# D. RAGHU AND OTHERS v. R. BASAVESWARUDU AND OTHERS ETC

- **Citation:** [2020] 5 S.C.R. 74
- **Court:** Supreme Court of India
- **Decided:** 2020-02-05
- **Case number:** Civil Appeal Nos. 1970-1975 of 2009
- **Bench:** Sanjay Kishan Kaul, K. M. Joseph
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/d-raghu-and-others-v-r-basaveswarudu-and-others-etc-34567
- **Pages:** 102

## Headnote

Service Law - Appellants in C.A Nos.1970-1975 of 2009
(concerning entitlement to promotion to the post of Inspector,
Central Excise) were originally recruited as Data Entry Operators
(DEOs) Grade 'A' and working as Data Entry Operators Grade
'B' from the year 2000 - Challenged notice dated.05.11.2002
seeking to confine promotion to the post of Inspector to category
of Tax Assistant, Upper Division (UD) Clerk, Stenographer GradeII, etc., with certain years of experience - Tribunal directed the
appellants to be considered for promotion to the post of Inspectors
- Challenged by Union of India and official respondents - High
Court set aside the order inter alia holding that Writ Petitioners had
legal right, under the erstwhile 1979 Rules, to be considered for
promotion to the vacancies arising prior to the 2002 Rules which
came to be made w.e.f 07.12.2002 in regard to the post of
Inspector - It also found that it was only when the Senior Tax
Assistant Rules, 2003 (STA Rules, 2003) were made in the year
2003 that the restructuring in the Department, to which the Cabinet
gave its approval on 19.07.2001, came into effect - Regarding
vacancies arising after 07.12.2002, it was left undecided - C.A
No. 1976 of 2009 relates to the right to be promoted to the post of
U.D.Clerk & Tax Assistant in Central Excise Department - High
Court allowed writ petition filed against the Order of the Tribunal
therein and found that promotions to the post of UDC and Tax
Assistant must be effected on the basis of the rights crystallized
under the 1979 Rules, as amended - Held: Promotion to the post
of Inspector was governed by the 1979 Rules till 07.12.2002 -
Under the 1979 Rules, DEOs were not among the feeder categories
for promotion as Inspector - By order dtd.19.07.2001, Cabinet
approved restructuring of certain posts including the post of
Inspector - Thereunder, the post of DEO Grade 'B' among other
categories, were merged and the cadre of Senior Tax Assistants
 [2020] 5 S.C.R. 74
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emerged - However, the restructured cadre of Senior Tax Assistants,
did not come into being - It was born with the bringing into force
of the STA Rules, 2003, on 20.01.2003 - Tribunal proceeded on
the basis that the restructuring became complete with the issuance
of order dtd.19.07.2001 - Appellants are not entitled to have
seniority determined in respect of vacancies of Inspector arising
prior to 07.12.2002 - Appellants are eligible to be considered for
promotion from 20.01.2003 and are entitled to add their service
as DEO Grade 'B' for the purpose of the 2002 Inspector Rules
and considered for vacancies to be filled by promotion, which arose
after 07.12.2002 - Persons in Clause (a) u/Column 12 of the 2002
Rules, are also entitled to be considered for two years from
20.01.2003 - Seniority is to be considered based on r.5, STA Rules
- Said exercise, if not carried out already shall be carried out -
Further promotions based on the above will be granted - However,
the promotions shall be notional where promotions have already
been effected, entitling the parties to seniority and pensionary
benefits - In C.A. No. 1976 of 2009, no fault is found with the
order of High Court - Central Excise and Land Customs
Department Group 'C' Posts Recruitment Rules, 1979 - Electronic
Data Processing Discipline (Group-E Technical Post) Recruitment
Rules, 1992 - Central Excise and Land Customs Department
Inspector (Group 'C' posts) Recruitment Rules, 2002 - Central
Excise And Customs Department Senior Tax Assistant (Group 'C'
Posts) Recruitment Rules, 2003 - Central Excise And Customs
Department Tax Assistant (Group 'C' Posts) Recruitment Rules,
2003 - Interpretation of Statutes.
Disposing of the appeals, the Court
HELD: 1.1 ANALYSIS
Though there is case for the respondents that the ban on
restructuring was lifted by letter dated 03.01.2002, such
contention appears to be categorically belied by the prohibition
against filling-up of any vacancy in respect of posts inclu

## Text

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D. RAGHU AND OTHERS
v.
R. BASAVESWARUDU AND OTHERS ETC.
(Civil Appeal Nos. 1970-1975 of 2009)
FEBRUARY 05, 2020
[SANJAY KISHAN KAUL AND K. M. JOSEPH, JJ.]
