Holding

The Tribunal was justified in ordering promotion on the quota basis and payment of the higher salary, and the employee’s undertaking not to claim benefits is unenforceable as it contravenes public policy and Section 23 of the Contract Act.

Summary

The case concerned the promotion of Har! Om Sharma, a senior non‑diploma line‑man, to the post of Junior Engineer‑I in 1990. Although promotion quotas were fixed for three feeder cadres, the department used an integrated seniority list, ignoring the quota for non‑diploma holders. Sharma was placed in the higher post on a stop‑gap basis, was not paid the higher salary, and was not considered for regular promotion; he also gave an undertaking not to claim salary or benefits. The Central Administrative Tribunal ordered that he be paid the salary of Junior Engineer‑I from 1990 and be considered for regular promotion on the basis of the non‑diploma quota. On appeal, the Supreme Court upheld the Tribunal’s order, holding that the quota system must be followed, that a stop‑gap promotion confers a right to the higher salary, and that the employee’s undertaking not to claim benefits is void under Section 23 of the Indian Contract Act as it is contrary to public policy.

Issues considered

Whether the promotion to Junior Engineer‑I should be made on the basis of the fixed quota for non‑diploma holders or on an integrated seniority list.
Whether an employee placed in a higher post on a stop‑gap basis is entitled to the salary of that post.
Whether an agreement by an employee not to claim higher salary or benefits for a stop‑gap promotion is enforceable under Section 23 of the Indian Contract Act.

Legislation cited

Indian Contract Act, 1872s. 23

Subjects

service lawpromotion quotaintegrated senioritystop‑gap promotionpublic policycontract enforceabilitySection 23employee salary rightsadministrative tribunal

Judgment

SECRETARY-CUM-CHIEF ENGINEER, CHANDIGARH A
v.
HAR! OM SHARMA AND ORS.

APRIL 29, 1998

[S. SAGHIR AHMAD, K. VANKATASWAMI ANDS. RAJENDRA B
BABU, JJ.]

Service Law-Promotion-Feeder cadre-Quotas fixed for-Promotion
made on the basis of integrated seniority list instead of making on quota
basis-Validity of C
Service law-Promotion-Stop gap arrangement-Employee continuing
for a long period-But neither paid salary for that period nor considered for
regular promotion-Direction by Tribunal for payment of salary and to
consider him for regular promotion-Held valid
D
Indian Contract Act, 1872: Section 23.

Government service-Employee-Stop gap promotion-Continuing for
a long period-Undertaking from employee that he would not claim salary
of higher post or other benefits-Held contrary to public policy.
E
In this case promotion to the post of Junior Engineer-I was being made
from three different feeder posts. For promotion, quota was fixed for (1)
direct recruitment from open market from amongst diploma holders; (ii)
diploma holders line-man already working with the appellant; and (iii) non-
diploma holders line man/meter readers who had put in ten years of service. F
However, an integrated seniority list o·f persons from three cadres was drawn
up on the basis of which promotions were made without adhering to the quota
system.
(

The respondent, a seniormost person in the cadre of n~n-diploma
holders was promoted as Junior Engineer. However, he was n~ither paid G
salary for that post nor was he considered for regular promotiqn. On the
other hand, while promoting him on a stop gap arrangement, an un~ertaking
was taken from him that he would neither claim promotion as of right nor
would he claim any benefit pertaining to that post.

The respondent approached the Central Administrative Tribunal, H
99
100 SUPREME COURT REPORTS [1998] 3 S.C.R.

A Chandigarh which directed that the respondent shall be paid salary for the
post of Junior Engineer and shall also be considered for promotion on
regular basis on the basis of quota fixed for non diploma holders with ten
years of service. Against the decision of Tribunal an appeal was preferred
before this Court.

