Supreme Court of India
K. NARAYANAN AND OTHERSversusSTATE OF KARNATAKA AND ORS.
- Citation
- 1993 INSC 282
- Decided
- 2 September 1993
- Disposal
- Appeal(s) allowed
- Bench
- S C AGRAWAL
Holding
The retrospective operation of the 1985 amendment rules is ultra vires and violative of Articles 14 and 16, and Note 2 provides only eligibility, not seniority.
Summary
The Karnataka Government amended its Public Works Engineering Department Service (Recruitment) Rules in 1985, backdating them to 1 January 1976 to allow Junior Engineers who obtained a degree to be transferred to the Assistant Engineer cadre with retrospective seniority and a one‑third service weightage. A group of directly recruited Assistant Engineers challenged the amendment, arguing that it violated Articles 14 and 16 of the Constitution by treating unequals as equals, eroding vested seniority rights, and operating retrospectively without a rational nexus. The Court examined whether the classification between diploma‑holding and degree‑holding Junior Engineers and between the Junior and Assistant Engineer cadres was a valid classification, and whether the retrospective effect of the rule could be sustained. It held that the retrospective operation was an exceptional and unjustified use of power, discriminating against existing Assistant Engineers and infringing constitutional equality guarantees. Consequently, the Court struck down the retrospective clause, read Note 2 as providing only eligibility, set aside the tribunal’s order, and directed the preparation of a fresh gradation list.
Issues considered
- The amendment rules granting retrospective seniority to Junior Engineers transferred as Assistant Engineers violate Articles 14 and 16 of the Constitution.
- Whether the classification of diploma‑holding and degree‑holding Junior Engineers, and of Junior versus Assistant Engineer cadres, is a valid classification under Articles 14 and 16.
- Whether Notes 2 and 3 of the 1985 Rules confer only eligibility or also confer seniority and retrospective appointment.
- Whether a rule framed under Article 309 may be given retrospective effect without a reasonable nexus and without infringing vested rights.
Legislation cited
- Constitution of Indias. 14, s. 16, s. 309
Subjects
Article 14Article 16EqualityRetrospective ruleService lawSeniorityRecruitmentKarnataka Public Works DepartmentClassificationCadreAppointment by transferConstitutional validity
Judgment
K. NARAYANAN AND OTHERS A
v.
STATE OF KARNATAKA AND ORS.
SEPTEMBER 2, 1993
[S.C. AGRAWAL AND R.M. SAHAI, JJ.]
SelVice Law-Karnataka Public Works, Engineering Department Service
(Recruitment) Rules, 19B~Appointment-Seniori~Whether retrospective
appointment and seniority can be given prior to date of eligibility-Held,
retrospective operation is exceptional-Nexus with objective necessary-Rules c
discriminatory and affect vested rights-Violative of Articles 14 and 16 of the
Constitution.
Constitution of India, 195(}-Articles 14 and 16-Kamataka P. W.D.
Se1vice (Recruitment) Rules, 198~Whether violative of D
When Karnataka Public Service Engineering Department Service
(Recruitment) Rules, were framed in 1968, two principal sources of recruit·
ment were, Assistant Engineers and Junior Engineers, the minimum
qualification for the two, being degree and diploma respectively in
Civil/Mechanical engineering. There was further sub division in the Cadre E
of Junior Engineers. Some were appointed as Junior Engineers and others
as Supervisors and draftsmen. In 1969, the Rules were amended and 50%
of Junior Engineers were to be graduates. Pay scales of the two cadres were
not the same. The State Government maintained distinction between the
two classes of Junior Engineers. They were not given the same scale of pay F
and the non-graduate Junior Engineers were encadred separately. Promo-
tional avenue for degree holders being better, diploma holder ased to
acquire degree, while continuing in service. In 1975, Diploma holders
working as Junior Engineers Grade II, made representation for increase
of their pay s~ales to the scale of pay of Junior Engineers Grade I and for
maintaining a separate cadre, for promotion to the post of Assistant G
Engineers, by deducting 4 years service as junior Engineers. It was founded
on the premise that nature of work performed by the two was the same. In
1977 the Secretary to the Government recommended that 10% vacancies
of Junior Engineers Division I may be reserved for Junior Engineers
Division II, who acquired B.E. degree. There after the Diploma Holders H
105
106 SUPREME COURT REPORTS [1993) SUPP. 2 S.C.R.
A staked their claim for promotion as Assistant Engineer. The State Govern-
ment did not accept the recommendation of the Board of Chief Engineers
in this regard, as cadre of Assistant Engineers (later designated as Assis-
tant Executive Engineers) and Junior Engineers (later designated as As-
sistant Engineers), were different, with different scales of pay. The
Diploma Holders made a demand for sanctioning 4 advance increments
B and for absorbing Junior Engineers Division II as Junior Engineer
Division I from the last date of examination. In 1984, better promotional
avenues were provided and one-sixth of the cadre strength was reserved
for Junior Engineers to be promoted as Assistant Engineer Division II.