Service Law - Appellants in C.A Nos.1970-1975 of 2009
(concerning entitlement to promotion to the post of Inspector,
Central Excise) were originally recruited as Data Entry Operators
(DEOs) Grade 'A' and working as Data Entry Operators Grade
'B' from the year 2000 - Challenged notice dated.05.11.2002
seeking to confine promotion to the post of Inspector to category
of Tax Assistant, Upper Division (UD) Clerk, Stenographer GradeII, etc., with certain years of experience - Tribunal directed the
appellants to be considered for promotion to the post of Inspectors
- Challenged by Union of India and official respondents - High
Court set aside the order inter alia holding that Writ Petitioners had
legal right, under the erstwhile 1979 Rules, to be considered for
promotion to the vacancies arising prior to the 2002 Rules which
came to be made w.e.f 07.12.2002 in regard to the post of
Inspector - It also found that it was only when the Senior Tax
Assistant Rules, 2003 (STA Rules, 2003) were made in the year
2003 that the restructuring in the Department, to which the Cabinet
gave its approval on 19.07.2001, came into effect - Regarding
vacancies arising after 07.12.2002, it was left undecided - C.A
No. 1976 of 2009 relates to the right to be promoted to the post of
U.D.Clerk & Tax Assistant in Central Excise Department - High
Court allowed writ petition filed against the Order of the Tribunal
therein and found that promotions to the post of UDC and Tax
Assistant must be effected on the basis of the rights crystallized
under the 1979 Rules, as amended - Held: Promotion to the post
of Inspector was governed by the 1979 Rules till 07.12.2002 -
Under the 1979 Rules, DEOs were not among the feeder categories
for promotion as Inspector - By order dtd.19.07.2001, Cabinet
approved restructuring of certain posts including the post of
Inspector - Thereunder, the post of DEO Grade 'B' among other
categories, were merged and the cadre of Senior Tax Assistants
 [2020] 5 S.C.R. 74
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emerged - However, the restructured cadre of Senior Tax Assistants,
did not come into being - It was born with the bringing into force
of the STA Rules, 2003, on 20.01.2003 - Tribunal proceeded on
the basis that the restructuring became complete with the issuance
of order dtd.19.07.2001 - Appellants are not entitled to have
seniority determined in respect of vacancies of Inspector arising
prior to 07.12.2002 - Appellants are eligible to be considered for
promotion from 20.01.2003 and are entitled to add their service
as DEO Grade 'B' for the purpose of the 2002 Inspector Rules
and considered for vacancies to be filled by promotion, which arose
after 07.12.2002 - Persons in Clause (a) u/Column 12 of the 2002
Rules, are also entitled to be considered for two years from
20.01.2003 - Seniority is to be considered based on r.5, STA Rules
- Said exercise, if not carried out already shall be carried out -
Further promotions based on the above will be granted - However,
the promotions shall be notional where promotions have already
been effected, entitling the parties to seniority and pensionary
benefits - In C.A. No. 1976 of 2009, no fault is found with the
order of High Court - Central Excise and Land Customs
Department Group 'C' Posts Recruitment Rules, 1979 - Electronic
Data Processing Discipline (Group-E Technical Post) Recruitment
Rules, 1992 - Central Excise and Land Customs Department
Inspector (Group 'C' posts) Recruitment Rules, 2002 - Central
Excise And Customs Department Senior Tax Assistant (Group 'C'
Posts) Recruitment Rules, 2003 - Central Excise And Customs
Department Tax Assistant (Group 'C' Posts) Recruitment Rules,
2003 - Interpretation of Statutes.
Disposing of the appeals, the Court
HELD: 1.1 ANALYSIS
Though there is case for the respondents that the ban on
restructuring was lifted by letter dated 03.01.2002, such
contention appears to be categorically belied by the prohibition
against filling-up of any vacancy in respect of posts included in
the cadre restructuring, till such time, as further orders are
issued. Though vacancies may have arisen, which could be filledup under the 1979 Rules, this appears to be a case where a
conscious decision was taken not to fill-up the vacancies in the
wake of the restructuring process which was undertaken by the
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Government. Though a contention is taken that the post of
Inspector is not part of the cadre restructuring, there may not
be merit in the said contention. The post of Inspector emerged
as re-designated post in place of the erstwhile post of Inspector/
Preventive Officer/Appraiser. More importantly, that it was a
part of the restructuring, is clear from the fact that the number
of posts fell from a little over 22000 to a little over 18000.
Therefore, the post of Inspector was a post which can be treated
as included in cadre restructuring. The taboo against filling-up
of the vacancy, is clearly reflected in the communication dated
05.06.2002. On 26.6.2002, urgent direction is issued to hold
DPC to the post of Superintendent of Central Excise and
Superintendent of Customs. The next letter to notice is the
letter dated 19.09.2002. Therein, after referring to letter dated
26.06.2002, it is stated that it was decided to initiate the process
for filling-up vacancies that have arisen on account of cadre
restructuring in all remaining cadres up to Grade 'B'. It was
directed to ensure that apparently DPC was convened in respect
of all Grades for the change of number of posts, as also Grades,
where revised Recruitment Rules have been circulated. On
23.09.2002, promotion orders in respect of Superintendents were
allowed to be issued. On 28.10.2002, the Draft Recruitment
Rules for Group 'C' post of Inspector and Senior Tax Assistant
was communicated to all Chief Commissioners, both, Customs
and Central Excise. It was further stated that Notifications
notifying the Rules will be issued shortly. Direction was given
to start the process of DPC. Thus, it could be said that by the
issuance of this communication, the Government decided to
proceed with the recruitment by promotion to the post of
Inspector. A perusal of the communication dated 28.10.2002,
reveals the following:
All chief Commissioners were favoured with Draft
Recruitment Rules for the Group 'C' post of Inspector (Central
Excise and Land Customs), Inspector (Examiner) and Inspector
(Preventive Officers). Besides the Draft Recruitment Rules for
the post of Senior Tax Assistant, as approved by the Ministry,
was also dispatched to the Chief Commissioners. It is specifically
stated that the Notifications, notifying the Rules, will be issued
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shortly. The Chief Commissioners were told that they may
initiate necessary action to process for DC (apparently DPC).
