Holding

No vested right had crystallised in favour of the respondents; the Department's promotion policy is a lawful administrative scheme and the Tribunal's direction is set aside.

Summary

The respondents, originally Upper Division Clerks in the Income Tax Department, were promoted to the intermediary cadre of Tax Assistants but were not eligible for promotion to Head Clerk except according to their seniority as Upper Division Clerks. They approached the Central Administrative Tribunal (CAT) seeking to be treated as a cadre senior to Upper Division Clerks for Head Clerk promotions. The CAT suggested the government devise a scheme and later ordered that the respondents be promoted as Head Clerks, holding that their right to promotion had crystallised. The Union appealed, arguing that no vested right existed and that the Department’s policy of considering Tax Assistants for Head Clerk promotion based on Upper Division Clerk seniority was neither arbitrary nor discriminatory. The Supreme Court held that the earlier CAT order did not create a specific right, the recruitment rules (both original and amended) did not provide for such promotion, and the Department’s policy was a legitimate administrative decision. Consequently, the Court set aside the CAT’s direction and allowed the appeal.

Issues considered

Did the CAT's order create a vested right for Tax Assistants to be promoted to Head Clerk senior to Upper Division Clerks?
Is the Department's scheme of promoting Tax Assistants to Head Clerk based on seniority in the Upper Division Clerk cadre arbitrary, discriminatory, or violative of natural justice?
Do the amendments to the recruitment rules defeat the respondents' claim to promotion?
Can the Court interfere with the Department's policy on promotions in the absence of arbitrariness or discrimination?

Subjects

promotionadministrative lawcentral administrative tribunaltax assistantshead clerksenioritydepartmental rulesarbitrarinessnatural justicepolicy decision

Judgment

A UNION OF INDIA AND ORS.
v.
SYED MOHD. RAZA KAZMI AND ORS.'

MARCH 13, 1992

B [S. RANGANATHAN, V. RAMASWAMI AND YOGESHWAR
DAYAL, JJ.]

Civil Services :

C Income Tax Department--Creation of cadre of Tax Assistants-fnter-
mediary cadre between Upper Division Clerk and Head Clerk-Promotion to --{
the post of Head Clerk along with UDCs on the basis of seniority in the cadre
of UDC-Claim of Tax Assistants for being declared en bloc senior to Upper ">-
Division Clerks-Validity of the claim-consideration of-Policy decisions
regarding promotions-Intelference by Court/Tribunal-When justified.
D
The Respondents joined service in the Income Tax Department as
Upper Division Clerks. In the normal course after five years of service and
after passing a ministerial staff examination, they would have been
promoted as Head Clerks. Since there was stagnation, the Government
constituted a grade of Tax Assistants, as an intermediary cadre between
E
Upper Division Clerks and Head Clerks. One-third of the cadre strength
of UDCs was upgraded as Tax Assistants. The recruitment to the post of
Tax Assistants was entirely by promotion of UDCs, on a selection basis.
-UDCs with a minimum service of three years who had secured atleast 40
per cent marks in atleast four subjects in the departmental examination
F for the post of Income Tax Inspectors, were considered for selection as Tax
Assistants.

Having fulfilled the above qualifications, the Respondents were _;-
promoted as Tax Assistants.
G Even after the creation of the post of Tax Assistant, the recruitment
rules for the post of Head Clerk remained unaltered. As such, only UDCs
were eligible for promotion as Head Clerk; the Tax Assistants were not
eligible. For the post of Income Tax Inspector, the Tax Assistants were
~igible subject to their completing the departmental examination therefor.
H Since the eligible candidates from higher ministerial cadres were con-
280
U.O.I. v. MOHD. RAZA KAZMI 281

.f~ sidered first, the Tax Assistants bad to wait for their tum. A
The department, after considering the fact that Tax Assistants
formed a grade higher than that of UDCs, and that it would be inequitable
to deny them promotion as Head Clerks, issued instructions to the effect
that Tax Assistants would also be considered along with UDCs for promo·
..,, ti on as Head Clerk. However, they were to be considered only in accordance B
with their seniority in the cadre of UDCs, irrespective of their confirmation
in the grade of Tax Assistants. This resulted in a peculiar situation
wherein UDCs who could not qualify for the post of Tax Assistants could
become Head Clerks, and the Tax Assistants, who formed a higher grade,
~ were considered along with such UDCs, for promotion to the post of Head c
Clerks.

