Holding

Seniority between promotees and direct recruits must be fixed according to the quota‑rota rule in Item 3 of Appendix‑A, with temporary promotions not giving promotees seniority over direct recruits.

Summary

The petitioners, who were temporarily promoted to Assistant Traffic Manager (ATM) positions under the A.P. State Road Transport Corporation's recruitment regulations, challenged their placement below direct recruits in the integrated seniority list of 1994. The core dispute was whether seniority should be determined by the date of temporary promotion or by the quota‑rota system prescribed in Item 3 of Appendix‑A of the recruitment regulations, especially given a ban on direct recruitment from 1977 to 1988. The Supreme Court held that temporary promotions under Regulation 30 do not constitute a first appointment for seniority purposes and that seniority must follow the 1:1 quota and rota rule between direct recruits and promotees. Consequently, the promotees could not claim seniority over direct recruits, and the seniority list was upheld. The Court dismissed the civil appeals without costs.

Issues considered

The method of fixing inter‑se seniority between promotees and direct recruits under the recruitment regulations.
Whether temporary promotion and subsequent regularisation confer seniority over direct recruits.
Effect of the ban on direct recruitment on the operation of the quota‑rota rule.
Interpretation of Service Regulation 3 in conjunction with Recruitment Regulations 30 and 34.

Legislation cited

Road Transport Corporation Act, 1950s. 45

Subjects

senioritypromoteedirect recruitquota‑rota ruletemporary promotionservice regulationsrecruitment regulationsban on recruitmentRoad Transport Corporation

Judgment

M. SUBBA REDDY ANO ANR. A
V.

A.P. STATE ROAD TRANSPORT CORPORATION ANO ORS.

APRIL 12, 2004

[V.N. KHARE, CJ., S.8. SINHA ANDS. H. KAPADIA, JJ.] B

Service law:

A. P. State Road Transport Corporation Employees (Service) Regulations,
1964-Regulation 3-A. P. State Road Transport Corporation Employees C
(Recruitment) Regulations, 1964-Regulations 30, 34 and, item 3 ofAppendix
A (Section 8) -Recruitment regulations prescribing quota of I: 1 between
> direct recruits and promotees for recruitment to the post of Assistant Traffic
Manager-Ban on direct recruitment for few years-Corporation temporarily
promoting certain persons to post reservedfor direct recruits-Vacancy arising D
in promotees' quota and promotees regularised therein-Thereafter, direct
recruits borne in services-Fixation of seniority-Held: On reading service
regulations with recruitment regulations, fixation of seniority depends upon
the number of vacancy falling in a particular category and not on the date of
promotion or date of selection-Rule of rota is inbuilt in quota prescribed for
direct recruits and promotees and in accordance with the quota seniority is E
• fixed-Thus, promotees could not get seniority over direct recruits-Also
promotees were promoted subject to being reverted to substantive post on
approved candidates becoming available and when such revertees are
repromoted as per regulation 34 they can be deemed to be appointed to such
post, as such temporary promotions cannot be first appointment to that p
category-Furthermore, mere inaction or imposition of ban does not mean
that quota was broken down-Road Transport Corporation Act, 1950-Section
45.

First respondent-State Road Transport Corporation is a statutory
Corporation constituted under the Road Transport Corporation Act, 1950. G
Appellant No. 1 was appointed as a Traffic Apprentice on 10.8.1971 in
the Corporation. In 1983 he was promoted temporarily as Assistant Traffic
Manager against vacancy reserved for direct recruitment subject to
appointment. When the vacancy arose in the promotee quota, his services
were regularised with probation rights with retrospective effect from
7 H
8 SUPREME COURT REPORTS [2004) SUPP. I S.C.R.

A 27.12.1986 vide order dated 9.9.1988. He was confirmed as ATM on
1.4.1987. On 9.11.1990, respondent-direct recruits were borne into services
of the Corporation. In the integrated seniority list of 10.11.1994 appellants
were placed below direct recruits. Appellants filed writ p~tition challenging
the same. It is the appellant's case that there had been ban on direct
recruitment from 1977 upto 1988 in the Corporation and the promotions •
B were made from lower feeder posts in excess of ratio of 1:1 under A.P.
State Road Transport Corporation Employees (Recruitment) Regulations,
1966 on temporary basis and in course of time they wer~ regularized; and
that when their promotions were regularized, the direct recruits were not
even borne on the cadre of ATMs/AMEs and as such they could not be
c placed below the direct recruits. High Court applying quota-rota rule held
that direct recruits were rightly treated as senior to the promotees. Division
Bench upheld the order. Hence the present appeals.

Appellant-promotees contended that t.he appellants had a right to
be promoted within their quota during the years 1981 to 1987, when
D vacancies for promotees quota became available as during this, period no
direct recruits were available, that on the date when appellant No. 1 was
regularized, there were no direct recruits available and as such
Corporation cannot place direct recruits above promotees; that the direct
recruits cannot claim appointments from the date of the vacancy in. their
quota before their selection; that Item-3 of Appendix-A (Section-B)
E
prescribes the method of recruitment and the manner in which vacancy
is allocated, it does not involve rota for the purposes of seniority but only
quota, therefore, rota cannot be implied; that seniority is dealt with only
by regulation 3 of S.ervice Regulations, and not by regulation 34 of

F
Recruitment Regulations, which refers to only allocation of vacancy; that
the non-availability of candidates in a particular category, may be on
~ .
account of ban on recruitment or on any other ground, therefore, when
promotees were regularized in the promotion quota when direct recruits
were not available, the quota in item-3(1) of Appendix-A would not apply;
and that in any event, allocatiOn of vacancy under the said clause was not
rigid and it cannot be a basis for denying seniority to the promotees from
G the date of regularization.

Dismissing the appeals, the Court

HELD: Per Kapadia J. (For himself and Khare CJ) : •
H 1.1. Reading item 3 of Appendix-A (Section-B) with regulation 34
M.S. REDDY v. A.P.S.R.T.C. 9
of the Recruitment Regulation it is clear that filling up of the posts, A
reserved for direct recruits by departmental promotees has to be on
temporary basis under regulation 30 and as soon as eligible candidates
from direct recruits quota become available, they are to replace the
....... temporarily promotees. 120-D)

1.2. Regulation 3 of Service Regulations which states that seniority B
would be determined by the date of first appointment to such service, class,
category or grade, has to be read with regulations 30 and 34 of the
Recruitment Reg~lations. [20-E, F]

1.3. In the instant case, the appellant-promotees were promoted C
temporarily to the posts of ATMs/AMEs under regulation 30 as there were'
no direct recruits available subject to being reverted to substantive posts
on approved candidates becoming available. On being reverted they would
> subsequently be considered for repromotion against the quota of vacancies
reserved for promotees under Regulation 34(6). It is only when such
revertees are repromoted as per regulation 34, they can be deemed to have D
been appointed to the post of ATM or AME within the meaning of
regulation 3 and not when they were first appointed tentatively to the post
of ATMs/AMEs being reserved for direct recruits. Therefore, for posts
reserved for direct recruits, the temporary promotions cannot be said to
be first appointments to that category. It follows that seniority had to be
fixed between the direct recruits and the promotees strictly in accordance .
with the quota provided for in Item-3 of Appendix-A (Section-B).
[20-F-H; 21-A)

1.4. Appellants were promoted on temporary basis under regulation
30 with the clear understanding that the period of officiation will not give · F
them any right over direct recruits in future. Regulation 30 (6) states that
if a temporarily promotee is subsequently promoted in accordance with .
the regulations, his probation will commence in the higher category" only
from the date of subsequent promotions. For the same reason, regulation
34 states that revertees shall be subsequently considered for repromotion
against the quota of vacancies reserved for being filled by promotion. G
Regulation 34 ensures induction of qualified direct recruits. It is enacted
to protect the quota prescribed for direct recruits. On reading regulation ·
3 of service regulations with regulations 30 and 34 of recruitment
regulations, it becomes clear that neither the date of promotion nor the
date of selection is the criteria for fixation of seniority. The fixation of .H

..
10 SUPREME COURT REPORTS [2004) SUPP. I S.C.R.

A seniority under the above regulations depends upon the number of
vacancies falling in a particular category against which promotees became
due for promotion. Therefore, the rule of rota is inbuilt in the quota
prescribed for direct recruits and for promotees in terms of item-3 of
Appendix-A (Section-B) to the recruitment regulations. In the instant c~se,
B the regulations prescribe a quota of 1:1, which leads to rota for
confirmation. Having fixed the quota between the two sources of
recruitment, there is no discretion with the Corporation to alter the quota
or to deviate from the quota. (22-F-H)

The Direct Recruit Class-I/ Engineering Officers' Association and Ors.
C v. State of Maharashtra and Ors., AIR (1990) SC 1607, distinguished.

