Supreme Court Upholds Seniority Based on Skilled Grade Promotion in Engine Factory: V. Vincent Velankanni vs. Union of India (2024)

Date of the Judgment: September 30, 2024
Citation: 2024 INSC 748
Judges: Sandeep Mehta, J., R. Mahadevan, J.
Can an employee’s seniority be determined from the date of their initial appointment or from the date they are promoted to a skilled grade after completing probation and passing a trade test? The Supreme Court of India recently addressed this question in a dispute arising from the Engine Factory, Avadi, Chennai. The court had to decide whether the seniority of employees should be reckoned from their initial date of joining as semi-skilled workers or from the date they were promoted to the skilled grade. This judgment clarifies the rules for determining seniority in industrial establishments, particularly when promotions are contingent on completing probation and passing trade tests. The bench comprised Justices Sandeep Mehta and R. Mahadevan, with the judgment authored by Justice Sandeep Mehta.

Case Background

This case involves a dispute over seniority among employees of the Engine Factory, Avadi, Chennai. The appellant, V. Vincent Velankanni, and the private respondents were initially hired as semi-skilled workers, such as Fitters and Machinists, in 1996. A merit-based select list placed the appellant higher than the private respondents. The appellant was appointed as a ‘Fitter General (semi-skilled)’ on January 17, 1996, and was placed on probation. His probation was extended by six months, and he completed it on July 16, 1998. He was then promoted to the ‘Skilled’ grade on January 6, 1999. A draft seniority list in 2006 placed the appellant lower than the private respondents, as the list was based on the date of promotion to the skilled grade.

Timeline

Course of Proceedings

The appellant, aggrieved by the draft seniority list of July 28, 2006, which placed him lower than the private respondents, submitted a representation that was rejected by the General Manager. He then filed Original Application No. 821 of 2007 before the Central Administrative Tribunal (CAT). Another employee, Mr. P. Kumaresan, also filed a similar application, which was allowed by the CAT, holding that seniority should be counted from the date of initial selection after completion of the extended probation period. Relying on this, the CAT allowed the appellant’s application, directing the revision of the seniority list. The private respondents challenged this decision by filing Original Application No. 318 of 2009, which was dismissed by the CAT. Instead of filing a review, the private respondents filed a writ petition before the High Court of Judicature at Madras, which was allowed. The High Court held that the private respondents were senior to the appellant based on both initial appointment and promotion to the skilled grade. The High Court also noted the delay in the appellant’s challenge. This High Court judgment was then appealed to the Supreme Court.

Legal Framework

The case revolves around the interpretation of rules governing seniority in industrial establishments, particularly concerning the transition from semi-skilled to skilled grades. The key legal provisions and documents are:

• Statutory Regulatory Order (SRO) No. 185 of 1994: This order stipulates that a trade test is required for promotion to the skilled grade. Note 6 of the SRO states, “Wherever ‘Trade Test’ is laid down in Column 12 of this Schedule such trade test shall be prescribed by the General Manager of the factory or the Ordnance Factory Board. The term ‘Trade Test’ will include written, oral and practical examination and aptitude test and interview and also statutory qualification test where applicable.”
• Government Order (GO) dated December 24, 2002: Issued by the Ordinance Factory Board, this GO clarifies that semi-skilled posts are training posts for skilled posts and that seniority is counted from the date of promotion to the skilled grade, not from the date of induction into the semi-skilled grade. It states, “Seniority will be counted from the date of promotion to Skilled grade and not from the date of induction/entry/promotion in semi-skilled grade.”
• Office Memorandum (OM) dated November 4, 1992: This OM, issued by the Department of Personnel and Training, states that seniority should be determined by the order of merit at the time of initial appointment. It notes, “the seniority of a person regularly appointed to a post according to rule would be determined by the order of merit indicated at the time of initial appointment and not according to the date of confirmation.”
• Government Order (GO) dated August 4, 2015: This GO superseded the earlier GO of December 24, 2002, and stated that seniority would be governed by the OM of November 4, 1992, meaning seniority would be based on the initial merit list. It states, “henceforth, seniority in respect of IEs will be governed by the relevant clause of DOPT OM No.20011/5/90 -Estt(D) dated 4th November, 1992 and OM No.22011/7/86 -Estt(D) dated 3rd July, 1986.”

These provisions must be interpreted in the context of Articles 14 and 16 of the Constitution, which ensure equality before the law and equality of opportunity in public employment.