~ Being aggrieved by the said instructions, the respondents ap·
proacbed the Central Administrative Tribunal, contending that the Tax
Assistants should be treated en bloc as a cadre senior to UDCs, as was the
position in regard to promotion for the post of Income Tax Inspector, and D
that they should not be made to wait for their turn in seniority as UDC,
for promotion to the post of Head Clerk.

The Tribunal was of the view that the Government should evolve a
proper scheme to tide over the situation and suggested three alternative
E
methods, viz., (i) A quota or roster on the same lines, as in the case of
-" Inspectors for prorilotion to the post of Head Clerks should be fixed; (ii)
Option should be invited from such of the TAs who want to opt for HC's
posts and thereafter for supervis~rs, posts; and (iii) the posts of HCs
should be filled not by seniority alone but by an open competition where
all UDCs of certain minimur.1 years of service are allowed to compete. F

The department considered the suggestions given by the Tribunal
1"....,.. and felt that since the existing scheme of promotion of Tax Assistants to
Head Clerk had stood the test of time and since it was in the best interest
of the department and all the feeder cadres ofemployees, any change would
G
create enormous difficulties for the department whose offices are located
all over the country. Therefore, the department decided to continue the
existing scheme.
~
The Department having stood its ground, the Respondents again
moved the Tribunal questioning the stand of the department and certain H
282 SUPREME COURT REPORTS [1992] 2 S.C.R.

A amendments to the Recruitment Rules made after the Tribunal's order.
The Tribunal felt that the amendment in the Rules were intended to defeat
the respondents' claim for promotion. It also took the view that the
respondents were entitled to promotion posts under the earlier rules, such
rights having crystallised by virtue of its orders passed in 1988. The
Tribunal directed that in case the respondents were found entitled for
B promotion, their appointment to such promotion posts would take effect '1"'
from the date of its order and not from the date they were subsequently
promoted.

Against this order of the Tribunal, the department preferred the
C present appeal by special leave. 1
Allowing the appeal, this court,

HELD : 1. No right had crystallised in favour of respondents as a
result of the earlier order of the Tribunal. At that time, the Tribunal was
D inclined to think that the grade of Tax Assistants being higher than the
grade of Upper Division Clerks, the department should evolve some
scheme whereby the respondents could be made eligible to be considered
for promotion as Head Clerks otherwise than in their turn of seniority as
Upper Division Clerks. The earlier order did not however, give any specific
E direction to the department. [291 E, F]

2. Neither the original rules nor the amended rules provided for the
promotion of Tax Assistants to the post of Head Clerk. The amended rules

F
in respect of Inspectors did not also place the respondents under any
greater disadvantage than before in the matter of their promotion as
Inspectors. The reference to higher ministerial establishments contained
-
in the earlier rules was replaced by a more detailed specification by a
reference being made to "Supervisors Grade-I, Supervisors Grade-II, Head ;r-
Clerks, Tax Inspectors, Upper Division Clerks and Stenographers" provid-
ing a similar arrangement of gradation as earlier and creating quotas for
G ministerial grades on the one hand and the stenographer's grades on the
other. There is no basis for the Tribunal's conclusion that the department
had attempted to by- pass any direction or conclusion of the Tribunal by
the amendments to the rules. (292 C·E]
-./I
3. The respondents are no doubt better than the other Upper
H Division Cierks in that they have qualified in a limited manner in the
U.0.1. v. MOHD. RAZA KAZMI 283

Income-tax Inspectors' Examination which the other Upper Division A
Clerks have not done. Therefore, the Tax Assistants have been given a
promotion and they have been in receipt of higher grades of salary right
from the beginning from the day they become Tax Assistants. To this
extent, they have gained a march over the other UDCs who could not
qualify, wholly or partly, in the Income Tax Inspectors examination. They B
have also gained a preference for promotion as Inspector over UDCs who
do not qualify as Tax Assistants but who pass the Inspectors' examination
in due course. It is no doubt true that the promotion of the respondents
as Tax Assistants has not been carried to its fullest logical sequel by giving
them promotion as Head Clerks treating them as a cadre higher to UDCs.
But this was a calculated decision taken in the difficult situation of having C
to reconcile the claims of the large number of UDCs who would be left
otherwise with no avenues of promotion and of the UDCs who had already
earned some advantages by becoming Tax Assistants. [294 E-G]

