Holding

The 29‑03‑1990 office order was an upgradation, not a promotion, and did not require Gazette notification; therefore it is valid and the respondents are not entitled to the higher pay scales claimed.

Summary

The Punjab State Electricity Board (PSEB) issued a series of office orders between 1989 and 1990 to address stagnation among Junior Engineers, including an upgradation order dated 29‑03‑1990 that raised 20% of Junior Engineer‑II posts to a higher pay scale. The respondents, Junior Engineers, filed a writ petition seeking higher pay scales (Rs 2200‑4250 and Rs 3000‑5600) on the basis of those orders, arguing that the 29‑03‑1990 order created new posts and therefore required Gazette notification under Section 79 of the Electricity (Supply) Act, 1948. The High Court held the order unenforceable for lack of such notification. On appeal, the Supreme Court held that the 29‑03‑1990 order was merely an upgradation – a financial benefit without change of post or duties – and therefore fell within the powers conferred by Regulation 17 of the 1965 Recruitment Regulations, which had already been Gazette‑published. Consequently, no separate Gazette notification was required, the order was valid, and the respondents were not entitled to the higher scales claimed. The High Court’s judgment was set aside and the appeal allowed.

Issues considered

The office order dated 29‑03‑1990 required Gazette notification under Section 79 of the Electricity (Supply) Act, 1948.
Whether the 29‑03‑1990 order constituted a promotion (necessitating amendment of regulations) or an upgradation within existing powers.
Whether the respondents were entitled to the time‑bound promotional pay scales claimed.
The interpretation of upgradation versus promotion under service law.

Legislation cited

Electricity (Supply) Act, 1948s. 79(c)

Subjects

upgradationpromotionservice lawtime bound benefitgazette notificationpay scalestagnationregulationsPunjab State Electricity Board

Judgment

[2021] 7 S.C.R. 547 547

PUNJAB STATE POWER CORPORATION LIMITED & ANR. A
v.
BAL KRISHAN SHARMA & ORS.
(Civil Appeal No. 6995 of 2021)
NOVEMBER 23, 2021 B
[UDAY UMESH LALIT AND BELA M. TRIVEDI, JJ.]
Punjab State Electricity Board Service of Engineers (Civil)
Recruitment Regulations, 1965: Time bound benefit – PSEB passed
an office order on 19.07.1989 for regular employees introducing a
C
scheme to allow a time bound benefit of higher scale on their
completion of 9/16 years of services – On 29.03.1991, another office
order was passed upgrading 20% of the cadre posts of Junior
Engineer-II (Civil) in the scale of Rs.1640/3200 (revised) to that of
Junior Engineer-I (Civil) in the scale of 1800/3500 w.e.f. 01.01.1986
– Thereafter, in continuation, consolidation and supersession of D
orders dated 19.07.1989 and 29.03.1991, the PSEB issued office
order dated 23.04.1990 introducing scheme to allow “time bound
benefit of promotional scales” after completion of 9/16 years of
regular service in PSEB w.e.f. 01.01.1986 subject to certain
conditions – Respondents (original petitioners) in the writ petition
E
prayed for granting the pay scale of Rs. 2200-4250 with initial
start of Rs. 2400/- per month with effect from 01.01.1986 and further
to grant the pay scale of Rs. 3000-5600 on completion of 16 years
of their services on the basis of office orders dated 19.07.1989,
29.03.1990 and 23.04.1990, however made no challenge to office
order dated 29.03.1990 in the petition, which was held to be F
unenforceable by the High Court on the ground that it was not
published in the Gazette as required under s.79 of the Electricity
(Supply) Act, 1948 – Contention raised by the respondents was that
office order dated 29.03.1990 was issued in the disguise of
upgrading the respondents posts, which in fact was issued for
G
creating new posts of promotion, so as to deprive the respondents
the benefit of office order dated 23.04.1990; that issuance of such
order was changing the conditions of service of the respondents
and, therefore, the same was required to be published in the gazette
as required under s.79 of the 1948 Act – Held: Office order dated
29.03.1990, which was issued only for upgrading 20% of the posts H
547
548 SUPREME COURT REPORTS [2021] 7 S.C.R.

