supernumerary post to accommodate the respondent.

Sentiment Analysis Table

Fact:Law Ratio Table

Logical Reasoning

Judgment

The Supreme Court held that the High Court’s judgment was not sustainable and had to be set aside. The Court emphasized that the terms of absorption were binding on Respondent No. 1, and he could not claim seniority from his initial date of appointment in Delhi. The Court also noted that the absorption was not in the public interest, and thus, the relevant clause of the Office Memorandum dated May 29, 1986, applied. The Supreme Court observed that the Union of India should be more careful while filing affidavits before the Court. The Court also noted that the respondent had been promoted in the meantime, and thus, a direction of demotion would be harsh. Therefore, the court directed the creation of a supernumerary post to accommodate the respondent.

The Court’s reasoning was based on the following key points:

• The respondent had accepted the terms and conditions of absorption, which clearly stated that he would be treated as a fresh appointee and ranked junior-most in the cadre.
• The absorption was not in the public interest, as the department had initially wanted him to return to his parent cadre.
• The respondent had not challenged the terms of absorption at the time of absorption, and only challenged the seniority list, which was an oblique manner of challenging the terms of absorption.
• The judgment in Sub-Inspector Rooplal & Anr. v. Lt. Governor Through Chief Secretary, Delhi & Ors [(2000) 1 SCC 644] was not applicable to the facts of the case.

The Court quoted the following from the judgment:

• “The crucial aspect is that respondent No.1 was to be treated as a ‘fresh appointee’ in the Regional Eastern Office and rank junior most in the cadre after his appointment to that office. He was called upon to give his willingness to all the conditions, which were duly accepted by respondent No.1.”
• “In the instant case, where the conditions were categorically stated that the absorption would be “ deemed to be new recruitment” and the previous service would be counted for all purposes “except his or her seniority in the cadre ”, appellant having accepted it without any demur, the seniority list prepared as a sequitur to the terms and conditions of the absorption could not be faulted with.”
• “Thus, normally the deputation would be counted, but this was further made subject to the caveat that in case the transfers are not strictly in public interest, the transferred officers will be placed below all appointed regularly to the grade on the date of absorption. It is the latter clause which will apply as this was not a case “strictly in public interest”.”

Key Takeaways

• Employees are bound by the terms and conditions of their absorption, especially when those terms are clearly communicated and accepted.
• Seniority in a new department is determined by the terms of absorption, not necessarily by previous service in a parent department.
• Transfers that are not strictly in the public interest may result in the transferred officer being placed below all regularly appointed officers.
• Employees cannot unilaterally alter the terms of their employment after accepting them.
• The Supreme Court emphasized the importance of maintaining the sanctity of agreements in service matters.

Directions

The Supreme Court directed that while the seniority list would be maintained, Respondent No. 1 would not be demoted. An ex-cadre/supernumerary post would be created to keep him in the same post without affecting the seniority list.

Development of Law

The ratio decidendi of the case is that an employee is bound by the terms and conditions of their absorption, especially when those terms are clearly communicated and accepted. This case reaffirms the principle that seniority in a new department is determined by the terms of absorption, not necessarily by previous service in a parent department. The judgment clarifies that the exception carved out in O.M. dated 29.05.1986 regarding transfers not in public interest would apply where the employee has insisted on absorption despite the department wanting the employee to return to the parent cadre. The Supreme Court also clarified that the judgment in Sub-Inspector Rooplal & Anr. v. Lt. Governor Through Chief Secretary, Delhi & Ors [(2000) 1 SCC 644] was not applicable to the facts of the case.

Conclusion

In conclusion, the Supreme Court allowed the appeals, setting aside the High Court’s judgment. The Court upheld the principle that employees are bound by the terms of their absorption, and seniority is determined by those terms, not by previous service. The Court also directed the creation of a supernumerary post to accommodate the respondent, without affecting the seniority list. This judgment reinforces the importance of adhering to contractual agreements in service matters and clarifies the interpretation of relevant office memorandums regarding seniority upon absorption.