4. The policy decision taken by the department is not arbitrary or D
meaningless. It has a background and it has a purpose. It is for the depart-
ment to decide on policies of promotion which will be consistent with the
interests of all employees belonging to various cadres. It is not for the
Administrative Tribunal or for the Courts to interfere with this and to
dictate the avenues of promotion which the department should provide for
its various employees. The courts cannot direct that Tax Assistants should E
be made a direct feeder post to Head Clerks superior to Upper Division
----l Clerks. No doubt the court will interfere if there is arbitrariness or resultant
discrimination. There is no arbitrariness or discrimination. There is no
ground for interfering with the policy of the department which has been in
force since 1978. The Tribunal has had no opportunity to hear the point of
view of the larger category of Upper Di,·ision Clerks who have not qualified
F
to be either Inspectors or officers and whose future is fully jeopardised by
the directions given by the Tribunal. This is another reason why the Tribunal
was not justified in giving such a direction as it did to the effect that the
respondents should be promoted as Head Clerks by treating them as belong-
ing to a cadre higher than Upper Division Clerks. [294 H; 295 A-DJ G

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2255 of
1992.

From the Judgment and Order dated 9.5.1991 of Central Administra- H
284 SUPREME COURT REPORTS [1992] 2 S.C.R.

A tive Tribunal, Allahabad in O.A. No. 348 of 1990.

~.T.S. Tulsi, Addi. Solicitor General, A.S. Rao, Ms. Sushma Suri,
P.Parmeshwaran, Niranjan Singh, T.C. Sharma and C.V.S. Rao for the
Appellants.

B Respondent appeared in person with Arun K. Sinha.

The Judgment of the Court was delivered by

RANGANATHAN, J. Leave is granted and the appeal is disposed
of after hearing counsel for both parties.
c
The four respondents joined service in the Income-tax department
as Upper Division Clerks. Their scale of pay was Rs. 330-560. In the normal
course of events, after putting in five years of service and passing a
ministerial staff examination, they would have been promoted as Head
D Clerks (H.C.) on the scale of Rs. 425-700. Perhaps because of the stagnancy
of a large number of Upper Division Clerks (UDCs) without any promo-
tion,-the Government constituted a grade of Tax Assistants (T.As.) by an
order dated 11th March, 1978. The pay-scale of the post of J'ax Assistants
was fixed at Rs. 380-12-EB-15-560-EB-20-640. In other words, the cadre of
T.As. was created as an intermediary cadre between U.D.Cs. and H.Cs.
E classifying it also as a ministerial cadre in Group C of the Central Services.
This was done by upgrading as T.As. one third of the cadre strength of
U.D.Cs. The idea was to provide more experienced and competent mini-
sterial staff to deal with important clerical work particularly in the
Companies' and investigation circles. 4,140 posts of TAs were created by
F upgrading an equal number of posts of UDCs with the result that a
corresponding number of posts of UDCs got abolished from time to time
as posts of Tax Assistants got filled up in the respective charges. The
recruitment to the post of T As was entirely by promotion from the cadre
of UDCs on a selection basis on the recommendation of a duly constituted
G departmental promotion committee out of those of the UDCs as had (a)
rendered a minimum service of three years and (b) secured at least 40 per
cent marks in the papers on four subjects in the departmental examination
conducted for the post of Income-tax Inspectors (LT.I.) from time to time.

This may be described as a limited qualification in the LT.I. Ex-
H amination. A pass in every paper of the examination with 50% marks and
U.0.1. v. MOHD. RAZA KAZMI [RANGANATHAN, J.J 285

an overall average of 60% made the candidates eligible for consideration A
for promotion to the post of ITis which is a non-gazetted, non-ministerial
post in Class III (Group C) of the Central Services.

The four respondents had obtained the limited qualification referred
to above in the ITI examination in 1976 and 1977 and, as such,· they were
all promoted as T As and have been functioning as such.
B

