Supreme Court Upholds Terms of Absorption: Mrigank Johri vs. Union of India (2017)

LEGAL ISSUE: Whether employees absorbed into a new department can claim seniority based on their previous service, despite agreeing to specific terms of absorption that deny such seniority.

CASE TYPE: Service Law

Case Name: Mrigank Johri & Ors. vs. Union of India & Ors.

Judgment Date: July 10, 2017

Date of the Judgment: July 10, 2017

Citation: 2017 INSC 676

Judges: Abhay Manohar Sapre, J., Sanjay Kishan Kaul, J.

Can an employee, who has willingly accepted the terms of absorption into a new department, later claim seniority based on their previous service, despite those terms explicitly denying it? The Supreme Court of India addressed this critical question in the case of Mrigank Johri & Ors. vs. Union of India & Ors., involving Junior Engineers who were absorbed into the Postal Department after initially serving in All India Radio. This case clarifies the binding nature of agreed-upon terms of absorption and their impact on seniority. The judgment was delivered by a two-judge bench comprising Justice Abhay Manohar Sapre and Justice Sanjay Kishan Kaul, with the majority opinion authored by Justice Sanjay Kishan Kaul.

Case Background

The appellants, initially employed as Junior Engineers (Electrical) at All India Radio between 1987 and 1990, were deputed to the Electrical Wing of the Postal Department in 1996. The initial deputation was for two years. Subsequently, the appellants sought permanent absorption into the Department of Post (DOP). All India Radio had become an autonomous body, “Prasar Bharati,” leading some appellants to prefer absorption in DOP rather than returning to their parent cadre. While some appellants requested preservation of their previous seniority and service terms, they all ultimately agreed to the terms and conditions specified by the DOP for absorption. These terms included the condition that they would be treated as “new recruits” and their previous service would not count towards seniority in the new cadre, although it would count for other purposes.

Timeline

Course of Proceedings

The appellants, after their request to consider their deputation period for seniority was rejected, approached the Central Administrative Tribunal (CAT), Principal Bench, New Delhi. They argued that the terms of absorption were arbitrary and violated Articles 14 and 16 of the Constitution of India. The Tribunal ruled in favor of the appellants, directing the DOP to re-draft the seniority list, counting their regular service in All India Radio and the deputation period. The Delhi High Court, however, overturned the Tribunal’s decision, stating that the appellants had willingly accepted the terms of absorption and that the recruitment rules did not allow for seniority to be counted from the date of deputation. The High Court also emphasized that the appellants could not challenge the terms of absorption after accepting them.

Legal Framework

The case primarily revolves around the interpretation of the Department of Post Junior Engineer (Civil) in Civil Wing Rules, 1995, specifically:

• Rule 3: Specifies that the method of recruitment, age limit, qualifications, etc., shall be as detailed in columns 5 to 14 of the Schedule.
• Rule 5: Grants the Central Government the power to relax any provision of these rules.
• Column 11: Details the method of recruitment for Junior Engineers (Civil), specifying 83.33% by direct recruitment and 16.66% by promotion.
• Column 12: Specifies the grade from which promotion, deputation, or transfer can be made, applicable only if the mode of recruitment is prescribed as per Column 11.

The Court also considered the following Office Memorandums (OMs):

• OM No. 9/II/55-RPS dated 22.12.1959: Provided guidelines for counting seniority of deputationists upon absorption.
• OM No. 20011/1/2000-Estt.(I) dated 27.3.2001: Modified the earlier OM to state that seniority should be counted from “whichever is earlier” instead of “whichever is later.”
• OM No.20020/7/80-Estt.(D) dated 29.5.1986: Provided for the benefit of previous service rendered in the cadre.

The Court also examined the constitutional validity of the terms of absorption in light of Articles 14 and 16 of the Constitution of India, which guarantee equality before the law and equality of opportunity in matters of public employment.

Arguments

Appellants’ Submissions:

• The appellants argued that the terms of absorption were arbitrary, illegal, and against public policy, violating Articles 14 and 16 of the Constitution.
  • They contended that they were compelled to accept the terms of absorption and that their previous service should be counted for seniority.
• They relied on the OM dated 29.5.1986, as modified on 27.3.2001, which provides for counting previous service for seniority upon absorption.
  • They argued that the ratio of SI Rooplal & Anr. vs. Lt. Governor through Chief Secretary, Delhi & Ors. (2000) 1 SCC 644, which struck down “whichever is later” in the OM, should apply.
• They referred to Column 12 of the DOP Rules, which allows for recruitment by deputation for officials holding analogous posts.
  • They argued that they were holding analogous posts in All India Radio and thus should be covered under this provision.
• They cited the Ernakulum Bench of the Central Administrative Tribunal’s decision in T. Vijaykumar & Anr. Vs. Union of India & Ors., which favored similarly absorbed Junior Engineers.
  • They argued that the DOP’s failure to appeal this judgment should extend the same benefit to them.
• They pointed to the case of Shri B.K. Singh, a Junior Engineer, who was granted seniority based on a similar judgment.
  • They argued that denying them the same benefit was discriminatory.
• They argued that the terms of absorption were not made known to them before absorption, and they should have had the option of not accepting permanent absorption.
  • They relied on Central Inland Water Transport Corporation Ltd. & Anr. vs. Brojo Nath Ganguly & Anr. (1986) 3 SCC 156, on the issue of consent being obtained by coercion.

