Supreme Court of India
CHENNAI CUSTOMS APPRAISING OFFICERS ASSN.versusUNION OF INDIA & ORS.
- Citation
- 2008 INSC 718
- Decided
- 16 May 2008
- Disposal
- Dismissed
- Bench
- S B SINHA
Holding
Promotees appointed on an ad‑hoc basis cannot rank senior to direct recruits; seniority is determined by the date of appointment under the 1961 Rules.
Summary
The Chennai Customs Appraising Officers Association, representing promotee appraisers, challenged the seniority list prepared by the Union of India, arguing that promotees should enjoy seniority based on the continuous officiation doctrine articulated in Gaya Baksh Yadav. The Union contended that the 1961 Recruitment Rules empower the Central Board of Revenue to determine recruitment methods and that a minimum of 50% of posts must be filled by direct recruitment, with no fixed quota for promotees. The Supreme Court examined the 1961 Rules, noting the distinction between cadre and vacancy and the Board's discretion to fill vacancies, and held that the Rules do not fix a separate quota for promotees. Consequently, seniority of direct recruits is counted from their appointment date, while promotees appointed on an ad‑hoc basis cannot rank senior to them. The Court dismissed the appeals, affirming that the seniority list prepared in accordance with the Rules is valid.
Issues considered
- The interpretation of the Customs Appraisers' Service, Class II Recruitment Rules, 1961, particularly Rule 4(c) regarding the 50% direct recruitment requirement.
- Whether the doctrine of continuous officiation from Gaya Baksh Yadav applies to promotees appointed on an ad‑hoc basis.
- Whether promotees can be given seniority over direct recruits in the absence of a fixed quota.
- The extent of the Central Board of Revenue's discretion in determining recruitment methods and quotas.
Subjects
service lawseniorityrecruitment rulescustoms appraiserscontinuous officiationquotapromotiondirect recruitment
Judgment
[2008) 9 S.C.R. 475
CHENNAI CUSTOMS APPRAISING OFFICERS ASSN. ~ A
II.
UNION OF INDIA & ORS.
(Civil Appeal No.3630 of 2008)
MAY 16, 2008
8
[S.B. SINHA AND V.S. SIRPURKAR, JJ.]
Service Law:
Inter se seniority- Continuous officiation doctrine - Cus-
toms Appraisers' Service, Class II Recruitment Rules 1961 - C
Interpretation of - On the touchstone of the decision in Gaya
Baksh Yadav case - Customs Department recruiting Apprais-
ers - Two sources of recruitment; by promotion and by direct
recruitment - Dispute in regard to inter-se seniority between
promotees and direct recruits - Held: Whereas all appoint- D
ments in the direct recruitment quota being regular in nature,
their seniority was to be counted from date of their appoint-
ment, but so far as promotees who had been promoted on ad
hoc basis are concerned, they could not, in terms of the Rules,
rank senior to the direct recruits - Department of Revenue E
(Customs Appraisers) Recruitment Rules, 1988.
The Customs Department recruits Appraisers. There
were two sources of recruitment; one by way of promo-
tion and, the second by direct recruitment.
F
Dispute arose in regard to inter-se seniority between
the promotees and the direct recruits.
Appellant is the Custom Appraisers Officers Asso-
ciation representing promotee 'Appraisers'. It was con-
tended on its behalf, i) that in terms of the Customs Ap- G
praisers' Service, Class II Recruitment Rules, 1961, the
promotees could be appointed upto 50o/ci of the total cadre
strength and their seniority in terms of the Gaya Baksh
475 H
476 SUPREME COURT REPORTS (2008] 9 S.C.R.
A Yadav case, was required to be determined on the basis
of the doctrine of continuous officiation and not other-
wise; ii) that Gaya Baksh Yadav having clearly interpreted
the 1961 Rules and having laid down the law that quota
and rota rule would not apply and only the principles of
B continuous officiation would, no seniority list could have
been published in contravention thereof; iii) that the im-
pugned seniority list should have been issued directly in ....
,.
terms of the 1961 Rules as the same did not contemplate
any year-wise seniority list; iv) that the seniority list clearly
c showed that whereas the names of persons stated in
Serial No. 1 to 72 were mentioned in terms of the 1961
Rules, from Serial No. 73 onwards they have been pre-
pared on year-wise basis which is not postulated under
the 1961 Rules and v) that 171 persons whose names
appeared in the said list and who had been officiating in
D
the said posts on the basis of the orders of promotion
issued pursuant to the recommendations made by the
DPC, could not have been excluded therefrom.
Respondent-Union of India, on the other hand, sub-
E mitted that a bare perusal of the 1961 Rules clearly showed
that it was for the Central Board of Revenue to fix the num-
ber of vacancies on a yearly wise basis keeping in view
the exigencies of work and as from 1961 onwards the
F
percentage of the direct recruits had gone up substan-
tially, promotion of any person, except the cases of filling
.'
up of the permanent vacancies granted in an ad hoc man-
ner, could not have been considered for the purpose of
reckoning of the seniority.
