Supreme Court of India
AJAYA KUMAR DASversusSTATE OF ORISSA & ORS.
- Citation
- 2009 INSC 978
- Decided
- 31 July 2009
- Disposal
- Appeal(s) allowed
- Bench
- TARUN CHATTERJEE
Holding
On promotion, the employee's pay must be fixed in accordance with Rule 74(b) of the Orissa Service Code, and circulars cannot override this statutory provision.
Summary
The appellant, a government employee originally appointed as Overseer and later re-designated as Sub-Assistant Engineer, was promoted to Assistant Engineer in 1981. His pay on promotion was fixed at Rs. 850 per month, lower than the Rs. 950 he claimed was due under Rule 74(b) of the Orissa Service Code, which mandates that a promotion cannot result in a reduction of pay. The Orissa Administrative Tribunal directed that his pay be fixed according to Rule 74(b); the High Court reversed this, relying on government circulars that allowed a lower pay. The Supreme Court held that statutory provisions in Rule 74(b) cannot be overridden by circulars and that the appellant’s pay must be fixed as per the rule, ensuring a higher pay than his pre‑promotion salary. Consequently, the appeal was allowed, the High Court order set aside, and the Tribunal’s order restored, with the differential salary to be paid.
Issues considered
- Whether the pay fixation on promotion must follow Rule 74(b) of the Orissa Service Code or can be governed by government circulars such as the April 16, 1971 circular.
- Whether circulars or executive instructions can override a statutory rule framed under Article 309 of the Constitution.
- Whether a promotion can lawfully result in a reduction of an employee's emoluments.
Legislation cited
- Constitution of Indias. Article 309
Subjects
pay fixationpromotionRule 74(b)Orissa Service CodeArticle 309statutory rulegovernment circularspay protectionreducible personal pay
Judgment
[2009] 12 S.C.R. 219
AJAYA KUMAR DAS A
t v.
STATE OF ORISSA & ORS.
(Civil Appeal No. 4977 of 2009)
JULY 31, 2009
B
[TARUN CHATIERJEE AND R.M. LODHA, JJ.)
Service Law: Pay scale - Employee drawing higher pay
scale, on promotion cannot be dragged to lower pay scale
resulting in reduction of his pay- Orissa Service Code - Rule c
74(b).
Departmental instructions/Circulars cannot override the
"(
statutory provisions - Statutory Rules framed under Article
309 of the Constitution can be amended only by a Rule or D
Notification duly made under Article 309 and not otherwise -
+
. Constitution of India, 1950 - Article 309 - Administrative law.
Appellant was appointed by the Government of
Orissa as Overseers (Electrical). He was deputed to serve
in the Orissa State Electricity Board (OSEB). Later on,. the E
post of Overseer was re-designated as Sub-Assistant
Engineer. The pay scale of SERs in OSEB was revised
--'(
from time to time. Since scale of pay of SERs appointed
directly by the OSEB was higher in comparison to the
Sub-Assistant Engineer on deputation with OSEB and F
who were initially appointed by the Government of Orissa
as Overseers, it was decided to provide such SERs
(erstwhile Overseers) reducible personal pay. This was
done so that the SERs (erstwhile Overseers) like the
appellant and similarly situated persons do not get lesser G
__. salary in comparison to the SERs appointed directly by
the OSEB. The appellant was promoted to the rank of
Assistant Engineer (Electrical) in 1981 and at the time of
promotion he was in the pay scale of 480-970 and
219 H
220 SUPREME COUFff REPORTS [2009] 12 S.C.R.
A drawing pay of Rs. 874. However, his pay in the
promotional rank of Assistant Engineer was fixed at Rs.
850/- per month. The appellant was aggrieved thereby as,
according to him, his pay should have been fixed on
promotion at Rs. 950/- per month in view of Rule 74(b) of
B the Orissa Service Code.
The Tribunal directed that the appellant's pay on his
promotion to the rank of Assistant Engineer (Electrical)
be fixed taking his last pay drawn in the rank of SER into
account and following the provisions of Rule 74(b) of the
c Code. The State challenged the order of tribunal before
the High Court. The grievance of the State Government
was that the tribunal passed the order inconsistent with
the Government Circulars, particularly the Circulars dated
June 18, 1982 and March 17, 1983. The High Court,
D although noticed that the pay of the Government Servant
cannot be reduced on promotion yet by relying upon the ~
Government Circular dated April 16, 1971, directed that ..
pay of the appellant in the next higher post, 1.e., Assistant
Engineer was required to be fixed in accordance with the
E said Circular. The effect of the High Court's order was
that it reduced the scale cf pay of the appellant. Hence
the present appeal.