The next sentence is of crucial significance. [Paras 69-71] [146G-H; 147-A-D; 147-G-H; 148-A-D]
1.2 This communication establishes further, the following
aspects:
Restructuring the post of Inspector, contemplated under
the order dated 19.07.2001, had not yet come into being. This
is because there is reference to the post of Inspector (Central
Excise & Customs), Inspector (Examiner) and Inspector
(Preventive Officer). If the post of Inspector, as contemplated
under the Order dated 19.07.2001, had already come into
existence with the issuance of the Order dated 19.07.2001, there
was no occasion to continue to refer to pre- designated posts
from which the post of Inspector emerged. Still further, what was
obviously contemplated was that the post of Inspector was to
be filled-up after the process of restructuring was over. In other
words, the Rules relating to Inspector and the Rules relating
to recruitment of Senior Tax Assistants, was to be brought into
force simultaneously. This conclusion appears inevitable from
the circumstance that the Chief Commissioners were directed
to await issuance of Notification notifying the Rules before orders
of promotions were issued based on the Rules which were the
Draft Recruitment Rules. It is not indicated in the Order dated
28.10.2002 that promotion to the post of Inspector was to be
made under 1979 Rules. What was, in fact, contemplated was
that the process, viz., the holding of the DPC for the post of
Inspector, was to begin and operationalised under the Draft
Rules but the actual orders of promotion were to be issued only
after the Rules were actually brought into force. The Draft
Recruitment Rules for the Tax Assistant was also sent by letter
dated 06.11.2002. In the Order dated 14.11.2002, it is
specifically, inter alia, ordered that promotion orders in respect
of the post of Inspector (Central Excise)/Preventive Officer/
Examiner of Customs may be issued on the basis of the
Recruitment Rules after the allotment of GSR Number by the
Government of India Press. Thus, the green signal was given
to go ahead with the issuance of promotion order for the post
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of Inspector, inter alia, based on the Recruitment Rules, after
the allotment of the GSR, which means the Notification of the
Rules. What actually happened was, however, as follows:
The Inspector Rules and the Senior Tax Assistant Rules
were not published and brought into force on the same date. The
Inspector Rules came to be finalised and published on
29.11.2002. It is brought into force on 07.12.2002. The STA
Rules, though published on 16.01.2003, was brought into force
on 20.01.2003. [Paras 72-75] [148-E-H; 149-A-B; 150-A-C]
2.1 WHEN CADRE RESTRUCTURING TOOK PLACE
Turning back to Note 1 to the 2002 Inspector Rules, it is
noticed that promotion under Clause (a) was to be operative for
a period of two years from the date on which the restructured
Cadre in Clause (b) comes into existence. If the interpretation
sought to be placed by the appellants is accepted, and it is held
that the restructured cadre of Senior Tax Assistant came into
force with effect from 19.07.2001, the result would be that
promotion under Clause (a) would be limited by a period of two
years from 19.07.2001. In other words, no promotion could be
ordered from the Feeder Category mentioned in Clause (a) in
Column 12 of the 2002 Inspector Rules after 18.07.2003. This
also means that promotions could be, therefore, effected during
the period commencing from 19.07.2001. This produces the
anomalous result that promotions are to be countenanced under
the 2002 Rules, retrospectively from 19.07.2001. What is more,
according to the appellants, promotions were banned during the
period. This, in our view, completely militates against the idea
that the restructured Cadre came into being from 19.07.2001.
The Court is not oblivious and has indeed expressly articulated
the circumstances from communication dated 19.07.2001 which
probablised the appellant's contention that restructuring became
a reality from 19.07.2001. But, the Court, at this juncture, must
also notice that the actual distribution of posts in different
formations was postponed. It may not be in apposite, at this
juncture, to also notice another factual aspect. There is a definite
case for the respondents that the Data Entry Operator Grade
'B' and 'C' continued as such and they were only re-designated
as Senior Tax Assistant or Tax Assistant on the enforcement of
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the 2003 Rules and not before such enforcement. In fact, it was
also not seriously disputed before us that this was indeed the
case on the ground. The Court may also find light from the STA
Rules. Rule 5 declares that "all the persons appointed on
regular basis at the commencement of the Rules in the Grade
of Assistant, Tax Assistant, U.D. Clerk (Special Pay), Data Entry
Operator Grade 'B' and Grade 'C', shall be deemed to have
been appointed as Senior Tax Assistant under these Rules".