Interpretation of the said 1961 Rules on the touch-
G stone of the decision in Gaya Baksh Yadav case is thus in
question in the present appeals. '(
Dismissing the appeals, the Court
HELD: 1.1. In terms of the Customs Appraisers' Ser-
H vice, Class II Recruitment Rules, 1961, separate quotas
CHENNAI CUSTOMS APPRAISING OFFICERS ASSN. 477
v. UNION OF INDIA & ORS.
for different categories of employees have not been fixed. A
If there is to be no 'quota', the principles of'rota' will have
no application. Rule 4 of the 1961 Rules empowered the
Central Board of Revenue to determine the method of re-
cruitment to be employed. Appointment was to be made
for the purpose of-filling up of vacancies in the services. B
It will depend upon the requirements for any particular
period. The number of candidates required to be ap-
pointed by applying the methods envisaged under Rule
3 of the 1961 Rules is again a matter which was within the
domain of the Board. Otherwise unguided jurisdiction of c
the Board, however, was sought to be controlled by clause
(c) of Rule 4 providing that the percentage of posts to be
filled by direct recruitment shall not be less than 50 per
cent of the total cadre of appraisers. [Para 32] [490-G,H:
491-A,B,C]
D
1.2. The 1961 Rules seek to maintain a distinction be-
tween ·cadre' and 'vacancy'. The cadre indicates the
strength in the service which in turn ould depend upon
the determination by a competent authority on a periodi-
cal basis including the vacancies arising for various rea- E
sons including death, retirement, imposition of punish-
ment, etc. [Para 33] [491-C,D]
1.3. The Board was required to take a decision on a
periodical basis as to how and in what manner the va-
cancies were to be filled up. The decision of the Board F
was required to be based on some rational criteria. It was
also required to take into consideration the interest of the
Department. The purpose for making recruitments was
to be taken into consideration by the Board itself. Keep-
ing in view the fact that apart from the restrictions on the G
power of the Board as contained in Clause (c) of Rule 4 of
the 1961 Rules, if a decision had been taken by it to fill up
even more than 50 per cent of the total cadre of apprais-
ers through direct recruitment, in absence of any allega-
tion of mala fide or unauthorized purpose or fairness or H
478 SUPREME COURT REPORTS [2008] 9 S.C.R.
A reasonableness on its part, the same cannot ordinarily
be called in question. Jurisprudentially there exists a dis-
tinction between post and vacancy. But posts have to be
filled having regard to the provisions contained in the 1961
Rules. It is to be made workable. The practice followed by
B the Board for a number of years cannot be set at naught
by a stroke of pen. [Para 33] [491-E-H, 492-A]
1.4. The entry in service is in a post. However, when
it comes to filling up of a post, the same would depend
upon existence of vacancy. Rule 4 of the 1961 Rules pro-
C vides for the method to be adopted therefor. Clause (c) of
Rule 4 puts a rider thereupon, namely, how to do it. The
mandate being that the percentage of direct recruitment
shall not be less than 50%. On. year to year basis, a requi-
sition has to be made to the Union Public Service Com-
o mission intimating them the number of vacancies avail-
able. Keeping in view the nature of competitive examina-
tion, some posts may stil} tema;r, ··~ant. Even in a case
where there are, for example, on(, "l..indred vacancies, the
number of direct recruits available may be much less.
E Other exercises for recruitment then have to be resorted
to for filling up of the rest of the vacancies. It is only for
that purpose, the Government takes the yearly vacancy
position. For the said purpose, the quota has to be kept
flexible. As the number of requisitions may Qxceed the
F number of posts which could be filled up t,..:':.tough direct
recruits, the remaining vacancies must be filled up in terms
of the Rules. Determination of the mode and manner there-
for being flexible, the essential features of the recruitment
process cannot solely depend upon the sanctioned
G strength, i.e., cadre strength. For the said purpose, deter-.
mining working strength will have some relevance. The
said system has been followed for a number of years. The
exigibility of the said method is not in question. The exer-
cises undertaken year after year remained unchallenged.
(Para 34) [492-B-H]
H
CHENNAI CUSTOMS APPRAISING OFFICERS ASSN. 479
v. UNION OF INDIA & ORS. [S.B. SINHA, J]
~
1.5. The promotees did not have any fixed quota. Had A
there been a quota fixed for the promotees, the matter
might have been different. But, when no quota is fixed
and from 1976 onwards there has been a progressive in-
crease in the percentage of the direct recruitments, it can-
not be said that for the purpose of giving effect to the 1961 B
Rules, it was necessary to consider the question of ex-
ceeding or non-exceeding the 50 per cent quota. [Para
35] [493-A,B,C]
1.6. No doubt, this Court in Gaya Baksh Yadav man-
dated that seniority had to be counted from the date of c
continuous officiation. But such a direction was issued
keeping in view the fact situation obtaining at that stage.