Meanwhile, Engineer Subordinate Service Rules in Andhra Pradesh were
c amended and the Supervisors and Draftsman who acquired engineering
degree became eligible for the post of Assistant Engineer by transfer
subject to satisfying certain conditions. This Court upheld (Devi Prasad &
Ors. v. Government of Andhra Pradesh & Ors., [1980) Supp. SCC 206 the
rule.
D The Diploma Holders submitted alternative proposal, for counting
1/3 of their previous service and to absorb in the cadre of Assistant
Engineers from the date of passing the examination. It was based on
assumption that nature of work performed by Junior Engineers and the
Assistant Engineers was same. Similar claim was made before the pay
E Commission. It was not accepted. In 1985, the Cabinet decided that the
assumption of law department that the work of Junior Engineers and
Assistant Engineers was substantially similar, was correct. On that basis,
the Rules were amended (in 1985). The amendments were deemed to have
come into force on Junuary 1, 1976. The amended Rules inter alia provided
F direct recruitment by to posts of Assistant Engineers, by transfer of Junior
Engineers, who held degree in Civil Engineering or mechanical engineer-
ing. According to note 2 of the Rules, the transfer would be effective from
the date of graduation, subject to availability of vacancies. Note 3 of the
Rules, entitled the Junior Engineers appointed by transfer as Assistant
G Engineers on or after 1.1.1976, to count one-third of service rendered as
Junior Engineer prior to appointment as Assistant Engineer, subject to
maximum of 4 years, for the purpose of promotion to next higher post i.e.
Assistant Executive Engineer Division· I. Seniority of Junior Engineer
appointed as Assistant Engineer was to be fixed with reference to notional
date arrived at after giving weightage of service, as aforesaid.
H
NARAYANAN v. STATE 107
Validity of the amended rules was challenged before the Karnataka A
- Administrative Tribunal. The Tribunal did not find any violation of Article
14 or 16. The Tribunal construed note 2 of the Rules as providing elgibility
only. In the seniority list, published in 1988, Junior Engineers appointed
as Assistant Engineers, by transfer, were given seniority by giving benefits,
both under note (2) and (3). Hence the Junior Engineer, who acquired
degree in July, 1976, was deemed to have been appointed as Assistant
B
Engineer, against vacancy in December, 1976 and he was also given benefit
of weightage of service for 4 years. Therefore, he came to be placed as
Assistant Engineer from December 1972. Validity of the Rules was chal-
lenged in another claim petition filed before the Administrative Tribunal.
It was dismissed on the ground that weightage had been given as provided C
in the rules.
Direct Recruit Assistant Engineers, approached this court by ap-
peals and Writ Petitions.
Allowing the appeals and Writ Petitions, this Court D
HELD : 1. Diploma Holder Junior Engineers form a different class
than degree holder Junior Engineers. Cadre of Assistant Engineer was
different from Junior Engineers. Distinction was founded on valid clas-
sification both on nature of job and qualifications. (116-F-H]
E
2. Eligibility to be appointed to a particular post does not mean that
the candidate, who acquires qualificat.ion stands automatically appointed
to that post. (117-A]
3. A Junior Engineer acquiring qualification may become entitled to
be promoted as Assistant Engineer, and for that purpose, the period of F
service may be reduced, where a diploma holder Junior Engineer could be
promoted as Assistant Engineer after longer service. It is equation between
two classes of Junior Engineers, in the same cadre. [117-C-D]
State of Gujarat v. C.G. Desai and Others, [1974) 1S.C.C.188; Devi G
Prashad and Others v. Government of Andhara Pradesh and Others, [1980)
Supp. SCC 206 and Mohammad Shujat Ali and Others v. Union of India &
Ors., [1975] 3 S.C.C. 76, relied ~n.
4. Demarcation of cadres or gradation in the same cadre, on higher
and lower qualification, is a common phenomenon for fixing hierarchy in H
108 SUPREME COURT REPORTS (1993) SUPP. 2 S.C.R.
A services. It is a valid basis of classification. [117-G]
Statt of Mysore and Others v. P. Narasing Rao, [1968] SCR 407; The
Union of Lldia & Others v. Dr. (Mrs.) S.B. Kohli & Anr., [1973] 3 SCC 592;
State of Jammu & Kashmir v. Tirloki Nath Khosa & Ors., [1974] 1 SCC 19
and P. Mwugesan & Ors. v. State of Tamil Nadu & Others, JT (1993) 2 SC
B 115, relied on.
5. A policy decision taken by the Government is not liable to be
interfered unless the Court is satisfied that the rule, making authority has
acted arbitratity or in violation of fundamental rights guaranteed under
C Articles 14 and 16. [118-B]
6. Appointment by transfer from lower to higher cadre, not by
promotion but by direct appointment only because the incumbent became
eligible, without selection test or criteria, is not in consonance with service
discipline. [118-C]
D
7. Giving a higher post in a different cadre, in which the employee
never worked, because he became eligible earlier, is violation of right of
equality. Such employee cannot be given precedence, over those who are
working from before. Seniority is an incidence of service, which cannot be
eroded or curtailed by a rule which operates discriminatelly. [118-D, FJ
E
8. There can be no functional parity between employees of two
different cadres. [119-BJ
9. Rule which attempts to bypass regular method of recruitment is
violative of Article 14. [119-C]
F
R.N. Nanjundappa v. T. 1himmiah & Anr., [1972) 2 SCC 409 arid
State of Andhra Pradesh & Another v. KS. Muralidhar & Ors., [1992) 2 SCC
241, relied on.
