Holding

The retrospective revision of pay scales and service rules was valid, the respondent had no vested right under the old scheme, and a conditional option was not permissible, so the Tribunal's order was set aside.

Summary

The Agricultural Research Service (ICAR) revised its scientists' pay scales and service rules retrospectively to align with the UGC pay package effective 1 January 1986. The respondent, a Scientist S‑1 appointed in 1982, claimed a vested right to promotion under the old five‑yearly assessment scheme, which would have made him eligible in 1987, and argued that his acceptance of the new scheme was conditional. The Central Administrative Tribunal ordered his promotion under the old scheme, but the Supreme Court held that the retrospective amendment of service rules was permissible, that the respondent had no vested right under the discontinued scheme, and that a conditional option could not be entertained. The Court further held that the amendment did not violate Articles 14 and 16, and that service rules not statutory can be amended by resolution without invoking Article 309. Consequently, the Tribunal's order was set aside and the appeal allowed.

Issues considered

The permissibility of retrospective revision of pay scales and service rules.
Whether service rules can acquire retrospective effect by executive instructions.
Whether non‑statutory service rules require legislation under Article 309 of the Constitution.
Whether the respondent had a vested right to promotion under the old scheme that could not be taken away by the new scheme.
Whether a conditional option to accept the new pay scale is valid.
Whether the amendment violates Articles 14 and 16 of the Constitution.

Legislation cited

Constitution of Indias. Article 14, s. Article 16, s. Article 309
Societies Registration Act

Subjects

service lawpay scale revisionretrospective amendmentvested rightspromotionArticles 14Article 16Article 309conditional optionCentral Administrative TribunalUGC pay scales

Judgment

l.C.A.R. A
v.
SATJSH KUMAR AND ANR.

MARCH 31, 1998

[S.C. AGRAWAL, D.P. WADHWA AND A.P. MISRA, JJ.] B

Service Law :

Pay Scale-Retrospective revision, on basis of UGC pay scale modi/Ying
whole scheme-Held, permissible. C
Pay Scale-Conditional option excercised for higher pay scale-Held,
not permissible.

Service Rules-Retrospective operation-Held, not permissible by mere
executive instructions. D
Service Rules-Not statutory rules-Held, can be amended by a
resolution, no legislation under Article 309 of Constitution of India required.

Constitution of India-Articles I 4 & I 6-Retrospective revision of pay
scale-Applied without any discrimination-Held, not violative. E
The appellant-society introduced for its employees Agriculture
Research Service w.e.f. October 1, 1975. The respondent was appointed as
scientist in S-1 in pay scale of Rs. 700-1300 in 1982. The next grade of
Scientific S-11 in pay scale of Rs. 1100-1600 became due to him in 1987 on
completion if five years under the five yearly assessment. The respondent F
was asked to submit his five yearly as~essment which he did, but no action
was taken thereon. The appellant by a circular conveyed its decision to revise
the pay scales of Scientists retrospectively w.e.f. January 1, 1986 to bring
them at per with the UGC pay scales. The scientists made representation
against the implementation of the UGC pay package. The appellant issued G
orders revising the pay scale of the scientists in various i;rades w.e.f. January
1, 1986. The appellant also mentioned that anomalies, hardships and doubts,
if any, in the implementation of the revised pay scales be brought to its notice
for clarification. The scheme of assessment, recruitment etc. stood modified
after adoption of UGC pay package and comprehensive instructions were to
follow. The appellant further issued modified Career Advancement Scheme H
557
558 SUPREME COURT REPORTS (1998] 2 S.C.R.

A with retrospective effect from January I, 1986 and a new procedure was
prescribed for promotion. The respondent opted for the new scheme with a
rider that the option was subject to clarification in regard to his career
advancement after consideration of the five-yearly assessment as was in
vogue during the year 1987. He was placed in the next higher grade of
B Scientist (Senior Scale) under the new Career Advancement Scheme. He
claimed promotion on the basis of five-yearly assessment when he completed
the service of five years in the year 1987. He also made a representation
before the appellant-council but was unsuccessful.

The respondent filed a petition before the Central Administrative
C Tribunal. The Tribunal directed the appellant to consider the case of the
respondent for promotion to the higher grade of Scientist (Senior Scale).

