Supreme Court Upholds Seniority of Absorbed Employees in Inter-Departmental Transfers: Geetha V.M. & Ors. vs. Rethnasenan K. & Ors. (2025)

Introduction

Date of the Judgment: 03 January 2025

Citation: 2025 INSC 33

Judges: J.K. Maheshwari, J., Rajesh Bindal, J.

When government employees are moved from one department to another due to a policy change, how is their seniority determined? The Supreme Court of India recently addressed this complex question in a case involving employees of the Directorate of Health Services (DHS) who were absorbed into the Directorate of Medical Education (DME) in Kerala. The core issue was whether these employees, upon absorption, could retain their original seniority or if they would be treated as new recruits in the DME.

The Supreme Court, in this case, clarified that when employees are transferred as part of a policy decision, they retain their original seniority. This ruling has significant implications for how inter-departmental transfers are handled in the context of government service. The judgment was delivered by a two-judge bench comprising Justice J.K. Maheshwari and Justice Rajesh Bindal, with the opinion authored by Justice J.K. Maheshwari.

Case Background

The case revolves around a policy decision by the Government of Kerala to abolish the dual control system in medical colleges. Previously, hospitals attached to medical colleges were under the control of the DME, while the staff (nursing, paramedical, and ministerial) were under the administrative control of the DHS. This dual control led to administrative difficulties and delays.

To resolve this, the government decided to bring all staff under the DME. Existing DHS employees were given the option to move to the DME, with their positions transferred. This led to a dispute over seniority between the original employees of the DME and those absorbed from the DHS. The absorbed employees claimed they should retain their original seniority from their time in the DHS, while the original DME employees argued that the absorbed employees should be placed at the bottom of the seniority list.

Timeline

Legal Framework

The primary legal provisions at play in this case are:

✓ Rule 27(a) of the Kerala State and Subordinate Service Rules, 1958 (KS&SS Rules): This rule states that seniority is determined by the date of the first appointment to a service, class, category, or grade. However, a proviso states that in cases of inter-departmental transfers on request, seniority is determined by the date of joining the new department.

✓ Rule 27(c) of the KS&SS Rules: This rule specifies that the seniority of a person appointed on the advice of the Commission is determined by the date of the first effective advice for their appointment.

✓ G.O. (P) No. 548/2008/H&FWD dated 25.10.2008: This Government Order (GO) directed the transfer of staff from DHS to DME, stating that seniority would be maintained as per Rule 27(a) and 27(c) of the KS&SS Rules. Rule 8 of Appendix I of this GO states: “The seniority of the staff opted to Department of Medical Education will be maintained as per Rule 27(a) and Rule 27(c) of Part II, KS & SS Rules.”

✓ Clarificatory letter No. 8195/K1/10/H&FWD dated 24.04.2010: This letter clarified that seniority of absorbed employees would be reckoned from the date of promotion for promotees and from the date of first effective advice for direct recruits.

These rules and orders form the basis for the dispute regarding the seniority of the absorbed employees.

Arguments

Arguments of the Absorbed Employees:

• The transfer from DHS to DME was a result of a policy decision by the State to abolish the dual control system, not a request from the employees. The employees were given a choice to exercise an option by the State in furtherance of a policy decision.

• The G.O. dated 25.10.2008 specifically stipulated that the seniority of those who opted for absorption in DME would be maintained, and their ‘lien’ would be shifted.

• The entire exercise was carried out by a committee set up by the State after due consultation, and by transferring the lien to DME, the service of the absorbed employees rendered in DHS was specifically protected.

• The absorbed employees argued that the transfer was not an ‘inter-departmental’ transfer on their ‘request’ as stipulated in the proviso to Rule 27(a) of the KS&SS Rules. Therefore, their seniority should not be reckoned from the date they joined DME.