Arguments

Appellant’s Submissions:

• The High Court erred in holding that the appellant’s challenge to the draft seniority list was delayed and that the private respondents were senior to the appellant as on the date of initial appointment.
• The draft seniority list was published in 2006 for the first time, and the appellant immediately made a representation against it.
• The rules do not state that promotion from Fitter (semi-skilled) to Fitter (skilled) is dependent on passing the trade test. Once the appellant completed his probation, his services should have been confirmed from the initial appointment date.
• The period spent during training/probation should be included when calculating the length of service for seniority.
• The movement from semi-skilled to skilled grade is a confirmation/upgradation, not a promotion.
• The Office Memorandum (OM) dated November 4, 1992, states that seniority should be based on the merit at the time of initial appointment, not the date of confirmation.
• Relied on L. Chandrakishore Singh v. State of Haryana (AIR 1975 SC 613) for the proposition that the period spent during training/probation should be included in the length of service, and on BSNL v. R. Santhakumari Velusamy ((2011) 9 SCC 510) to argue that movement from semi-skilled to skilled grade was a confirmation/upgradation, not a promotion.
• Cited Direct Recruit Class II Engg. Officers’ Assn. v. State of Maharashtra ((1990) 2 SCC 715), a Constitution Bench decision, to support the argument that seniority should be based on the initial appointment date.

Respondents’ Submissions:

• The semi-skilled grade is a trainee grade, and promotion to the skilled grade requires satisfactory completion of probation and passing the prescribed trade test.
• Where rules exist, they should prevail over the initial merit list in determining seniority.
• Relying on Suresh Chandra Jha v. State of Bihar and Others ((2007) 1 SCC 405) for the proposition that if rules are in vogue, then the same will prevail.
• Statutory Regulatory Order (SRO) No. 185 of 1994 states that appointments in industrial establishments are against the skilled grade, and the period in the semi-skilled grade is considered a training period.
• The Government Order (GO) dated December 24, 2002, clarifies that seniority is counted from the date of promotion to the skilled grade, not from the date of induction into the semi-skilled grade.
• The appellant’s probation was extended, and he was promoted to the skilled grade later than the private respondents.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was:

1. Whether the seniority of the appellant is to be reckoned from the date of induction/initial appointment or as per the date of promotion/confirmation in the skilled grade.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Judgment

The Supreme Court upheld the High Court’s decision, ruling that the seniority of the appellant should be reckoned from the date of promotion to the skilled grade and not from the date of his initial appointment as a semi-skilled worker.

How each authority was viewed by the Court?

• L. Chandrakishore Singh v. State of Haryana (AIR 1975 SC 613)*: The court distinguished this case, stating that while the probation period is generally included in service, it can be overridden by specific rules.
• BSNL v. R. Santhakumari Velusamy ((2011) 9 SCC 510)*: This case was distinguished as the court held that the movement from semi-skilled to skilled grade was not just a confirmation but a promotion requiring a trade test.
• Direct Recruit Class II Engg. Officers’ Assn. v. State of Maharashtra ((1990) 2 SCC 715)*: The court acknowledged the general principle that seniority is counted from the date of appointment, but noted that this is subject to specific rules.
• Suresh Chandra Jha v. State of Bihar and Others ((2007) 1 SCC 405)*: The court followed this case, emphasizing that if rules are in force, they will prevail.
• Pawan Pratap Singh and Others v. Reevan Singh and Others ((2011) 3 SCC 267)*: Cited to summarise the principles of seniority determination.
• Malcom Lawrence Cecil D’Souza v. Union of India and Others ((1976) 1 SCC 599)*: Cited to highlight that seniority lists should not be reopened after a long time.
• R.S. Makashi and Others v. I.M. Menon and Others ((1982) 1 SCC 379)*: Cited to emphasize that rights accrued after a long time should not be disturbed.
• K.R. Mudgal and Others v. R.P. Singh and Others ((1986) 4 SCC 531)*: Cited to highlight the need for stability in government service.
• B.S. Bajwa and Another v. State of Punjab and Others ((1998) 2 SCC 523)*: Cited to reinforce that seniority lists should not be reopened after a reasonable period.
• Sonia v. Oriental Insurance Co. Ltd. and Others ((2007) 10 SCC 627)*: Cited to state that an Office Memorandum cannot have a retrospective effect unless explicitly stated.
• Sree Sankaracharya University of Sanskrit and Others v. Dr. Manu and Another (2023 SCC OnLine SC 640)*: Cited to lay down principles for determining whether an order is clarificatory or a substantive amendment for retrospective operation.

What weighed in the mind of the Court?