A of Junior Engineer-II (Civil), in the higher pay scale, could neither
be construed as creating new posts of promotion nor could it be
construed as changing the conditions of service of the Junior
Engineers (Civil) – The said upgradation merely conferred a
financial benefit by raising the pay scale of the Junior Engineers
(Civil), without there being advancement to a higher position, and
B
without there being change in the duties and responsibilities – There
was also nothing on record to suggest that the Junior Engineers
had to undergo any process of selection for getting the benefit of
the said office order – Hence, it could not be said that the PSEB
had robbed the respondents of their legitimate right of promotion
C by issuing the said office order or that such order could not have
been issued without corresponding amendment in the Regulations
– In view of Regulation 17 of the said Regulations, the PSEB was
authorised to fix the scales of pay of the posts specified therein
including that of the Junior Engineers, from time to time – PSEB
having already framed the Regulations of 1965 in exercise of powers
D
conferred under s.79(c) of the Act, and the Regulations having also
been published in the Official Gazette, there was no need for the
PSEB to notify office order dated 29.03.1990 – An employee could
be said to be suffering from stagnation as per the office order dated
23.04.1990 only if he possessed the requisite qualification for the
E next higher post and was unable to get the higher post on account
of non availability of such post – Thus, the claim of the respondents
based on office order dated 23.04.1990, for getting the pay scale
of the next higher post of Assistant Engineer i.e. Rs. 2200-4250 on
the completion of 9 years of their service and the pay scale of another
next higher post of the Executive Engineer i.e. Rs. 3000-5600 on
F
the completion of 16 years of their service, without assuming the
responsibilities of the said promotional posts, was misconceived.
Service law: Upgradation and Promotion – Difference
between – Held: There is a vast difference between the upgradation
and the promotion – Ordinarily upgradation of a post would involve
G transfer of a post from lower to higher grade and placement of an
incumbent of that post in the higher grade – Such placement would
not involve any selection process to be followed, but would merely
confer a financial benefit by raising the scale of pay of the post –
However, in case of promotion, there would be an advancement to
H a higher position or rank along with an advancement to a higher
PUNJAB STATE POWER CORPORATION LIMITED & ANR. v. 549
BAL KRISHAN SHARMA & ORS.

grade – Therefore, the word “promotion” would mean advancement A
or preferment in honour, dignity, rank and grade.
Allowing the appeal, the Court
HELD: 1. It cannot be gainsaid that there is a vast difference
between the upgradation and the promotion. Ordinarily
upgradation of a post would involve transfer of a post from lower B
to higher grade and placement of an incumbent of that post in the
higher grade. Such placement would not involve any selection
process to be followed, but would merely confer a financial benefit
by raising the scale of pay of the post. However, in case of
promotion, there would be an advancement to a higher position C
or rank along with an advancement to a higher grade. Therefore,
the word “promotion” would mean advancement or preferment
in honour, dignity, rank and grade. [Para 12][558-E-F]
Bharat Sanchar Nigam Ltd. v. R. Santhakumari Velusamy
and Ors. (2021) 9 SCC 510 – relied on. D
2. The office order dated 29.03.1990, which was issued only
for upgrading 20% of the posts of Junior Engineer-II (Civil), in
the higher pay scale, could neither be construed as creating new
posts of promotion nor could it be construed as changing the
conditions of service of the Junior Engineers (Civil). The said E
upgradation merely conferred a financial benefit by raising the
pay scale of the Junior Engineers (Civil), without there being
advancement to a higher position, and without there being change
in the duties and responsibilities. There was also nothing on
record to suggest that the Junior Engineers had to undergo any
process of selection for getting the benefit of the said office order. F
Hence, it could not be said by any stretch of imagination that the
PSEB had robbed the respondents of their legitimate right of
promotion by issuing the said office order or that such order could
not have been issued without corresponding amendment in the
Regulations, as held by the High Court. [Para 13][559-F-H; 560- G
A]
3. The PSEB has already framed the Regulations 1965 in
exercise of the powers conferred by clause (c) of Section 79 of
the said Act, and the said Regulations have been notified in the
H
550 SUPREME COURT REPORTS [2021] 7 S.C.R.

A Official Gazette. Regulation 17 of the said Regulations states that
the members of the service will be entitled to such scale of pay
as may be authorised by the Board from time to time. Thus, in
view of Regulation 17 of the said Regulations, the PSEB was
authorised to fix the scales of pay of the posts specified therein
including that of the Junior Engineers, from time to time. Even
B
otherwise it is well settled proposition of law that in absence of
any Rules or Regulations governing the service conditions of
the employees, the Electricity Board has power to issue
administrative orders. [Para 14][560-B-D]
Sohan Singh Sodhi v. Punjab State Electricity Board,
C Patiala (2007) 5 SCC 528 : [2007] 6 SCR 250; Punjab
State Electricity Board and Ors. v. Gurmail Singh (2008)
7 SCC 245 : [2008] 6 SCR 868 – relied on.
4. In the instant case, apart from the fact that the
respondents had not challenged the validity of the said office order
D dated 29.03.1990 in the writ petition on the ground that it was
not notified as per Section 79 of the said Act, the PSEB having
already framed the Regulations of 1965 in exercise of powers
conferred under Section 79(c) of the said Act, and the said
Regulations having also been published in the Official Gazette,
E there was no need for the PSEB to notify the office order dated
29.03.1990 which pertained to the upgradation of 20% of the posts
of Junior Engineer-II (Civil), as was permissible under Regulation
17 of the said Regulations. [Para 16][561-H; 562-A-B]
Bhakra Beas Management Board v. Krishan Kumar Vij
F and Anr. (2010) 8 SCC 701 : [2010] 10 SCR 462 –
relied on.
5. An employee could be said to be suffering from stagnation
as per the office order dated 23.04.1990 only if he possessed the
requisite qualification for the next higher post and was unable to
G get the higher post on account of non availability of such post.
Thus, the claim of the respondents based on the office order dated
23.04.1990, for getting the pay scale of the next higher post of
Assistant Engineer i.e. Rs. 2200-4250 on the completion of 9
years of their service and the pay scale of another next higher