Arguments of the Original Employees:

• The original employees contended that the transfer was an inter-departmental transfer made on the ‘request’ of the absorbed employees. They relied on the proviso to Rule 27(a) of the KS&SS Rules, which states that in such cases, seniority must be reckoned from the date of joining the new department.

• They argued that the ‘Form of Option’ annexed with G.O. dated 25.10.2008 required employees to give a declaration regarding ‘Stations requested for posting,’ which indicates a request for transfer.

• They cited the Supreme Court’s judgment in K.P. Sudhakaran and Another Vs. State of Kerala and Others (2006) 5 SCC 386, which held that on transfer, an employee has to forego their past service, and their seniority will be determined from the date of joining duty in the new department/unit.

• They contended that reckoning the seniority of absorbed employees from their initial appointment would cause grave prejudice to original employees, who were never given an option.

Arguments of the State:

• The State argued that the original posts in DHS, along with their promotional posts, were transferred to DME. The options were exercised by the absorbed employees on the premise of assured seniority. Placing them at the bottom of the seniority list would mean they would have to forego their previous service, which was not the intention of the government.

• The State also submitted that the option was never in the nature of request as contemplated under proviso to Rule 27(a) of KS&SS Rules. Hence, the said proviso has no bearing on the inter -se seniority between the original employees and absorbed employees.

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for consideration:

1. Whether the option exercised by DHS employees to join DME pursuant to a policy decision of the State of Kerala ought to be considered as an option for absorption or a request for transfer under proviso to Rule 27(a) of KS&SS Rules, and in that situation, the inter-se seniority of such employees in the DME shall be reckoned from which date?

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Cases:

• K.P. Sudhakaran and Another Vs. State of Kerala and Others (2006) 5 SCC 386 – Supreme Court of India: This case dealt with the interpretation of Rule 27 of the KS&SS Rules in the context of transfers on request. The Court held that on transfer, an employee has to forego his past service, and his seniority will be determined from the date of joining duty in the new department/unit. The Supreme Court in the present case distinguished this case, stating that it was dealing with transfers on request, while the present case was one of absorption due to a policy decision.

• Kartar Singh v. State of Punjab, 1989 SCC OnLine P&H 482 – Full Bench of the Punjab and Haryana High Court: This case dealt with the seniority of Patwaris absorbed from the Consolidation Department to the Revenue Department. The court held that the employees would have the benefit of their length of service in the Consolidation Department. The Supreme Court concurred with this view, stating that absorption is akin to amalgamation, where an employee becomes part and parcel of the new department.

Legal Provisions:

• Rule 27(a) of the Kerala State and Subordinate Service Rules, 1958 (KS&SS Rules): The Court analyzed this rule, which stipulates that seniority is determined by the date of the first appointment, and its proviso, which applies to inter-departmental transfers on request.

• Rule 27(c) of the KS&SS Rules: This rule was considered to determine the seniority of persons appointed on the advice of the Commission.

Authority Consideration Table

Judgment

The Supreme Court allowed the appeals, setting aside the judgment of the Division Bench of the High Court and restoring the judgment of the Single Judge. The court held that the transfer of the absorbed employees was by way of absorption as per the policy decision of the Government of Kerala, and it would not fall within the purview of the proviso to Rule 27(a) of the KS&SS Rules. The court held that the seniority and inter-se seniority of the absorbed employees shall be maintained as per Rule 27(a) and 27(c) of Part II of KS&SS Rules read with the clarificatory letter dated 24.04.2010 with reference to Rule 8 of Appendix I to G.O. dated 25.10.2008.

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

How each authority was viewed by the Court?