Union of India v. S.D. Gupta, AIR (1996) SC 3325 and State of West
Bengal and Ors. v. Aghore Nath Dey and Ors., (1993) 3 SCC 371, relied on.
(
Devendra Prasad Sharma v. State of Mizoram and Ors., [1997) 4 SCC
D 422 and S.G. Jaisinghani v. Union of India and Ors., AIR (1967) SC 1427,
referred to.

1.5. Under regulation 30 read with regulation 34, temporary
promotees were liable to be reverted as and when approved direct recruits
became available. The promotees were liable to be replaced by direct
E recruits. Under regulation 34, the said revertees were to be considered for
repromotion only against the quota of vacancies reserved for promotees.
This is clear from the terms of the order dated 9.9.1988. The submission
that the appellants came to be regularized vide order dated 9.9.1988 with
retrospective effect against the post earmarked for promotion and as 'iUCh
F in the integrated seniority list they were not liable to be pushed down below
direct recruits cannot be accepted. Also in the absence of direct
recruitment, the appellants could not have got seniority over direct
recruits. Furthermore where there is inaction on the part of the
Government or employer or imposed ban on direct recruitment in filling
up the posts. meant for direct recruits, it cannot be held that the quota
G has broken down. [25-C, B; 26-C-D) I.;

UP. Secretariat UD.A. Association and Ors. v. State of UP. and Ors.,
(1999) 1 SCC 278 and A.N Sehgal and Ors. v Raje Ram Sheoram and Ors.,
AIR (1991) SC 1406, referred to.

H 1.6. The impugned seniority list is dated 10.11.1994 whereas
M.S. REDDY v. A.P.S.R.T.C. 11
regulation 34 has been amended w.e.f. 15.9.1995. Therefore, reliance A
cannot be placed on the amended regulation 34 by the appellants.
(26-D, E)

1i Per Sinha, J. (Dissenting) :

1.1. Regulation 18 provides for date of commencement of probation B
either by way of direct recruitment or by way of promotion. The date of
probation may in the event of his subsequent appointment (which would
include promotion) may commence from the date of subsequent
appointment or from such earlier date, as the case may be. Appellants were
temporarily promoted to the post of Traffic Managers initially in the year C
1983. By an office order dated 9.9.1988, their promotion was regulariz~d
with retrospective effect from 27.12.1986 having regard to the vacancies
which occurred in the posts earmarked for promotion. Their serv~ces were
regularized with effect from the date when the vacancies became available
and not from the date of their initial ad hoc promotion. Therefore, their
services after regularization would not be by way of a stopgap D
arrangement. (30-E-G; 32-D, E)

Santosh Kumar v. State ofAndhra Pradesh [2003) 5 SCC 511, referred
to.

1.2. In such case, the court shall not consider the matter relating to E
allocation of vacancy in term of clause (1) of Appendix 'A' as a rigid
formula; in terms whereof even the promotees would be denied seniority
from the date of regularisation. Regulation 3 and 18 governing the field
clearly suggest that in such case the promotees should be held to be senior
to the direct recruits. In any event, in absence of any challenge to the office
order dated 9.1.1988, the court must give effect thereto in terms whereof F
the appellants were placed on probation with effect from 21.07.1986 which
must be considered to be the crucial date for determining the seniority.
The regulations must be read in a manner so that a meaningful effect
thereto can be given. (35-C-E)
G'
Rudra Kumar Sain and Ors. v. Union of India and Ors., [2000) 8 SCC
25, referred to.
).
1.3. The direct recruits who were appointed in the years 1990 and
1991, in terms of clause 3 of Annexure 'A' would be considered to have
been appointed only after their successful completion of training. They H
12 SUPREME COURT REPORTS (2004] SUPP. I S.C.R.

A were borne in the cadre in the years 1990-1991 and, thus, prior thereto
they cannot claim seniority. 132-GJ

Suraj Prakash Gupta and Ors. v. State ofJ & Kand Ors., 12000) 7 SCC
561, referred to. •

B 1.4. The total ban for direct recruitment was imposed from the year
1977 to 1988 and, thus, the purported quota and the rota rule contained
in clause 3 of Annexure 'A' could not have been given effect to. In such a
situation, the quota rule become inoperative. [30-G, HJ

Direct Recruitment Class II Engineering Officers' Association v. State
C of Maharashtra, [1990) 2 SCC 715 and Excise Commissioner, Karnataka and
Anr. v. V. Sreekanta, (1993) 3 Suppl. SCC 53, referred to.

1.5. Having regard to the policy decision of the Corporation of ban
on direct recruitment the question of considering the candidature of any
person for direct recruitment at the relevant time, does not arise. The said
D policy decision evidently had presumably been taken keeping in view the
financial health of the Corporation. It is well settled that only because
certain vacancies existed, the employer cannot be forced to employ persons
against their will. If the ban order was not questioned.and the same had
been followed over a period of more than 10 years, an inference has to be
E raised that the quota rule had broken down. (34-B, C]

2. When two interpretations are possible; the one which promotes
justice and equity should be preferred. Although hardship cannot not be
a ground for striking down a law but when two views are possible, it is
permissible in law that the court would interpret the statutory provision
F in such a manner so that possible hardship is avoided.

Mahadeo Oil Mills and Ors. v. Sub-Divisional Magistrate Araria and
Ors., AIR (1978) Patna 86 and Commissioner of Income Tax, Bangalore v.
J.H. Got/a, Yadagiri, (1985) 4 SCC 343, referred to. (36-G]

G CIVIL APPELLATE JURISDICTION : Civil Appeal. No. 490.7 of
1999.

From the Judgment and Order dated 3.2.1999 of the Andhra Pradesh
High Court in W.A. No. 70 of 1999.
WITH
H
M.S. REDDY v. A.P.S.R.T.C. [KAPADIA, J.] 13
C.A. No. 4908 of 1999. A
Rakesh Dwivedi, Abhishek Chaudhary, Ms. Vimla Sinha and
M. Mahesh Babu for i:he Appellants .

• G.R.K. Prasad, Md. Wasay Khan and T.V. Ratnam for the Respondents.
B
The Judgments/Order of the Court were delivered by

KAPADIA, J. The civil appeals herein raise a common point of law
i.e. fitment of the promotees in the integrated seniority list. The posts of
Assistant Traffic Manager (for short "ATM") and Assistant Mechanical
Engineer (for short "AME") are Class-I Junior Scale Officers posts. It is the C
case of the appellants that for several years, due to ban on recruitment,
promotions were made from lower feeder posts even in excess of the ratio of
1: 1 under A.P. State Road Transport Corporation Employees (Recruitment)
Regulations, 1966 (hereinafter referred to as "the recruitment regulations").
It is the case of the appellants that whenever direct re~ruitment was not D
possible within a short period and when administrative exigencies warranted
the filling of posts, like the one in the instant case, promotions were made
either on ad hoc or on ~mporary basis and in course of time they were
regularized. M. Subba Reddy, appellant herein, was appointed as a Traffic
Apprentice on 10.8.1971 in the Corporation. He was promoted temporarily
on 31.1.1983 as ATM vide Office Order dated 10. l.1983 and regularized on E
27.12.1986 vide order dated 9.9.1988. He was confirmed on l.4.1987 as
ATM. It is the case of the appellants that while they were senior to direct
recruits, who entered the above posts in 1988, 1990 etc., in the impugned
~ integrated seniority list dated I 0.11.1994, they have been placed below the
direct recruits. The appellants contend that when their promotions were F
regularized, the direct recruits were not even born on the cadre of ATMs/
AMEs and, therefore, there was no reason for placing them below the direct
recruits. Per contra, it is the case of direct recruits that the integrated seniority
list is in consonance with the quota rule of l: l under the statutory rules
mentioned supra.
G
Before coming to the arguments advanced on both sides, we notice the
relevant provisions of recruitment regulations framed by the corporation under
;. section 45 of the Road Transport Corporation Act, 1950. For the purposes of
deciding this matter, we quote herein below the relevant provisions of the
recruitment regulations :
H
14 SUPREME COURT REPORTS [2004) SUPP. I S.C.R.
t
A "3.Appointment and qualifications :
(1) Appointment to the posts in the Corporation shall be made
(a) by direct recruitment; or