Allowing the appeal, the Court "·
F HELD: 1. Rule 74(b) of the Orissa Service Code,
provides that on promotion of a Government servant, his
initial pay in the time scale of promotional post needs to
be fixed at the stage next above the pay notionally arrived
at by increasing his pay in respect of the lower post by
G one increment at the stage at which such pay has
accrued. In a case where the Government servant
immediately before his promotion was drawing maximum
of the time scale of 1the lower post, his pay on the
promotional post needs to be fixed by notionally
H
AJAYA KUMAR DAS v. STATE OF ORISSA & ORS. 221
~··
increasing his pay in respect of lower post by an amount A
equal to his last increment. In other words, on promotion,
a Government servant, by virtue of Rule 74(b), gets higher
pay than what he was getting immediately before his
promotion. Rule 74(b) of the Code is aimed at protecting
the scale of pay of a Government employee in his B
promotional cadre and seeks to ensure that in no case
an incumbent is directed to receive less emoluments,
less pay than what he was drawing prior to his promotion.
.,.. This provision statutorily ensures that the State
Government employee gets the benefits of receiving c
higher scale of pay than that of the post held by him prior
to such promotion. In the light of Rule 74(b), ~nitial pay in
the time scale of higher post of a Government servant
cannot be fixed which is less than the pay he was getting
immediately before promotion. [Para 8] [226-C-F] 0
+ 2.1. The Circular dated June 18, 1982 contemplates
... that the completed years of service rendered by SERs
under the OSEB should be treated as having been
rendered under the Government in the Government scale
of SERs and their pay in the scale of Assistant Engineers E
under. the Government be fixed following the principle
under Rule 74(b) of the Code. This Circular was modified
'¥ by a subsequent Circular dated March 17, 1983 whereby
a clarification was made that in case of promotion of
SERs of OSEB to the rank of Assistant Engineer under F
Government, if the pay so fixed as per principles laid
down in the Government Circular dated June 18, 1982
becomes less than the pay last drawn by them under the
Board, the difference may be allowed to them by
reducible personal pay to be absorbed in future G
~ increments. Neither the Circular dated June 18, 1982 nor
the subsequent Circular dated March 19, 1983 modifying
the earlier Circular dated June 18, 1982 can override the
statutory provision contained in Rule 74(b) of the Code
if it results in reduction of pay of the employee Qn H
·,,
'
222 SUPREME COURT REPORTS [2009] 12 S.C.R.
A promotion. That Orissa Service Code has been framed
under Article 309 of the Constitution of India is not in
dispute. It is well settled that Statutory Rules framed
under Article 309 of the Constitution can be amended
only by a Rule or Notification duly made under Article 309
B and not otherwise. Whatever be the efficacy of the
Executive Orders or Circulars or Instructions, Statutory
Rules cannot be altered or amended by such Executive
Orders or Circulars or Instructions nor can they replace
the Statutory Rules. The Rules made under Article 309 of
c the Constitution cannot be tinkered by the administrative
Instructions or Circulars. [Paras 9 and 10] [226-G-H; 227-
A-E]
2.2. Upon promotuon of the appellant to the rank of
Assistant Engineer from SER, his pay in the time.scale
D of Assistant Engineer has to be fixed as per Statutory
...
Rule 74(b), more particularly, in a situation such as the
present one because by relying upon the Government
Circulars dated June 18, 1982 or March 19, 1983 or April
16, 1971, the appellant's scale of pay gets reduced. [Para
E 11] [227-F-G]
3. The State Government has not challenged the
applicability of Rule 74(b) of the Code in the matter. That
,,_
being the position, the appellant's pay has to be fixed in
F accordance with Rule 74(b) of the Code and not ,,,
otherwise. The view of the Tribunal, therefore, that the
appellant's pay be fixed on his promotion to the rank of
Assistant Engineer (Eh~ctrical) taking his last pay drawn
in the rank of Sub-Assistant Engineer and following the
provisions of Rule 74(b) of the Code being eminently just,
G
proper and in accordance with law warranted no
interference at the hands of the High Court. [Para 12]
[227-H; 228-A-B]
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
H 4977 of 2009.