For the purpose of giving effect to continuous officiation
doctrine, the entry to the service must be in accordance
with law. If in particular years, having regard to the decision D
of the Board, the percentage of direct recruits were more
than 50%, a' fortiori the percentage of the promotees would
come down. If they were recruited in excess of the vacan-
cies which were required to be filled up in terms of the deci-
sion of the Board, the percentage of the promotees for the E
said year was required to be reduced. [Para 35] [493-C,D,E]
1.7. Whereas all appointments in the direct recruit-
ment quota being regular in nature, their seniority was to
., be counted from the date of their appointment, but so far
as the promotees who had been promoted on ad hoc F
basis are concerned, they could not, in terms of the Rules,
rank senior to the direct recruits. [Para 36] [493-E,F]
1.8. The promotions may have to be continued
whether on an ad hoc basis or otherwise so as to enable
G
the Department to function effectively and efficiently. The
promotees may continue in their service but when a ques-
tion arises in regard to determination of seniority, the
statutory rules must be given effect to. The opinion of this
Court in Gaya Baksh Yadav is subject to Rule 4(a) of the
H
480 SUPREME COURT REPORTS [2008] 9 S.C.R.
A 1961 Rules. (Paras 39, 40] (494-G, 495-A]
Gonal Bihimappa v. State of Karnataka & Ors. ((1987) 3
SCR 885]- relied on.
Direct Recruit Class II Engineering Officer Association
B v. State of Maharashtra & Ors. ((1990) 2 SCC 715] and Gaya
Baksh Yadav v. Union of India and Others ((1996) 4 SCC 23]-
distinguished.
Mervyn Coutindo & Ors. v. Collector of Customs,
Bombay & Ors. ((1966) 3 SCR 600] - referred to.
c
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 3630
of 2008
From the final Judgment and Order dated 21/4/2006 of
the High Court of Judicature at Madras in Writ Petition Nos.
D 26975, 39564, 39583 of 2005 and 15158 of 2002
WITH
C.A. No. 3631 of 2008
WITH
E
I.A. Nos. 3, 5 & 6
Vikas Singh, A.S.G., J. L. Gupta, Brijender Chahar,
Venkataramani, B. Kumar, A.K. Ganguli, K.V. Viswanathan,
Jitendra Mohan Sharma, J.M. Sharma, Mithilesh Kumar Pandey, l'
'
F Jagbir Singh, Malik, Jyoti Chabar, A. Jain, Asha G. Nair, TA.
Khan, B.V. Bairam Das, Ranjan Kumar, Rajeev Kumar, K.K.
Senthilvelan, Hiren Dasan, Dhirendra Kumar Mishra, Sarla
Chandra, Senthil Jagadeesan and Praveen Chaturvedi for the
Appearing Parties.
G
The Judgment of the Court was delivered by
S.B. SINHA, J : 1. Leave granted.
2. Interpretation of the Customs Appraisers' Service, Class
H II Recruitment Rules, 1961 (for short "the 1961 Rules") and the
CHENNAI CUSTOMS APPRAISING OFFICERS ASSN. 481
v. UNION OF INDIA & ORS. [S.B. SINHA, J]
Department of Revenue (Customs Appraisers) Recruitment A
Rules, 1988 (for short "the 1988 Rules") vis-a-vis application of
the decisions of this Court in Mervyn Coutindo .& Ors. v. Col-
lector of Customs, Bombay & Ors. ((1966) 3 SCR 600] and
Gaya Baksh Yadav v. Union of India and Others ((1996) 4 SCC
23] is in question in these appeals which arise out of a judg- B
ment and order dated 21.04.2006 passed by the High Court of
Judicature at Madras.
3. Appellant is the Custom Appraisers Officers Associa-
tion representing promotee 'Appraisers' who were appointed
in the post of 'Examiner' on various dates. c
Customs Department of the Government of India (Depart-
ment) appoints Appraisers. There was no statutory rule govern-
ing the terms and conditions of their services including senior-
ity.
D
4. l'here were two sources of recruitment in the post of
Appraisers; one by way of promotion and, the second by direct
recruitment.
In the year 1936, an order was passed by the Central
Board of Revenue (Board) laying down that recruitment to the E
Customs Appraisers' Service would be from two sources, i.e.,
50% by promotion, 25% directly from amongst the experts and
25% by way of a competitive examination or selection by Pub-
lic Service Commission.
F
Circulars were issued from time to time in regard to inter
se seniority between the promotees and the direct recruits.
5. On or about 12.12.1959, the Government of India is-
sued a cfrcular containing general principles for determining
seniority of various categories of persons employed in .central G
services. By reasons thereof, several types of recruitment like
war service candidates, which was the subject matter of an
earlier circular, were not to be made. Seniority was to be deter-
mined in terms of the 1959 Circular whereby it was directed
that the instructions contained in the circulars would not aper- H
482 SUPREME COURT REPORTS [2008] 9 S.C.R.
A ate in preference to the normal principles for determining se-
niority in future. Only certain general principles were laid down
therefor. They were, however, not to be applied with retrospec-
tive effect. One of the principles laid down therein was in re-
spect of the relative seniority of the direct recruits and the
B promotees. It provided that the same shall be determined as
per rotation of vacancies between direct recruits and promotees
which shall be based on the quota of reservation for direct re-
cruitment and promotion respectively as provided for in the re-
cruitment rules.
c 6. The dispute in regard to inter se seniority between the
direct recruits and the promotees inter alia for the post of Ap-
praisers came up for consideration before this court in Mervyn
Coutindo (supra).