B
(b) by promotion; or •
(c) by transfer or deputation of an official already in the service
of a Department of the Central or State Government or a
State Transport Undertaking.
(2) The method of recruitment to each post specified in column
2 of Annexure-A shall be as shown in the corresponding entry in
c column (3) thereof and the qualifications prescribed for each such
post shall be as shown in the corresponding entry in column (4).
(3) Notwithstanding anything in Clause (2) the Corporation may
at any time, appoint suitable officers of the State or Central
Government or any State Transport Undertaking to any of the posts
D · specified in Annexure-A on 'Foreign Service' tenns.
...>-
(4) Where suitable departmental candidates are not available for
promotion to any of the posts specified in Annexure-A where the
posts are to be filled by promotion only, such posts may be filled by
l
direct recruitment by selection provided that recruitment to all the
E higher posts from the lower posts shall be made by way of promotion
and resort had to direct recruitment only when suitable and qualified
persons are not available for promotions.
17. Temporary appointment :
(I) Where it is necessary in administrative interests owing to an •:'
F emergency which has arisen, to fill immediately a vacancy in a post
borne on the cadre of a service and if it is likely that there would be
undue delay in making any appointment in accordance with these
regulations, the appointing authority may appoint a person temporarily
otherwise than in accordance with these regulations, until a person is
G appointed in accordance with these regulation, provided the post is
not one which is reserved to be filled by promotion.
(2) No appointment under clause (1) shall ordinarily be made of a
person 1vho does not possess the qualifications, if any, prescribed for .I.

the said post. Every person who does not possess such qualifications
H and who has been or is appointed under this clause shall-.be-replaced
M.S. REDDY v. A.P.S.R.T.C. [KAPADIA, J.) 15
as soon as possible by an approved candidate. A
(3) Where it is necessary to fill a short vacancy in a post borne on
the cadre of a service and the appointment of the person entitled to
such appointment under the regulations or orders in force would
involve excessive expenditure on travelling allowance or exceptional
administrative inconvenience, the appointing authority may appoint B
any other person who possesses the qualifications, if any, prescribed
for the said post.

(4) A person appointed under clause (1) shall, whether or not he
possess the qualification prescribed for appointment to the post to
which he is appointed, be replaced as soon as possible by an employee c
or an approved candidate as the case may be, who is qualified to hold
the post under the regulations or orders in force.

(5) A person appointed under clause (1) or claµse (3) shall not be
entitled by reason only of such appointment to any preferential claim
to future appointment to such post or category of posts. D
(6) Notwithstanding anything in these regulations, if and when a
temporary post is created as an addition to the cadre of a service and
the holder thereof is required by the corporation to possess any special
qualifications, knowledge or experience, any person who possesses
such qualifications, knowledge or experience, and is considered to be E
the best suited to discharge the duties of such post may, irrespective
of other considerations, be appointed to that post by the appointing
authority but the person so appointed shall not by reason only of such
appointment be regarded as a probationer in such service, class,
category nor shall be acquired thereby any preferential right to future F
appointment to sue~ service, class, category or posts.

18. Date of Commencement of probation of persons appointed
temporarily :

If a person, having been appointed temporarily under clauses (1), (3) G
or (6) of regulation 17 to a post borne on the cadre of any service,
or having been appointed to any services otherwise than in accordance
with the regulations governing appointment thereto is subsequently
appointed to the service in accordance with these regulations, he shall
commence his probation from the date of such subsequent appointment
or ~om such earlier date (not being earlier than the date of his first H
16 SUPREME COURT REPORTS [2004) SUPP. I S.C.R.

A appointment on a temporary basis) as the appointing authority may
detennine. He shall also be eHgible to draw increments in the time
scale of pay applicable to him from the date of commencement of his
probation but shall not be entitled to arrears of pay unless otherwise
ordered by the corporation.

B 30. Temporary Promotion :
(1) (i) Where it is necessary in the administrative interest to fill
emergently a vacancy in a post borne on the cadre of a higher category
in a service or class by promotion from lower category and if the
filling of such vacancy in accordance with these regulations is likely
c to result in undue delay, the appointing authority may promote a
person temporarily otherwise than in ~ccordance with these regulations.

(ii) No person who does not possess the qualifications, if any,
prescribed for the said service, class, or category shall ordinarily be
promoted under sub-clause (i). Every person who has been or is
D promoted under sub-clause (i) shall be replaced as soon a8 possible
by promoting a person possessing such qualifications.

(2) Where it is necessary to fill a short vacancy in a post borne on
the cadre of a higher category in a service or a class, by ·promotion
from lower category and the appointment of a person w.ho is eligible
E for such promotion under these regulation, would involve excessive
expenditure on traveling allowance of exceptional administrative
inconvenience, the appointing authority may promote any other person
possessing the qualifications, if any, prescribed for the post.

(3) A person promoted under sub-clause (i) of clause (1), whether or
F not he possesses the qualification prescribed for the service, class or
category to which he is promoted shall as soon as possible be replaced
by a member of the service who is eligible to hold the post under the
regulations or orders in force.

(4) A person promoted under clauses (I) or (2) of regulation 30 shall
G
not be regarded as a probationer in the higher category or be entitled
by reason only of such promotion to any preferential claim to future
promotion to such higher category.

(5) The appointing authority shall have the power to revert to a lower
category or post any person promoted under clause (1) or (2) of
H
M.S. REDDY v. A.P.S.R.T.C. [KAPADIA, J.] 17

regulation 30 at any time without assigning any reason and without A
notice.

(6) If any person referred to in clause (4) is subsequently promoted
to the higher category in accordance with these regulations, he shall
commence his probation in such category from the date of such
subsequent promotion or from such earlier date as the appointing B
authority may in its discretion determine. He shall also be eligible to
draw increments in the time scale of pay applicable to him from the
date of commencement of his probation but shall not be entitled to
arrears of pay unless otherwise ordered.

34. ff in any of the following categories a sufficient number of C
approved candidates who have successfully completed their training
is not available for filling posts reserved to be filled by direct
.. recruitment such posts may be filled temporarily by departmental
promotion until approved caodidates who have successfully completed
their training become available to replace the promotees and the D
reverted person shall subsequently be considered for repromotion
against the quota of vacancies reserved for being filled by promotion.

(a) Asstt. Mechanical Engineer and Asstt., Works Manager.
(b) Asst. Traffic Manager
(c) Chargeman
E

(d) Traffic Inspector Grade II and Head Depot Clerk.
(e) Artisans.
... ltem-3 of Annexure 'A' (Section-B) Class-I Jr. Scale Service :
F
"3. Assistant Traffic Manager. - In a unit of four:

(1) The first and third vacancy shall be filled in by appointing of an
officer under training, who h'as successfully completed his training
and the second and fourth by promotion of a Chief Inspector.
G
(2) If a suitable candidate is not available in a particular category for
filling up a vacancy reserved for that category, the vacancy may be
filled in by a suitable candidate from the other categories.

(3) If no suitable candidate is available in any of the categories
mentioned above, the post may be filled in by direct recruitment by H
18 SUPREME COURT REPORTS [2004) SUPP. I S.C.R.

A selection.

Qualifications :

(I) For Promotion :

The Chief Inspector must have put in not less than 5 years of service
B as such.

For Direct Recruitment: The Candidate -

(a) must hold a degree in Mechanical Engineering from a recognised
University or have passed sections 'A' & 'B' of the Associate
C Membership Examination of the Institution of Engineers (India)
or hold a diploma or a certificate recognized by the Institution
of Engineers (India) as exempting him from Section 'A' & 'B'
of their Associate Membership Examination.
(b) must have had experience for not less then four years as Traffic
D Executive in large size passenger road transport organization
exclusive of the period of training, if any, preference will be
given to a candidate who is a graduate member of the Indian
Institution of Road Transport or any other recognised Institution
of Transport; and
E (c) must not be above 30 years of age as on 1st July of the year in
which the recruitment is made."

We also quote herein below regulation 3 of Employees Service Regulations,
1964 (hereinafter referred to as "the service regulations") :-

F "3. Seniority :
(a) The "Seniority" of a person in service, class, category or grade
shall unless he has been reduced to a lower rank as a punishment, be
determined by the date of his first appointment to such service, Class,
category or grade. If any portion of the service of such person does
G not count towards probation his seniority shall be determined by the
date of commencement of his service which counts towards probation.

