# NARENlll!R CllAllllA & ORS v. UNION OF INDIA & ORS

- **Citation:** [1986] 1 S.C.R. 211
- **Court:** Supreme Court of India
- **Decided:** 1986-02-11
- **Case number:** Civil Miscellaneous Petition No. 2604 of 1985
- **Bench:** 0. Chinnappa Reddy, E.S. Venkataramiah
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/narenlll-r-cllalllla-ors-v-union-of-india-ors-9249
- **Pages:** 28

## Headnote

Constitution of India, 1950 - Articles 14 and 16.
Indian Economic/Indian Statistical Service Rules, 1961.
Direct recruits and promotees - Promotees holding posts
in Grade IV of Service in deliberate breach of quota rules
continuously for 15 to 20 years on temporary/ad hoc basis
Fixation of inter se seniority - Whether to be placed 10'4er in
seniority list to direct recruits entering service after such
promotees -
Quota rule -
Not maintained -
Rules confer
relaxation power on Government - Whether relaxation of quota
rule to be assumed.
The Indian Economic Service Rules, 1961 and the Indian
Statistical Service Rules, 1961 were notified on November 1,
1961. These Services were constituted with effect .from that
date by encadering numerous posts carrying economic and
statistical functions in various ministries of the Government
of India. Both the Services have Grade I, Grade II, Grade III
and Grade IV posts and Officers of Grade I to Grade IV are
classified as Class-I Officers. The authorised permanent
strength of each of the Services is to be fixed by the
Controlling Authority, constituted under Rule 6, in accordance
with the Rules. Under Rule 7, the Union Public Service
Commission was required to constitute a Selection Committee to
determine the suitability of departmental candidates for
appointment to the different grades and to prepare an order of
preference for each grade for the initial constitution of both
the Services. On receipt of the Committee's report, the
Commission was required to forward its recommendati<ins to the
Government. The departmental candidates who were not absorbed
at the initial constitution of the Service were given the
opportunity to apply for future vacancies. Future maintenance
of the two Services is governed by Rule 8.
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SUPREME COURT REPORTS
[1986]
1 ·s.c.R.
After the initial constitution of the two Services was
completed it was found that a number of posts carrying
economic/statistical functions could not be considered for
inclusion in the officers' Grades. Further as the process of
formation of the two Services was prolonged for a number of
years and the need for appointing more officers in various
Departments during that long period also arose gradually,
several posts carrying economic/statistical functions were
created. Although Rule 8 provided that not less than 75 per
cent of the vacancies in Grade IV should be filled up by
direct recruitment through an open competitive examination to
be held by the Union Public Service Comnission in the manner
prescribed in Schedule II to the Rules and it further provided
that not more than 25 per cent posts of the vacancies in that
Grade should be filled by selection from S100ng officers
serving
in
the
offices
under
the
Government
in
Economic/Statistical posts recognised for that purpose by the
Controlling Authority, no direct recruitment was resorted to
till about the year 1968. In the meanwhile, a large number of
persons in the feeder posts were appointed to the posts in
Grade IV from time to time from the year 1962 onwards although
the orders promoting them stated that they had been promoted
only temporarily. Undisputedly, all those promotees have been
holding those posts continuously till now without being
reverted to the feeder posts from which
they had
been
promoted. Some have been retired from those posts.
Thus the prescribed quota of appointment from the two
different
sources
was
not
maintained
right
from
the
commencement of the constitution of the Services. After
completion of the initial constitution of the two services
under Rule 7, Rule 7A was added and subsequently amended. Rule
7A made special provision regarding certain departmental
candidates who were to be absorbed in the two Services.
Between the years 1964 to 1984 in all there were 435
vacancies for direct recruitment in the Indian Economic
Service out of whic~ only 342 posts were filled up by direct
recruitment. Ollt of 93 remaining unfilled posts most of