However, the said dispute pertained to the 1961 Rules,
D
which came into force on or about 27.07.1961. Various circulars
were issued from time to time thereafter. Seniority lists were
also published from time to time. The employees filed several
applications before different High Courts. It appears although
that one of the matters wherein validity of a circular letter dated
E 29.10.1982 was in question, has been quashed by the High
Court but some other matters are said to be still pending.
7. Indisputably, recruitments used to take place at zonal
level, viz., Bombay Madras and Calcutta. On or about
l~
F 22.05.1986, the Government of India issued a circular as re-
gards seniority list, viz., "All India Combined List of Apprais-
ers". On the basis of the said list, orders of promotions were
issued in favour of the incumbents of the post of Appraisers to
the post of Assistant Collector of Customs of Central Excise.
The said circular dated 22.05.1986 was initially challenged
G
before this Court through a petition under Article 32 of the Con- (.
stitution of India by the 'Direct Recruits'. The said petition was ..,.
permitted to be withdrawn by an order dated 28.10.1986 grant-
ing liberty to the petitioners therein to approach the Central
Administrative Tribunal (CAT), pursuant whereto an original
H
CHENNAI CUSTOMS APPRAISING OFFICERS ASSN. 483
v. UNION OF INDIA & ORS. [S.B. SINHA, J]
).
application was filed before the Principal Bench of the CAT, A
Madras. The said circular was quashed. The orders of promo-
tions passed in terms thereof were also quashed. The Union of
India was directed to prepare a fresh seniority list on the basis
of the date of continuous officiation as Appraiser. An appeal
thereagainst was filed before this Court leading to pronounce- B
ment of the judgment in Gaya Baksh Yadav (supra).
>·
8. These appeals raise a question of interpretation of the
said decision. We would, however, deal with the said question
a little later.
c
9. The Central Government issued the 1988 Rules on or
about 1.01.1988. Pursuant to or in furtherance of the decision
of this Court in Gaya Baksh Yadav (supra), a seniority list of
Appraisers was published upto 31.12.1987 on 12.11.1997. The
said seniority list again was challenged by the direct recruits
D
before the Bombay Bench of CAT as also before the Madras
Bench. The Madras Bench dismissed the said application be-
ing barred by limitation. Despite the same, merit of the matter
was gone into by it holding that the ad hoc promotions having
been made on the recommendations of the Departmental Pro-
motion Committee (DPC) and the seniority list having been pre- E
pared in conformity with the law laid down by this Court in Gaya
Baksh Yadav (supra) as also Direct Recruit Class II Engineer-
ing Officer Association v. State of Maharashtra & Ors. [(1990)
-,,: 2 sec 715), the same should not be interfered with.
F
The said order was challenged before the High Court of
Madras.
10. In the meantime, however, the Bombay Bench of CAT
by a judgment and order dated 18.06.2003 quashed the said
seniority list dated 12.11.1997.The Government was directed G
to review positions of those who had been promoted beyond
50% of their quota on ad hoc basis holding that the same was
violative of Rule 4(c) of the 1961 Rules.
A writ petition filed thereagainst, is said to be still pending
H
484 SUPREME COURT REPORTS [2008) 9 S.C.R.
A before the Bombay High Court.
11. Pursuant to or in furtherance of the directions of the
Bombay Bench of CAT, another draft seniority list was published
on 30.06.2004. A year-wise seniority list was published on
16.12.2004 showing names of those who were appointed/ pro-
s moted upto 31.12.1987. Allegedly, from the said seniority list,
names of 171 promotee appraisers were excluded. A draft se-
niority list of the appraisers appointed on or after 1.01.1988
was circulated on 28.04.2005. In the said seniority list, how-
ever, the names of 171 appraisers were included.
c
12. Another original application was filed before the Ma-
dras Bench of CAT on or about 23.05.2005 challenging the
seniority list dated 16.12.2004. The said application was
marked as OA No. 419 of 2005.
D 13. Sharath Kumar Rath [Appellant in Civil Appeal arising
out of SLP (C) No. 17494 of 2006], however, filed another origi-
nal application which was marked as OA No. 566 of 2005 ques-
tioning the validity of the draft seniority list dated 28.02.2005.
14. By reason of a judgment and order dated 9.08.2005,
E the said original applications were dismissed. A writ petition
was preferred thereagainst by the appellants, which by reason
of the impugned judgment dated 21.04.2006 has been dis-
missed.
F 15. Mr. J.L. Gupta, learned Senior Counsel appearing on .