(b) The appointing authority may, at the time of passing an order
appointing two or more persons simultaneously to a seryice fix the
order of preference among them; and where such order has been
H fixed seniority shall be determined in accordance with .it.
M.S. REDDYv. A.P.S.R.T.C. [KAPADIA. J.] 19
(c) The transfer of a person from one category or grade of a service A
to another category or grade carrying the same pay or scale of pay
shall not be treated as a first appointment to the latter for purposes
of seniority and the seniority of a person so transferred shall be

... determined with ~eference to the date of his first appointment to the
category or grade from which he was transferred. Where any difficulty
B
or doubt arises in applying this regulation, seniority shall be determined
by the appointing authority.

(d) Where a member of any service,. class, category or grade, is
reduced to· a lower service class, category or grade, he shall be placed
at the top of the latter unless the authority ordering such reduction
directs that he shall take rank in such lower service, class, category
c
or grade next below any specified member thereof."

A. bare reading of the above regulations indicate that under service
-~
regulation 3, the seniority is reckonable from ~he date of appointment to a
service or a grade. On the other hand, regulation 3 of the recruitment
D
regulations deals with the method and manner in which the appointments
shall be made to various posts. It states that appointments can be made by
direct recruitment, promotions and transfer. The method of recruitment to
each post is specified in column 2 of Appendix-A to the recruitment regulations
as shown in the corresponding column 3. Therefore, one has to read regulation
3 of the recruitment regulations with Appendix-A in order to ascertain the E
method of recruitment to each post. Item 3 quoted above relates to method
of recruitment to the post of Assistant Traffic Manager (A TM). Under item-
3(1 ), it is stipulated that in a unit of four vacancies, the first and third vacancies
shall be filled by direct recruits whereas the second and fourth vacancies
shall be filled by promotees. It further provides that if a suitable candidate
is not available in a particular category for filling up a vacancy reserved for
F
that category, the vacancy may be filled in by a suitable candidate from the
other category. Regulation 17 of the recruitment regulations deal with
temporary appointments, the sole criteria being undue delay in making of
regular appointments. Regulation 18 specifies that if a person appointed to a
tempora!"Y post under regulation 17 is subsequently appointed to the service G
in accordance with the regulations, his probation shall commence only from
the date of such subsequent appointment in accordance with the regulations.
Regulation 17 deals with power to make temporary appointments whereas
~ regulation 30 deals with the power to make temporary promotions. Regulation
30( 1} stipulates that the appointing authority may promote a person
H
20 SUPREME COURT REPORTS [2004] SUPP. I S.C.R.

A temporarily, otherwise than in accordance with the regulations, in cases where
administrative exigency requires the appointing authority to immediately fill
in a vacancy in the cadre of a higher category. Regulation 30(3) specifies
further that the temporary promotee covered by regulation 30( 1) shall as
soon ~s possible be replaced by a member of the service eligible to hold the
post under the regulations. Regulation 30(4) stipuiates that the temporary
...
B promotee shall not be regarded as the probationer in the higher category,
neither shall he have any preferential claim to future promotion in the higher
category. Regulation 30(6) states that ifa temporary promotee is subsequently
promoted to the higher category in accordance with the regulations, his
probation shall commence in the higher category only from the date of
c subsequent promotion in the higher category and he shall not be entitled. to
any benefits for the period when he was a temporary promotee. Regulation
34 applies to posts reserved only to be filled by direct recruits. Reading item
3 of Appendix-A (Section-B) with regulation 34, it is clear that filling up of
4~
the posts reserved for direct recruits by departmental promotees has to be on
temporary· basis under regulation 30 and as soon as eligible candidates from
D direct recruits quota become available, they are to replace the temporarily
promotees.

Regulation 3 of the Service Regulations inter a/ia states that seniority
shall be determined by the date of first appointment to such service, class,
category or grade. In the present case, regulation 3 of the service regulations
E
has been pressed into service by the appellants, who have urged that their
seniority shall be determined on the basis of the date of appointment. However,
one has to read regulation 3 of the service regulations with regulations 30 and
34 of the recruitment regulations. In the present case, the appellants- promotees
were promoted to the posts of ATMs7AMEs temporarily under regulation 30
F as there were no direct recruits available. They were promoted subject to
being reverted to substantive posts on approved candidates becoming available.
Regulation 34(6) states that the revertees shall subsequently be considered
for repromotion ag~inst the quota of vacancies reserved for promotees.
Therefore, in the present case, one has to read regulation 3 of the service
regulations with reguiations 30 arid 34 of the recruitment reg"Ulations. It is
G only when such revertees are repromoted as per regulation 34, they can be
deemed to have been appointed to the post of ATM or AME. Therefore,
when the appellants were tentatively appointed. to the post of ATMs/AMEs
originally for want of direct recruits and to the posts reserved for direct ~-.

recruits, it cannot be said that they were first appointed to that category
H within the meaning of regulation 3 of the service regulations. Therefore, in
M.S. REDDY v. A.P.S.R.T.C. [KAPADIA, J.] 21
so far as posts reserved for direct recruits are concerned, the temporary A
promotions cannot be said to be first appointments to that category. It follows
that seniority had to be fixed between the direct recruits and the promotees
strictly in accordance with the quota provided for in Item3 of Appendix-A
(Section-B).

Mr. Rakesh Dwivedi, learned senior counsel appearing on behalf of the B
appellants submitted that the appellants had a right to be promoted within
their quota during the years 1981 to 1987, when vacancies for promotees
quota became available. During this period, no direct recruits were available.
Direct recruits became available in July I 988, November, I 990 and June,
1992. Appellant M. Subba Reddy was regularized from 27.12.1986 vide C
order dated 9.9.1998, when no direct recruits were available and, therefore,
it was improper for corporation to place direct recruits above the promotees.
It is the case of the appellants that the direct recruits cannot claim appointments
from the date of the vacancy in their quota before their selection. It has been
contended that ltem-3 of Appendix-A (Section-B) prescribes the method of
recruitment in the manner in which vacancy is allocated. According to the D
learned counsel it does not involve rota for the purposes of seniority. It
prescribes only quota, therefore, rota cannot be implied. It was urged that
seniority is dealt with only by regulation 3 of the service regulations, 1964
and not by regulation 34 of the recruitment regulations, 1966. Reliance was
placed in this connection on regulation 34 as amended on 15.9.1995. It was E
submitted that in view of the said amendments, Appendix-A refers to only
allocation of vacancy and not for de.tennination of seniority. It was to be
detennined only by regulation 3 of the service regulations. The n<;m-availability
of candidates in a particular category, it was urged, may be on account of ban
on recruitment or on any other ground. Therefore, in the present case, where
promotees were regularized in the promotion quota when direct recruits were F
not available, the quota in item-3(1) of Appendix-A will not apply. It was
submitted that in any event, allocation of vacancy under the said clause was
not rigid and it cannot be a basis for denying seniority to the promotees from
the date of regularization. Reliance was place on the judgment of this Court
in the case of The Direct Recruit Class-II Engineering Officers' Association G
and Ors. v. State of Maharashtra and Ors., reported in AIR (1990) SC 1607.

We do not find any merit in the above arguments. Appellants have not
challenged the validity of the above regulations. As stated above, it has been
contended before us on behalf of the appellants that item-3(1) of Appendix-
A (Section-B) prescribes method of recruitment and the manner in which H
22 SUPREME COURT REPORTS [2004] SUPP. I S.C.R.