10. 'Recruitment' is a comprehensive term and includes any method
G provided for inducting a person in public service. Rule framed under
Article 309 of the Constitution to regulate recruitment is subject to other
provisions of the Constitution. Therefore, it bas to be tested on rule of
equality. Transfer made in a different and higher cadre, must not be
violative of constitutional guarantee and the rule offairness. Providing for
H a
appointment of diploma holder from the cadre of Junior Engineer to
NARAYANAN v. STATE 109
Assistant Engineer from back date, without any test or selection on !A
eligibility only does not sound reasonable and fair. [i19·E·F]
11. Rules operate prospectively. Retrospectivity is exception. Exer·
cise of power to frame rule with retrospective effect, must not. operate
discriminate or in violation of any constitutional right, so as to affect
vested right. [121-B] ~
12. The Service Rules made in 1985, permitting appointment by
transfer, and making it operative from 1976, subject to availability of
vacancy results in appointing a Junior Engineer in 1986 with effect from
1976. It operates viciously against the Assistant Engineers, who were C
appointed between 1976 to 1985. [121-C]
Ex-Capt. KC. Arora & Anr. v. State of Haryana & Ors., [1984] 3 SCC
281; P.D. Aggarwal & Ors. v. State of U.P. & Ors., [1987] 3 SCC 622 and
B.S. Yadav & Ors. etc. v. State of Haryana Ors. etc., (1981] 1 SCR 1024,
relied on. D
13. Retrospective operation of the impugned rule attempts to disturb
a system, which has been existing for more than 20 years and that too
without any rationale. Absence of nexus apart, no rule can be made
retrospectively to operate unjustly and unfairly against other. Retrospec- E
tive operation of the rule with effect from 1st January, 1976 is dis·
criminatory and violative of Articles 14 and 16 of the Constitution. [122-B]
14. It is not only desirable but just and proper that the States by
common consensus may adopt same set of rules, which may pave the way
for promoting national integrity eliminating disparity amongst employees, F
reducing litigation and improving harmony. [110-G]
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 630-32
of 1989.
From the Judgment and Order dated 21.10.1988 of the Karnataka G
High Court in Application Nos. 4298 and 4299 of 1988 ..
WITH
Writ Petition (Civil) No. 939 of 1989. H
110 SUPREME COURT REPORTS [1993) SUPP. 2S.C.R.
A (Under Article 32 of the Constitution of India.)
S. Rama J ois, and Ms. Kiran Suri for the appellants.
K. Madhava Reddy, M.R. Janardhan, S.R. Bhat, L.M. Bhat, N.R.
Nath, Ms. Kiran Aneja, M. Veerappa and K.H. Nobin Singh for the
B respondents.
The Judgment of the Court was delivered by
R.M. SAHAI, J. Validity of the Karnataka Public Works Engineering
Department Service (Recruitment) (Amendment) Rules 1985 has been
c challenged by the Assistant Engineers, recruited directly, both on the
ground of constitutional invalidity as it treats unequals as equals and also
for giving retrospective appointment to the diploma holders and seniority
even prior to the date of their eligibility.
D Engineering services in the Public Works Department (PWD) of the
country can justly feel proud for having contributed largest number of
decisions from this Court touching upon nearly every aspect of service law
the most common being seniority. This has resulted to a large extent due
to different set of rules framed in different States to accommodate and
benefit one set of employees over other either to mitigate injustice arising
E out of peculiar circumstances as in the State of Andhra Pradesh due to
merger of the State of Hyderabad, or because of sympathetic consideration
of supposed injustice as in the State of Karnataka or due to pressure and
pull depending on the strength of the Association of Employees of one or
the other group coupled with if the Chief Engineer in the State was a
F promotee or direct. In either view in services such as engineering services
where similar pattern prevails and same hierarchy is maintained between
draftsman, designer, supervisor, junior engineer, assistant engineer, execu-
tive engineer throughout the country it is not only desirable but just and
proper that the States by common consensus may adopt same set of rules
G which may pave the way for promoting national integrity eliminating dis-
parity amongst employees reducing litigation and improving harmony.
Necessity for it is demonstrated by these appeals and writ petitions as when
facts are adverted it shall be clear how the State of Karnataka by erroneous
understanding of a decision given by this Court on rules framed in the
neighbouring States in Andhra Pradesh in completety different circumstan-
H ces narrated in detail in Mohammad Shujat Ali & Others v. Union of India
NARAYANAN v. STATE [SAHAI,J.] 111
& Others, [1975) 3 sec 76 attempted to adopt it resulting in grave injustice. A
What was held to be reasonable and not shocking by this Court for one
State has become discriminatory and unreasonable for other.