"t·
behalf of the appellants, in support of these appeals would raise
the following contentions:
(i) In terms of the 1961 Rules, the promotees could be
appointed upto 50% of the total cadre strength and
G their seniority in terms of Gaya Baksh Yadav (supra},
was required to be determined on the basis of the
./
doctrine of continuous officiation and not otherwise.
(ii) Gaya Baksh Yadav (supra) having clearly interpreted
the 1961 Rules and having laid down the law that
H
CHENNAI CUSTOMS APPRAISING OFFICERS ASSN. 485
v. UNION OF INDIA & ORS. [S.B. SINHA, J]
quota and rota rule would not apply and only the A
principles of continuous officiation would, no seniority
list could have been published in contravention
thereof.
(iii) The impugned seniority list should have been issued
directly in terms of the 1961 Rules as the same did B
not contemplate any year-wise seniority list.
(iv) The senibrity list would clearly show that whereas the
names of persons stated in Serial No. 1 to 72 were ·
mentioned in terms of the 1961 Rules, from Serial c
No. 73 onwards they have been prepared on year-
wise basis which is not postulated under the 1961
Rules.
(v) 171 persons whose names appeared in the said list
and who had been officiating in the said posts on the D
basis of the orders of promotion issued pursuant to
the recommendations made by the DPC, could not
have been excluded therefrom.
(vi) Serial No. 235 onwards having been based on year-
wise seniority is clearly violative of the dicta laid down E
in Gaya Baksh Yadav (supra) which would clearly
go to show that they have been prepared on the
basis of the existing vacancies and not the number
')' of posts.
F
(vii) The seniority list containing the names of more than
1500 persons evidently cannot be said to be correct
""' as even according to the Central Government, the
sanctioned strength of the cadre of Appraiser is only
809.
G
(viii) The Tribunal has wrongly proceeded on the basis
that the promotions had been made on an ad hoc
basis and in excess of 50% quota.
16. Mr. Vikas Singh, learned Additional Solicitor General
H
486 SUPREME COURT REPORTS [2008) 9 S.C.R.
A appearing on behalf of Union of India, on the other hand, would
submit that a bare perusal of the 1961 Rules would clearly go to
show that it was for the Board to fix the number of vacancies on
a yearly wise basis keeping in view the exigencies of work and
as from 1961 onwards the percentage of the direct recruits had
B gone up substantially, promotion of any person, except the cases
of filling up of the permanent vacancies granted in an ad hoc
manner, could not have been considered for the purpose of reck-
oning of the seniority.
17. It was pointed out that in fact from 2002 onwards, the
C Central Government has not made any appointment against the
vacancy arising in the quota of direct recruits at all.
18. Mr. A.K. Ganguly, learned senior counsel appear-
ing on behalf of the respondent no. 4 urged:
D (i) As orders of promotion had been given by the zonal
DPCs keeping in view the exigencies of the situation,
the same cannot be said to have been passed in
accordance with law.
(ii) The decision of this Court in Gaya Baksh Yadav
E
(supra) must be interpreted in the factual matrix of
the matter obtaining herein so that those who have
illegally been promoted remained out of reckoning
in the All India Seniority List.
F (iii) Although the 1961 Rules speak of cadre, the manner
in which the same should be operationalised having
been laid down in Sub-Rules (b) and (c) of Rule 4 of
the 1961 Rules, must be held to be referable only to
the existing vacancies and not the cadre strength
G which was required to be determined on a year to
year basis.
19. Mr. B. Kumar, learned senior counsel appearing on
behalf of the respondent no. 3, supplementing the submission
of the Additional Solicitor General and Mr. Ganguly urged that
H the basis for the judgment of the Tribunal as also the High Court
CHENNAI CUSTOMS APPRAISING OFFICERS ASSN. 487
v. UNION OF INDIA & ORS. [S.B. SINHA, J]
being Exhibit L having not been the subject matter of challenge A
either before the CAT or the High Court as also before this Court,
it is incorrect to contend that the appellants were entitled to fig-
ure in the All India Seniority List only on the basis of their con-
tinuous officiation. Properly read, it was urged, Gaya Baksh
Yadav (supra) suggests that the ad hoc promotees who were B
appointed in violation of Rule 4(c) of the 1961 Rules could not
)F have been considered for reckoning their seniority.
'
20. Mr. Venkataramani, learned senior counsel appear-
ing on behalf of the impleaded Association would urge that Gaya
Baksh Yadav (supra) suggests that continuous officiation theory c
should be applied in cases of promotees irrespective of the
manner in which they were promoted. On a proper reading of
the 1961 Rules, it would contend that there did not exist any
dichotomy between post and vacancy as number of vacancies
can only be taken into consideration in terms of the Rules. D
21. Ms. Vibha Datta Makhija, learned counsel appearing
on behalf of the Group 'A' Appraisers (lntervenors), would con-
tend that this Court should not interfere with the impugned judg-
<
ments as the matter is pending before the Bombay High Court.