A vacancy is to be allocated, which does not involve rotation for the purposes
of seniority; that item-3( I) of Appendix-A (Section-B) prescribes only quota
and rota cannot be implied. However, the appellants before the High Court
unequivocally submitted that under the above regulations, promotions and
direct recruitments were required to be made in the ratio of I: I and that the
B said regulations provided for a cycle in which vacancies were to be rotated.
[See: Affidavit of M. Subba Reddy dated 28.12.1994]. Jn the said affidavit,
it is further submitted that in the absence of direct recruits, the slots reserved
for direct recruits were liable to be adjusted with the promotees immediately
and subsequently arrived direct recruits should be given their positions in the
seniority list subsequently in a bunch. Jn our view, the averments of the
C appellants before the High Court, if accepted, would result in complete
violation of the quota and rota rule embodied in the above regulations, which
cannot be permitted. As stated above, appellants were promoted originally
subject to the conditions envisaged in regulation 34 and, therefore, they
cannot claim seniority by ignoring the said regulations and on the basis of
their officiating services. They were promoted temporarily under regulation
D 30 which provides for ad hoc promotions. Regulation 34 ensures induction
of qualified direct recruits. But for regulation 34, candidates from feeder
posts would be temporarily promoted to the slots reserved for direct recruits
and on their regularization, the quota prescribed for direct recruits will be
defeated. Regulation 34 has been enacted to protect quota prescribed for
E direct recruits. As stated above, regulation 3 of the service regulations has to
be read with regulations 30 and 34 of the said recruitment regulations. The
appellants were promoted on temporary basis under regulation 30 with the
clear understanding that the period of officiation will not give them any right

F
over direct recruits.in future. It is for this reason that regulation 30 (6) states
that if a temporarily promotee is subsequently promoted in accordance with
the regulations, his probation will commence in t~e higher category only
..
from the date of subsequent promotions. For the same reason, regulation 34
states that revertees shall be subsequently con~idered f~r repromotion against
the quota of vacancies reserved for being filled by promotion. Therefore,
regulation 34 protects the quota prescribed for direct recruits. On reading
G regulation 3 .of the service regulations with regula:tions 30 ·and 34 of the
recruitment regulations,· it becomes clear that neither the date of promotion
nor the date of selection is the criteria for fixation of seniority. The fixation
of seniority under the above regulations depends upon the number of vacancies
falling in a particular category. Therefore, the rule of rota is inbuilt in the
quota prescribed for direct recruits and for promotees in terms of item-3 of
. "
H Appendix-A (Section-B) to the recruitment regulations. In the present case,
M.S. REDDY v. A.P.S.R.T.C. [KAPADIA, J.) 23
the above regulations prescribe a quota of I: I, which leads to rota for A
confirmation. The fixation of seniority under the above regulations depends
upon the number of vacancies against which promotees became due for
promotion. In the case of Devendra Prasad Sharma v. State of Mizoram and
Ors., reported in [1997] 4 SCC 422, rule 25(iii) stated that the relative seniority
>
of direct recruits and of promotees shall be determined according to rotation B
of vacancies between direct recruits and promotees based on the quotas of
vacancies reserved for direct recruitment and promotion. Rule 25(iii) is similar
to Item-3 (1) of Appendix-A (Section-B). It was held by this Court that in
cases where there is rotation of vacancies between direct recruits and promotees
based on quota of vacancies, the rotation has to be considered in accordance
with the vacancies as and when they accrue under the rules. Therefore, the C
quota rule needs to be strictly adhered to, if not, it would lead to absurdity.
If the contention of the appellants is accepted, it would mean that the entire
group of direct recruits will have to be placed below the entire group of
promotees. We are of the· opinion that having fixed the quota between the
two sources of recruitment, there is no discretion with the corporation to alter
the quota or to deviate from the quota. In the circumstances, there is no merit D
in the argument of the appellants that item-3(1) of Appendix-A (Section-B)
prescribes only quota and not rota and that the said item was not for
determination of seniority. In the case of S. G. Jaisinghani v. Union of India
and Ors. reported in AIR (1967) SC 1427, this Court held that having fixed
the quota between two sources of recruitment, it is not open to the government E
to alter the quota or to deviate from the quota. In the case of Union of India
and Ors. v. S.D. Gupta and Ors., reported in AIR (1996), SC 3325, the
respondents were promotees - Extra Assistant Directors (Class-III) in Central
Water Commission Engineering Class-I Service. The recruitment rules were
f· made w.e.f. 15.10.1965. In the earlier litigation, the tribunal found that one
Shri V.P. Misra, Extra Assistant Director was promoted on ad hoc basis on F
31.3.1978 and he was required to be confirmed with effect from the date on
which vacancy was available to him in the quota of promotees. The vacancy
had admittedly arisen in the quotaofpromotees on 3.5.1979. Shri V.P. Misra

-
was fitted in that vacancy. While doing so, the department applied principle
I
of rota and quota and determined the inter-se seniority of promotees and G
direct recruits. Consequently, the promotees were pushed down in the order
of seniority which led to second round of litigation. The question which arose
for determination before this Court was whether fitment of seniority determined
by the department was in accordance with the rules. The Court found that
. 60% of the vacancies were to be filled by direct recruits and 40% by promotees.
Among the 40% quota, there was a further demarcation in the ratio of 25% H
24 SUPREME COURT REPORTS [2004] SUPP. I S.C.R.

A and 15% between pro·motees and transferees. Admittedly, the promotees were
entitled to their fitment within 25% quota. Vacancies for the promotees had
arisen on 3.5.1979 and, therefore, V.P. Misra was entitled to that vacancy
which arose on that date. However, as stated above, in the integrated list, the
promotees were pushed down. It was contended on behalf of the promotees
B that the direct recruits were not born in the service when the promotees were
promoted and equity requires that the promotees cannot be pu~hed down.
This Court rejected the said argument by observing that the object of direct
recruitment is to blend talent and experience. So long as the system continues,
consequences were inevitable. Although, the direct recruits were recruited
later, their fitment in the order of seniority had to be determined with reference
C to rota and quota prescribed under the rules. In such a case, there was no
illegality even whert promotees were pushed downwards in the order of
seniority. In our view, the judgment of this Court in the case of S. D. Gupta's
case (supra) squarely applies to the facts of the present case. .
Appellants have relied upon the judgment of this Court in the case of
D The Direct Recruit Class-II Engineering Officers' Association's case (supra).
In that matter, an unusual situation had developed under which the rota and
quota system had broken down. The promotees had worked for twenty years
without being reverted and in view of that fact, the Constitution Bench of this
Court confirmed the principles of counting towards seniorityi the period of
E continuous officiation. The said judgment has no application to the facts of
this case. In the present case, the argument of the appellants is that on the
date when the appellants were regularized, there were no direct recruits
available and consequently they cannot be pushed down in the integrated
seniority list. Hence, the judgment of this Court in the case of The Direct
Recruit Class-II Engineering Officers' Association (supra) has no application ...
F to the present cas.e. In fact, in the later judgment of this Court in the case of
State of West Bengal and Ors. v. Aghore Nath Dey and Ors., reported in
[1993] 3 sec 371, it has been held, relying on the judgment in the case of
The Direct Recruit Class-I/ Engineering Officers' Association (supra), that
seniority has to be counted from the date of initial appointment and not from
G the date of confirmation provided the initial appointment is according to the
rules. But the corollary to the above proposition is that where initial
appointment is only ad hoc and not according to rules, the officiation cannot
be taken· into account for considering the seniority. The ratio of the judgment
of this Court in the· case of Aghore Nath Dey (supra) is that the benefit of ad 4..

hoc or temporary service is not admissible, if appointment was outside the
H rules. Applying the ratio of the said judgment to the facts of this case, the
M.S. REDDY v. A.P.S.R.T.C. [KAPADIA, J.) 25
benefit of temporary promotion to the appellants under regulation 30 was not A
admissible to them for computation of seniority.

It was, however, urged on behalf of the appellants that the position
changed when vacancies became available in the promotion quota and the
appellants came to be regularized vide order dated 9.9.1988. By the said
order, according to the appellants, regularization took place with retrospective B
effect from the dates indicated against their names and against the post:
eannarked for promotion and consequently in the integrated seniority list,
they were not liable to be pushed down below direct recruits. We do not find
any merit in this argument. Under regulation 30 read with regulation 34,
temporary promotees were liable to be reverted as and when approved direct; C
recruits became available. The promotees were liable to be replaced by direct
recruits. Under regulation 34, the said revertees were to be considered for
repromotion only against the quota of vacancies reserved for promotees. This
is clear from the tenns of the order dated 9.9.1988. In the case of U.P.1
Secretariat U.D.A. Association and Ors. v. State of U.P. and Ors., reported
in [1999] 1 sec 278, it has been held that a direct recruit is to be treat~ as D
in service from the date he joins it, whereas the promotee has to be fitted into
service from the date when he becomes entitled to fitment in accordance with
the quota and rota rule prescribed under the rules. In the case of A.N. Sehgal
and Ors. v. Raje Ram Sheoram and Ors., reported in AIR (1991) SC 1406,
one of the arguments advanced on behalf of the promotees was that they E

- were promoted as Executive Engineers against regular vacancies and they
continued in service without break from the respective dates of their promotion,
therefore, they were members of the service in substantive capacity from
respective dates of promotion. It was argued that the direct recruit Shri Rl!<ie
- I Ram was recruited long after the promotion of the appellants (promotees) i
and, therefore, the promotees cannot be pushed down and placed below the F
direct recruit. On examination of the rules, this Court found that recruitment
to the service was from three sources, namely, direct recruitment, promotion
and by transfer. A ratio was prescribed under rule 5(2) between the promotees.
and direct recruits. The ratio was 1: 1. It was held that rule 5(2) had restricted
the number of posts to promotees at 50%. Under the proviso to rule 5(2) , G
it was laid down that the rigour of 50% quota may be relaxed in cases where
direct recruits were not available. On reading rule 5, it was held by this Court ,
that a promotee within his quota under rule 5 got his seniority from the date
•• when the vacancy arose in his quota. It was held that the promotee occupying
the post within 50% quota of the direct recruit acquired no right to the post
and should yield to direct recruit though promoted later to him. It was held H 1

-l
26 SUPREME COURT REPORTS (2004) SUPP. I S.C.R.