No doubt, the Rule contemplated that the persons to be deemed
to have been appointed as Senior Tax Assistant under the 2003
Rules, were the categories. What is more relevant is, they are
referred to as the persons appointed at the commencement of
"these Rules". The words used are "persons appointed". The
intention appears to be to indicate that the persons were
appointed and working on the commencement of the Rules,
which is on 20.01.2003. It is those persons, who were referred
to by the designation, which were the posts which were held by
them prior to the restructuring. In other words, appellants, who
were working as Data Entry Operator Grade 'B', upon being
promoted in the year 2000, were indeed persons who were
appointed on regular basis as Data Entry Operator Grade 'B'
as on 20.01.2003, when the Rules, admittedly, were brought into
force. Further support is found for the view that the appellants
became Senior Tax Assistant upon Rules being brought into
force from the further limbs of Rule 5. Sub-Rules (ii), (iii) and
(iv) deal with the issue of inter se seniority of the different
erstwhile restructured categories from which the designated
category of Senior Tax Assistant was born. Those Assistants,
who were drawing salary of pay scale of 5000-8000, and Data
Entry Operator Grade 'C', drawing the same pay scale, were redesignated as Senior Tax Assistants in the same scale. They
were to rank at the top of the seniority list of the newly created
posts of Senior Tax Assistants. Just below them were put the
categories of Data Entry Operator Grade 'B' and Tax Assistants,
both drawing the pay scale of 4500-7000, and they have been
placed in the higher pay scale of 5000-8000 and they were to
be placed below the Data Entry Operator Grade 'C'. Similarly,
at the bottom of the pyramid, there is the post of Upper Division
Clerk with special pay, who were to be placed below all the above
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categories as aforesaid. Note 1, in Column 12 of the 2002
Inspector Rules provides that the promotion in Clause (a) was
to be operative for a period of two years from the date on which
the restructured cadres, mentioned under Clause (b) above,
comes into existence. Had it been the case where the
restructured cadre in Clause (b) had already come into
existence, by virtue of order dated 19.07.2001, the Law Giver
would have used language indicating the past tense. The Law
Giver, thus, contemplated that the restructured cadre in Clause
(b), which includes cadre of Senior Tax Assistants, had not come
into existence and it was to come into existence. It came into
existence, indeed, in the future, viz., on 20.01.2003. On a
consideration of the Government Orders and, more importantly,
the Statutory Rules that the conclusion appears to be inevitable
that restructured cadre actually came into force in the cadre of
Senior Tax Assistant with the Rules being brought into force on
20.01.2003. Quite apart from the fact that this is the legal
interpretation that flows, we are also supported by the fact on
the ground that the appellants appeared to continue till after the
Rules were brought into force with the designation as Data Entry
Operators Grade 'B'. A perusal of Rule 5(v) of the STA Rules
2003 would also show reference to 'present employees' and they
were to pass the departmental examination 'within two years'.
Failure was to result in their being rendered ineligible for future
increments. Certainly, the period of two years would commence
only from 20.01.2003. If so, the 'present employees', including
the appellants continued as Data Entry Operator Grade 'B' till
20.01.2003. The view that the STA Cadre emerged only on
20.01.2003, is supported by official understanding, as reflected
in proceedings dated 21-04-2003. The principle of
contemporanea expositio is apposite in the facts. [Paras 81-85]
[153-F-H; 154-A-H; 155-A-H; 156-A-B]
3.1 APPELLANTS RIGHTS AS SENIOR TAX
ASSISTNATS ON RESTRUCTURING
The Tribunal proceeded on the basis that the restructuring
became complete with the issuance of the order dated
19.07.2001. It must be noted that the Original Application came
to be filed on 19.11.2002 at a time when the Inspector Rules
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had not even been finalized as the Rules came to be finalized
only on 29.11.2002 and, in fact, brought into force till later on
07.12.2002. Undoubtedly, the Note contemplated, giving persons
in Clause (a), viz., those falling in the pre-restructured cadre,
the benefit of taking into consideration the service rendered in
the restructured Cadre, for being promoted as Inspector. The
persons falling in the restructured Cadre, were not conferred
with such advantage. However, by the time the Original
Application came to be heard, the Senior Tax Assistants Rules
2003 came into force with effect from 20.01.2003. Under Rule
5 of the 2003 Rules, the persons working as Data Entry Operator
Grade 'B', inter alia, stood re-designated as Senior Tax
Assistants and they were also given the benefit of reckoning the
past service and calculating the qualification of experience of two
years under the Inspector Rules, 2002. In fact, the Tribunal has
also taken note of the 2003 Rules. Both the persons in the prestructured cadre and those in the restructured cadres, were, by
virtue of Note 1 to Column 12 to the 2002 Rules and Rule 5(i)
of the Senior Tax Assistants Rules 2003, respectively, were
given the benefit of counting service as provided therein. The
Tribunal, in fact, has gone on to find that the Senior Tax
Assistants under Rule 5(i) of the 2003 Rules were entitled to
reckon their service as Data Entry Operator Grade 'B' for
eligibility for promotion as Inspector. The Tribunal goes on to
find that the unified restructured cadre of Senior Tax Assistants
alone would be eligible for promotion as Inspector. The
integrated seniority is to be worked out in terms of Rule 5 of
the 2003 Senior Tax Assistant Rules. This is based on the
premise that with effect from 19.07.2001, the restructuring of
Senior Tax Assistant came into force and all the earlier Cadres
stood merged. [Para 87] [157-A-G]
3.2 The Original Application has been allowed in part. It
is necessary to notice that the effect of granting the said relief
and also the effect of not granting the reliefs in paragraph 8(b).