Respondents’ Submissions:

• The respondents argued that the appellants had willingly accepted the terms and conditions of absorption.
  • They contended that the appellants had the option to return to their parent cadre but chose absorption for better career prospects.
• They relied on Indu Shekhar Singh & Ors. vs. State of U.P. & Ors. (2006) 8 SCC 129, which held that the State could impose conditions for absorption under its residuary power.
  • They argued that since the DOP rules do not specifically provide for recruitment by deputation, the State could impose conditions.
• They argued that Column 11 of the DOP rules does not provide for deputation as a method of recruitment for Junior Engineers (Electrical).
  • They contended that Column 12 applies only if the mode of recruitment is prescribed in Column 11.
• They cited Union of India & Ors. vs. Deo Narain & Ors. (2008) 10 SCC 849, to argue that employees who voluntarily transfer to another cadre can lose seniority.
  • They stated that eligibility and seniority are different concepts.
• They presented a note from the Civil Engineer Wing of the DOP, which stated that the absorption was necessary due to a lack of direct recruits and was subject to the terms and conditions specified.
  • They argued that the appellants were fully aware of the terms before absorption.

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court framed the following key issue:

1. Whether the Office Memorandums (OMs) providing for the benefit of service rendered in the previous cadre would apply to a case where the absorption is on specified terms and conditions with the benefit of such past service in the previous cadre as well as the period of service rendered on deputation being denied?

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:

Judgment

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

How each authority was viewed by the Court?

• The Supreme Court relied on Indu Shekhar Singh & Ors. vs. State of U.P. & Ors. [(2006) 8 SCC 129]*, holding that the State could impose conditions for absorption under its residuary power.
• The Court distinguished SI Rooplal & Anr. vs. Lt. Governor through Chief Secretary, Delhi & Ors. [(2000) 1 SCC 644]*, stating that the ratio of that case would not apply because the absorption was on specified terms and conditions.
• The Court cited Union of India & Ors. vs. Deo Narain & Ors. [(2008) 10 SCC 849]*, to support the view that employees who voluntarily transfer to another cadre can lose seniority.
• The Court did not follow the Ernakulum Bench’s decision in T. Vijaykumar & Anr. Vs. Union of India & Ors., stating that the legal position was settled at the level of the High Court.
• The Court did not follow the case of Shri B.K. Singh, stating that the order in the case of Shri B.K. Singh was a sequitur to the judgment of the tribunal (Ernakulum Bench).

What weighed in the mind of the Court?

The Court’s decision was primarily influenced by the fact that the appellants had willingly accepted the terms and conditions of absorption, which clearly stated that they would be treated as new recruits and their previous service would not count towards seniority. The Court emphasized the binding nature of these agreed-upon terms and the fact that the appellants had the option to return to their parent cadre if they did not agree with the conditions. The Court also noted that the DOP rules did not provide for deputation as a method of recruitment for Junior Engineers (Electrical), thus allowing the State to impose conditions under its residuary power. The Court also considered the fact that the appellants had not challenged the terms of absorption in a timely manner.

Logical Reasoning:

The Court rejected the appellants’ arguments, stating that they had willingly accepted the terms of absorption and could not later claim seniority based on their previous service. The Court also noted that the DOP rules did not provide for deputation as a method of recruitment for Junior Engineers (Electrical), thus allowing the State to impose conditions under its residuary power.

The Supreme Court stated, “The terms and conditions are categorical in their wording that the absorbees would be ‘deemed to be new recruits’ and the previous service would be counted for all purposes ‘except his/her seniority in the cadre’.” The Court also observed, “The appellants accepted this with open eyes and never even challenged the same.” Further, the Court noted, “Since the appellants accepted the terms and conditions of absorption, they could not plead otherwise.”

Key Takeaways

• Employees who willingly accept specific terms of absorption into a new department are bound by those terms, including those related to seniority.
• Previous service may not be counted for seniority purposes if the terms of absorption explicitly exclude it, even if general service rules or OMs suggest otherwise.
• The State has the right to impose conditions for absorption under its residuary power, especially when recruitment rules do not specify deputation as a method of recruitment.
• Employees must challenge the terms of absorption in a timely manner; delays may result in the loss of their right to challenge those terms.

Directions

The Supreme Court did not issue any specific directions in this case other than dismissing the appeals.

Development of Law

The ratio decidendi of this case is that when employees willingly accept specific terms of absorption into a new department, they are bound by those terms, including the terms related to seniority. This judgment clarifies that general service rules or Office Memorandums (OMs) providing for the benefit of previous service do not apply when the absorption is subject to specific conditions that deny such benefits. This case reinforces the principle that an employee’s consent to the terms of absorption is binding, and those terms cannot be challenged later. It also upholds the State’s power to impose conditions for absorption under its residuary powers, especially when the recruitment rules do not specify deputation as a method of recruitment. This clarifies the law on the issue of seniority in cases of absorption.

Conclusion

The Supreme Court dismissed the appeals, upholding the Delhi High Court’s decision. The Court ruled that the appellants, having willingly accepted the terms of absorption that denied them seniority based on their previous service, could not later claim such seniority. The judgment emphasizes the importance of contractual agreements and the binding nature of terms and conditions that are agreed upon by employees during absorption into a new department.