## Text

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211
NARENlll!R CllAllllA & ORS.
v.
UNION OF INDIA & ORS.
FEBRUARY 11, 1986.
(0. CHINNAPPA REDDY & E.S. VENKATARAMIAH, JJ.]
Constitution of India, 1950 - Articles 14 and 16.
Indian Economic/Indian Statistical Service Rules, 1961.
Direct recruits and promotees - Promotees holding posts
in Grade IV of Service in deliberate breach of quota rules
continuously for 15 to 20 years on temporary/ad hoc basis
Fixation of inter se seniority - Whether to be placed 10'4er in
seniority list to direct recruits entering service after such
promotees -
Quota rule -
Not maintained -
Rules confer
relaxation power on Government - Whether relaxation of quota
rule to be assumed.
The Indian Economic Service Rules, 1961 and the Indian
Statistical Service Rules, 1961 were notified on November 1,
1961. These Services were constituted with effect .from that
date by encadering numerous posts carrying economic and
statistical functions in various ministries of the Government
of India. Both the Services have Grade I, Grade II, Grade III
and Grade IV posts and Officers of Grade I to Grade IV are
classified as Class-I Officers. The authorised permanent
strength of each of the Services is to be fixed by the
Controlling Authority, constituted under Rule 6, in accordance
with the Rules. Under Rule 7, the Union Public Service
Commission was required to constitute a Selection Committee to
determine the suitability of departmental candidates for
appointment to the different grades and to prepare an order of
preference for each grade for the initial constitution of both
the Services. On receipt of the Committee's report, the
Commission was required to forward its recommendati<ins to the
Government. The departmental candidates who were not absorbed
at the initial constitution of the Service were given the
opportunity to apply for future vacancies. Future maintenance
of the two Services is governed by Rule 8.
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SUPREME COURT REPORTS
[1986]
1 ·s.c.R.
After the initial constitution of the two Services was
completed it was found that a number of posts carrying
economic/statistical functions could not be considered for
inclusion in the officers' Grades. Further as the process of
formation of the two Services was prolonged for a number of
years and the need for appointing more officers in various
Departments during that long period also arose gradually,
several posts carrying economic/statistical functions were
created. Although Rule 8 provided that not less than 75 per
cent of the vacancies in Grade IV should be filled up by
direct recruitment through an open competitive examination to
be held by the Union Public Service Comnission in the manner
prescribed in Schedule II to the Rules and it further provided
that not more than 25 per cent posts of the vacancies in that
Grade should be filled by selection from S100ng officers
serving
in
the
offices
under
the
Government
in
Economic/Statistical posts recognised for that purpose by the
Controlling Authority, no direct recruitment was resorted to
till about the year 1968. In the meanwhile, a large number of
persons in the feeder posts were appointed to the posts in
Grade IV from time to time from the year 1962 onwards although
the orders promoting them stated that they had been promoted
only temporarily. Undisputedly, all those promotees have been
holding those posts continuously till now without being
reverted to the feeder posts from which
they had
been
promoted. Some have been retired from those posts.
Thus the prescribed quota of appointment from the two
different
sources
was
not
maintained
right
from
the
commencement of the constitution of the Services. After
completion of the initial constitution of the two services
under Rule 7, Rule 7A was added and subsequently amended. Rule
7A made special provision regarding certain departmental
candidates who were to be absorbed in the two Services.
Between the years 1964 to 1984 in all there were 435
vacancies for direct recruitment in the Indian Economic
Service out of whic~ only 342 posts were filled up by direct
recruitment. Ollt of 93 remaining unfilled posts most of them
were held all along by persons promoted from the feeder posts.
In tha Indian Statistical Service as against a total of 303
vacancies meant for direct recruits between the years 1964 to
1984 only 275 direct recruits were appointed. The remaining
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NAAENDER CHADHA v. u.o.I.
213
A
. -f unfilled posts were held by the departmental candidates. It
was alleged that many of the departmental candidates had been
- allowed to hold posts including Grade IV of the two Services
purely on ad hoc and ex gratis basis.
·Earlier certain persons holding posts in Grade IV of
B
these two Services had filed Writ Petition under Article 32
seeking direction/order to the Union of India to confirm and
regularise the petitioners in the posts held by them as and
~. from the dates when they had become due for confirmation or
j regularisation in accordance with the Indian Economic Services
Rules 1961 or the Indian Statistical Service Rules 1961 and to
consider them for all future promotions when due on the basis
C
of such seniority. This Court on February 1, 1984 directed the
Union of India to fill up, within four weeks,
the vacancies
available to the departmental candidates under
Rule
8
(l)(a)(ii) with
effect
from
the date
from which
the
petitioners became entitled to be promoted on regular basis,
that their seniority will be determined according to Rules and
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../._that rotation system will not apply under tlie ·existing_Rules.