H
PUNJAB STATE POWER CORPORATION LIMITED & ANR. v. 551
BAL KRISHAN SHARMA & ORS.

post of the Executive Engineer i.e. Rs. 3000-5600 on the A
completion of 16 years of their service, without assuming the
responsibilities of the said promotional posts, was thoroughly
misconceived. What they were entitled to, as per the scheme to
alleviate the stagnation as contained in the office order dated
23.04.1990, was the time bound promotional/devised promotional
B
scale as indicated in the Schedule drawn up by the Board. The
said Schedule had specified the first time bound scale to be
allowed after 9 years of service as Rs. 1800-3500, and the second
time bound scale to be allowed after 16 years of service as 2200-
4250 for the post of Junior Engineer Grade-II (Civil), subject to
the pre-conditions mentioned therein. The same having already C
been granted to the respondents, the pay scales as claimed by
the respondents in the writ petition could not have been granted
by the High Court. [Paras 18, 20][563-D, G-H; 564-A-C]
Union of India and Ors. v. M.V. Mohanan Nair (2020)
5 SCC 421 – relied on. D
State of Haryana Etc. v. Shamsher Jang Bahadur Etc.
(1972) 2 SCC 188 : [1973] 1 SCR 249; Mohammad
Shujat Ali and Ors. v. Union of India and Ors. (1975)
3 SCC 76 : [1975] 1 SCR 449 – referred to.
Case Law Reference E

[2007] 6 SCR 250 relied on para 9 (iii)
[2008] 6 SCR 868 relied on para 9 (iii)
[2010] 10 SCR 462 relied on para 9 (iv)
F
[1973] 1 SCR 249 referred to para 10 (iv)
[1975] 1 SCR 449 referred to para 10 (iv)
(2021) 9 SCC 510 relied on para 12
(2020) 5 SCC 421 relied on para 19
G
CIVIL APPELLATE JURISDICTION: Civil Appeal No.6995 of
2021.
From the Judgment and Order dated 30.08.2018 of the High Court
of Punjab and Haryana at Chandigarh in LPA No.2062 of 2014 (O&M).
H
552 SUPREME COURT REPORTS [2021] 7 S.C.R.

A Ms. Uttara Babbar, Manan Bansal, Advs. for the Appellants.
Vikas Mahajan, Sr. Adv., Vishal Mahajan, Vivek Mahajan, Vidit
Anand, Vinod Sharma, Advs. for the Respondents.
The Judgment of the Court was delivered by
B BELA M. TRIVEDI, J.
1. Leave granted.
2. The present appeal is directed against the judgment and order
dated 30.08.2018 passed by the Division Bench of the High Court of
Punjab and Haryana at Chandigarh in LPA No. 2062 of 2014 (O&M),
C whereby the Division Bench has dismissed the appeal filed by the
appellant(s)-Punjab State Power Corporation Limited (previously Punjab
State Electricity Board, hereinafter referred to as ‘PSEB’), arising out
of the order dated 03.07.2014 passed by the Single Bench in CWP No.
3232 of 1993.
D 3. The PSEB in order to settle the issue of stagnation in various
cadres of regular employees, had passed an office order on 19.07.1989
introducing a scheme to allow a time bound benefit of the higher scale
on their completion of 9 and 16 years of services. In continuation of the
said order, the PSEB also issued a circular dated 20.07.1989 granting
the benefit of the first and second time bound higher scales to the
E
employees including the Junior Engineers-II, as per the Schedule-I
attached thereto, with effect from 01.05.1989. Since the PSEB had found
that there was considerable stagnation in the cadre of Junior Engineers
(Civil), it had referred the matter to the Pay Revision Committee. Keeping
in view the recommendations of the said Pay Revision Committee, the
F PSEB passed an office order on 29.03.1990, upgrading 20% of the cadre
posts of Junior Engineer-II (Civil) in the scale of Rs. 1640/3200 (revised)
to that of Junior Engineer-I (Civil) in the scale of Rs. 1800/3500 with
effect from 01.01.1986. Thereafter in continuation, consolidation and
supersession of the orders dated 19.07.1989 and 29.03.1990, the PSEB
vide the office order dated 23.04.1990 issued consolidated instructions
G
to alleviate the problem of stagnation in the cadre. It was stated in the
said order dated 23.04.1990 that the PSEB had decided to introduce the
scheme to allow “time bound benefit of promotional scales” after
completion of 9/16 years of regular service in the PSEB w.e.f 01.01.1986
subject to the conditions mentioned therein. Some of the features of the
H scheme as contained in the said order dated 23.04.1990 were as under:
PUNJAB STATE POWER CORPORATION LIMITED & ANR. v. 553
BAL KRISHAN SHARMA & ORS. [BELA M. TRIVEDI, J.]