AJAYA KUMAR DAS v. STATE OF ORISSA & ORS. 223
From the Judgment & Order dated 2.3.2006 of the High A
~·
Court of Orissa at Cuttack in O.J.C. No. 10191 of 2000.
Yasobant Das, Alok Kumar for the Appellants.
Sibo Sankar Mishra, Rutwik Panda for the Respondents.
B
The Judgment of the Court was delivered by
R.M. LODHA, J. 1. Leave granted.
2. The short question that arises for consideration in this
appeal by special leave is : is the direction issued by the High c
Court that the pay fixation of the appellant and similarly situated
persons be done in accordance with the Government Circular
dated April 16, 1971 justified or the pay fixation of these
employees ought to be done as per Rule 74(b) of the Orissa
Service Code. D
..
+ 3. The controversy arises from the facts which may be
briefly noticed first. The appellant was appointed by the
Government of Orissa as Overseer (Electrical) on November
16, 1964. He was deputed to serve in the Orissa State E
Electricity Board (for short, "OSEB") in the then pay scale of
185-00-325. Later on, the post of Overseer was re-designated
as Sub-Assistant Engineer (for short, 'SER'). The pay scale of
·'('
SERs in OSEB was revised from time to time. Since scale of
pay of SERs appointed directly by the OSEB was higher in
F
comparison to the Sub-Assistant Engineer on deputation with
OSEB and who were initially appointed by the Government of
Orissa as Overseers, it was decided to provide such SERs
(erstwhile Overseers) reducible personal pay. This was done
so that the SERs {erstwhile Overseers) like the appellant and
G
similarly situated persons do not get lesser salary in
+ comparison to the SERs appointed directly by the OSEB. The
appellant was promoted to the rank of Assistant Engineer
(Electrical) in 1981 and at the time of promotion he was in the
pay scale of 480-970 and drawing pay of Rs. 874. However,
H
224 SUPREME COURT REPORTS [2009] 12 S.C.R.
A his pay in the promotional rank of Assistant Engineer was fixed
at Rs. 850/- per month. The appellant was aggrieved thereby
as, according to him, his pay should have been fixed on
promotion at Rs. 950/- per month in view of Rule 74(b) of the
Orissa Service Code (for short, "code").
B
4. The appellant challenged his fixation of pay before the
High Court of Orissa by filing Writ Petition but on formation of
Orissa Administation Tribunal, the writ petition came to be
transferred to the Tribunal. The litigation has chequered history
but it is not necessary to go into that; suffice it to say that the
C Tribunal by its Order dated December 23, 1999 directed that
the appellant's pay on his promotion to the rank of Assistant
Engineer (Electrical) be fixed taking his last pay drawn in the
rank of SER into account and following the provisions of Rule
74(b) of the Code. This is how the Tribunal considered the
D matter:
"Having bestowed our anxious considerations on the ...
submission of the learned counsel for the applicant and
perused the relevant papers on record, we are of the
E opinion that annexure-6 decision of the Government
regarding protection of pay is in effect a negative of the
concept for pay protection. It was in pursuance of
Government decision that though recruited by the O.S.E.B
they were promoted by the Government to the rank of
F Assistant Enginee:r when they were enjoying higher scale
of pay than the Sub-Assistant Engineers under the
Government. Since the applicant was drawing pay at Rs.
874.00 per month in the scale of pay of Rs. 480.00-970.00
he could not be dragged to a lower scale of pay of Rs.
410.00-840.00 and his pay was fixed at Rs. 850.00
G
leading to reduction in his pay to the extent of Rs. 110.00
per month. This can hardly be called protection of pay
which is sought to be ensured by annexure-6 instruction
to be unfair and unreasonable and direct that the
applicant's pay on his promotion to the rank of Assistant
H
226 SUPREME COURT REPORTS [2009] 12 S.C.R.
A notionally arrived at by increasing his pay in respect of the
~
lower post by an amount equal to his last increment in the
time scale of the lower post:
Provided further that the provision of this sub-rule
shall not apply when a Government servant holding a class-
B
I post is promoted or appointed to another class-I post."