B Dismissing the appeal, this Court
HELD : 1. The Tribunal was fully justified in ordering that the
respondent shall be promoted on the basis of "quota" fixed for non-diploma
holders with 10 years of service and not on the basis of integrated seniority. .
It was also justified in ordering payment of salary to the respondent for the
C post of Junior Engineer-I with effect from 1990 when he was made to work
on that post. The respondent, to begin with, was promoted in stop-gap
arrangement as Junior Engineer-I but that by itself would make no difference
to his claim of salary for that post. If a person is put to officiate on a higher
post with greater responsibilities, he is normally entitled to salary of that
D post The Tribunal has rightly held that the respondent having been promoted
as Junior Engineer-I, though in stop-gap arrangement , was continued on
that post and, therefore he has a right to be considered for regular promotion.
,
[102-E-HJ
2. An agreement that if a person is promoted to the higher post or put
E to officiate on that post or, as in the instant case, a stop-gap arrangement
is made to place him on the higher post, he would not claim higher salary
or other attendant benefits would be contrary to law and also against public
policy. It would, therefore, be unenforceable in view of section 23 of the
Contract Act. [103-DJ

p Punjab State Electricity Board & Anr. v. Ravinder Kumar Sharma &
Ors., [1986) 4 SCC 617, dissented from (Being already overruled).

Purijab State Electricity Board v. Sukhdev Raj Sharma & Ors., JT
(1987) 1 SC 333 and T. Murugesan & Ors. v. State of Tamil Nadu & Ors.,
It 993 J 2 sec 340, referred to.
G
Shreedaran Chandra Ghosh v. State of Assam & Ors., (1996) 10 SCC
567 and State of Haryana v. S.M. Sharma & Ors., JT (1993) 3 SC 740,
distinguished.

H 1995.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5546 of
-
SECY.-CUM-CHIEF-ENGG. v. HARi OM SHARMA [S. SAGHIR AHMAD, J.] JOJ

From the Judgment and Order dated 14.12.93 of the Central Administrative A
Tribunal, Chandigarh in O.A. No. 433/CH/1993.

Ujjagar Singh, G .C. Sharma and Naresh Bakshi for the Appellant.

Sunil Gupta, Ms. Indu Malthora and Ms. Kavita Walia for the
Respondents. B
A.K. Mahajan (NP) for Respondent-Ex-Parte.

The Judgment of the Court was delivered by
...
S. SAGHIR AHMAD, J. This appeal is directed against the judgment C
dated 14.12.93 passed by the Central Administrative Tribunal, Chandigarh (for
short, 'the Tribunal').

2. The dispute relates to the promotion on the posts of Junior Engineer-
!. Admittedly, promotion on the posts of Junior Engineer-I are made from
amongst Junior Engineers/S.S.Os./Meter Inspectors. Since there were three D
different feeder posts from which promotions were to be made, the appellant
themselves fixed the respective quotas. 34 percent of the posts were to be
filled up by direct recruitment from the open market from amongst diploma
holders. 33 per cent of the posts were to be filled up by diploma holders
linemen already working with the appellant. Another 33 per cent of the posts
were to be filled up from amongst non-diploma holders linemen/Meter Readers E
who had put in I 0 years of service.

3. In order to make promotions, an integrated seniority list of persons
working in three categories of feeder posts was drawn up and it was from this
seniority list that promotions were made and the quota system was not
adhered to in view of the decision of this Court in Punjab State Electricity F
Board and Anr. v. Ravinder Kumar Sharma & Ors. [1986] 4 SCC 617. It is
also stated by the appellant that 33 per cent quota, meant for non-diploma
holders, was quashed by this Court by its Judgment dated 30th of January,
1987 in Punjab State Electricity Board v. Sukhdev Raj Sharma & Ors., JT
(1987) 1 SC 333. It was after this Judgment that the recruitment rules were G
modified and it was provided that the posts of Junior Engineer-I would be
filed up, not on the basis of quota, but on the basis of integrated seniority-
cum-merit.

4. The respondent was promoted as Junior Engineer-I in 1990 and has
been continuing on that post without being paid salary for that post or H
102 SUPREME COURT REPORTS (1998] 3 S.C.R.