Granting of the Relief 8(c) would mean that this Court would also
have to accept that under the 2002 Inspector Rules, it is only
the restructured Cadre, which would be entitled for promotion
to the cadre of Inspector. To put it differently, the persons falling
in Category (a), which corresponds to feeder categories, under
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the 1979 Rules, would not be entitled for promotion as Inspector.
It is now necessary to look at their prayer, i.e., 8(b) and the
effect of not granting any relief thereunder. Prayer 8(b) was
sought by the appellants to set aside the Recruitment Rules
communicated vide 28.10.2002, as confirmed vide Gazette of
India Notification dated 29.11.2002, incorporating the
unconscionable conditions under Clause (a) and Note 1 of
Column 12 of the 2002 Inspector Recruitment Rules. This
prayer is also based on the restructuring process, having effect
from 19.07.2001. The Tribunal has not granted the relief in
paragraph 8(b) of the Original Application. This means that the
persons in Category (a) of Column 12 of the Inspector Rules,
cannot be affected. The result is that it exposes the fallacy in
grant of Relief 8(c). In fact, there are two basic flaws. In the first
place, the restructuring did not come into effect on issue of
communication dated 19.07.2001. The restructuring came into
effect only with the issuance of Rules. This by itself takes away
the entire basis of the Tribunal's Order. Secondly, the Tribunal
has not declared the Statutory Rule infirm, which was the specific
relief sought for by the appellants in Relief 8(b). In other words,
Clause (a) of Column 12 and the Note, in the 2002 Inspector
Rules impugned on the one hand, continues on the Statute Book,
whereas, the declaration is purportedly granted under paragraph
8(c), which necessarily involves declaring that only persons
re-designated under the restructured cadres in Clause (b) as
Senior Tax Assistants, inter alia, would be entitled to be
considered for promotion as Inspector of Central Excise and
Customs. In fact, the Order of the Tribunal at Chandigarh also
did not involve granting any exclusive right to the persons in
the restructured Cadre falling in Clause (b). The decision of the
Bombay High Court also does not reflect any such reasoning.
It is well-settled that when Statutory Rules are challenged, they
are upheld, or if warranted, declared ultra vires or read down, if
possible. The Order of the Tribunal is specific that what is
granted, is the relief contained in paragraph 8(c) of the Original
Application. Resultantly, Clauses (a) and (b) continued to be on
the Statute Book. The Tribunal has rather allowed the Original
Application partly and found that the appellants are also entitled
to be considered for promotion as Inspector. In Arriving at this
conclusion, the Tribunal has drawn support undoubtedly from the
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views expressed by the Central Administrative Tribunal,
Chandigarh, the Central Administrative Tribunal, Madras and the
High Court of Bombay. [Paras 88, 89] [158-C-H; 159-A-D]
4.1 WHETHER STA COULD ADD SERVICE AS DATA
ENTRY OPERATORS AND WHETHER PERSONS IN
CLAUSE (A) HAD AN EXCLUSIVE RIGHT FOR TWO
YEARS?