Aggrieved the appellant appealed to this Court contending that no
retrospectivity was involved in the instance case, as the earlier scheme was
discontinued; no visited right of promotion accured in favour of respondent
D under the earlier scheme, that there could not be two different dates, i.e., one
for the revision of pay scales and other for the purpose of assessment for
promotion; that the respondent had accepted revision of pay scales given
under the new Career Advancement Scheme and so he could not claim
consideration under the earlier scheme; that there could not be two schemes
E of promotion operating during the same period, that no person had a right
to be promoted, and that the UGC system of promotion, recruitment, pay
package etc. was adopted in toto without any alteration and the judgment of
the Tribunal amounted to· altering the same.

Allowing the appeal and setting aside the order of the Tribunal, this
F Court

HELD : I. The Appellant-Council had revised its service rules
retrospectively on the basis of the UGC pay package. Respoudent oecame due
for grant of higher pay scale under the old five-yearly scheme, when the new
G scheme was brought into force. The appellant council asked the scientists
working under it to exercise their option and also report any hardship or
anomalies for clarification. The respondent opted for the new scheme with
a rider the that he was also entitled to a higher pay scale under the old "",
scheme. He could not give such a conditional option under the amended
rules, which were not unreasonable, arbitrary of irrational or violative of
H Articles 14 and 16 of the Constitution of India. 1563-C; 564-DJ
l.C.A.R. v. SA TISH KUMAR 559

2. By amending the provision of law retrospective operation could be A
given to the rules. However retrospective operation of service rules could not
be given by mere Executive instructions. [568-H!
3. Rules framed by the appellant are not statutory rules and they can
be amended by a resolution of the competent body and any legislation on
framing of rules under Article 309 of the Constitution is not required: B
[569-A)
4. When a decision was taken on the basis of reports of various
committees and in consultation with the Ministry of Finance the UGC pay
scales were granted from January 1, 1986, the challenge to such a decision
could not be entertained. No question of promotion as such is involved in this C
case. Any scientist of S-1 grade having 12 years service could go to the next
higher grade irrespective of the fact of there being any vacancy in the higher
grade or not. He cannot pick up the higher grade merely on completion of
12 years service; his work has to be assessed. [569-8-C[

5. The amended rules, effective from January 1, 1986, have been D
~'\" applied to all the Scientists without any discrimination. Scientists including
the respondent are now in a much better position. It cannot be said that action
of the appellant has been in any way unreasonable, arbitrary or irrational
for the respondent to challenge the same under Articles 14 and 16 of the
Constitution. [569-Dj
E
6. The Tribunal did not address itself to another aspect of the matter,
whether the respondent could give a conditional option. He could not do so.
The appellant was justified in ignoring any condition give.n in the option
when respondent wanted UGC pay package from January 1, 1986. [569-El
7. The view which the Tribunal took in the instant case would certainly F
create chaos in the administration and working of the appellant society.
[569-El
Union of India v. Tushar Ranjan Mohanty, [ 1994] 5 SCC 450 and T.R.
Kapur v. State of Haryana. [1986] Suppl. SCC 584, distinguished.

A.S. Parmarv. State of Haryana, [19841 Supp. SCC land U.0.1. v. P.C. G
Misra, [1994] Supp. I SCC 39, relied on.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1839 of
1998.

From the Judgment and Order dated 26. 8. 96 of the Central H
560 SUPREME COURT REPORTS (1998] 2 S.C.R.

A Administrative Tribunal, Hyderabad in 0.A. No. 497 of 1996.
A.K. Sikri, V.K. Rao and Ms. Madhu Sikri. for the Appellant.

Dr. Aparna Bhardwaj, Rajesh Tyagi and Praveen Jain for the Respondents.