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

• Applicable Rules and Regulations: The Court emphasized the importance of following the specific rules and regulations in place at the time of the dispute. In this case, SRO No. 185 of 1994 and the GO dated December 24, 2002, were crucial in determining that seniority should be counted from the date of promotion to the skilled grade.
• Nature of Semi-Skilled Grade: The Court recognized that the semi-skilled grade was a training grade, and promotion to the skilled grade was not automatic but contingent upon the satisfactory completion of probation and passing the prescribed trade test.
• Prospective Application of GO dated August 4, 2015: The Court held that the GO dated August 4, 2015, which sought to change the seniority rules, could not be applied retrospectively as it was a substantive change in the rules and not merely a clarification.
• Stability and Certainty in Service Matters: The Court highlighted the need to avoid disrupting settled seniority positions after a long period to maintain stability and efficiency in public services. It emphasized that altering seniority lists after many years can lead to administrative chaos and injustice.
• Non-Interference with Crystallized Rights: The Court was wary of disturbing the rights that had accrued to employees over time based on the existing rules. It noted that many employees’ seniority had been fixed according to the GO of December 24, 2002, and any retrospective application of the new rules would cause significant prejudice.

Logical Reasoning:

The court considered the argument that seniority should be based on the initial appointment date, as per the OM dated November 4, 1992. However, it rejected this argument because the GO dated December 24, 2002, which was in force at the relevant time, specifically stated that seniority should be counted from the date of promotion to the skilled grade. The court also considered the GO dated August 4, 2015, which sought to change the seniority rules, but held that this GO could not be applied retrospectively. The court emphasized that retrospective application would disturb settled seniority positions and cause injustice to many employees.

The court’s decision was based on the following reasoning:

• The specific rules and regulations in place at the time of the dispute must be followed.
• The semi-skilled grade is a training grade, and promotion to the skilled grade is not automatic.
• A subsequent GO cannot be applied retrospectively unless it is explicitly stated or by necessary implication.
• Seniority lists should not be reopened after a long time.
• Vested rights of employees should be protected.

Key quotes from the judgment:

• “Seniority will be counted from the date of promotion to Skilled grade and not from the date of induction/entry/promotion in semi-skilled grade.”
• “The validity of this GO was never assailed by the appellant at any stage either before the CAT or the High Court.”
• “It is trite law that an Office Memorandum /Government Order cannot have a retrospective effect unless and until there is an express provision to make its effect retrospective or that the operation thereof is retrospective by necessary implication.”

There were no dissenting opinions in this case. The bench was unanimous in its decision.

The judgment has significant implications for future cases involving seniority disputes in industrial establishments. It clarifies that specific rules and regulations in place at the time of the dispute must be followed and that subsequent changes in rules cannot be applied retrospectively to disturb settled positions. This decision reinforces the principle of stability and certainty in service matters.

The court did not introduce any new doctrines or legal principles. It applied existing principles of service law and administrative law to the facts of the case.

Key Takeaways

• Seniority in industrial establishments is determined by the rules in force at the time of the dispute.
• The semi-skilled grade is considered a training grade, and promotion to the skilled grade is not automatic.
• A trade test is a valid requirement for promotion to the skilled grade.
• Subsequent changes in rules cannot be applied retrospectively to disturb settled seniority positions.
• Stability and certainty in service matters are paramount.
• Employees should challenge seniority lists and promotions without undue delay.

Directions

The Supreme Court did not give any specific directions, but it upheld the High Court’s decision, which directed the restoration of the seniority of the private respondents based on their date of promotion to the skilled grade.

Development of Law

The ratio decidendi of this case is that in industrial establishments where specific rules such as SRO No. 185 of 1994 and GO dated December 24, 2002, are applicable, seniority is to be reckoned from the date of promotion to the skilled grade and not from the date of initial appointment in the semi-skilled grade. This judgment reinforces the principle that specific rules and regulations must be followed and that subsequent changes in rules cannot be applied retrospectively to disturb settled positions. It clarifies that the semi-skilled grade is a training grade, and promotion to the skilled grade requires the satisfactory completion of probation and passing the prescribed trade test. There is no change in the previous position of the law; rather, this judgment clarifies the applicability of existing rules and regulations in industrial establishments.

Conclusion

In conclusion, the Supreme Court dismissed the appeal, upholding the High Court’s decision that seniority should be reckoned from the date of promotion to the skilled grade. The court emphasized the importance of following existing rules and regulations and maintaining stability in service matters. This judgment clarifies the rules for determining seniority in industrial establishments, particularly when promotions are contingent on completing probation and passing trade tests.