“5. The Board shall draw up schedule (s) indicating the lowest A
post(s) for direct recruitment in respect of various cadres for the
purpose of this cadres, separately.
6. In case, an employee has already availed of the benefit of
placement to the time bound promotional/devised promotional
scale(s) and is promoted to the next higher post, his pay would be B
fixed at the next stage in the same scale. In case he is promoted
to a post which is lower than the scale in which he has already
been placed on time bound promotional/devised promotional scale,
he will not be entitled to any increment and continue to draw the
pay of the scale in which he has already been placed.
C
7. In case of employees who do not fulfill the qualification/passing
of examination essential for their promotion to the next higher
post, they shall also be placed into the time promotional/devised
promotional scale to be specified by the Board in the schedule as
referred to in para 5 (above).”
D
4. The Schedule-1 annexed to the said order dated 23.04.1990
particularly pertaining to the time bound scales of the Junior Engineer-II
(Civil) read as under:
SCHEDULE-1
Sr. No. Name of the lowest Pay Scale First time bound 2nd time bound Remarks E
induction post scale to be allowed scale to be
throu gh direct after 9 years of allowed after 16
recruitment service. years of service
1.
2.
3.
4. JE-II (Civil) 1640-2925-3200 1800-3500 2200-40-2400-
60-2700-75-
These 2 time
bound higher
F
3000-100-4000- Scale will be
125-4250 allowed if JE-II
Qualifies the
DAE FOR tech.
Subordinates
otherwise he will
be placed in the
second time
bound scale of
G
2100-3700

5. The said scale of pay of Junior Engineer-II (Electrical/Civil)
circulated vide the office order dated 23.04.1990 was partially modified
by the PSEB (Finance Section) vide the order dated 31.08.1990.
Accordingly, the PSEB granted the respondents who were working as H
554 SUPREME COURT REPORTS [2021] 7 S.C.R.

A the Junior Engineers (Civil) the pay scale of Rs. 2000-3500 after 9 years
of their services and the pay scale of Rs. 2200-50-2400-60-2700-75-
3000-100-4000-125-4250 after 16 years of their services. Being
aggrieved by the same, the respondents (original petitioners) filed a writ
petition being CWP No. 3232/1993 before the High Court seeking
directions against the PSEB to grant them the pay scale of Rs. 2200-50-
B
2400-60-2700-75-3000-100-4000-124-4250 with effect from 01.01.1986
and further to grant the pay scale of Rs. 3000-100-4000-125-5000-150-
5600 on completion of 16 years of their service and to pay the arrears
thereof along with interest, in view of the orders passed by the PSEB
dated 19.07.1989, dated 30.03.1990 and dated 23.04.1990 (annexed to
C the petition as Annexures P-1, P-2 and P-4 respectively). According to
the respondents, in the PSEB, the promotion from the post of Junior
Engineer (Civil) was to the post of Assistant Engineer and from the post
of Assistant Engineer to the post of Executive Engineer, and therefore
they were entitled to the pay scale of Assistant Engineer, i.e. Rs. 2200-
4250 with an initial start of Rs. 2400 per month as per the office order
D
dated 19.07.1989, as all of them had already completed 9 years of service,
and they were entitled to the pay scale of Executive Engineer, i.e. Rs.
3000 and 5600, on the completion of 16 years of service. Their further
contention in the writ petition was that the subsequent creation of posts
of Junior Engineer-I (Civil) vide order dated 29.03.1990 by upgrading
E the 20% cadre posts of Junior Engineer-II (Civil), was the denial of the
benefit of the pay scale of Rs. 2200 and 4250 which had accrued to the
respondents as per the office order dated 19.07.1989.
6. The Single Bench of the High Court allowed the said petition
vide the judgment and order dated 03.07.2014, holding inter alia that the
F office order dated 29.03.1990 upgrading 20% posts of Junior Engineer-
II (Civil) was not notified in the Official Gazette as required under Section
79 of the Electricity (Supply) Act, 1948 (hereinafter referred to as the
said Act), and therefore could not be enforced, and that PSEB could not
deny the benefit claimed by the petitioners (the respondent herein) basing
reliance on the said office order dated 29.03.1990. The aggrieved PSEB
G preferred an appeal being LPA No. 2062 of 2014 before the Division
Bench which dismissed the same vide the impugned judgment dated
30.08.2018, by making perfunctory observations as under:
“The action of the Board, to our mind, is the one which
robs the respondents of their legitimate right to promotion. It is
H
PUNJAB STATE POWER CORPORATION LIMITED & ANR. v. 555
BAL KRISHAN SHARMA & ORS. [BELA M. TRIVEDI, J.]