The appellants are right that they are entitled to count the
previous service. The words used in Rule 5 are unambiguous
and clear. In this regard, the Court must also deal with the yet
another contention based on the differences between Rule 5 of
the Senior Tax Assistant Recruitment Rules, 2003 and Rule 4
of the Tax Assistant Rules, 2003. It may be true that there is
some difference but, in our view, the words used differently in
the two provisions, are not meant to take away the right, which
was conferred on persons who were on restructuring to be
designated as Senior Tax Assistants and Tax Assistants. In Rule
5, what is contemplated is that the service rendered by Data
Entry Operators Grade 'B' and 'C', inter alia, before
commencement of the Rules is to be taken about for eligibility
for promotion to the next higher grade. No doubt, in Rule 4, of
the Tax Assistant Rules, the Rule Maker has become more
articulate. They have referred to the words like 'respective
post', before commencement of Rules and 'regular service'
which expressions are conspicuous by their absence in Rule 5
of the Senior Tax Assistant Rules. Better wisdom prevailed on
the Law Giver in the course of few months to attain clarity in
thought and expression but the Court would not be gleaning the
intention of the Law Giver, if it were oblivious to the context
and the object with which the entire exercise of restructuring
was carried out. They would also amount to introducing an
element of discrimination between the Senior Tax Assistants and
the Tax Assistants in the conferring of benefits. Of foremost
importance is that the view the Court has taken is warranted
by even the plain words used in Rule 5. Rule 5 clearly indicates
that the service which was rendered by a Data Entry Operator
Grade 'B' and 'C', inter alia, prior to the commencement of the
Rules, would be considered for promotion. This leaves us in no
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doubt that the intention was to allow the Data Entry Operator
both Grade 'B' and 'C', inter alia, to tag their previous service
that is prior to 20.01.2003 for the purpose of calculating the
requisite period of service under the 2002 Inspector Rules. It
would appear that what was contemplated was that the Inspector
Rules and the STA Rules would be brought into force at the same
time. If it had so happened, the following consequences would
have followed. Not only would STA would be a feeder category
but STA would have been able to count their previous service
as Data Entry Operator Grade 'B', inter alia. Still further, under
Note 1, promotion under Clause (a), was to be operative for a
period of two years, from the date the restructured cadre, under
Clause (b), was to come into existence. Apart from indicating
that the restructured cadre 'was to come into force' and,
therefore, it had not come into force as on 19.07.2001 as
contended by the Data Entry Operators, the promotion from
Clause (a) being predicated on the point of time when the
restructured cadre came into force, if the STA Rules were also
brought into force from 07.12.2002, the service rendered by
persons under the restructured Grade could have been availed
of by persons in Clause (a) from 07.12.2002.
As regards the argument that under the 2002 Inspector
Rules, persons in Clause
(a) were given an exclusive right to be promoted for a
period of two years, little merit is seen in the same. Clause (c)
of Column 12 provides for promotion from the categories
thereunder, in the absence of persons falling in Clause (b). No
such rider is found in Clause (b). If the STA Rules had been
brought into force on 07.12.2002, then, it is clear that adding
two years as Data Entry Operator Grade 'B', the appellants
would certainly be eligible, particularly, keeping in mind the
intent in Order dated 28.10.2002. There can be doubt that
nothing stands in the way of appellants and others similarly
situated being considered from 20.01.2003 by adding the service
as Data Entry Operator Grade 'B'. Both, persons in Clause (a)
and persons in Clause (b), subject to being possessed of
qualifications, could compete for the vacancies. The right of
those in Clause (a), would come to an end from 19.01.2005.
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There can be no doubt that the STA Rules came into effect on
20.01.2003. The restructured cadre of STA became a reality from
20.01.2003. [Paras 92-96] [160-G-H; 161-A-H; 162-A-E]
4.2 The problem, however, arises as what is to be done
qua vacancies of Inspector which were purportedly filled-up as
on 20.01.2003 pursuant to Notice dated 05.11.2002 which was
impugned in O.A. 1362 of 2002. The Tribunal has not interfered
with the notice dated 05.11.2002 but it has found that it was not
in accordance with the Rules (apparently Inspector Rules 2002
which superseded the 1979 Rules). But this is again premised
on the restructuring becoming a reality with effect from
19.07.2001. This, has been found to be erroneous. Persons in
Clause (a), under the 2002 Rules, could be promoted for a
period of two years from the date the restructured categories
under Clause (b) came into force. Thus, the promotion involving
2002 Rules from Clause (a) could be for a two year from
20.01.2003 as the restructured category came into force only on
20.01.2003, even according to the respondents. Thus, for both
categories in Clauses (a) and (b) (STAs), their eligibility under
2002 Rules, commenced only from 20.01.2003. If so, the
question would be the effect of promotion already made as noted
by the Tribunal itself. As on 05.11.2002, the 1979 Rules
governed promotions. The status of the draft Recruitment Rules
is no longer res integra. While, promotion can be based on draft
Recruitment Rules, it cannot be done, if the draft Rules are in
the teeth of existing Statutory Rules. [Paras 97-100] [162-E-H;
163-A-C]
4.3 Vacancies were filled- up as per notice dated 05.11.2002
from persons falling under Clause (a), who corresponded to the
feeder category in the 1979 Rules. The appellants have not laid
any challenge to the Order of the Tribunal. The ban on direct
recruitment was to come to an end on 31.12.2002. There were
242 vacancies of Inspectors in Hyderabad Commissionerate. It
is true that under letter dated 28.10.2002, and even read with
letter dated 14.11.2002, what was contemplated was promotion
under the draft Recruitment Rules for Inspector and STA.
Promotion orders were to be made only after GSR Number were
made for the Draft Rules, meaning thereby, after it was finalised.