E
22. It is a matter of grave concern that although the parties
have filed a large number of original applications and writ ap-
plications and the matter had at least once been taken up upto
,,. this Court, the Union of India has singularly failed to lay down a
proper legal framework for the purpose of determination of in- F
terse seniority between the direct recruits and promotees. Cor-
rect facts and figures have also not been placed by the Union of
India before the learned Tribunal. It furthermore appears that
even they are not in possession of all the relevant documents. If
anybody is to be blamed for the messy situation, the Union of
G
India, must take upon it the major chunk of the blame.
-~
23. Before us also, some documents have been filed only
when we insisted as to what was the total cadre strength. We
were given to understand that the total cadre strength at present
is 809. Before us a chart has also been filed showing total sane- H
488 SUPREME COURT REPORTS [2008] 9 S.C.R.
A tioned and working strength in the three groups of Appraisers
from the years 1961 to 1987 and for the years 2004 to 2008.
24. We may notice that when the 1961 Rules·came into
force, there were 131 total posts in total. Out of total posts of
131, 46 were in Bombay, 19 were in Madras and 66 were in
B Calcutta, out of which the number of direct recruits in Bombay,
Madras and Calcutta were 2, 4 and 8 (totalling 14) and those of
""(
the promotees were 37, 12 and 9 (totalling 58). Since then, the
percentage of appointments through direct recruitment went up .
)""
considerably and only in or about 1976 when the sanctioned
c strength was 418, 198 direct recruits were functioning as against Y"
195 promotees. Yet again the percentage, of appointments ~
through direct recruitments went up and as in 1987, out of the
total sanctioned strength of 456, 269 direct recruits were work-
ing as against 181 promotees.
D
25. We have noticed hereinbefore that we do not have
r
any figure as to how things proceeded from the year 1988 to
2003. It is, however, of some significance to note that in the
year 2004, 164 direct recruits were working as against 520
promotees, and in the year 2005, 163 direct recruits were work-
E ing as against 539 promotees; the total cadre strength being
809.
-
26. We have noticed hereinbefore that the situation had
undergone a sea change from 2002 onwards as no direct re-
F cruitment has taken place at all. Rules have also not been
amended.
27. It is in the aforementioned background we may notice
the relevant statutory rules.
Rules 3 and 4 of the 1961 Rules read as under:
G
"Rule 3. ~·
Recruitment to the Service shall be made by any of the
following methods :-
,,,.,.,,
H (a) By competitive examination in India in accordance
CHENNAI CUSTOMS APPRAISING OFFICERS ASSN. 489
v. UNION OF INDIA & ORS. [S.S. SINHA, J]
with Part Ill of these rules. A
(b) By promotion in accordance with Part IV of these rules.
(c) By transfer of an Officer in Government Service in
accordance with Part V of these rules.
B
(d) By direct recruitment by selection otherwise than by
)' competitive examination in accordance with Part VI of
these rules.
Rule 4
(a) No appointment shall be made to the Service or to any c
post borne on the cadre of the Service by any method not
specified in Rule 3.
(b) Subject to the provisions of Sub-rule (a), the Board
, shall determine the method or methods of recruitment to
be employed for the purpose of filling in particular
vacancies in the Service, as may be required to be filled
D
during .any particul<fr period and the number of candidates
to be recruited by each method.
(c) The percentage of posts to be filled by direct recruitment E
by competitive examination or by selection otherwise than
by competitive examination shall not be less than 50 per
cent of the total cadre of Appraisers. The remaining posts
,,• may be filled by any other method mentioned in Rule 3."
Rules 2 and 3.of the 1988 Rules read as under: F
"2. Number of Post, Classification and Scale of Pay: The
number of the said post, its classification and the scale of
pay attached thereto shall be as specified in columns 2 to
4 of the First Schedule annexed to these rules. G
~ 3. Savings: Nothing in these rules shall affect reservations,
1
_,; relaxation of age limit and other concessions required to
be provided for the Scheduled Castes, the Scheduled
Tribes, the Ex-Serviceman and other special categories
of persons in accordance with the orders issued by the H
490 SUPREME COURT REPORTS [2008] 9 S.C.R.
A Central Government from time to time in this regard."
In the First Schedule appended to the 1988 Rules, in re-
gard to the method of recruitment of Customs Appraisers, it is
stated that 50% recruitment would be made by promotion and
50% by direct recruitment (partly through Civil Service Exami-
B nation and partly on the basis of selection through Union Public
Service Commission in case of expert Customs Appraisers).
"
28.. The terminologies used in the 1961 Rules and the 1988
Rules are different. Broadly speaking, the 1961 Rules speak of
c 'Cadre' whereas the 1988 Rules speak of 'Vacancies'.
29. Before embarking on the interpretation of the said
Rules, we may place on record that, according to the learned
Additional Solicitor G'")r-=>ral, there would not be muQh.signifi-
cant difference between a situation where the seniority list was ~
D prepared on the basis of 'Cadre' or where the same was pre-
.~
pared on the basis of 'Vacancy' inasmuch as within a span of
10 to 12 years, the direct recruits ordinarily are promoted to
Group A posts and the promotees either have already been pro-
moted as such or retired.