indeed a reflection of their concern when they acknowledge the A
right of an employee to gain at least two promotions in the service
career, but after doing so they have craftily denied the benefit by
creating an intermediary pay structure of Rs. 1600-2000-3500.
Evidently such a course could not have been adopted without
corresponding amendment in the regulations and as long as the B
regulations exists in the present form, the employees would be
entitled to promotion to the next higher post and if for some reasons
such a promotion cannot fructify, they would be entitled to the
pay scale admissible to such a post.
Learned counsel for the appellant contends that even if the C
creation of post is not permissible, the higher pay structure as
prescribed to a Junior Engineer (I) would be permissible through
introduction of a scheme.
We have already observed that this is a craftily devised via
media to subvert the right of an employee. If a higher pay structure D
has to be made permissible in time bound frame, then it has to be
equivalent to that of the promotional post otherwise it will lose all
significance of a symbolic promotion, offered to an employee for
failure of the employer to provide a venue for substantive
promotion.”
E
7. Since the High Court has relied upon Section 79 of the said
Act, for holding the office order dated 29.03.1990 as unenforceable, the
same is reproduced as under for ready reference.
“79. Power to make regulations:-
The Board may, by notification in the Official Gazette, make F
regulations not inconsistent with this Act and the rules made
thereunder to provide for all or any of following matters, namely:-
(a) xx xx xx xx
(b) xx xx xx xx
G
(c) the duties of officers and other employees of the Board,
and their salaries, allowances and other conditions of service.”
8. It may be noted that the PSEB in exercise of the powers
conferred by clause (c) of Section 79 of the said Act, has made the
Regulations called the Punjab State Electricity Board Service of H
556 SUPREME COURT REPORTS [2021] 7 S.C.R.

A Engineers(Civil) Recruitment Regulations, 1965 (hereinafter referred to
as the said Regulations). Regulation 17 of the said Regulations being
relevant is reproduced as under:
“Regulation 17: Pay of Members of Service
The members of the service will be entitled to such scale
B of pay as may be authorised by the Board from time to time. The
scales of pay at present in force in respect of specified posts are
given in Appendix ‘A’.
Provided that the Board may for reasons to be recorded in
writing grant to any person appointed to the service an initial start
C higher than the minimum pay of the scale in recognition of additional
qualification and/or experience.”
9. The learned advocate Ms. Uttara Babbar appearing for the
appellant-PSEB has broadly made following submissions:

D (i) The object of issuing the office order dated 23.04.1990 was to
alleviate the grievances of stagnation in the cadre of Junior Engineers
and it did not provide an avenue for promotion de hors the said
Regulations, and therefore Section 79(c) of the Electricity Act was not
applicable to the facts of the present case.
(ii) Vide the office order dated 29.03.1990 only 20% of the posts
E
of Junior Engineer-II (Civil) were upgraded to that of Junior Engineer-I
(Civil). Such upgradation of posts could not be treated as creation of
posts requiring amendment in service conditions. Even otherwise, the
PSEB had full powers under Regulation 3 of the said Regulations to
increase or reduce the number of posts in the cadre either temporarily
F or permanently from time to time.
(iii) As per the settled legal position, in absence of any Regulations,
issuance of Executive orders is permissible in law. (Sohan Singh Sodhi
vs. Punjab State Electricity Board, Patiala (2007) 5 SCC 528, and
Punjab State Electricity Board and Ors. vs. Gurmail Singh (2008)
G 7 SCC 245).
(iv) Placing reliance on the judgment of this Court in case of
Bhakra Beas Management Board vs. Krishan Kumar Vij and Anr.
(2010) Vol.8 SCC 701, it is submitted that this Court had an occasion to
consider the office order dated 23.04.1990 issued by the PSEB in the
H said case, wherein it has been held that the said order was issued only
PUNJAB STATE POWER CORPORATION LIMITED & ANR. v. 557
BAL KRISHAN SHARMA & ORS. [BELA M. TRIVEDI, J.]

with an intention to remove the stagnation, but it would not give blanket A
or absolute right to any employee to be entitled to higher pay scale even
if he did not fulfill prerequisite qualifications for holding the higher post.
If an employee possessed the required qualification but was unable to
get the higher post on account of non-availability of such post, then only
he could be categorised as suffering from stagnation as per the order of
B
23.04.1990.
(v) Regulation 17 of the said Regulations, authorises the PSEB to
fix the scales of pay of the Engineers(Civil) from time to time, and the
said Regulations having been published in the Official Gazette, the office
order dated 29.03.1990 was not required to be published in the Official
Gazette, under Section 79 of the said Act. C