They were intended, as already found, to be operated at the
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same time, thus, rendering both categories in Clauses (a) and
(b), to be considered. Having regard to the fact that vacancies
were not filled-up, as can be seen from communications dated
10.09.2001 and 05.06.2002, in the light of the restructuring that
took place in the Department, it would appear that a conscious
decision was taken to not fill- up the vacancies arising from the
restructuring based on 1979 Rules. Instead, communication
dated 28.10.2002 clearly would show that the vacancies were to
be filled-up, based on the proposed new Recruitment Rules. This
being the case, the High Court was in error in proceeding on
the basis that the principle in Y.V.Rangaiah would apply. Till
07.12.2002, the STA was not even in Feeder Category. It
has also been held that the STA Cadre is born on 20.01.2003.
There is a case for the respondents that the ban on direct
recruitment (which is also a method of appointment) was to come
to an end. There was a need to have Inspectors in a larger
number of vacancies. The STA Cadre could not have been used
to fill the vacancies. The finding that from 19.07.2001, the
restructured Cadre came into being, is unsustainable. In such
circumstances, though it may be true, intention was to fill-up the
vacancies after both sets of Rules were operationalised,
promotions were made. As to whether it is legal, the answer can
be that promotion, as per extant Rules, given in vacancies prior
to the new Rules, is recognized. This is not a case where the
Authority was denying promotion to vacancies based on the
earlier Rules. It is also noticed that based on such promotion,
further promotions have been given. The appellants were
directed to be considered for vacancies, which were filled-up
after. The Court cannot, in the circumstances, be persuaded to
hold that the Tribunal was right in directing the respondents to
revise the seniority qua promotion made earlier. [Paras 102-104]
[163-G-H; 164-A-H]
5. LEGALITY AND CORRECTNESS OF HIGH COURT
DIRECTING VACANCIES TO BE FILLED WHICH
EXSISTED PRIOR TO 07.12.2002
The High Court was not right in directing filling-up of
vacancies prior to 07.12.2002, based on the 1979 Rules, as after
the 2003 Rules came into force, going by the intention of the
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Authority, the right to promotion would be based on the new
Rules, even if the vacancies arose prior to the new Rules. That
is to say, when the High Court disposed of the matter, if any
vacancy remained to be filled-up in the Cadre of Inspector, then,
as the STA Rules had come into existence on 20.01.2003, the
STAs armed with the right to add service as Data Entry Operator
Grade 'B', were entitled to be considered. However, it is here
that the impact of the matter, having been pending in this Court
for more than a decade, and, in the meantime, the judgment being
implemented and further promotions being made, cannot be lost
sight of, even in an Appeal, which is maintained by grant of
Special Leave, as in this case. It is open to the Court to decline
to interfere. The Court bears in mind the principles laid down
by this Court in Taherakhatoon (D) By Lrs. v. Salambin
Mohammad and would not disturb the direction to fill-up the
vacancies which arose prior to 07.12.2002, as directed. [Para
106] [165-D-H]
6. VACANCIES OF INSPECTOR WHICH AROSE
AFTER 07.12.2002
Both persons in Clauses (a) and (b)(STA Cadre) became
entitled to be considered for promotion under the two sets of
Rules with effect from 20.01.2003. Certainly, the appellants
having worked as Data Entry Operator Grade 'B' are entitled
to add the period of service as Data Entry Operators Grade 'B'.
Thus, vacancies of Inspector, to be filled-up by promotion, must
be filled-up by considering both on the basis of the seniority,
under Rule 5 of the 2003 STA Rules. The appellants would be
entitled also to be considered for promotion based on the same
on the basis of the entitlement, as aforesaid. [Para 107] [166-CE]
7.1 CIVIL APPEAL NO. 1976 OF 2009
Under the 1979 Rules, on the basis of an amendment, the
post of Tax Assistant (old) was incorporated by GSR 314 dated
12.07.1996. Thereunder, post of Tax Assistant (old) was included
in the 1979 Rules. Promotion to the post was to be from the
post of U.D. Clerk with three years' service subject to their
passing a departmental exam with minimum marks of 40 per
cent. There are other rights given to Senior Clerks under the
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Note. Under the 1979 Rules, the post of U.D. Clerk was to be
filled-up 50 per cent from direct recruitment and 50 per cent by
promotion. One of the feeder categories was L.D. Clerks with
seven years' service which was relaxable up to five years. The
second Feeder Category was Women Searchers recruited prior
to 09.05.1975 with five years' combined service as Women
Searcher and L.D. Clerk and who have passed departmental or
promotional exam. The 1979 Rules, insofar as it related to the
post of U.D. Clerks and Tax Assistants, continued to remain in
force even after the promulgation of the Inspector Rules, 2002
and the Senior Tax Assistant Rules. It is when the Tax Assistant
Rules were made in supersession of the 1979 rules so far as it
related to the post of U.D. Clerk and L.D. Clerk that the 1979
Rules ceased to apply. Thus, 1979 Rules continued to be in force
in regard to the post of U.D. Clerk and L.D. Clerk till
05.05.2003. Under the 2003 Tax Assistant Rules, brought into
force w.e.f. 05.05.2003, as contended by the official respondents
before the Tribunal, the persons working as U.D. Clerks, were
to be established as initial cadre of Tax Assistants. So also, the
L.D. Clerks, upon passing the examination, were to become Tax
Assistants. The posts of U.D. Clerk and L.D. Clerk are Group
'C' posts. No doubt, the ban, which was imposed on direct
recruitment, was to continue till 31.12.2002 (See Order dated
19.09.2002). By Order dated 28.10.2002, the draft Recruitment
Rules for Inspector and Senior Tax Assistants was communicated
and the process was to be set in motion and promotion was to
await the issue of Notification. [Paras 112-115] [169-B-H; 170A-B]
7.2 As far as the post of Tax Assistant is concerned, by
the order dated 06.11.2002, all the Chief Commissioners were
forwarded the draft Recruitment rules for Tax Assistants which
was approved by the Ministry. The Commissioners were to
initiate necessary action for the process of DPC, etc. The issue
of any order passed under the draft Tax Assistant Recruitment
Rules was to await issue of Notification of the said Rules.