Reverting to the issues in dispute what was assailed, vehemnently, in
these appeals directed against the order of the Karnataka Administrative
Tribunal (KAT) Bangalore was its failure to quash the gradation list issued B
by the Government in breach of its earlier order. It was also urged that the
rules framed in 1985 having been made effective from 1976 were violative
of Articles 14 and 16 of the Constitution but the tribunal in its first order
having read down the rules the appellants did not challenge its correctness.
How far these challenges are well founded and what relief can be granted C
can be comperhended better only after the background in which these rules
were framed is narrated. When Karnataka Public Works Engineering
Department Service (Recruitment) Rules were framed in 1960 the two
principal sources of recruitment were Assistant Engineer and Junior En-
gineers. The minimum qualification for the two were degree and diploma,
respectively, in civil and mechanical engineering. In the cadre of Junior D
Engineer it appears there was further sub-division. Some were appointed
as Junior Engineers and others as supervisors and draftsman etc. The pay ,
scales of the two were not the same. In 1969 the rules were amended and
50% of Junior Engineers. could be degree holders. This amendment led to '
litigation between the two class of Junior Engineers the details of which
and consequence thereof is narrated in the object and reasons of the E
Karnataka Civil Services (Classification) Amendment Act 9 of 1975. It was
mentioned that even though the High Court on construction of the rule ,
equated the graduate and non-graduate junior engineers in one cadre, 'it
was never the intention of the State Government either to treat them as '
equals or to give the same scales of pay to both the categories and in fact , F
the non-graduate junior engineers have been separately encadred also.'
The Act provided that notwithstanding any judgment or decree or order
of any Court or any equation of the posts made at any time,
"(i) the category of posts of non-graduate Junior Engineers
shall be and shall with effect from 1st November 1956 be deemed ' G
to have been classified as a category saeparate and distinct from ,
the category of posts of Junior Engineers (Graduate);
(ii) the scale of pay admissible to such non-graduate Junior '
Engineers shall be and shall with effect on and from the such date, , H.
112 SUPREME COURT REPORTS (1993] SUPP. 2 S.C.R.
A be deemed to have been only those specified for such category of
posts (and revised from time to time in the Government Order
and Rules mentioned in the Schedule to this Act and not those
admissible to the categories of posts of Junior Engineers
(Graduates);"
B
The distinction between the two class of junior engineers on qualification
was thus legislatively recognised. As has been seen earlier this distinction
existed from before. And since the promotional avenue for degree holders
was better, the diploma holders working in the department used to acquire
degree while continuing in service. The department was sympathetic
c towards such employees and even in 1965 the Board of Chief Engineers
recommended that such Supervisors, draftsman and other officials should
be granted four advance increments in their respective scales of pay or the
minimum pay of Junior Engineers whichever was higher and then they may
be absorbed as Junior Engineer below the person who was drawing pay
D equal to them at the time of absorption. Later on it was recommended that
the pay fixation should be done from the date the results of degree
examinations were announced provided there existed a clear vacancy. In
1973 the Board again recommended for retrospective amendment of the
rules since 1965. Whether these recommendations were accepted by the
Government and if so to what extent is not clear as the Government has
E not filed any affidavit which could have given a clear picture. However to
complete narration even the Government of India was keen to improve the
conditions of diploma holders. So much so that it issued letters to State
Governments to organise part time degree courses in engineering colleges
to enable the diploma holders to improve their qualifications. In pursuance
F of this letter issued from the Ministry of Education and Youth Services the
Government of Karnataka issued letter in 1971 to the Engineering College
sanctioning scheme for part time evening classes. The course was started
from 1973. After completing two years of the course the Association of
Diploma Holders Working and Junior Engineers Grade II made repre-
G sentation that they were undergoing strenuous life by attending both the
college and office to serve the department better therefore their pay scale
be increased to Junior Engineer Grade I and separate cadre be m!lintained
for promotion to the post of Assistant Engineer by deducting four years of
service as Junior Engineer. The representation was founded on the premise
that nature of work performed by the two was same. In 1977 the Board of
H Chief Engineers after considering the representation recommended for the
NARAYANAN v. STATE [SAHAI, J.] 113
I recruitment of Junior Engineer Division II and provide for filling up A
vacancies by promotion from the cadre of Junior Engineer Division II who
acquire a B.E. degree or equivalent while in service in addition to existing
procedure of recruitment. On this recommendation the Secretary in the
Government in the same year recommended that 10% vacancies of Junior
Engineer in Division I may be reserved for Junior Engineer Division II who
acquired the B.E. degree. Having achieved equation of pay, status and even
B
promotion in the cadre of Junior Engineer Division I the Diploma Holders
staked their claim for promotion as Assistant Engineer. And the Board of
Chief Engineers in January 1978 recommended to the Government that
such of those who obtained degree while in service could be promoted to
the post of Assistant Engineer and .could be placed below the last directly C
recruited Assistant Engineer on the date of their acquiring degree: It was
not accepted by the Government and in February 1978 they were informed
that since the cadre of Assistant Engineer (now Assistant Executive En-
gineer) and Junior Engineer (now Assist~t Engineer) were different with
different scales of pay a Junior Engineer who incidentally happened to D
acquire a degree of Engineering could not be absorbed as Assistant
Engineer. It was however suggested that proposal may be examined for
making a provision in the rules for recruitment for Junior Engineer who
possessed a degree in Engineering. Various proposals were considered,
thereafter, and the cadre of Assistant Executive Engineer was increased
with proportionate increase in promotional quota of Junior Engineer ac- E
quiring degree. This led to further demand of sanctioning four advance
increments as recommended in 1965 and to absorb the Junior Engineer
Division II as Junior Engineer Division I from the last date of examination.