10. The learned Senior Advocate Mr. Vikas Mahajan appearing
for the respondents made following submissions:
(i) Prior to the issuance of the office order dated 29.03.1990, the
respondents were entitled to the scale of Rs. 2200-4250 with initial start D
of Rs. 2400/- per month after the completion of 9 years of service, and
to the scale of Rs. 3000-5600 after the completion of 16 years of service,
however in view of the office order dated 29.03.1990, the PSEB has
taken away the higher scales to which the respondents were entitled to
prior to the issuance of the said office order.
E
(ii) By virtue of the office order dated 29.03.1990, the PSEB has
created new posts of Junior Engineer-I without carrying out any
amendment in the Regulations of 1965. The said order was in the disguise
of upgrading the respondents’ posts and had adversely affected the
service conditions of the respondents.
F
(iii) The PSEB had not notified the office order dated 29.03.1990
as required under Section 79 of the Act, and therefore the High Court
has rightly held the same to be not enforceable.
(iv) The PSEB could not have amended or superseded the statutory
Regulations by issuing administrative instructions. In this regard reliance
G
has been placed on the decisions of this Court in case of State of
Haryana Etc. vs Shamsher Jang Bahadur Etc. (1972) Vol. 2 SCC
188 and in case of Mohammad Shujat Ali and Ors. vs. Union of
India and Ors. (1975) Vol. 3 SCC 76.

H
558 SUPREME COURT REPORTS [2021] 7 S.C.R.

A 11. At the outset, it may be noted that the respondents (original
petitioners) in the writ petition had prayed for granting the pay scale of
Rs. 2200-4250 with initial start of Rs. 2400/- per month with effect from
01.01.1986 and further to grant the pay scale of Rs. 3000-5600 on
completion of 16 years of their services on the basis of the office orders
dated 19.07.1989, 29.03.1990 and 23.04.1990 (Annexure P-1, P-2 and
B
P-4 respectively), however there was no challenge to the officer order
dated 29.03.1990 (Annexure P-3) in the petition, which has been held to
be unenforceable by the High Court on the ground that it was not published
in the Gazette as required under Section 79 of the said Act. The bone of
contention raised by the learned Senior Advocate Mr. Mahajan for the
C respondents is that the said office order dated 29.03.1990 was issued in
the disguise of upgrading the respondents posts, which in fact was issued
for creating new posts of promotion, so as to deprive the respondents
the benefit of the office order dated 23.04.1990. According to him,
issuance of such order was changing the conditions of service of the
respondents and therefore the same was required to be published in the
D
gazette as required under Section 79 of the said Act. The moot question
therefore, which falls for consideration before this Court is as to whether
the said office order was required to be published in the Official Gazette
as contemplated in Section 79 of the said Act?
12. It cannot be gainsaid that there is a vast difference between
E the upgradation and the promotion. Ordinarily upgradation of a post would
involve transfer of a post from lower to higher grade and placement of
an incumbent of that post in the higher grade. Such placement would not
involve any selection process to be followed, but would merely confer a
financial benefit by raising the scale of pay of the post. However, in
F case of promotion, there would be an advancement to a higher position
or rank along with an advancement to a higher grade. Therefore, the
word “promotion” would mean advancement or preferment in honour,
dignity, rank and grade. This Court, in case of Bharat Sanchar Nigam
Ltd. vs. R. Santhakumari Velusamy and Ors (2021) Vol. 9 SCC 510,
has laid down certain principles relating to the promotion and upgradation
G which read as under:
“29. On a careful analysis of the principles relating to promotion
and upgradation in the light of the aforesaid decisions, the following
principles emerge:

H
PUNJAB STATE POWER CORPORATION LIMITED & ANR. v. 559
BAL KRISHAN SHARMA & ORS. [BELA M. TRIVEDI, J.]

(i) Promotion is an advancement in rank or grade or both and is A
step towards advancement to a higher position, grade or honour
and dignity. Though in the traditional sense promotion refers to
advancement to a higher post, in its wider sense, promotion may
include an advancement to a higher pay scale without moving to a
different post. But the mere fact that both-that is, advancement
B
to a higher position and advancement to a higher pay scale-are
described by the common term “promotion”, does not mean that
they are the same. The two types of promotion are distinct and
have different connotations and consequences.
(ii) Upgradation merely confers a financial benefit by raising the
scale of pay of the post without there being movement from a C
lower position to a higher position. In an upgradation, the candidate
continues to hold the same post without any change in the duties
and responsibilities but merely gets a higher pay scale.
(iii) Therefore, when there is an advancement to a higher pay
scale without change of post, it may be referred to as upgradation D
or promotion to a higher pay scale. But there is still difference
between the two. Where the advancement to a higher pay scale
without change of post is available to everyone who satisfies the
eligibility conditions, without undergoing any process of selection,
it will be upgradation. But if the advancement to a higher pay E
scale without change of post is as result of some process which
has elements of selection, then it will be a promotion to a higher
pay scale. In other words, upgradation by application of a process
of selection, as contrasted from an upgradation simpliciter can be
said to be a promotion in its wider sense, that is, advancement to
a higher pay scale.” F

13. In view of the afore-stated legal position, the office order
dated 29.03.1990, which was issued only for upgrading 20% of the posts
of Junior Engineer-II (Civil), in the higher pay scale, could neither be
construed as creating new posts of promotion nor could it be construed
as changing the conditions of service of the Junior Engineers (Civil). G
The said upgradation merely conferred a financial benefit by raising the
pay scale of the Junior Engineers (Civil), without there being advancement
to a higher position, and without there being change in the duties and
responsibilities. There is also nothing on record to suggest that the Junior
Engineers had to undergo any process of selection for getting the benefit H
560 SUPREME COURT REPORTS [2021] 7 S.C.R.