• The Supreme Court distinguished K.P. Sudhakaran and Another Vs. State of Kerala and Others (2006) 5 SCC 386, stating that it dealt with transfers on request, while the present case was one of absorption due to a policy decision.
• The Supreme Court concurred with the view taken by the Full Bench of the Punjab and Haryana High Court in Kartar Singh v. State of Punjab, 1989 SCC OnLine P&H 482, that absorption is akin to amalgamation, where an employee becomes part and parcel of the new department.
• The Court interpreted Rule 27(a) of the Kerala State and Subordinate Service Rules, 1958 (KS&SS Rules) and held that its proviso did not apply to transfers by way of absorption.
• The Court considered Rule 27(c) of the KS&SS Rules and used it to determine the seniority of persons appointed on the advice of the Commission.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the nature of the transfer, which it determined to be an absorption due to a policy decision and not a transfer on request. The Court emphasized that the government’s intention was to maintain the seniority of the absorbed employees. The court also highlighted that the word ‘maintained’ used for seniority in Rule 8 of Appendix I of G.O. dated 25.10.2008 had its own significance.

Sentiment Analysis of Reasons given by the Supreme Court:

Fact:Law Ratio:

The court’s reasoning was based on the factual context of the transfer being a policy decision and the legal interpretation of the relevant rules. The court gave more weight to the factual aspects of the case.

Logical Reasoning

Issue: Whether the option exercised by DHS employees to join DME pursuant to a policy decision of the State of Kerala ought to be considered as an option for absorption or a request for transfer under proviso to Rule 27(a) of KS&SS Rules, and in that situation, the inter-se seniority of such employees in the DME shall be reckoned from which date?

The Supreme Court concluded that the transfer was an absorption due to a policy decision, not a transfer on request. The proviso to Rule 27(a) of KS&SS Rules was not applicable in this case. The seniority of the absorbed employees was to be maintained as per Rule 27(a) and 27(c) of KS&SS Rules, which meant that they would retain their original seniority from DHS.

The Court emphasized that the word “maintained” in Rule 8 of Appendix I of G.O. dated 25.10.2008 had significance and was meant to protect the seniority of the absorbed employees.

Key Takeaways

• When government employees are transferred from one department to another due to a policy decision, they are considered to be absorbed into the new department, and their original seniority is to be maintained.

• The proviso to Rule 27(a) of the KS&SS Rules, which states that seniority is determined by the date of joining the new department in cases of inter-departmental transfers on request, does not apply to transfers by way of absorption due to a policy decision.

• The term “option” in the context of policy-driven transfers does not equate to a “request” for transfer. It is a choice given to employees within the framework of a policy decision.

• This judgment clarifies that the intent of the government’s policy decision is paramount in determining the seniority of absorbed employees. If the policy intends to maintain seniority, it should be upheld.

• This ruling provides clarity on the distinction between transfers on request and transfers by way of absorption due to policy decisions, which will be beneficial for future cases involving inter-departmental transfers.

Directions

The Supreme Court directed the State of Kerala to draw the seniority list of DME employees, including original and absorbed employees, reckoning the seniority of the absorbed employees as directed in paragraph 52 of the judgment. This means that the seniority of the absorbed employees is to be calculated based on their original date of appointment in DHS.

Development of Law

The ratio decidendi of this case is that when employees are transferred from one department to another due to a policy decision, it is considered an absorption and not a transfer on request. The seniority of such employees is to be maintained as per their original date of appointment in the parent department. This case clarifies the interpretation of Rule 27(a) of the KS&SS Rules and distinguishes transfers on request from transfers by way of absorption due to policy decisions. This judgment has changed the position of law by clarifying that the proviso to Rule 27(a) of the KS&SS Rules does not apply to transfers by way of absorption made by the Government in public interest or administrative exigencies.

Conclusion

The Supreme Court’s judgment in Geetha V.M. & Ors. vs. Rethnasenan K. & Ors. provides much-needed clarity on the issue of seniority in cases of inter-departmental transfers due to policy decisions. The court has clearly distinguished between transfers on request and transfers by way of absorption, ruling that in the latter case, employees retain their original seniority. This decision upholds the government’s policy intent to protect the seniority of absorbed employees and provides a clear framework for future cases involving similar issues.