In 1984 better promotional avenues were provided and one-sixth of the
cadre strength was reserved for junior engineer to be promoted as Assis-
F
tant Engineer Division II. While all this was going on the Engineer Subor-
dinate Service Rules in the neighbouring State of Andhra Pradesh were
amended and the supervisor etc. who acquired the engineering degree
became eligible for the post of Assistant Engineer by tran'sfer subject to
satisfying certain conditions. It was upheld by this Court in Devi Prasad &
Ors. v. Government of Andhra Pradesh & Ors., (1980] Supp. SCC 206 as the G
Court did not find that the rule giving weightage for having served as Junior
Engineer was unreasonable or shocking. The Association of Diploma
Holders therefore in response to Government's letter submitted alternative
proposal stating therein,
114 SUPREME COURT REPORTS (1993) SUPP. 2 S.C.R.
A "This Association after examining the various aspects in this matter
it is resolved unanimously to request the Chief Engineer (C&B)
to recommed the Andhra Pattern i.e. counting 1/3 of the previous
service and to absorb in the cadre of assistant engineers from the
date of passing the examination. This Association though strongly
feel that 50% of the previous service is the most reasonable period
B however considering the other factors has decided to recommend
to Government at least 1/3 of the service."
The basis for this claim was assumption that the nature of work performed
by the Junior and Assistant Engineers was same. Similar claim was made
C before Pay Commissions as well. It was never accepted. And even though
the Official (Pay) Committee of 1985 did not agree with the assertion of
the diploma holders that the nature of their work was same as turned out
by the Graduate Junior Engineers and observed, 'that contention of the
Graduate that their services are utilised for superior type of work for which
they have acquired competence by their higher qualification appears to be
D more acceptable', and agreed with the report of Narayan Pay Commission,
yet the Cabinet in its meeting decided that the, 'assumption of law depart-
ment that the work of Junior Engineer and Assistant Engineer are sub-
stantly similar' was correct. This furnished basis for amending rules in 1985
relevant portions of which are extracted bolow :
E
1. TITLE AND COMMENCEMENT: (1) These rules may be
called the Karnataka Public Works Engineering Department Ser-
vice (Recruitment) (Amendment) Rules 1985.
(2) They shall be deemed to have come into force on the first of
F January 1976.
2. AMENDMENT OF THE SCHEDULE-In the schedule to the
Karnataka Public Works Engineering Department Services
(Recruitment) Rules, 1960, in the entries relating to the category
of posts of "Assistant Engineer" for columns (2) and (3) the
G following shall be substituted, namely : -
'By direct recruitment or by transfer of a Junior Engineer.
for Direct recrnitment :
H Should be a holder of a degree in Civil Engineering or Mechanical
NARAYANAN v. STATE[SAHAI,J.] 115
Engineering depending upon the requirements, as the case may be A
or of a Diploma Certificate from a recognise·d Institute of En-
gineers that he has passed parts A and B of the Associate Mem-
bership Examination of the Institute of Engineers or equivalent
qualification. Age : Must not have attained the age of thirty five
years. I
B
For transfer:
Must possess B.E., or AMIE (India) qualification in Civil En-
gineering, or Mechnical Engineering.
Note 1 : The option of the Junior Engineer shall be obtained before C 1
such transfer within the time stipulated by the Government.
Note 2 : The transfer shall be effective from the date of graduation
subject to the availability of vacancies without ignoring the inter-se
seniority among those eligible for such transfer. D
Note 3 : A Junior Engineer who is appointed by transfe.- as
Assistant Engineer on or after 1.1.1976 shall be entitled to count
one-third of the service rendered by him as Junior Engineer prior
to appointment as Assistant Engineer, subject to a maximum of 4
years, as if he had been in the post of Assistant Engineer for the E
purposes of consideration for promotion to the post of Assistant
Executive Engineer Division-I and subject to the following condi-
tions, namely:-
(i) The seniority of a Junior Engineeer who is appointed as
Assistant Engineer shall be fixed in the category of Assistant F
Engineers with reference to the notional date arrived at after
giving weightage of service as aforesaid;
(ii) A Junior Engineer who is appointed as Assistant Engineer
shall put in a minimum service of two years, on duty as
Gi
Assistant Engineer, after such appointment and a total service
of five years as Assistant Engineer, inclusive of the service
given as weightage to become eligible for promotion as As-
sistant Executive Engineer Division-I."