E 30. Rule 3 of the 1961 Rules provides that the recruitment
could be from two sources; one by competitive examination and
other by promotion. So far as direct recruitment is concerned, it
could be made if competitive examination is held as envisaged
under Part Ill of the 1961 Rules, i.e., Rule 6 or by selection oth- t,
F erwise than by competitive examination in accordance witt·, Part
VI, i.e . , Rule 16 thereof.
31. So far as filling up of the posts by promotion is con-
cerned, the same could be done by way of promotion in accor-
dance with Part IV thereof, viz., Rule 14 or by transfer of an of-
G
ficer in Government Service in accordance with Part V of the
1961 Rules, viz., Rule 15. All appointments were to be made
..,-
F'
strictly in terms of the m~thod specified in Rule 3. t
)
32. In terms of the 1961 Rules, separate quotas for differ-
H ent categories of employees have not been fixed. If there is to
CHENNAI CUSTOMS APPRAISING OFFICERS ASSN. 491
v. UNION OF INDIA & ORS. [S.B. SINHA, J]
be no 'quota', indisputably, the principles of 'rota' will have no A
application. Rule 4 of the 1961 Rules empowered the Board to
determine the method of recruitment to be employed. Appoint-
ment was to be made for the purpose of filling up of vacancies
in the services. It will depend upon the requirements for any
particular period. The number of candidates required to be ap- B
pointed by applying the methods envisaged under Rule 3 of the
1961 Rules is again a matter which was within the domain of
the Board. Otherwise unguided jurisdiction of the Board, how-
ever, was sought to be controlled by clause (c) of Rule 4 provid-
ing that the percentage of posts to be filled by direct recruit- c
ment shall not be less than 50 per cent of the total cadre of
appraisers.
33. The 196.1 Rules, .therefore, seek to maintain a distinc-
tion between 'cadre' and 'vacancy'. The cadre indicates the
strength in the service which in turn would depend upon the de- D
termination by a competent authority on a periodical basis in-
cluding the vacancies arising for various reasons including
death, retirement, imposition of punishment, etc.
The Board was required to take a decision on a periodi-
cal basis as to how and in what manner the vacancies were to E
be filled up. The decision of the Board was required to be based
on some rational criteria. It was also required to take into con-
sideration the interest of the Department. The purpose for mak-
ing recruitments was to be taken into consideration by the Board
itself. Keeping in view the fact that apart from the restrictions on F
the power of the Board as contained in Clause (c) of Rule 4 of
the 1961 Rules, if a decision had been taken by it to fill up even
more than 50 per cent of the total cadre of appraisers through
direct recruitment, in absence of any allegation of mala fide or
unauthorized purpose or fairness or reasonableness on its part, G
the same cannot ordinarily be called in question. Jurispruden-
tially there exists a distinction between post and vacancy. But
posts have to be filled having regard to the provisions contained
in the 1961 Rules. It is to be made workable. The practice fol-
lowed by the Board for a number of years eannot be set at naught H
492 SUPREME COURT REPORTS (2008] 9 S.C.R.
A by a stroke of pen. Let us consider the matter keeping in mind
the legal principles as noticed heretobefore.
34. Indisputably, promotion used to take place on a zonal
basis. The direct recruits get entry in Class II services. They are
appointed on an annual basis. Whereas one is a selection
B through competitive examination, th_e other is by direct recruit-
ment by selection. ·
Recruitment process is carried out by the Union Public
Service Commission. The entry in service is in a post. How-
e ever, when it comes to filling up of a post, the same would de-
pend upon existence of vacancy. Rule 4 provides for the method
to be adopted therefor. Clause (c) of Rule 4 of the 1961 Rules
puts a rider thereupon, namely, how to do it. The mandate be-
ing that the percentage of direct recruitment shall not be less
than 50%. On year to year basis, a requisition has to be made
0
to the Union Public Service Commission intimating them the
number of vacancies available. Keeping in view the nature of
competitive examination, some posts may still remain vacant.
Even in a case where there are, for example, one hundred va-
cancies, the number of direct recruits available may be much
E less. Other exercises for recruitment then have to be resorted
to for filling up of the rest of the vacancies. It is only for that pur-
pose, the Government takes the yearly vacancy position. For
the said purpose, the quota has to be kept flexible. As the num-
ber of requisitions may exceed the number of posts which could
F be filled up through direct recruits, indisputably, the remaining
vacancies must be filled up in terms of the Rules. Determina-
tion of the mode and manner therefor being flexible, the essen-
tial features of the recruitment process cannot solely depend
upon the sanctioned strength, i.e., cadre strength. For the said
G purpose, determining working strength will have some rel-
evance. We have noticed hereinbefore that the said system has
been followed for a number of years. The exigibility of the said
method is not in question. The exercises undertaken year after
year remained unchallenged.