A that the seniority of the promotee has to be reckoned only from the date of
availability of the post and, therefore, he has to be placed below his immediate
senior promotee within the said quo_ta. The officiating period of the promotee
between the date of initial promotion and the date of availability of vacancy
would stand excluded. A direct recruit on promotion within his quota, though ._ '
later to the promotee is interposed in between the periods and interjects the
B promotee's seniority; he snaps the links in the chain of continuity and steals
a march over the promotee. It has been further held that the rule of quota is
a statutory rule and must be strictly implemented. The result of pushing dowri
the promotees may work hardship but it is unavoidable as it would nullify
otherwise the statutory rules. In the case of UP. Secretariat U.D.A. Association
c (supra), it has been held by this Court that mere inaction on the part of the
government cannot be made ground to contend that the quota rule has broken
down. In the present case, in the absence of direct recruitment, the appellants
could not have got seniority over direct recruits. Where there is inaction on
the part of the Government or employer or imposed ban on direct recrnitment ""'
in filling up the posts meant for direct recruits, it cannot be held that the
D quota has broken down.

Before concluding, it may be pointed out that in the present case, the
impugned seniority list is dated 10.11.l 994 whereas regulation 34 has
,, been
amended w.e.f. 15.9.1995. Therefore, reliance placed on the amended
regulation 34 by the appellants is incorrect.
E
For the aforestated reasons, we do not find any merit in the above civil
appeals and the same are dismissed accordingly, with no order as to costs.

S.B. SINHA, J. INTRODUCTION :
l
·-....-
F The usual vexed question as regard determination of inter se seniority
between the direct recruit and the promotees once again falls for consideration
in this appeal which arises out of a judgment and order dated 3 .2.1999 passed
by a Division Bench of the Andhra Pradesh High Court in Writ Appeal No.

-
70/1990.
G
FACTUAL MATRIX:

The appellants herein were granted temporary promotion in terms of
Regulations 30 and 34 on or about 18.1.1993 on purely temporary basis and
~
against the vacancies reserved for direct recruitment subject to appointment.
H The petitioner was promoted as Assistant Traffic Manager. On 3 l. l.1983
M.S. REDDYv. A.P.S.R.T.C. [SINHA, J.] 27
when vacancy arose in the promotee quota, his services were regularised A
after placing him on probation with effect from 27 .12.1986. Thereafter he
was confirmed on 1.4.1987. The respondents-direct recruits were borne into
the services of the Corporation on 9 .11.1990 on being recruited as officer
under Training (General). The next batch of direct recruits came into the
service of the Corporation on 4.3.1991.
B
The Office Order dated 9.9.1988 reads as follows :-

"The VC & MD has now accorded sanction for regularisation of the
officers in the cadres of ATM/AME as the case may be with probation
rights with retrospective effect from the dates indicated against them,
against the posts earmarked for promotion. The VC & MD has also C
accorded sanction for declaration of the period of probation of these
officers from the dates shown against their names."

A perusal of this order clearly shows that the promotion of the
appellant was regularised with probation rights with retrospective effect
from the dates specified therein. It categorically states that such regularisation D
was against the post earmarked for promotion. It does not say that the
seniority of the promotees would be fixed after the direct recruitment is
made. The direct recruits were appointed on or about 9.11.1990. It is also
not in dispute and as would appear from the counter affidavit filed by the
first respondent herein before the High Court that there had been a ban E
on direct recruitment from 1977 upto 1988. In the meanwhile on 13.5.1994,
the appellants were promoted to the Class I Senior Scales as Divisional
Managers. A provisional seniority which was prepared on 22.8.1994 was
finalised on 10.11.1994 whereagainst some representations were made. A
writ petition filed thereagainst was dismissed. A writ appeal preferred by F
the appellant was also dismissed.

Statutory Provision :

The first respondent is a statutory corporation constituted under the
Road Transport Corporation Act, 1950. It framed rule in exercise of its G
powers conferred under Section 45 thereof. Rule 3 of the Recruitment
Rules provides for appointment to the post of Assistant Traffic Manager
by three modes; (i) by direct recruitment (ii) by promotion and (iii) by
~· transfer or deputation. The method of recruitment to each post specified
in column 2 of Annexure 'A' is to be as shown in the corresponding entry
in column 3. Sub-rule 4 of Rule 3 of Recruitment Regulation reads thus:- H
28 SUPREME COURT REPORTS [2004) SUPP. I S.C.R.

A "3. Appointment and qualification:

(4) Where suitable departmental candidates are not available for
promotion to any of the posts specified In Annexure-A where the
posts are to be filled by promotion only, such posts may be filled by
direct recruitment by selection provided that recruitment to all the
B higher posts from the lower posts shall be made by way of promotion
and resort had to direct recruitment only when suitable and qualified
persons are not available for promotion."

Regulation 17 provides for temporary appointment. A temporary
appointment de hors the rules is permissible only in administrative interest
C owing to emergency, provided, however, the post is not one which is
reserved for promotion. Such an appointee may be replaced by an approved
candidate who is qualified to hold the post under the regulations. Regulation
18 reads as under:- . '
"18. Date of Commencement of probation of persons appointed
D temporarily:

If a person, having been appointed temporarily under clauses (I), (3),
or (6) of regulation 17 to a post borne on the cadre of any service,
or having been appointed to any services otherwise than in accordance
with the regulations governing appointment thereto is subsequently
E appointed to the service in accordance with these regulations, he shall
commence his probation from the date of such subsequent appointment
or from such earlier date (not being earlier than the date of his first
appointment on a temporary basis) as the appointing authority may
determine. He shall also be eligible to draw increments in the time
F scale of pay applicable to him from the date of commencement of his
probation but shall not be entitled to arrears of pay unless otherwise
ordered by the corporation."

Regulation 30 provides for temporary promotion, clause 6 whereof
reads thus:-
G
"(6) If any person referred to in clause (4) is subsequently promoted
to the higher category in accordance with these regulations, he shall
commence his probation in such category from the date of such
subsequent promotion or from such earlier date as the appointing
authority may in its discretion determine. He shall also be eligible to
H draw increments in the time scale of pay applicable to him from the
M.S. REDDYv. A.P.S.R.T.C. [SINHA, J.] 29
date of commencement of his probation but shall not be entitled .to A
arrears of pay unless otherwise ordered."

Regulation 34 reads as under :

- ) . "If in any of the following categories a sufficient number of approved
candidates who have successfully completed their training is n9t B
available for filing posts reserved to be filled by direct recruitment
such posts may be filled temporarily by departmental promotion until
approved candidates who have successfully completed their trainin~
become available to replace the promotees and the reverted person
shall subsequently be considered for repromotion against the quota of
vacancies reserved for being filled by promotion. C
(a) Asstt. Mechanical Engineeer and Asstt. Works Manager.
(b) Asstt. Traffic manager
(c) Chargeman
-- D
(d) Traffic Inspector Grade II and Head Depot Clerk.
(e) Artisans."
In terms of item No. 3 of Annexure 'A' (Section-B) Class-I, Junior
Scale Service, as appended to the said regulation, so far as the post of
Assistant Traffic Manager. is concerned; in a unit of 4 the first and third E
vacancy ar~ to be filled in by appointment of an officer under training
who has successfully completed his training and the second and the fourth
by promotion of a Chief Inspector. If, however, a suitable candidate is not
available, the vacancy can be filled up by a suitable candidate from other
) categories.
F
Regulation 3 providing for seniority reads as under :-

"Seniority

(a) The "Seniority" of a person in service class, category or grade
shall unless he has been reduced to a lower rank as a punishment, be G
determined by the date of his first appointment to such service, class
category or grade. If any portion of the service of such person does
not count towards probation his seniority shall be determined by the
date of commencement of his service which counts towards probation.