B The Judgment of the Court was delivered by

WADHWA, J. Leave granted. ,...
The appellant is a society registered under the Societies Registration
Act and is engaged in the research of agriculture, animal husban.dry, fishery,
C etc. having network of research institutes in different parts of the country. It
is aggrieved by the judgment dated August 26, I 996 of the Central
Administrative Tribunal, Hyderabad ('Tribunal' for short) allowing the petition
of the respondent, a scientist working with the appellant. Tribunal directed
the appellant to consider the case of the respondent for promotion to the
higher grade of Scientist (senior scale) from the year 1987 on the basis of five
D yearly assessment scheme in existence at that time and if found fit to promote
him and to fix his pay in the revised scale of pay introduced as per proceedings ..,.,--
dated March 9, 1989 notionally and to make him actual payment in that scale
on the basis of above fixation from January 13, 1990 when he was actually
promoted to that grade. A further direction was that the respondent be paid
E arrears of salary, if any, within a period of three months from the date of
receipt of copy of the judgment.

'rhe appellant introduced Agricultural Research Service with effect from
October I, I 975 and the relevant grades and pay-scales of scientists working
with it on December 31, 1985 were as under :-
F "Grade Pay Scale

Scientists-S Rs. 550-950

Scientists-S-1 Rs. 700-1300

G Scientists-S-11 Rs. 1100-1600

Scientists-S-III Rs. 1500-2000" ,.,
Respondent was appointed as Scientist S-1 by order dated January 8,
1982 and he joined this post on January 13, 1982 in the pay-scale of Rs. 700-
H 1300. Relevant service rules at the time of appointment of the respondent
l.C.A.R. v. SA TISH KUMAR [WADHWA, J.] 561
provided for assessment, promotion etc. on the .basis of a five-yearly A
assessment. The respondent should have become eligible for grant of next
higher grade of Scientist S-11 in 1987. On July 18, 1987 respondent was asked
to submit his five-yearly assessment for the period 1982-87 which he submitted
but no action was taken thereon. In the meantime revised pay-scales of
Scientists were introduced replacing the old Scheme of assessment by new B
Career Assessment Scheme of the UGC w.e.f. January I, 1986. Old Scheme
ceased to operate after December 31, 1985. Now, not only the pay-scales were
revised but the Scientists were also given new designation and were brought
at par of UGC as below :-

S.No. Grade Existing Pay Nell' Desig- Revised Desig- c
Scale nation Pay Scale nation in
UGC

I. Scientist S-0 550-25-750 Experimental 1740-60-2700- Enumerate
EB-30-900 Scientists -EB-75-3000 Documents

D
2. Scientist S-1 700-40-900-EB Scientist 2200-75-2800- Lecturer
40-1100-50-1300 EB-I 00-4000

3. Scientist S-2 l l 00-50-1600 Scientist 3000-100-3500 Lecturer
(with total ser- (Sr. Scale) -125-5000 (Sr. Scale)
vice in the ARS
as on 31.12.85
upto 8 years). E
4. Scientist S-2 1100-50-1600 Scientist 3 700-125-4950 Reader
(with total ser- (Selection Grade) -150-5700
vice in the ARS
as on 31.12.85
exceeding upto 16 years).

5. Scientist S-3 1500-60-1800- Scientist 3700-125-4950 Reader
F
(with total ser- 100 (Selection Grade) -150-5700
vice in the ARS
as on 31.12.85
up to 16 years).

5. Scientist S-3 1500-60-1800- Principal 4500-150-5700 Prof.
(with total ser- 100 Scientist -200-7300 G
vice in the ARS
as on 31.12.85
upto 16 years).

January l, 1986 is the date when the recommendations of Fourth Pay
Commission were implemented. There are several streams of people working H
562 SUPREME COURT REPORTS [1998] 2 S.C.R.