A without being promoted on regular basis. It was in this situation that the
respondent approached the Tribunal and the Tribunal, as pointed out earlier,
allowed the claim petition with the direction that the respondent shall be paid
salary for the post of Junior Engineer-I and shall also be considered for
promotion on regular basis on the basis of quota fixed for non-diploma
B holders with IO years of service. Admittedly, the respondent is the seniormost
person in the cadre of non-diploma holders and has also put in IO years of
service.

5. The decision in Punjab State Electricity Board and Anr. v. Ravinder
Kumar Sharma & Ors., (supra) was overruled by this Court in T. Murugesan
C & Ors. v. State of Tamil Nadu & Ors., (1993] 2 SCC 340. It was on this
decision that the Tribunal placed reliance and came to the conclusion that the
promotions had still to be made on the basis of quota fixed for three different
feeder categories and not on the basis of integrated seniority particularly as
the classification on the basis of "educational qualification" was held to be
valid by this Court.
D
6. Having regard to these facts, we are of the view that the Tribunal was
fully justified in ordering that the respondent shall be promoted on the basis
of"quota" fixed for non-diploma holders with 10 years of service and not on
the basis of integrated seniority. The Tribunal was also justified in ordering
payment of salary to the respondent for the post of Junior Engineer-I with
E effect from 1990 when he was made to work on that post. It is true that the
respondent, to begin with, was promoted in stop-gap arrangement as Junior
Engineer-I but that by itself would make no difference to his claim of salary
for that post. If a person is put to officiate on a higher post with greater
responsibilities, he is normally entitled to salary of that post. The Tribunal has
F noticed that the respondent has been working on the post of Junior Engineer-
! since 1990 and promotion for such a long period of time cannot be treated
to be a stop-gap arrangement.

7. Learned counsel for the appe)lant has placed reliance on Shreedaran
Chandra Ghosh v. State of Assam & Ors., (1996] IO SCC 567, as also on State
-
G o/Haryana v. S.M Sharma & Ors., IT (1993) 3 SC 740, to contend that since
the respondent was promoted on the basis of stop-gap arrangement, he could
not claim promotion as a matter of right nor could he claim salary for the post
of Junior Engineer-I as he was given only current duty charge of that post.
Both the contentions cannot be accepted. The Tribunal has already held that
the respondent having been promoted as Junior Engineer-I, though in stop-
H gap arrangement, was continued on that post, and therefore, he has a right
I
SECY.-CUM-CHIEF-ENGG. v. HAR! OM SHARMA [S. SAGHIR AHMAD, J.] 103

to be considered for regular promotion. Having regard to the facts of this A
case, there is no, reason to differ with the Tribunal.
"
8. Learned counsel for the appellant attempted to contend that when the
respondent was promoted in stop-gap arrangement as Junior Engineer-I, he
had given an undertaking to the appellant that on the basis of stop-gap
arrangement, he would not claim promotion as of right nor would he claim any B
benefit pertaining to that post. The argument, to say the least, is preposterous.
Apart from the fact that the Government in its capacity as a model employer
cannot be permitted to raise such an argument, the undertaking which is said
to constitute an agreement between the parties cannot be enforced at law. The
respondent being an employee of the appellant had to break his period of C
stagnation although, as we have found earlier, he was the only person amongst
the non-diploma holders available for promotion to the post of Junior Engineer-
! and was, therefore, likely to be considered for promotion in his own right.
An agreement that if a person is promoted to the higher post or put to
officiate on that post or, as in instant case, a stop-gap ~mangement is made
to place him on the higher post, he would not claim higher salary or other D
attendant benefits would be contrary to Jaw and also against public policy.
It would, therefore, be unenforceable in view of Section 23 of the Contract
Act.

9. For the reasons stated above, we find no merit in this appeal which
is dismissed without any order as to costs. E
T.N.A Appeal dismissed.

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