8. Rule 74(b) of the Code, thus, provides that on promotion
of a Government servant, his initial pay in the time scale of
promotional post needs to be fixed at the stage next above the
c pay notionally arrived at by increasing his pay in respect of the
lower post by one increment at the stage at which such pay has
-
accrued. In a case where the Government servant immediately
before his promotion has been drawing maximum of the time
scale of the lower post, his pay on the promotional post needs
D to be fixed by notionally increasing his pay in respect of lower
post by an amount equal to his last increment. In other words
on promotion, a Government servant, by virtue of Rule 74(b),
..
•
gets higher pay than what he was getting immediately before
his promotion. Rule 74(b) of th13 Code is aimed at protecting
E the scale of pay of a Government employee in his promotional
cadre and seeks to ensure that in no case an incumbent is
directed to receive less emoluments, less pay than what he was
drawing prior to his promotion. This provision statutorily ensures
that the State Government employee gets the benefits of "'
F receiving higher scale of pay than that of the post held by him
prior to such promotion. Surely, in the light of Rule 74(b), initial
pay in the time scale of higher post of a Government servant
cannot be fixed which is less than the pay he was getting
immediately before promotion.
G 9. The Circular dated June 18, 1982 contemplates that the
completed years of service rendered by SERs under the OSEB +
should be treated as havin,g been rendered under the
Government in the Government scale of SERs and their pay in
the scale of Assistant Engineers under the Government be fixed
H following the principle under Rule 74(b) of the Code. The
AJAYA KUMAR DAS v. STATE OF ORISSA & ORS. 227
[R.M. LODHA, J.]
aforesaid Circular was modified by a subsequent Circular A
d;
dated March 17, 1983 whereby a clarification was made that
in case of promotion of SERs of OSEB to the rank of Assistant
Engineer under Government, if the pay so fixed as per principles
laid down in the Government Circular dated June 18, 1982
becomes less than the pay last drawn by them under the Board, B
the difference may be allowed to them by reducible personal
pay to be absorbed in future increments.
10. Neither the Circular dated June 18, 1982 nor the
~
subsequent Circular dated March 19, 1983 modifying the
earlier Circular dated June 18, 1982 can override the statutory
c
provision contained in Rule 74(b) of the Code if it results in
reduction of pay of the employee on promotion. That Orissa
.
,
Service Code has been framed under Article 309 of the
Constitution of India is not in dispute. It is well settled that
Statutory Rules framed under Article 309 of the Constitution can D
-~ be amended only by a Rule or Notification duly made under
.. Article 309 and not otherwise. Whatever be the efficacy of the
Executive Orders or Circulars or Instructions, Statutory Rules
cannot be altered or amended by such Executive Orders or
Circulars or Instructions nor can they replace the Statutory E
Rules. The Rules made under Article 309 of the Constitution
cannot be tinkered by the administrative Instructions or
Circulars.
11. Seen thus, upon promotion of the appellant to the rank F
of Assistant Engineer from SER, his pay in the time scale of
Assistant Engineer has to be fixed as per Statutory Rule 74(b),
more particularly, in a situation such as the present one because
- by relying upon the Government Circulars dated June 18, 1982
or March 19, 1983 or April 16, 1971, the appellant's scale of
G
pay gets reduced.
12. The State Government has not challenged the
applicability of Rule 74(b) of the Code in the matter. That being
the position, the appellant's pay has to be fixed in accordance
with Rule 74(b) of the Code and not otherwise. The view of the H
..
228 SUPREME COURT REPORTS [2009] 12 S.C.R.
A Tribunal, therefore, that the appellant's pay be fixed on his
promotion to the rank of Assistant Engineer (Electrical) taking
his last pay drawn in the rank of Sub-Assistant Engineer and
following the provisions of Rule 74(b) of the Code being
eminently just, proper and in accordance with law warranted no
B interference at the hands of the High Court.
13. Appeal, accordingly, has to be allowed and is allowed.
The order dated March 2, 2006 passed by the High Court 0
impugned in the present appeal is set aside and th e order
dated December 23, 1999 passed by Orissa Administrative
C Tribunal is restored. The differential salary shall be paid to the
appellant now within two months from today. No order as to
costs.
D.G. Appeal allowed.
-
..
•
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