There were two promotional avenues for Upper Division Clerks.
They could become Head Clerks after putting in five years of service and
passing a ministerial staff examination as already mentioned. They were
also eligible, along with staff in higher ministerial grades and stenog- C
raphers, to be considered for the post of Inspectors provided they had also
completed the departmental examination for ITis. For this purpose, /
per-
sons in the higher grades got preference over the persons working in the
lower grade. An Upper Division Clerk could become an Inspector only
after persons in higher ministerial grades had been duly considered. But D
Upper Division Clerks could become Head Clerks and Inspectors in due
course of time, subject to their passing the respective qualifying examina..
tion. When the post of Tax Assistant was created, the rules of recruitment
for Head Clerks was not modified. In other words, so far as the post of
Head Clerks was concerned, that had to be filled up 100 per cent by
promotion only from Upper Division Clerks. The Tax Assistants were not E
eligible for promotion as Head Clerks. They were. however, eligible for
consideration as Inspectors on completing the LT.I. examination. Thus Tax
Assistants could be promoted only to the posts of Inspectors but there also
they stood in the queue till all eligible candidates from higher ministerial
cadres had been considered. Considering that they formed a grade higher F
than the grade of Upper Division Clerks, it was inequitable that they should
be denied promotion to the post of Head Clerks. The Department, there-
fore, issued instructions that promotion to the grade of Head Clerks could
be made not only from the cadre of Upper Division Clerks but also from
the cadre of Tax Assistants but added, as a rider, that in so doing, the Tax
Assistants would be considered only in turn in accordance with their G
seniority in the cadre of Upper Division Clerks, irrespective of the fact that
they may have been confirmed in the grade of Tax Assistants. These
instructions appear to have been issued in 1978 itself but were reiterated
by another Memorandum dated 26th March, 1982. The result of this was
that though Tax Assistants got promotion as Head Clerks, it was available H
286 SUPREME COURT REPORTS [1992] 2 S.C.R.

A only according to their order of seniority among the Upper Division Clerks.
They felt that it was very inequitable that they, who belonged to a higher
c"1dre than the Upper Division Clerks should get promotion as Head
+·
Clerks much after persons who continued to remain as Upper Division
Clerks and had not qualified for appointment as Tax Assistants. This, they
felt, amounted to putting a premium on inefficiency.
B
The Tax Assistants, thus aggrieved, went to the Central Administra-
tive TribU;nal for redress. They contended that, for promotion as Head
Clerks, Tax Assistants should be treated en bloc as a cadre senior to UDCs
(as was the position regarding promotion as ITis) and should not be made
C to wait for promotion to HCs for their turn in seniority as UDC. To
illustrate their grievance, it may be mentioned that respondent Syed Mohd.
Raza Kazmi (who was the applicant before the Tribunal) had completed
the departmental examination for Income-tax Inspectors as early as 1977
and had qualified for becoming and had become a Tax Assistant by reason
D of complete success in the above examination which made him eligible even
for promotion as Income-tax Inspectors subject, of course, to his seniority.
On the other hand, though promoted as Tax Assistant as early as 1977 he
found himself continuing as a Tax Assistant even as late as 1988, whereas
if he had been treated as belonging to a higher grade of employees than
Upper Division Clerks he would have been promoted as Head Clerk w.e.f.
E 7.3.1984. There was also another hurdle in the way of this respondent in
that he could not appear in Income- tax Officers' Examination, (Group-B),
until promoted as a Head Clerk. To sum up, his promotion as a Head Clerk
was inordinately delayed; his promotion as Inspector was also consequently
delayed because Tax Assistants could be considered for promotion as
F Inspectors only after Head Clerks; and he was also under a handicap in
regard to his eligibility for appearing in the officers' examination. The
Central Administrative Tribunal felt that there was an injustice in this J
{
situation. The Tribunal observed:
;t-
"It is not under dispute that the post of Tax Assistants is an
G intermediatary-cadre post in a higher grade and is considered
as a promotional post from the grade of UDC. The only reason
that has been emphasised in the replies filed by the respondent
for not giving any consideration to the fact that it is an inter-
mediatary cadre and higher grade post and a promotional post
H from the grade of Upper Division Clerk, is that in case this was
U.O.I. v. MOHD. RAZA KAZMI [RANGANATHAN, J.] 'lJ37