A in ICAR, the appellant, and the non-technical staff who opted for the
replacement scales recommended by the Fourth Pay Commission, were given
the benefits from January I, 1986 and they drew their arrears. In the case of
Scientist, the. question remained pending because there were representations
from them for implementation of the UGC pay package as per recommendations
of Dr. N.V. Rao Committee. This Committee had seven members and had made
B certain recommendations. There were certain objections made against the
recommendations of Dr. N.V. Rao Committee and another Committee with Dr.
M.G.K. Menon as Chairman was constituted. It was thereafter that
recommendations to implement UGC pay package for Scientists were adopted.
The appellant issued orders on March 9, 1989 and it was mentioned that it
C was decided with the approval of the Government of India, Ministry of
Finance (Department of Expenditure), to revise the pay-scales of the Scientists
in various grades w.e.f. January I, 1986. Detailed instructions were issued.
Scientists were asked to give their option to draw salary in the revised scales
in writing in the form prescribed within three months from the issue of the
letter dated March 9, 1989. In para 14 of this communication it was mentioned
D that anomalies, hardships and doubts, if any, in the implementation of the
revised pay-scales may be brought to the notice of the appellant for clarification
and in para 16 it was stated that as a result of the adoption of the UGC pay
package, the Scheme of assessment, recruitments, etc. stood modified w.e.f.
January 1, 1986 and that comprehensive instructions in this regard would be
E issued shortly. With reference to this para 16 the appellant took further
decision as envisaged therein and issued modified Career AdvanceMent
Scheme on October 28, 1991. In suppression of earlier procedure new procedure
was prescribed for promotion. Some of the relevant ru'les prescribing the
procedure to be followed for promotion are as under :-

F "I. Suitability for promotion to the next Higher Grade will be adjudged
by the Departmental Promotion Committee to be constituted at the
Institute level with the following composition:
(i) Chairman - to be nominated by the ASRB.

G (ii) One Expert to be nominated by DG, !CAR.

(iii DOG concerned with the Institute or his nominee.

(iv) Director of the Institute or his nominee.

2. The recommendation of the DPC shall normally be made within a
H year of completion of requisite years of service and promotion if
1.C.A.R. v. SA TISH KUMAR [WAD HWA, J.] 563
awarded will take place from a date following the date of completion A
of prescribed years of service.

3. The recommendations made by the DPC shall be submitted by the
Director of the concerned Institute to !CAR for seeking the approval
of the competent authority.
B
4. The posts will stand created for this purpose by upgrading the
number of posts of Scientists/Senior Scientists in the respective
Institute/ICAR headquarters."

The respondent gave his option to be covered under the new Scheme
by his letter dated June 8, 1989 but it was with the rider that the option was C
subject to the clarification in regard to his career advancement after
consideration of the five-yearly assessment which was in vogue in the year
1987 when he became eligible for consideration for the next higher grade. The
new Career Advancement Scheme had come into effect by Office Memorandum
dated October 28, 1991 with retrospective effect from January 1, 1986 as stated
earlier. Respondent went on study leave from September 13, 1989 to November D
30, 1993. On his joining duty an office order dated March 17, 1994 was issued
placing him in the next higher grade of Scientist (senior scale) in the pay-scale
of Rs. 3000-5000 w.e.f. January 13, 1990 under the new Career Advancement
Scheme as under the new Scheme he was to have eight years of service in
Scientist S-1 grade. The respondent represented that his case be considered E
for promotion on the basis of earlier five-yearly assessment when he completed
the service of five years in the year 1987, to promote him on that basis and
to fix his pay in the revised pay-scale. Since there was no response to the
representation this led to the filing of the petition before the Tribunal which,
as stated above, was allowed.
+- F
The question which fell for consideration before the Tribunal was: Has
the respondent acquired vested rights for promotion under the old Scheme
and his case should have been considered for placing him in the higher grade
of scientist (senior scale) in the year 1987 in terms of the existing rules at that
time or could the amended rules given effect retrospectively w.e.f. January 1, G
1986, take away the vested rights already conferred on' the respondent?

It was submitted by the appellant before the Tribunal that, no doubt,
under the old scheme the respondent would have become eligible for
assessment for promotion to the next higher grade on completion of five years
of service as Scientist Grade S-1 on January 12, 1987 but, however, as a result H
(

"""
564 SUPREME COURT REPORTS [1998] 2 S.C.R.

A of the adoption of UGC pay package by the appellant the old Scheme of
assessment was replaced with the new Career Advancement Scheme of UGC
w.e.f. January I, 1986. The old asses~ment scheme ceased to operate after
December 31, 1985 and the benefit of that old scheme was admissible to the
sci~ntists up to that date and not thereafter. It was submitted that scientists
with the appellant had been allowed UGC pay package as per the decision
B of the Government of India, Ministry of Finance, Department of Expenditure
and that was to be applied without alteration. Thus the placement of the
scientists in UGC revised scales was to be done strictly as per the position/
scale held by the scientist concerned as on December 31, 1985. Therefore, as
per the option given by the respondent he was placed in the pay-scale of Rs.
C 2200-4000 w.e.f. January 1, 1986 according to his position of Scientist S-1 as
on December 31, 1985.