Interpretation of the Regulations is required to be considered having H
30 SUPREME COURT REPORTS (2004] SUPP. 1 S.C.R.

A regard to the factual backdrop as noticed hereinbefore.
High Court Judgment :

The learned Single Judge sought to make a distinction between those
who had been promoted prior to 1981 and those who were promoted
B subsequent thereto. The learned Single Judge of the High Court, however,
applying the quota-rota rule held that direct recruits were rightly treated
as senior to the promotees. The Division Bench of the High Court also
proceeded on the basis that vires of the regulations being not in question,
the que.stion of placement of the promotee candidates in the event of non-
C · availability of direct recruit candidate did not arise and in that view of the
matter the contention that the promotee candidate would rank senior to
the direct recruits must be repelled.

Findings:

The High Court unfortunately did not enter into the question as
......
D regard application and interpretation of the Regulations. It is neither in
doubt nor in dispute that any ad hoc or any temporary appointment or
temporary promotion de hors the rules or against the quota meant to be
filled up by direct recruitment shall be of no avail for any purpose whatsoever
as consequent upon the appointment of the direct recruits such promotees
E are liable to be reverted. However Regulation 18 which provides for date
of commencement of probation either by way of direct recruitment or by •'
way of promotion, clearly states that the date of probation may_ in the
event of his subsequent appointment (which would include promotion)
may commence form the date of subsequent appointment or from such
earlier date, as the case may be. Appellants herein were temporarily promoted
F to the post of Traffic Managers initially in the year 1983. By an office
order date<l 9.9.1988, their promotion was regularized with retrospective
effect from 27.12.1986. Their services were so regularized having regard
to the vacancies which occurred in the posts earmarked for promotion.

G It is furthermore not in dispute that total ban for :iirect recruitment
was imposed from the year 1977 to 1988 and, thus, the purported quota
and the rota rule contained in clause 3 of Annexure 'A' could not have
been given effect to. In a situation of this nature I am of the opinion that
the said quota rule become inoperative. ~

H A similar question come up for consideration before a Constitution
M.S. REDDYv. A.P.S.R.T.C. [SINHA, J.] 31
Bench of this Court in Direct Recruitment Class II Engineering Officers' A
Association v. State of Maharashtra and Ors., [1990] 2 SCC 715 wherein
this court observed:

"Mr. Tarkunde is right when he says that in such a situation the rule
> should be appropriately amended, so t~at the scope for unnecessary
controversy is eliminated. But, merely for the reason that this step is B
not taken promptly, the quota rule, the perfom1ance of which has
been rendered impossible, cannot be treated to continue as operative
and binding. The unavoidable situation brings about its natural demise,
and there is no meaning in pretending that it is still vibrant with life.
In such a situation if appointments from one source are made in C
excess of the quota, but in a regular manner and after following the
prescribed procedure, there is no reason to push down the appointees
below the recruits from the other source who are inducted in the
Service subsequently. The later appointees may have been young
students still prosecuting their studies when the appointments from
the other source take place - and it is claimed on behalf of the D
respondents that this is the position with respect to many of the direct
recruits in the present case - and, it will be highly inequitable and
arbitrary to treat them as senior. Further, in cases where the rules
themselves permit the government to relax the provisions fixing the
rat~o, the position for the appointees is still better; and a mere deviation E
therefrom would raise a presumption in favour of the exercise of the
power of relaxation. There would be still a third consideration relevant
in this context : namely, what is the conclusion to be drawn from
deliberate continuous refusal to follow an executive instruction fixing
the quota. The inference would be that the executive instruction has
c~ased to remain operative. In all these cases, the matter would F
however be subject to the scrutiny of the court on the ground of ma/a
fide exercise of power. All the three circumstances mentioned above
which are capable of neutralising the rigours of the quota rule are
present in the cases before us, and the principle of seniority being
dependent on continuous officiation cannot be held to have been G
defeated by reason of the ratio fixed by the 1960 Rules."

The Constitution Bench summir..g up its decisions, inter alia, held:-

.. "If it becomes impossible to adhere to the existing quota rule, it
should be substituted by an appropriate rule to meet the ends of the
situation. In case, however, the quota rule is not followed continuously H
32 SUPREME COURT REPORTS [2004] SUPP. I S.C.R.

A for a number of years because it was impossible to do so the inference
is irresistible that the quota rule had broken down.

Where the rules permit the authorities to relax the provisions relating
to the quota, ordinarily a presumption should be raised that there was
such relaxation when there is a deviation from the quota rule.
B
If the quota rule is prescribed by an executive instruction, and is not
followed continuously for a number of years, the inference is that the
executive instruction has ceased to remain operative. "

The said decision of the Constitution Bench in Direct Recruitment
C Class II Engineering Officers' Association (supra) was followed by this
Court in Excise Commissioner, Karnataka and Anr. v. V. Sreekanta, [1993]
3-Suppl. sec 53.

Another aspect of the matter may not also be lost sight of. The appellants
herein were promoted in a regular manner having been regularized in services
D with retrospective effect. Their services were not regularized from the date
of their initial ad hoc promotion but with effect from the date when the
vacancies became available. Their services after regularization would not be
by way of a stopgap arrangement. In Santosh Kumar v. State of Andhra
Pradesh, [2003] 5 SCC 511 this court has laid down the law in the following
E terms:-

" ... The respondent was admittedly promoted on temporary basis as
OSSI prior to the recruitment of the appellant. Once his services were
regularised that too in the promotee quota, the appellant being direct
recruit cannot make any grievance. In this view it cannot be said that
p the appellant was an affected person for want of notice before passing
the order of relaxation to question the seniority of the respondent."

The direct recruits who were appointed in the years 1990 and 199i, in
terms of clause 3 of Annexure 'A' would be considered to have been appointed
only after their successful completion of training. They were borne in the
G cadre in the years 1990-1991 and, thus, prior thereto they cannot claim
seniority.
The consequence of imposing the quota-rota rule would become evident
if the seniority list of 10.12.1994 is closely scrutinised. Item No.20 thereof
refers to a promotee Shri U. Brahma Chari. He was temporarily promoted on "
H 21.5.1981 and his services were regularized with effect from 9.7.1981. The
M.S. REDDY v. A.P.S.R.T.C. [SINHA, J.) 33
direct recruits whose services have been regularized in March, 1991 and' A
October, 1991 would have been senior to him. As noticed hereinbefore those
who have been appointed in 1991 would also be senior to the appellant No. I
whose promotion admittedly was regularized with effect from 27.12.1986.
It is trite that a direct recruit is considered to be borne in the cadre from
the date of his recruitment. This aspect of the matter has been considered by B
a Division Bench of this Court in Suraj Prakash Gupta and Ors. v. State of
J & Kand Ors., reported in [2000] 7 SCC 561. wherein almost all the decisions
operating in the field including State of West Bengal and Ors. v. Aghore Nath
Day and Ors., [1993] 3 SCC 371 and N.K. Chauhan v. State of Gujarat,
[ 1977] l SCC 308 were noticed.
This court formulated the following points for consideration:-"
c
"( l) Whether the quota rule had broken down ? Whether excess
promotees are to be pushed down ? Whether there is a q1JOta-rota
rule?
(2) Whether the ad hoc/stopgap promotion of Assistant Engineers , D
(and Assistant Executive Engineers) could be made beyond six months
and till regularisation, by the Government without consulting the Public
Service Commission ? Whether the Government could have regularised '
the ad hoc service by executive order dated 2-1-1998 ? Whether the
point raised in para IX of the written submissions by the direct recruits
that retrospective regularisation cannot be made in respect of the ad E
hoc/stopgap service and could be made only if the initial appointment
as Assistant Engineers or Assistant Executive Engineers was "in
accordance with rules", is correct ?
(3) Whether the direct recruits could claim a retrospective date of·.
recruitment from the date on which the post in direct recruitment was F
available, even though the direct recruit was not appointed by that '
date and was appointed long thereafter ?"
As regards the quota rule, the Court referring to the dicta of the
Constitution Bench in Direct Recruitment Class II Engineering Officers'
Association (supra) held that quota rule as far as possible should be followed. ,G
Ban on direct recruitment was an outcome of a policy decision of the
corporation. The legality of the said policy decision on the part of the
corporation was not questioned by the direct recruits on the ground of ma/a
fide or otherwise. A suitable candidate was, thus, not available in terms of the
extant regulations, which should receive a broad interpretation. When in H
34 SUPREME COURT REPORTS [2004) SUPP. I S.C.R.