made a channel of promotion of UDCs (sic) who do not appear A
in the departmental examination for promotion to the post of
ITis and who wait for promotion to the post of HCs will be
denied any promotion avenue and will stagnate and retire on
the same post i.e. Upper Division Clerk. To our mind, this
explanation is not founded on well considered principles and B
the chances of further promotion for TAs should also have been
safeguarded because once they took a chance to appear in a
departmental examination and qualify through a DPC for
promotion as TAs, which is a higher grade post they cannot
be, for the purposes of consideration for further promotion to
the grade of Head Clerks, (in) made to lose their rights accrued C
to them by virtue of their promotion and by virtue of occupying
a post which is without any doubt a higher grade and promo-
tional post. At the same time, when these posts were created,
only part of the cadre of Upper Division Clerks i.e. l/3rd was
upgraded to those posts. Therefore, majority of UDCs still D
remain in the parent cadre of UDCs. A plain reading of the
manner in which the post of Tax Assistants have been created
also does not leave any doubt that these posts could very well
be treated in the regular avenue of promotions from the post
of UDC to that of H.C. but this would have resulted in a
peculiar situation i.e. all UDCs would have to pass through the E
post of H.C. which posts are definitely not in large numbers
and thereby there would have been no stability and continuity
in the incumbency of the post of HC as he would have there-
after moved for further promotion to the category of Supervisor
Grades I and II or ITI. The respondents raised a contention in F
their reply that if T As were allowed to occupy the post of HC
and they already have a chance for promotion as a Inspector,
which is a higher grade post than that of Head Clerk, they
would have not been able to find sufficient number of staff
to man the post of Supervisor Grade I and II who are in
the avenue of promotion of Head Clerks (sic) can also not G
be just right."

Considering the above aspects, the Tribunal was of the opinion that
the Government should evolve a proper scheme by which the fact of the
Tax Assistants being in a higher grade is not ignored and the difficult H
288 SUPREME COURT REPORTS (1992] 2 S.C.R.

A situation facing the applicants could be overcome. The Tri!funal proceeded
to suggest three alternative methods by which such an improvement in the
situation could be achieved.

(i) A quota or roster on the same lines as in the case of ·
inspectors for promotion to the post of Head Clerks should be
B fixed;

(ii) Option should be invited from such of the TAs who want
to opt for HC's posts and thereafter for supervisors' posts; and

(iii) The posts of HCs should be filled not by seniority alone
c but by an open competition where all UDCs of certain mini-
mum yeats of service are allowed to compete.

The respondents filed an application for review praying, inter alia, )o--
that "specific orders for immediate implementation be passed that the TAs
D be given seniority over UDCs for promotion to HCs w.e.f. 31.5.78". This
application was dismissed by the Tribunal on 28.4.1989. Then they
preferred petitions for special leave to the Supreme Court being SLP Nos.
15854-63 of 1991. These petitions were dismissed by this Court's order
dated 24.1.1990 with the following observations:

E "The Tribunal has formulated the scheme which we hope
will be implemented by the Department within reasonable time.
The Special Leave Petitions are dismissed".

The Department claims that it has given careful consideration to the
various suggestions made by Tribuanl. A propos the three suggestion made
F by the Tribunal, the department's comments are as follows:

4. That the Government has carefully re-examined various
alternatives suggested in the directions of Central Administra-
tive Tribunal. The first alternative suggested was that a qu.:>ta
system could be introduced for promotion to the grade of Tax
G Assistant (TA). This has been examined carefully. The quota
system in the grade of Inspectors, (ITI) referred to by the CAT
is only for the feeder categories as provided in the relevant
recruitment rules. This position is not obtaining in the case of
TAs. The quota/Roster system cannot be introduced for
H promgtion to the post of Head Clerks (HC) ;,.s under the
U.0.1. v. MOHD. RAZA KAZMI [RANGANATIIAN, J.] 289

recruitment rules for HCs, the TA is not a feeder grade for A
promotion to the post of H.C. The Quota/Roster system for
promotion to HC would not be advantageous to the T As as at
present they are eligible for consideration for promotion to all
available posts of HCs on the basis of their seniority as UDC.
That if quota system is introduced it is likely that junior UDCs B
may get promotions to the post of HCs earlier than some of
the T As who may be senior in the grade of LDC as promotion
of TA to HC would than be restricted to the fixed quota only.
They may be senior as UDCs but cannot get promoted to the
grade of HC due to the proposed fixation of quota for
TAs/UDCs. Hence, fixation of quota system for promotion of C
Tax A~sts. to H.C. is not considered feasible.

5. That as regards the suggestion that option be obtained from
T As, it is considered that it should be a retrograde step to
obtain options from T As, who want to be absorbed in the
Ministerial cadre, foregoing their chances for promotion in the D
grade of Inspectors. The efficiency of the Income-tax Deptt.
would suffer if such a step is taken. The purpose behind
creation of the grade of TAs senior to the level of UDC, would
be defeated if option is allowed to the TAs for absorption in
the ministerial cadre. E
6. That the TA perform work of Technical and complicated
nature in the Income-tax Deptt. having qualified in the
Departmental examination of ITis. Promotion to the ministerial
cadre posts of HCs and above are basically provided for UDCs,
who form part of the ministerial cadre. However, TAs are also F
considered for promotion to HC as per their place in the UDC
seniority list.