The Tribunal relied upon the judgment of this Court in Union of India
v. Tushar Ranjan Mohanty, [1994] 5 SCC 450, in coming to the conclusion that

D
vested rights for consideration for promotion of the respondent had already
been conferred upon him in 1987 under the old Scheme and the new amended
...
rule which was given retrospective effect from January I, 1986 could not take
away those vested rights of the appellant. The Tribunal held that it was well
settled law that rights which had accrued to an employee, could not be taken
away by making amendment with retrospective effect.
E Aggrieved by the impugned judgment of the Tribunal the appellant has
come up in appeal to this Court. It has been submitted before us that no
retrospectivity was involved in the present case. After December 31, 1985
earlier assessment scheme was discontinued and there could not have been
any assessment after January I, 1986 under that scheme. No vested right
F accrued in favour of the respondent under the earlier Scheme inasmuch as on
January 1, 1986 he had rendered only four years of service as Scientist Grade
S-1. It was the Scientists Forum of the appellant which had been demanding
UGC system of pay-scales, etc., and the petitioner being a member of that
Forum was estopped from challenging the same when it had been introduced.
Appellant further submitted that there could not be two. different dates, i.e.,
G one for the revision of pay-scales and other for the purpose of assessment
for promotion. The respondent had accepted the revision of pay-scales which
he was given under the new Career Advancement Scheme and he could not
contend that while he be given revised pay-scale under the new Scheme he
should be considered for promotion under the earlier Scheme. There could
H also not be two schemes of promotion operating during the same period. The
l.C.A.R. v. SA TISH KUMAR [W ADHWA, J.] 565

respondent was claiming UGC pay-scales w.e.f. January I, 1986 as per UGC A
pay pattern and on the other hand was contending that the Career
,<_
Advancement Scheme, under which he got the revised pay-scale circulated
on October 28, 1991, never operated from January 1, 1986. It was submitted
that during the last eleven years w.e.f. January I, 1986 all scientists were given
promotion as per the new Career Advancement Scheme of UGC and that the
impugned judgment unsettled the settled position and was bound to create
B
undue complications. It was then submitted that no person had a right to be
-< promoted and that a chance of promotion was not a condition of service and
it. was always upon the employer to lay down procedure for promotion or
change the earlier procedure/norms. When UGC system of promotion,
recruitment, pay package, etc. was introduced it was done in toto without any c
alteration and the impugned judgment amounted to altering the same. The
Tribunal could not interfere with the policy decision of the appellant. It was
submitted that every Scientist with the appellant had the knowledge that if
ultimately the UGC Scheme was adopted it would be from January 1, 1986. It
was asserted that no Scientist in the appellant had been assessed nor promoted
after December 31, 1985 till March 9, 1989 under the old Scheme, and that this D
fact had not been controverted by the respondent. Lastly, it was submitted
that two Co-ordinate Benches of the Tribunal had dismissed the two petitions
by the Scientists involving the same issue and that same issue was also
raised by the Association of Scientists before the Principal Bench of the
Tribunal and their demand was rejected. E
Relying on the earlier rules as applicable, the respondent submitted that
a vested right for promotion had been acquired by him and th·at the same
could not be taken away by introduction of a new Scheme and it was
submitted that the option given by the respondent for acceptance of new
pay-scales from January I, 1986 was conditional and that option could not F
+ have been accepted by the appellant without reference to the conditions
contained therein. A vested right which had accrued. on January 12, 1987
could not be taken away by the new Scheme of October 28, 1991. Reliance
was placed on two decisions of this Court, which had been relied by the
Tribunal in its judgment, viz., Union of India v. Tushar Ranjan Mohanty,
G
[1994] 5 SCC 450 and TR. Kapur and Ors. v. State of Haryana & Ors., [1986]
;-.. Supp. sec 584.

In TR. Kapur and Ors. v. State of Haryana & Ors., [1986] Supp. SCC
584, the writ petitioners before this Court were diploma holders in Engineering
and were appointed to the Overseers Engineering Service (Irrigation Branch) H
566 SUPREME COURT REPORTS [1998] 2 S.C.R.