However, on 14.11.2002, it ordered, inter alia, that DPC in the
remaining Grades except DOSL-222 may be held on the basis
of the existing Recruitment Rules and the promotion orders
issued by 25.11.2002. As far as the post of L.D. Clerks and old
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Tax Assistants is concerned, the vacancies, which existed as on
06.11.2002, were to be filled-up under the existing Recruitment
Rules (See letter dated 14.11.2002). The orders were to be
issued by 25.11.2002. By 25.11.2002, the Tax Assistant Rules
were not even finalised, leave alone brought into force. The Tax
Assistant Rules came into force only by publication on
03.05.2003 and brought into force two days thereafter, i.e., on
05.05.2003. Going by letter dated 14.11.2002, the principle that
vacancies must be filled-up in accordance with the existing
Rules, would appear to apply. The intention of the Authority
would also appear to be the same as is evident from Clause (3)
of Order date 14.11.2002. In such circumstances, there is no
scope for any ambiguity and the Court is unable to find fault with
the order of the High Court. [Paras 116-118] [170-B-G]
8. SUMMARY OF CONCLUSIONS IN C.A. NOS.19701975 OF 2009
1) Promotion to the post of Inspector was governed by the
1979 Rules till 07.12.2002.
2) Under the 1979 Rules, Data Entry Operators were not
among the feeder categories for promotion as Inspector.
3) By 19.07.2001, Cabinet approved restructuring of
certain posts including the post of Inspector. The number of
posts of Inspector fell from a little over 22000 to a little over
18000. Thereunder, the post of Data Entry Operator Grade 'B'
among other categories, were merged and the cadre of Senior
Tax Assistants emerged. However, the restructured cadre of
Senior Tax Assistants, did not come into being.
4) The restructured Cadre of Senior Tax Assistants was
born with the bringing into force of the Senior Tax Assistant
Rules 2003, on 20.01.2003. Data Entry Operators Grade 'B',
among other categories, were re-designated as Senior Tax
Assistants under Rule 5.
5) The Inspector Rules 2002, was brought into force on
07.12.2002 superseding the 1979 Rules relating to Inspectors.
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6) The post of Senior Tax Assistant, which was not among
the feeder categories under the 1979 Rules, became one of the
feeder categories for promotion as Inspector, under Inspector
Rules, 2002 under Clause (b) of Column 12.
7) There was a ban of promotion to the posts of Inspector.
This is clear from communications dated 10.09.2001, 03.01.2002
and 05.06.2002. The communication dated 28.10.2002 read with
communication dated 14.11.2002, establish that the Draft
Recruitment Rules which were finalized on 29.11.2002 and
brought into force on 07.12.2002 as far as Inspectors are
concerned and Draft Recruitment Rules finalized and brought
into force on 20.01.2002 as far as Senior Tax Assistants are
concerned, were to be basis for promotion to the post of
Inspector. As per Order dated 28.10.2002, Departmental
Promotion Committee (DPC), was to operate, based on the draft
rules but no promotion orders were to be issued till the draft
rules were finalized. With order dated 04.11.2002 even the
promotion orders were permitted. The authority apparently
contemplated simultaneous bringing into force of the Inspector
Rules and the STA Rules.
8) The High Court was in error in holding that it has to
be necessarily held that the vacancies which arose prior to the
revised Recruitment Rules coming into force has to be filledup under then existing Rules (the 1979 Rules) relying upon case
law including Y.V. Rangaiah (supra). There was a conscious
decision taken to not fill-up vacancies based on the
restructuring, and what is more, letters dated 28.10.2002 and
14.11.2002 show that promotion to the post of Inspector was to
be effected based on the new recruitment rules.
9) It is while so, that in the Hyderabad Commissionerate,
by Notice dated 05.11.2002, persons falling under Clause (a) of
Column 12 of the 'Draft Inspector Rules' who also corresponded
to the feeder categories under the 'extant' Statutory Rules, the
1979 Rules, alone were called for selection as Inspector.
10) The benefit of reckoning service under Note 1 to
categories in Clause (a) would be available only after the
restructuring came into effect which was on 20.01.2003.