7. That the TAs have been made eligible for promotion as HC,
as a concession and they do not have a statutory right for such G
promotion, as their line of promotion is in the Executive cadre
of ITI.

8. That the Government has issued special executive orders
making the TA eligible for promotion to the post of HC on the
basis of their seniority as UDC alongwith other UDCs who H
290 SUPREME COURT REPORTS [1992] 2 S.C.R.

A have not received promotion to the grade of TA.

9. That giving an over-riding seniority to the post of TA in the
matter of promotion to HC would be doing injustice to the
UDCs and is not contemplated in the recruitment rules. It
would also be against the general principles of natural justice.
B
10. That thirdly, the post of HCs cannot be filled by open
examination as ·no open examination is held for such super-
visory post in any department of Govt. of India.

11. As already explained all the above three alternatives have
c been duly considered after detailed examination and the
Department of Revenue have come to the conclusion that
existing system is in the best interest of the Department and all
feeder categories of employees and could not be changed.

D The department was of the view that the existing scheme of promo-
tion of Tax Assistants to the grade of Head Clerks by virtue of their
seniority in the grade of Upper Division Clerks had stood the test of time.
It was in the best interests of the department and all the feeder categories
of employees. No representations had been received by the department
E from the staff side for any change in the scheme. No difficulties had also
been experienced so far from any other charge of the department which is
located all over India. On the other hand, any change made in the present
scheme, it was thought, would create enormous difficulties for the depart-
ment. It was, therefore, decided to continue the existing system.

F With the department taking up this stand, the respondents had no
option but to go back to the Central Administrative Tribunal. They sub-
mitted to the Tribunal that, though the department had categorically
admitted that they accepted the earlier order of the Tribunal, it was
declining to give effect to the directions contained in the said order. On
the other hand, certain amendments to the recruitment rules to various
G promotional posts that had been made in the meanwhile were also brought
to the Tribunal as placing the respondents in worse position. The Tribunal
also seems to have thought that the amendment in the rules were intended
to defeat the respondents' claim for promotion. The Tribunal also took the
view that the respondents had become entitled to the promotion posts
H under the earlier rules as they existed in view of the Tribunal's directions.
U.0.1. v. MOHD. RAZA KAZMI [RANGANATHAN, J.] 291

on the earlier applications. Their rights for promotion thus crystallised A
since 1988, they observed, could not be defeated because of subsequent
amendments in the rules. They commented adversely on the department's
failure "to formulate a scheme even after judicial orders had been passed
which had to be obeyed and implemented by them". The Tribunal directed
(in terms which are not quite clear in the copy of the order furnished to B
us):.

"We direct that the respondents (sic) with rules along with as
per the order of the Tribunal dated 26.8.88 referred to above
notwithstanding the fact there was any failure on their part to
formulate the scheme. In case the applicants are found entitled, C
their appointment will take effect from the date they were
subsequently promoted. Let compliance of this order be made
within a period of two months and one week from today. As
this order has been passed in the presence of the counsel and
officials of the Income Tax Department, it is not necessary to
say that the order is to be implemented from the date of receipt D
of copy of the same."

It is from this order of the Tribunal dated 9.5.1991 that the Union of
India. has preferred the present appeal.

We are afraid that the Tribunal's order is based on confusion and E
misapprehension. In the first place, we do not think that any right had
crystallised in the favour of respondents as a result of the earlier order of
the Tribunal. At that time, the Tribunal was no doubt inclined to think that,
the grade of Tax Assistants being higher than the grade of Upper Division
Clerks, the department should evolve some scheme whereby the respon- F
dents could be made eligible to be considered for promotion as Head
Clerks otherwise than in their turn of seniority as Upper Division Clerks.
The earlier order did not however, give any specific direction to the
department. The operative portion of the order only read thus:

'We dispose of this application only by a direction to the G
respondents to evolve a scheme considering the suggestions

- given in our observations along with any other scheme that they
may be able to evolve to remove the anomalous situation
whereby the incumbents of promotional post which are in
intermediary cadre are clubbed for their seniority with persons H
292 SUPREME COURT REPORTS [1992) 2 S.C.R.