A of the said office order. Hence, it could not be said by any stretch of
imagination that the PSEB had robbed the respondents of their legitimate
right of promotion by issuing the said office order or that such order
could not have been issued without corresponding amendment in the
Regulations, as held by the High Court.
B 14. At this juncture, it is pertinent to note that the PSEB has already
framed the Regulations 1965 in exercise of the powers conferred by
clause (c) of Section 79 of the said Act, and the said Regulations have
been notified in the Official Gazette. Regulation 17 of the said Regulations
states that the members of the service will be entitled to such scale of
pay as may be authorised by the Board from time to time. Thus, in view
C of Regulation 17 of the said Regulations, the PSEB was authorised to fix
the scales of pay of the posts specified therein including that of the
Junior Engineers, from time to time. Even otherwise it is well settled
proposition of law that in absence of any Rules or Regulations governing
the service conditions of the employees, the Electricity Board has power
D to issue administrative orders. In case of Sohan Singh Sodhi vs. Punjab
State Electricity Board, Patiala (supra), this Court has held in the context
of Section 79(c) of the Electricity (Supply) Act, 1948 that when the
State Electricity Board can frame Regulations under Section 79(c) of
the said Act, in absence of any Regulation, issuance of executive order
is permissible in law.
E
15. In yet another decision in case of Punjab State Electricity
Board And Ors. vs. Gurmail Singh (supra), this Court held as under:
“19. The validity of the provisions of the said Regulations is not in
question. The power of the Board to issue circulars from time to
F time in support of the matters which are not governed by the
statute or statutory regulations is also not in dispute. The Board,
as noticed hereinbefore, had been issuing such regulations from
time to time. It is now well settled that the Board, even in absence
of any express provision of statute, may issue such circular.

G 20.In Meghalaya SEB v. Jagadindra Arjun it was held: (SCC
p. 453, para 11)
“11. As per Section 79(c), Meghalaya SEB may frame regulations
not inconsistent with the provisions of the Act and the Rules
providing for the duties of officers and other employees of the
Board and their salary, allowances and other conditions of service.
H
PUNJAB STATE POWER CORPORATION LIMITED & ANR. v. 561
BAL KRISHAN SHARMA & ORS. [BELA M. TRIVEDI, J.]

It is to be stated that this is an enabling provision. Meghalaya A
SEB may frame regulations as provided in Section 79(c) of the
Act, but in the absence of any regulations, Meghalaya SEB can
lay down service conditions by administrative order/instructions.
Section 15 of the Act empowers the Board to appoint its employees
as may be required to enable Meghalaya SEB to carry out its
B
functions under the Act except the Secretary who is to be appointed
with previous approval of the State Government. The power to
lay down service conditions by regulations is expressly conferred
upon Meghalaya SEB, so it has power to prescribe service
conditions. Section 78-A also provides that except on question of
policy for which the State Government has issued directions, the C
Board is entitled to discharge its functions prescribed under the
Act which would include appointment of staff to enable it to carry
out its functions and also lay down service conditions. Hence, if
there are no rules or regulations pertaining to service conditions
of its employees, the same could be prescribed by administrative
D
order and such power of the employer which is a statutory
corporation would be implied.”
21. Yet again in Sohan Singh Sodhi v. Punjab SEB, Meghalaya
Electricity Board was noticed. It was stated: (SCC p. 532, para
10)
E
“10. The power of the State Electricity Board to issue circulars in
exercise of its powers under Section 79(c) of the Electricity
(Supply) Act, 1948 is not in dispute. It has the power to frame
regulations. If it can frame regulations, in absence of any
regulations, issuance of executive orders is permissible in law.
The power of framing regulations prescribing conditions of service F
of its employees appointed by the Board in terms of Section 15 of
the Act cannot be disputed. Thus, in absence of any rules or
regulations governing the service conditions of its employees,
issuance of administrative order is permissible in law vide
Meghalaya SEB v. Jagadindra Arjun [(2001) 6 SCC 446 : 2001 G
SCC (L&S) 976] .”
Power of the Board to issue circulars, therefore, was not in
dispute. The validity of the said circular letters was not in question.”
16. In the instant case, apart from the fact that the respondents
had not challenged the validity of the said office order dated 29.03.1990 H
562 SUPREME COURT REPORTS [2021] 7 S.C.R.