When these rules were promulgated its validity was challenged before the H 1
116 SUPREME COURT REPORTS [1993] SUPP. 2 S.C.R.
A KAT even before any· appointment was made. The tribunal did not find
any violation of Article 14 or 16 as similar rule giving weightage in the State
of Ai:J.dhra Pradesh had been upheld by this Court. But it construed Note
(2) to the rules as providing eligibility only. In effect a diploma holder was
entitled to appointment by transfer if he had acquired higher qualifications
B but his placement could not be pushed beyond four years from the date of
appointment. Yet when seniority list was published in 1988 the Junior
Engineer appointed by transfer in 1988 were given their seniority by giving
benefit both under Note (2) and (3). How did i,t work, can be explained by
taking illustration of a Junior Engineer transferred in 1988? He has been
C placed at serial no. 801 in the list. He acquired the degree qualification in
July 1976. Since on notional working out the vacancy was found to exist in
December 1976 his seniority was pushed to 1976 as rule having come in
force on that day and he being qualified was deemed to have been
appointed as an Assistant Engineer and thereafter he was given weightage
of four years being one-third of the service he had rendered as Junior
D Engineer. He thus came to be placed as Assistant Engineer from Decem-
ber 1972. Consequently a second claim petition was filed before the
tribunal. It was dismissed as it did not find any illegality in placement of
the diplOma holder as the weightage of four years was given only from the
date the rule is deemed to have come into force namely 1976.
E
Are the rules violative of Articles 14 and 16 of the Constitution? Do
the rules framed in 1985 with effect from 1976 suffer from inherent vice of
discrimination? What is the import of Notes (2) and (3) of the Rules? Does
it mean that seniority should be taken back to the date of acquiring degree
and then four years more for having rendered service as diploma engineer
F or four years in all from before the date of appointment by transfer? What
is apparent from the historical background is that the diploma holder
Junior Engineers formed a different class than degree holder Junior En-
gilleers. They were treated differently by the rule making authority and
when the High Court equated them the legislature intervened and they
G were classified as different class statutorily. It is further clear that the cadre
of Assistant Engineer was different from Junior Engineer. The method of
recruitment, selection, pay scale and promotional avenues were all dif-
ferent. A Junior Engineer could move up to Assistant Executive Engineer
Division II whereas an Assistant Engineer was entitled to be promoted as
Assistant Executive Engineer Division I. This distinction founded on valid
H classification both on the nature of job and the qualification existing in ·
NARAYANAN v. STATE[SAHAI,J.) 117
service since long could not be obliterated and the two, that is, the Junior A
Engineer and Assistant Engineer belonging to two different cadres could
not be treated as one only because the diploma holder in course of service
acquired the degree. Eligibility to be appointed to a particular post does ,
not mean that the candidate who acquires higher qualification stands
automatically appointed to that post. It may be an ideal situation in which
every diploma holder acquiring degree should be deemed to be appointed B
as Assistant Engineer. But that is not practical. It is bound to result in
inequality. That is why this Court as far back as 1971 warned in State of
Gujarat v. C.G. Desai & others, [1974] 1 SCC 188 against adopting any
doctrinnaire approach to such problems and recommended to resolve it in
practical way. A Junior Engineer acquiring higher qualification may be- C
come entitled to be promoted as Assistant Engineer. And for that purpose
the period of service may be reduced as happened in Andhra Pradesh
where a diploma holder Junior Engineer could be promoted as Assistant
Engineer after ten years of service. But if he acquired degree during service
then, he was entitled to count 50% of his service rendered as supervisor
prior to acquisition of such qualification subject to maximum of four years D
as if he had been in the post of Junior Engineers for purposes of considera-
tion for appointment by transfer like degree ~10lder Junior Engineer to the
post of Assistant Engineer. That is it was equation between the two classes
of Junior Engineers in the same cadre. That is why this Court in Devi
Prasad (supra) did not find the rule unfair or shocking. But appointment
of a diploma holder only because he has acquired degree as Assistant E
Engineer in a cadre where selection is made not because of degree but on
competition and selection would not be practical. InDevi-Prasad this Court
distinguished Desai's (supra) case where period prior to appointment
counted for determining seniority was not approved by this Court as the
diploma holders in Andhra Pradesh were granted benefits under the rule.
Therefore, it may now be examined if the impugned rules are fair and just. F
Demarcation of cadres or gradation in the same cadre on higher and
lower qualification is a common phenomenon for fixing hierarchy in ser-
vices. It is a valid basis of classification as held by this Court in State of.