A and in due course were promoted as Sub-Divisional Officers in Class II
service. In an earlier decision rendered by this Court in A.S. Parmar v. State
of Haryana, (1984] Supp. SCC 1, on a construction of the Rule 6(b) of the
Punjab Service of Engineers Class I, PWD (Irrigation Branch) Rules, 1964, it
was held that a member of Class II service was not required to have university
B degree for promotion to the post of Executive Engineer in Class 1 service. The
petitioners being diploma holders were thus eligible for promotion as Executive
Engineers in Class I service. Just two days before the eYpiry of the period
within which promotion of eligible persons including the petitioners was to
-
be completed the State Government issued a notification purporting to amend
Rule 6(b) of the Rules of Class I Rules with retrospective effect from July 10,
C 1964. Under this amended Rule degree in Engineering was made essential
qualification for promotion to Class I service. The petitioners challenged this
notification on two counts (I) violative of Articles 14 and 16 of the constitution
and (2) ultra vires the powers of the State Government by reason of the
proviso to Section 82(6) of the Punjab Reorganisation Act, 1966. We are not
concerned here with the second ground though the amendment was struck
D down by this Court as ultra vires the State Government under this count as
well. On the first count this Court said :-

"It is well settled that the power to frame rules to regulate the
conditions of service under the proviso to Article 309 of the
Constitution carries with it the power to amend or alter the rules with
E a retrospective effect. It is equally well settled that any rule which
affects the right of a person to be considered for promotion is a
condition of service although mere chances of promotion may not be.
It may further be stated that an authority competent to lay down
qualifications for promotion, is also competent to change the
F qualifications. The rules defining qualifications and suitability for
promotion are conditions of service and they can be changed
retrospectively. This rule is however subject to a well recognised
principle that the benefits acquired under the existing rules cannot be
taken away by an amendment with retrospective effect, that is to say,
there is no power to make such a rule under the proviso to Article 309
G which affects or impairs vested rights. Therefore, unless it is specifically
provided in the rules, the employees who are already promoted before
the amendment of the rules, cannot be reverted and their promotions
cannot be recalled. In other words, such rules laying down
qualifications for promotion made with retrospective effect must
H necessarily satisfy the tests of Articles 14 and 16(1) of the
l.C.A.R. v. SA TISH KUMAR [WADHWA, J.] 567
constitution." A
In Union of India v. Tushar Ranjan Mohanty, [1994] 5 SCC 450
respondent No. I was a general category candidate belonging to Indian
Statistical Service. Ce1tain other respondents, who belonged to Scheduled
Castes and Scheduled Tribes, were promoted under the relevant rules
superseding the first respondent. This suppression was successfully challenged B
by the first respondent in the Central Administrative Tribunal on the ground
that reservation in respect of appointments by promotion was not permissible
under the Rules. Subsequently, Rules were amended by notification dated
February 20, 1989 retrospectively with effect from November 27, 1972 providing
for reservation even in appointments made by way of promotion. On the basis C
of the amendment to the Rules the decision of the Tribunal quashing the
process of the first respondent was challenged by Union of India in this
court. This Court dismissed the appeal and said that the legislatures and the
competent authority under Article 309 of the constitution of India have the
power to make laws with retrospective effect. This power, however, cannot be
used to justify the arbitrary, illegal or unconstitutional acts of the Executive. D
When a person is deprived of an accrued right vested in him under a statute
or under the Constitution and he successfully challenges the same in the
court of law, the legislature cannot render the said right and the relief obtained
nugatory by enacting retrospective legislation. The Court was of the view
that the retrospective operation of the amended Rule could not be sustained E
and the retrospective amendment could not take away the vested right of a
general category candidate senior to candidates belonging to ScheduJed
Castes and Scheduled Tribes. The Court struck down the amended Rule
insofar ar.d to the extent it had been made operative retrospectively to be.
unreasonable, arbitrary and as such violative of Articles 14 and 16 of the
Constitution. F
In Union of India v. P.C. Misra, [1994] Supp. 1 SCC 39. referred to by
Mr. Sikri, in which one of us, (S.C. Agrawal, J.) was a member, there were two
grades - Grade-I (Selection Grade) and Grade II in· the Delhi and Andaman
Nicobar Islands Service Rules, 1971 framed under proviso to Article 309 of
the Constitution. By a Memorandum dated November 26, 1987 Central G
Government decided to change the pay structure of the salaries w.e.f. January
I, 1986, which is as under:-

"(i) Entry Grade Rs. 2000-3500 Existing
(ii) Selection Grade Rs. 3000-4500 Existing H
568 SUPREME COURT REPORTS [1998) 2 S.C.R.