H
. CHENNAI CUSTOMS APPRAISING OFFICERS ASSN. 493
v. UNION OF INDIA & ORS. [S.B. SINHA, J]
35. Submission of Mr. Gupta, that at no point of time, the A
promotees have exceeded 50 per cent of the cadre strength
must be considered keeping in view the aforementioned statu- ·
tory provisions. Promotees did not have any fixed quota. Had
there been a quota fixed for the promotees, the matter might
have been different. Various decisions of this Court whereupon B
reliance has been placed, thus, cannot be said to have any ap-
plication whatsoever is a case of this nature. But, when no quota
is fixed and from 1976 onwards there has been a progressive
increase in the percentage of the direct recruitments, it cannot
be said that for the purpose of giving effect to the 1961 Rules, it c
was necessary to consider the question of exceeding or non-
exceeding the 50 per cent quota.
No doubt, this Court in Gaya Baksh Yadav (supra) man-
dated that seniority had to be counted from the date of continu-
ous officiation. But such a direction was issued keeping in view D
the fact situation obtaining at that stage. For the purpose of giv-
ing effect to continuous officiation doctrine, the entry to the ser-
vice must be in accordance with law. If in particular years, hav-
ing regard to the decision of the Board, the percentage of di-
. rect recruits were more than 50%, a' fortiori the percentage of E
the promotees would come down. If they were recruited in ex-
cess of the vacancies which were required to be filled up in
; terms of the decision of the Board, the percentage of the
promotees for the said year was required to be reduced.
36. Whereas all appointments in the direct recruitment F
quota being regular in nature, their seniority was to be.counted
from the date of their appointment, but so far as the promotees
who had been promoted on ad hoc basis are concerned, they
could not, in terms of the Rules, rank senior to the direct re-
cru~s. G
37. Strong reliance has been placed by Mr. Gupta on the
decision of this Court in Direct Recruit Class II Engineering
Officer Association (supra). Therein, this Court had no occa-
sion to consider a situation of this nature. We may, however, H
494 SUPREME COURT REPORTS [2008] 9 S. C.R.
~
A notice Clauses (A), (C) & (E) of the directions issued by this
Court, which have some bearing on the controversy, which are
in the following terms:
"(A) Once an incumbent is appointed to a post according
to rule, his seniority has to be counted from the date of his
B appointment and not according to the date of his
confirmation.
The corollary of the above rule is that where the initial
appointment is only ad hoc and not according to rules and
c made as a stop-gap arrangement, the officiation in such
post cannot be taken into account for considering the
seniority.
(C) When appointments are made from more than one
source, it is permissible to fix the ratio for recruitment from
D the different sources, and if rules are framed in this regard
they mus! ordinarily be followed strictly.
· (E) Where the quota rule has broken down and the
appointments are made from one source in excess of the
quota, but are made after following the procedure
E
-
prescribed by the rules for the appointment, the appointees
should not be pushed down below the appointees from
the other source inducted in the service at a later date."
38. As the ratio fixed for recruitment from different sources
'T'
F was not fixed, strict adherence to the principles enunciated
therein was not possible to implement the same in a case of
this nature. Similarly, no quota rule having been fixed, the ques-
tion of breaking down thereof shall not apply.
39. Therefore, promotions may have to be continued
G whether on an ad hoc basis or otherwise so as to enable the
Department to function effectively and efficiently. The promotees
may continue in their service but when a question arises in re-
gard to determination of seniority, the statutory rules must be
given effect to.
H
CHENNAI CUSTOMS APPRAISING OFFICERS ASSN. 495
v. UNION OF INDIA & ORS. [S.B. SINHA, J]
40. In Gaya Baksh Yadav (supra), this Court opined: A
" ... Both would be entitled to placement in the joint senior-
ity list on the basis of their continuous officiation."
This is subject to Rule 4(a) of the 1961 Rules.
41. In Gonal Bihimappa v. State of Karnataka & Ors. B
[(1987) 3 SCR 885], this Court held:
>o" " ••• In the present batch of cases the law being clear and
particularly the mandate in the rule being that when
recruitment takes place the promotee has to make room c
for the direct recruit, every promotee in such a situation
would not be entitled to claim any further benefit than the
advantage of being in a promotional post not due to him
but yet filled by him in the absence of a direct recruit. ... "
42. We, therefore, do not find any apparent illegality in the D
judgment of the High Court. As we have interpreted the 1961
~ Rules on the touchstone of the decision of High Court in Gaya
Baksh Yadav (supra), we do not think it necessary to deal with
the individual submissions of the learned counsel for the par-
ties. E
43. We may, however, observe that we have not gone into
the merit of the matter which is pending before the Bombay
High Court.
44. In view of our order aforementioned, no separate or- F
, der need be passed in IA No. 3 as well as in IA Nos. 5 and 6.
45. For the reasons aforementioned, there is no merit in
these appeals which are dismissed accordingly. No costs.
B.B.B. Appeals dismissed.
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