Mysore & Anr. v. P. Narasing Rao, [1968] SCR 407; The Union of India & G ,
Ors. v. Dr. (Mrs.) S.B. Kohli & Anr., [1973] 3 SCC 592; State of Jammu &
Kashmir v. Triloki Nath Khosa & Others, [1974] 1 SCC 19 and P. Murngesan
& Others v. State of Tamil Nadu & Others, JT (1993) 2 SC 115. Engineering
services throughout the country, normally, maintain distinction between
Junior and Assistant Engineer on diploma and degree. It existed in the
H
118 SUPREME COURT REPORTS [1993) SUPP. 2 S.C.R.
A State of Karnataka right from the day the rules were framed. It has been
done away with on assumption by the Cabinet that some of the duties
performed by the two were common. The tribunal did not agree with it,
and in our opinion rightly. But that alone is not sufficient to stirike down
the rule. A policy decision taken by the government is not liable to
interference, unless the Court is satisfied that the rule making authority has
B acted arbitrarily or in violation of the fundamental right guaranteed under
Articles 14 and 16. Appointment by transfer in the same service or from
the different cadre or service but equal in rank and status is well known.
But transfer from lower to higher cadre not by promotion but direct
appointment only because the incumbent became eligible without any
C selection, test or criteria may not be in consonance with service discipline.
What the rules contemplate is that once a junior engineer acquires· a degree
qualification then he automatically should be 4eemed to have become an
Assistant Engineer. An employee occupying a higher post in different
cadre may on regularisation be entitled to claim his seniority from the date
he was holding the post but giving a higher post in different cadre in which
D the employee has never worked either as officiating or temporary or even
ad hoc because the employee became eligible earlier would be violative of
the right of equality. The methodology adopted in the rules by transferring
such a person and placing him in the category of direct recruits from the
date of acquiring the degree the Government in our opinion violated the
basic norms of appointment and recruitment to any particular service. The ·
E Government may appoint all the Junior Engineers en bloc after framing of
the rule and place them below all those who were working as Assistant
Engineers on that date but they cannot be so appointed as to get
precedence over those who ·are working from before. It would result in
artificially making unequals as equals. Any person entering the service can
F justly feel secure of equality in continuance, promotion etc. Any executive
action violating it cannot be upheld. Seniority .is an incidence of service
which cannot be eroded or curtailed by a rule which operates discriminate-
ly. The purpose of opening evening classes and permitting diploma holders
to study was to improve efficiency in service and provide better service
conditions. When rules were framed and provision for appointment by
G transfer was made both these objectives were achieved. But operation of
the rule with retrospective effect has no nexus with either except that it
may result in undue benefit tcfone class of employees over the other. The
impugned rules having been ~amed in 1985 with effect from 1976 result in
enJry of diploma holders as Assistant Engineer only because they became
qualified as against those who entered in service before or after 1976 by
H
NARAYANAN v. STATE[SAHAl,J.] 119
competitive process. Devi Prasad (supra) was upheld by this Court because A
it was found, 'as reasonable and in the circumstances fair'. The dispute was
between non-graduate diploma holders working as supervisor etc. and
graduates working as Junior Engineer. Since the Court found that there
was functional parity between supervisors and Junior Engineers the rule
framed by the government giving weightage of four years to supervisors to
make them eligible for appointment as Assistant Engineer was not invalid. B
But there can be no functional parity between employees of two different
cadres. It would be too dangerous to accept such assumption. In R.N.
Nanjundappa v. T. 1himmiah & Anr., (1972) 2 SCC 409 this Court struck
down a rule for violation of Article 14 as it had attempted to bypass the
regular method of recruitment by competitive examination or by selection C
or by promotion and provided for regularisation of a government servant
working on deputation as deemed to have been appointed. In State of
Andhra Pradesh & Another v. KS. Muralidhar & Ors., [1992) 2 SCC 241 the
temporary supervisor who had succeeded before this Court in Devi
Prasad's case claimed seniority from the d~te of academic qualification. It
was repelled and it was held that it could be from the date of appointment D
only.
Article 309 of the Constitution empowers appropriate legislature to
frame rules to regulate recruitment to public services and the post.
'Recruitment' according to dictionary means 'enlist'. It is comprehensive
term and includes any method provided for inducting a person in public E
service. Appointment, selection, promotion deputation are all well known
methods of recruitment. Even appointment by transfer is not unknown. But
any rule framed is subject to other provisions of the Constitution. There-
fore it has to be tested on rule of equality. Transfer is normally resorted
in same cadre. But when it is made in a different and higher cadre it must F
not be violative of constitutional guarantee and the rule of fairness. Provid- ·
ing for appointment of a diploma holder from the cadre of Junior Engineer
to Assistant Engineer from back date without any test or selection on
eligibility only does not sound reasonable and fair. Why was it done is
apparent from the following notings by the Secretary,
G
"The most important issue was regarding the date of transfer of
the Junior Engineer acquiring graduate qualifications, the
weightage of past service had to be taken into consideration. In
the proposals submitted to the cabinet this crucial aspect was not
outlined specifically and the impression that was created was that H
120 SUPREME COURT REPORTS [1993) SUPP. 2 S.C.R.
A the transfer would take place with prospective effect. In such an
event the weightage of previous service would have to be confined
only upto date of graduation and this would not have been of any
advantage to most of the Junior Engineers who have acquired the
degree qualification several years ago. Even if the weightage of
past service after graduation and upto the date of appointment as
B Junior Engineers was given the transferees would not have gained
any significant advantage in the matter of notional seniority. The
Karnataka Graduate Engineers have strongly represented on this
issue and have urged that their transfer to the Assistant Engineer's
cadre should be with retrospective effect i.e., from the date they
c have acquired graduate qualification. In support of their arguments
they have pointed out that even in Andhra Pradesh a similar step
was taken in that the transfer was allowed with retrospective effect.