A in a lower gr~de for consideration for promotion to the post of
Head Clerk."

It is, therefore, difficult to see how any rights had got crystallised iii
favour of the respondents which have been taken away by the department
subsequently. The second major impression underlying the order of the
B Tribunal is that the department had defeated the rights of the respondent
by the subsequent amendments made in the rules. This, again, is an
incorrect impression as the amendments did no such thing. Neither the
original rules nor the amended rules provided for the promotion of Tax
Assistants to the post of Head Clerks. The amended rules in respect of
C Inspectors· did not also place the respondents under any greater disad-
vantage than before in the matter of their promotion as Inspectors. Only,
the reference to highe: ministerial establishments contained in the earlier
rules was replaced by a more detailed specification by a reference being
made to "Supervisors Grade-I, Supervisors Grade-II, Head Clerks, Tax
Inspectors, Upper Division Clerks and Stenographers", providing a similar
D arrangement of gradation as earlier and creating quotas for ministerial
grades on the one hand and the stenographer's grades on the other. There
is no basis for the Tribunal's conclusion that the department had attempted
to by-pass any direction or conclusion of the Tribunal by the amendments
to the rules.
E
It is no doubt true that, by its earlier order, the Tribunal had
suggested to the department that some alternative schemes should be
thought of and some solution should be evolved to redress the grievances
of the respondents. But no specific direction was given and the mere far.t
that the department has not found it feasible to accept any of the sugges-
F tions made by the Tribunal can~ot justify the grant of the respondent's
prayer. The only effect of the order dated 26.8.88 not being implemented
is, therefore, to put the parties back in the position in which they were and
to call for a fresh consideration of their plea on the merits.

G Now the short question is whether there is any injustice suffered by
the respondents which can be remedied by the Tribunal or the Court. The
respondents no doubt have a grievance that, though promoted to a grade
higher than the Upper Division Clerks, they are being considered for •
promotion as Head Clerks only in accordance with their seniority in the
cadre of Upper Division Clerks. This creates two types of anomalies. One
H is that a UDC (who has not qualified as TA) can become HC earlier than
U.0.1. v. MOHD. RAZA KAZMI (RANGANATHAN, J.J 293

one who has, by virtue of his seniority as UDC. The second is that a senior A
UDC, who qualifies as a TA much latter than a UDC junior to him can
become HC earlier, though, as TA, he would be junior to the latter. But
as against these anomalies, one has to consider the difficulties faced by the
Department in giving TAs as a class higher preference than UDCs for
promotion as Head Clerks. For one thing, the recruitment rules of 1969
did not, naturally, envisage T As as a feeder post for promotion as HCs B
and, when the posts of T As were created, it was deliberately decided not
to include them as such; the rules were not amended and the instructions
only put them on par with other UDCs. This remained unchallenged and,
even when challenged in 1987, the Central Government as such was not
made a party and no specific directions for the amendment of the rule in
this behalf were prayed for. But, this apart, there were insuperable difficul-
c
ties in the way. The figures given to us indicate that there were about 13,000
Upper Division Clerks in 1978. Their promotional avenue was only to
become Head Clerks by passing a ministerial service examination or to
become Inspectors on passing the ITI examination. There were UDCs who
could do this and get such promotions in due course. Secondly, there were D
Upper Division Clerks who were not capable of passing the Income-tax
Inspectors' Examination but were able to qualify in the lower grade mini-
strial examination which made them eligible to become Head Clerks. There
was third category of Upper Division Clerks who fell in between these two
categories. They did not completely pass the Income-tax Inspectors' Ex-
amination but qualified in it with sufficient marks to justify the view that, E
given some encouragement, they would be able to move into the Inspectors'
executive line. The department was also in need of a category of persons
who would not be simply doing clerical work but who showed such promise
of developing into Inspectors. In this situation, the department created the
post of Tax Assistants and promoted to these posts persons who had not
fully completed the ITI examination but had secured a "limited" pass
F
therein. This gave the UDCs who had achieved this distinction two ad-
vantages: (i) they became immediately entitled to higher scale of pay than
other UDCs and (b) they acquired higher eligibility to become Inspectors
of Income-tax for which selection they stood in between Head Clerks and
other Upper Division Clerks. But they suffered this advantage that they G
would not become Head Clerks; their ability to pass the ITI examination
was taken as an indication of their propensity to move to an executive line
and so, promotion for them was to be only as ITis in due course. So far as
the rest of the UDC staff was concerned, who had qualified neither in the
Income-tax Inspectors' Examination, nor in the Tax Assistants' Examina-
H
294 SUPREME COURT REPORTS [1992] 2 S.C.R.