A (After 8 years)
(20% of APS)
J>.r
(iii) Junior Administrative Grade Rs. 3700-5000 New Scale
(After 12 years) Introduced
(with at least 4 years
in Selection Grade]
B (20% of APS-Subject
to identification of posts)"
)-..
The Memorandum also stated that necessary amendments in the Rules
were being carried out and these were introduced by notification dated
November 22, 1988. The Tribunal held that 1988 amendment providing for
c promotion to the Junior Administrative Grade from Grade-I (Selection Grade)
being prospective could only govern the vacancies arising after the coming
into force of the 1988 Amendment and further that the vested rights and
legitimate expectations of the respondents could not be taken away by
retrospective amendment of the rules and by providing for fresh selection to
D the upgraded posts in the Junior Administrative Grade by adopting new
criteria. The Court said :-
~

"We are unable to appreciate the view of the Tribunal that the 1988
Amendment could only govern vacancies arising after the coming into
force of the 1988 Amendment and that the vested rights and legitimate
E expectations could not be taken away by retrospective amendment of
the Rules. Since the Junior Administrative Grade was introduced for
the first time with effect from January I, 1986 the rule-making authority
was competent to make provision for appointment to the iunior
Administrative Grade after it was introduced. Amendments introduced
in Rule 31 by the I 988 Amendment make provision for such
F appointments and we do not find any legal infirmity in .the said ~-
provision".

"We do not think the law laid by this Court in two judgments, relied by
the respondent, in any way helps his case. In both the judgments the employees
were civil servants governed by statutory rules either framed by the Legislature
G or under Article 309 of the Constitution. By amending the provision of Jaw
retrospective operation could be given to the Rules. However, retrospective
""-..
operation of service rules could not be given by mere Executive instructions.
In the present case before us the respondent is not governed by any statutory
rules. Here it is the competent body of the appellant which frames rules laying
H down conditions of service of its employees. Rules framed by the Society are
l.C.A.R. v. SA TISH KUMAR [W ADHWA, J.] 569

not statutory rules and they can be amended by a resolution of the competent A
body and any legislation or framing of rules under Article 309 of the Constitution
is not required. Scientists of the appellant had been agitating for grant of UGC
pay-scales. When a decision was taken on the basis of reports of the various
committees and in consultation with the Ministry of Finance and UGC scales
of pay were granted from January 1, I 986 the challenge to such decision could B
not be entertained. Moreover, no question of promotion as such is involved.
Any Scientist of S-1 grade having 12 years' service could go to the next
~ higher grade irrespective of the fact that if there is any vacancy in the higher
grade or not. Of course, he cannot pick up the higher grade merely on
completion of 12 years' service and his work had to be assessed. It is also
not the case of the respondent that any Scientist has been treated differently C
than him after January I, 1986. To all the Scientists amended rules effective
from January i, 1986 had been applied without any discrimination. Scientists
including the respondent are now in a much better position. It cannot be said
that action of the appellant has been in any way unreasonable, arbitrary or
irrational for respondent to challenge the same as violative of Articles 14 and
16 of the Constitution. D
In our opinion the Tribunal also did not address itself to another aspect
of the matter, namely, whether the respondent could give a conditional option.
We do not think he could do so. The appellant was justified in ignoring any
condition given in the option when respondent wanted UGC pay package E
from January I, 1986. The view which the Tribunal took would certainly create
chaos in the administration and the working of the appellant. Accordingly,
this appeal is allowed. The impugned order of the Tribunal is set aside and
the petition filed by the respondent is dismissed. We will leave the parties to
bear their own costs.
F
A.Q. Appeal allowed.