The points raised by the Graduate Engineers Association have
been examined and it is felt that their demand to have to the
transfer effected with retrospective effect has some justification in
D
view of the long years of service rendered by the Junior Engineers
before and after acquiring graduate qualification. If this benefit is
not given, the amendment to the C&R Rules allowing for their
transfer would be of little use for many of the senior members of
the Graduate Engineers Association who have been fighting for
E this change for many years. Therefore taking an overall sym-
pathetic view it is proposed that we may allow for the transfer of
Junior Engineers who acquired graduate qualifications with
retrospective effect from the date of acquisition of such qualifica-
tion subject to the availability of vacancies at that time in the
Assistant Engineer's cadre. It is seen that the first batch of the
F
in-service Junior Engineers took their graduate degree in 1976 and
hence the Notification amending the rules would have to be effec-
tive from 1.1.1976."
Rules were thus bent and made retrospective as a sympathetic considera-
G tion as many Junior Engineers who were working since long would not have
derived any benefit otherwise. May be true but if the extension of such
benefit impinges upon the constitutional guarantee of equality then it
cannot be upheld. And that does stand disturbed. No further need .be said.
Nor it is necessary to pronounce on validity of a rule which in the class of
H appointment by direct recruitment includes appointment by transfer result-
NARAYANAN v.STATE[SAHAl,J.] 121
ing in entry of one class by competition or selection and other by acquisi- A
tion of minimum qualification as the appellants did not challenge the rule
of appointment by transfer but confined their claim to its operation
retrospectively.
Rules operate prospectively. Retrospectivity is exception. Even B
where the Statute permits framing of rule with retrospective effect the
exercise of power must not operate discriminately or in violation of any
constitutional right so as to affect vested right. The rule making authority
should not be permitted normally to act in the past. The impugned rule
made in 1985 permitting appointment by transfer and making it operative
from 1976 subject to availability of vacancy in effect results in appointing C
a Junior Engineer in 1986 with effect from 1976. Retrospectivity of the rules
is a camouflage for appointment of Junior Engineers from a back date. In
our opinion the rule operates viciously against all those Assistant Engineers
who were appointed between 1976 to 1985. In Ex-Capt. KC. Arora & Anr.
v. State of Haryana & Ors., [1984) 3 sec 281 and P.D. Aggarwal & Ors. V. D
State of U.P. & Ors., [1987) 3 SCC 622 it was held by this Court that the
President or Governor cannot make such retrospective rules under Article
309 of the Constitution as contravene Articles 14, 16 or 311 and affect
vested right of an employee. Even in B.S. Yadav & Others etc. v. State of
Haryana & Others etc., [1981) 1SCR1024 where the power to frame rules
retrospectively was upheld it was observed, E
"Since the Governor exercises a Legislative power under the
proviso to Article 309 of the Constitution, it is open to him to give
retrospective operation to the rules made under that provision. But
· the date from which the rules are made to operate must be shown F
to bear, either from the face of the rules or by extrinsic evidence,
reasonable nexus with the provisions contained in the rules, espe-
cially when the retrospective effect extends over a long period as
in this case."
As seen earlier .there is no nexus between framing a rule permitting G
appointment by transfer and making it retrospective with effect from 1976.
Appointing a person to a higher post in a different cadre in which he has
never worked is Violative of constitutional guarantee of those who are
working in the cadre. It is agallist ba8ic principle of recruitment to any
service. Even in Mohammad Shujat Ali (supra) where the Constitution H
122 SUPREME COURT REPORTS [1993) SUPP. 2 S.C.R.
A Bench while reiterating that distinction in qualification was valid criteria
for determining eligihility for promotion except where both held the same
post and perform same duty did not strike down the rules as the differen-
tiation in same class of persons was not brought about for the first time
but existed from before and the two were treated as distinct and separate
class. The retrospective operation of the impugned rule attempts to disturb
B a system which has been existing for more than twenty years. And that too
without any rationale. Absence of nexus apart no rule can be made
retrospectively to operate unjustly and unfairly against other. In our
opinion the retrospective operation of the rule with effect from 1st January
1976 is discriminatory and violative of Articles 14 and 16.
c
So far weightage is concerned such provision has been upheld by this
Court in Devi Prasad. Even the appellant candidly stated that they were
not against weightage.
D For the reasons stated above these appeals and writ petition succeed
and are allowed. The following directions are issued :
(i) The order of the tribunal dated 21st October 1988 is set aside.
The second paragraph of the 1985 Amendment Rules making it
operative from 1st January 1976 is struck down as ultra vires.
E
(ii) Note 2 shall be read as providing eligibility only.
(iii) The respondents are directed to prepare fresh gradation list
in light of observations made above.
F
Parties shall bear their own costs.
l.S.G. Appeals and Petitions allowed.
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