A in the writ petition on the ground that it was not notified as per Section
79 of the said Act, the PSEB having already framed the Regulations of
1965 in exercise of powers conferred under Section 79(c) of the said
Act, and the said Regulations having also been published in the Official
Gazette, there was no need for the PSEB to notify the office order
dated 29.03.1990 which pertained to the upgradation of 20% of the posts
B
of Junior Engineer-II (Civil), as was permissible under Regulation 17 of
the said Regulations.
17. It may be further be noted that after the issuance of the said
office order dated 29.03.1990, the PSEB had issued another office order
dated 23.04.1990, to overcome the problem of stagnation prevailing
C amongst the various cadres of regular employees of the Board. The said
office order dated 23.04.1990 which has been heavily relied upon by the
respondents in the instant case, had come up for consideration before
this Court in case of Bhakra Beas Management Board vs. Krishan
Kumar Vij and Anr. (supra). In the said case, this Court was required
D to consider whether in the light of the order/circular issued by the Bhakra
Beas Management Board, pursuant to the office order dated 23.04.1990
issued by the PSEB, the concerned Assistant Engineer (Civil) was entitled
to the benefit of the higher scale of pay/upgradation/stepping up of salary
sansprerequisite qualification for the grant of the same. This Court after
considering the aims and objects of the office order dated 23.04.1990
E issued by the PSEB, and also the entire scheme of time bound benefit of
promotional/devised promotional scale as envisaged in the said office
order, observed as under:
“25. The critical examination of the impugned judgment passed
by the Division Bench of the High Court completely defeats primary
F purpose of the 1990 Order and provisions applicable to the
employees of the Board. No doubt, it is true that the 1990 Order
was issued only with an intention to remove the stagnation but
this would not give blanket or absolute right to any employee to be
entitled to higher pay scale even if he does not fulfil prerequisite
G qualifications for holding the higher post. In other words, if he
possesses the required qualifications but is unable to get the higher
post on account of non-availability of such post, then only he can
be categorised as suffering from stagnation as per Order of 23-4-
1990.

H 26 to 30…………
PUNJAB STATE POWER CORPORATION LIMITED & ANR. v. 563
BAL KRISHAN SHARMA & ORS. [BELA M. TRIVEDI, J.]

31. If the interpretation of the High Court to the 1990 Order is to A
be implemented, then it would lead to unsustainable consequences.
It would then mean that every Assistant Engineer irrespective of
his conduct, qualifications, performance or behaviour would become
entitled to the higher scale on completion of particular length of
service. If that be so, then even those employees with poor service
B
record and doubtful integrity would also become entitled to claim
higher scale merely because they had completed a particular length
of service. If such an interpretation is to be given to the 1990
Order, then it would not only be improper but would also be against
public policy and interest of the Board. It is too well settled that a
statute or any enacting provision must be so construed as to make C
it effective and operative. Any such construction which reduces
the statute to a futility has to be avoided.”
18. In view of the above, it was made clear by this court that an
employee could be said to be suffering from stagnation as per the office
order dated 23.04.1990 only if he possessed the requisite qualification D
for the next higher post and was unable to get the higher post on account
of non availability of such post.
19. In case of Union of India and Ors. vs. M.V. Mohanan Nair
(2020) 5 SCC 421, while considering the object behind the MACP
Scheme which provided relief against the stagnation, this Court observed E
as under:
“31.The object behind the MACP Scheme is to provide relief
against the stagnation. If the arguments of the respondents are to
be accepted, they would be entitled to be paid in accordance with
the grade pay offered to a promotee; but yet not assume the F
responsibilities of a promotee. As submitted on behalf of Union of
India, if the employees are entitled to enjoy grade pay in the next
promotional hierarchy, without the commensurate responsibilities
as a matter of routine, it would have an adverse impact on the
efficiency of administration.”
G
20. Thus, the claim of the respondents based on the office order
dated 23.04.1990, for getting the pay scale of the next higher post of
Assistant Engineer i.e. Rs. 2200-4250 on the completion of 9 years of
their service and the pay scale of another next higher post of the
Executive Engineer i.e. Rs. 3000-5600 on the completion of 16 years of
H
564 SUPREME COURT REPORTS [2021] 7 S.C.R.

A their service, without assuming the responsibilities of the said promotional
posts, was thoroughly misconceived. What they were entitled to, as per
the scheme to alleviate the stagnation as contained in the office order
dated 23.04.1990, was the time bound promotional/devised promotional
scale as indicated in the Schedule drawn up by the Board. The said
Schedule had specified the first time bound scale to be allowed after 9
B
years of service as Rs. 1800-3500, and the second time bound scale to
be allowed after 16 years of service as 2200-4250 for the post of Junior
Engineer Grade-II (Civil), subject to the pre-conditions mentioned therein.
The same having already been granted to the respondents, the pay scales
as claimed by the respondents in the writ petition could not have been
C granted by the High Court.
21. In that view of the matter, the impugned judgments and orders
passed by the High Court are set aside. The Appeal stands allowed
accordingly.

D
Devika Gujral Appeal allowed.

E

F

G

H