A tion, they continued to be Upper Division Clerks. The department felt that,
if the Tax Assistants were also allowed to compete for the post of Head ~
Clerks by the mere reason of their limited qualification in the Income-tax
Inspectors' Examination at a level higher than UDCs, there would be a
tremendous stagnation among the Upper Division Clerks. More than 2/3rd
of the Upper Division Clerks would be completely shut out from all
B chances of promotion. However, realising that, to deny the Tax Assistants
completely any promotion as Head Clerks would also amount to an anoma- 7
ly since they were in no way inferior to the other Upper Division Clerks
who were eligible for such promotion, the department decided that while
Tax Assistants should normally await promotion as Income-tax Inspectors,
c they should be enabled as and when their normal seniority in the rank of
Upper Division Clerks warranted it, to be promoted as l..{ead Clerks
though, strictly speaking, they belonged to a grade from which there would
be no promotion to the posts of Head Clerks. This was a via media found
by the department between the two alternatives (a) of altogether denying
r
the Tax Assistants promotion as Head Clerks and (b) of treating the Tax
D Assistants as a cadre superior to Upper Division Clerks in all respects
including promotion as Head Clerks. It was a concession shown to the T As,
standing in the longer queue for ITis, by permitting them to join the queue
for HCs but with no precedence over other senior UDCs already standing
in this_ second queue. In this situation, it is very difficult to agree that the
department has acted unreasonably or unjustly. The respondents are no
E doubt better than the other Upper Division Clerks in that they have
qualified in a limited manner in the Income-tax Inspectors' Examination
. which the other Upper Division Clerks have not done. But, for this
>-
"achievement", they have been given a promotion and they have been in
receipt of higher grades of salary right from the beginning from the day
became Tax Assistants. To this exterit, they have gained a march over the
F
other unenterprising UDCs who could not qualify, wholly or partly, in the
ITI examination. They have also gained a preference, for promotion as
ITis, over UDCs who do not qualify as T As but who pass the ITI's
examination in due course. It is no doubt true that the promotion of the
-,J--
respondents as TAs has not been carried to its fullest logical sequel by
G giving them promotion as Head Clerks treating them as a cadre higher to
UDCs entitled to such promotion. But this was a calculated decision taken
in the difficult situation of having to reconcile the claims of the large
number of UDCs who would be left otherwise with no avenues of promotion
and of the UDCs who had already earned some advantages by becoming T As. ~
The policy decision is not arbitrary or meaningless. It has a background
H
-a; U.O.I. v. MOHD. RAZA KAZMI [RANGANA1HAN, J.] 295

and it has a purpose. It is for the department to decide on policies of A
promotion which will be consistent with the interests of all employees
belonging to various cadres. It is not for the Administrative Tribunal or for
the Courts to interfere with this and to dictate the avenues of promotion
which the department should provide for its various employees. The courts
cannot, we think, direct that TAs should be made a direct feeder post to B
HCs superior to UDCs. No doubt the Court will interfere if there is
arbitrariness or resultant discrimination. But, after considering very care-
fully all aspects the situation, we are unable to say that there is any such
arbitrariness or discrimination. We are unable to see any ground for
interfering with the policy of the department which has been in force since
1978. We may also point out that, in the proceedings before it, the Tribunal C
has had no opportunity to hear the point of view of the larger category of
Upper Division Clerks who have not qualified to be either Inspectors or
officers and whose future is fully jeopardised by the directions given by the

- Tribunal. This is also an additional reason why we think the Tribunal was
not justified in giving such a direction as it did to the effect that the D
respondents should be promoted as HCs by treating them as belonging to
a cadre higher than UDCs ..

-•.
For the above reasons, we quash the Tribunal'~ direction to give
promotion to the respondents on the basis indicated in its order. We would
only like to add that, while there is no doubt some ground for complaint E
on the part of the respondents, it should not be forgotten that, for the
"limited" qualification they had obtained, they have had clear and tangible
benefits by being appointed to the higher post of TAs. They are better off
than they would have been had they not qualified as T As at all. We,
therefore, do not consider it necessary to inferfere in the matter.
F
The appeal is allowed, but, in the circumstances, we make no order

- regarding costs.

G.N. Appeal allowed.