A tenns of a policy decision, no appointment can be made, the question of
finding out a suitable candidate would not arise. Having regard to the policy
decision of the corporation the question of considering the candidature of any
person for direct recruitment at the relevant time, thus, did not arise. The said
policy decision evidently had presumably been taken keeping in view the
B financial health of the corporation. It is well settled that only because certain
vacancies existed, the employer cannot be forced to employ persons against
their will. If the ban order was not questioned and the same had been followed
over a period of more than I 0 years, an inference has to be raised that the
quota rule had broken down.
The following observations of this Court in Suraj Prakash Gupta (supra)
C are furthennore worth noticing:
"We shall next refer to the contention for the direct recruits that
"rota-quota" rule is to be applied. Before us, it is not disputed by the
learned counsel for the direct recruits that in the Recruitmeht Rules,
1978, there is only a quota rule and that no rota rule has been expressly
D prescribed."
It categorically held that the principles of "rota" cannot be employ'ed
to the quota rule and the same can break down because of past practice. Even
this aspect of the matter has not been considered by the High Court.
As regard point No.3 the Division Bench in Suraj Prakash (supra) took
E into consideration a large number of earlier decisions of this Court and held
that services of ad hoc/stop gap service of promotees can be regularized. The
court noticing the decisions relating to the employees governed by the service
regulations framed by the State of Andhra Pradesh (which are in pari materia.
with the rules in question) in no uncertain terms held that services of an
F employee can be regularized with retrospective effect. This court while arriving
at the said conclusion also relied upon a large number of decisions arising
from other states which also support the legal principle that the regularization
of the promotees with retrospective effect is permissible in law. It was
categorically held :-
"Sel'Vice of the promotees which is regularized with retrospective
G effect from the date of vacancies wit.Ii.in the quota counts for seniority."

.This court in no _uncertain terms·repelled the contention that ifpromotees
occupie_d the quota belonging to the direct recruits they had to be pushed
down whenever direct recruitment was made, stating :-

H "This contention, in our view, cannot be accepted. The reason as to
M.S. REDDY v. A.P.S.R.T.C. [SINHA. J.] 35
why this argument is wrong is that in service jurisprudence, a direct A
recruit can claim seniority only from the date of his regular
appointment. He cannot claim seniority from a date when he was not
born in the service."
/.
The direct recruits of 1990 and 1991· by reason of the impugned seniority
list could not, thus, have been placed over and above the appellants. B
Furthermore, in a case of this nature this court shall not consider the
matter relating to allocation of vacancy in term clause (I) of Appendix 'A'
as a rigid formula; in terms whereof even the promotees would be denied
seniority from the date of regularisation. The regulation governing the field
clearly suggest that in a case of this nature the promotees should be held to c
be senior to the direct recruits. Regulation 3 clearly states that respective
dates of first appointment in service shall be the determinative factor. If the
'r rules governing appointment contained in Appendix 'A' could not be given
effect to for good and valid reasons, the quota rule, if any, must be held to
have broken down. In any event as Regulation 18 permits regularisation of
promotion with retrospective effect; in absence of any challenge to the office
D
order dated 31.1.1988, the court must give effect thereto in terms whereof the
appellants were placed on probation with effect from 21.07 .1986 which must
be considered to be the crucial date for determining the seniority. The
regulations in my opinion should be read in a manner so that a meaningful
effect thereto can be given. E
In Rudra Kumar Sain and Ors. v. Union of India and Ors., [2000] 8
SCC 25 a Constitution Bench of this Court while considering the relevant
provisions of Delhi Higher Judicial Services Rules held that the concept of
'cadre' is larger than the 'service' under the recruitment rules. While following
the earlier decision of this Court in OP. Sing/a and Anr. v. Union of India F
and Anr., [1984] 4 SC 450] it was observed :

"We are also unable to accept the contention of Mr. Subramanium
that until the principle of"quota" provided in Rule 8 is made applicable
to appointments under Rules 16 and 17, such appointees, under Rules
16 and 17 cannot claim continuous length of service for their seniority. G
Such a contention appears to have been considered and negatived in
Sing/a case [1984] 4 SCC 450 : [1984] SCC (L&S) 657: [1985] I
.,, SCR 351. The judgment of this Court in Sing/a case [1984] 4 SCC
450 : [1984] SCC (L&S) 657 : [l ~85] l SCR 351 is obviously intended
to evolve some equitable principle for determination of inter se
H
36 SUPREME COURT REPORTS [2004) SUPP. I S.C.R.

A seniority of a group of officers, when the Rule of seniority contained
in Rule 8(2) has been held to be not operative because of breaking
down of "quota and rota" Rule. To meet the peculiar situation, the
Court evolved the principle that continuous length of service should
be the criteria for inter se seniority between the direct recruits and the
promotees, provided, the promotees did possess the required
B qualification as per Rule 7 and the appointments had been made
under Rules 16 and 17, after due consultation and/or approval of the
High Court, which in our view also is the most appropriate basis,
evolved in the fact-situation. This being the position, we see no
justification for reconsidering the decision of this Court in Sing/a
c case [1984] 4 SCC 450 : [1984] SCC (L&S) 657 : [1985] 1 SCR
351 ). That apart, the Recruitment Rules have been amended in the
year 1987 and the aforesaid principle, which had been evolved in
Singla's case [1984] 4 SCC 450 : [1984] SCC (L&S) 657: [1985] l '.
SCR 351 would apply for determining the inter se seniority between
the promotees and direct recruits, all of whom had been appointed to
D the Higher Judicial Service, prior to the amendment of the Rules in
question, which was made in the year 1987."

The court further held that if a strict construction to the different
provisions of the rules is given then all the temporary appointees under Rule
16 who might have rendered 5 to 10 years of service would be denied of their
E right for the purpose of seniority observing :

"It is this impasse created on account of inaction of the authorities
and on account of non-adherence to the provisions of the Rules strictly,
which persuaded the Court in Sing/a case [1984] 4 SCC 450: [1984]
SCC (L&S) 657 .: [1985] I SCR 351 to evolve the principles for
F working out equities and that principle has to be followed by the
High Court in drawing up the seniority list."

Furthermore_ when two interpretations are possible; the one which
promotes justice tand equity should be preferred. Although hardship cannot
not be a ground for striking down a law but when two views are possible, it
G is permissible in law that the court shall interpret the statutory provision in
such a manner so that possible hardship is avoided.

In Mahadeo Oil Mills and Ors. v. Sub-Divisional Magistrate Araria "
and Ors., AIR (1978) Patna 86, it was held:

H ".. .I a!ll aware of the well settled rule of construction that the argument
M.S. REDDY v. A.P.S.R.T.C. [SINHA, J.] 37
from inconvenience and hardship is a dangerous one and is only A
admissible in construction of statutory provisions where there are
alternative methods of construction. But another principle which has
to be borne in mind is that if too literal an adherence to the words of
an enactment appears to produce an absurdity and injustice, it will be
the duty of the Court of construction to avoid such a result in case
the enactment is capable of any other fair interpretation. As Maxwell B
on the Interpretation of Statutes, Twelfth Edition, points out at p.43,

"It was stated in this way by Parke B.: 'It is a very useful rule, in the
construction of a statute, to adhere to the ordinary meaning of the
words used, and to the grammatical construction, unless that is at
variance with the intention of the legislature, to be collected from the C
statute itself, or leads to any manifest absurdity or repugnance, in
which case the language may be varied or modified, so as to avoid
such inconvenience, but no further.' 'If', said Brett L.J. 'the
inconvenience is not only great, but what J may call an absurd
inconvenience, by reading an enactment in its ordinary sense, whereas D
if you read it in a manner in which it is capable though not its
ordinary sense, there would not be any inconvenience at all, there
would be reason why you should not read it according to its ordinary
grammatical meaning."

Yet again in Commissioner of Income Tax, Bangalore v. J.H. Got/a, E
Yadagiri, [1985] 4 SCC 343, this Court held :

"47 ... Though equity and taxation are often strangers, attempts should
be made that these do not remain always so and if a construction
results in equity rather than in injustice then such construction should
be preferred to the literal construction ..." F
For the aforementioned reasons I respectfully dissent with the opinion
of Brother Kapadia, J., I would allow these appeal.

ORDER

In view of the majority opinion dilivered by Hon'ble Mr. Justice S.H. G
Kapadia on behalf of Himself and Hon'ble the Chief Justice, the civil appeals
are dismissed with no order as to costs.

N.J. Appeals dismissed.