On May 1, 1984, after expiry of the extended time, the
respondent - Union of India filed two sets of seniority lists
in respect of the two services, namely, (i) lists based on the
principle of rotation, and (ii) lists based on Rule 9C of the
E
Rules. Since the lists were to the disadvantage of the departmental promoteea, the Court while declining to endorse either
of the two seniority lists directed the respondent-Union to
implement the order dated February I, 1984 on or before 30th
·November, 1984. In the meanwhile the petitioners filed a
petition for initiating contempt proceedings against the
F
·;respondent-union of India which was resisted by the respondent. Certain direct recruits also intervened and wanted to be
heard before disposal of the contempt application. Opportunity
was given to all the parties to make their submissions.
Disposing of the petition,
G
HELD: 1. Having regard to the facts of the case _and the
events that have followed the order passed by this Court on
February I, 1984, no action for contempt against the Union
__,,. ._};overnment or any of its officers for not obeying the orders
---7 Aif this Court would be taken. [221 B-C]
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SUPREME COURT REPORTS
[19,86]
1 s.c.R.
2. The Union Government is directed to treat all persons.",
who have been promoted to several posts in Grade (IV) in '"']
Indian
Economic
Service
and
Indian Statistical
Service
contrary to the Rules till now as having been regularly
appointed to those posts in Grade (IV) under Rule 8(1) (a)
(ii) and assign them seniority in the cadre with effect from
the dates from which they are continuously officiating in
those posts. Even those promotees who have been selected in
1970, 1982 and 1984, shall be assigned seniority with effect
from the
date
on
which
they
co11111enced
to
officiate ·~ --
continuously in the posts prior to their selection. For purposes of seniority the dates of their selection shall be
ignored. The direct recruits shall
be given seniority .with
effect from the date on which their names were reco11111ended by
the Commission for appointment to such grade or posts as
provided in clause (a) of Rule 9-C. A seniority list of all
promotees and direct recruits shall be prepared on the above
basis treating the promotees as full members of the Service
with effect from the dates from which they are continuously_.
officiating in the posts. This direction shall be applicable 4only to officers who have been promoted till now, which means
that rotation system will not be applicable under the Rules,
as they exist now. All appointments shall be made hereafter in
accordance with the Rules, and the seniority of all the
officers to be appointed hereafter shall be governed by Rule
9-C. [237 D-H; 238 A]
3. If as a result of the preparation of the seniority
list as aforesaid any officer is likely to be reverted, such
officer shall not be reverted. lie shall be continued in the
higher
post
which
he
is
now
holding
by
creating
a\.
supernumerary post to accommodate him. Furthe• promotion shall,
be given to him when it becomes due as per the new seniority
list to be prepared. There shall be a review of all the
promotions made so far from Grade (IV) to higher posts in the
light of the new seniority list. (238 B-D]
P.S. Mahal &. Ors. v. Union of India & Ors. (1984] 3
s.c.R. 847 followed.
4. When an officer has worked for a long period
for
nearly 15 to 20 years in a post and had
never been revert~ •
it cannot be held that the officer's continuous officiation< F-
NARENDER CHADHA v. U. 0. I.
215
-I· was\ a mere temporary or local or stop gap arrangement even
·
though the order of appointment may state so •. In such circumstances the entire period of officiation has to be counted for
seniority. Any other view would be arbitrary and violative of
Articles 14 and 16(1) because the temporary service in the
post in question is not for a short period intended to meet
some emergent or unforseen circumstances. [236 C-E]
In the circumstances of the instant case, clause (b) of
•
; Rule 9-<: of the Rules which deals with the question of
seniority of promotees becomes irrelevant as regards promotees
who have been holding the posts from a long time. [236 El
5, It is permissibl" for the Government to recruit
persons from different sources to constitute a service. It is
also open to it to prescribe a quota for each source. Rules of
recruitment framed on the above lines are perfectly legitimate
and
quite consistent with Articles
14
and
16 of the
:..Constitution.
When
the
Rules
of
recruitment
prescribe
~
.
recruitment from different sources in accordance with the
specified quota the Government is bound to appoint persons to
the Service concerned j_n accordance with the Rules. The
seniority of persons recruited from different sources will
have to be regulated accordingly. [230 C-E]
In the instant case, the Government had m.!de violent
departure from the Rules of recruitment by deliberately
allowing those who were appointed contrary to Rules to hold
the posts cont-inuously over a period of long time. [230 E-F]
... ,
6. The petitioners were not promoted by following the
'actual procedure prescribed under rule 8(l)(a)(ii) but the
fact remains that they have been working in posts included in
Grade IV from the date on which they were appointed to these
posts. The appointments are made in the name of the President
by the competent authority. They are being paid all along the
salary and all<>Wances payable to incumbents of such posts.
They have not been asked to go back t~ the posts from which
they were proDllted at any time since the dates of their
appointment. The orders of promotion issued in some cases show
that they are proOllted in the direct line of their promotion •
.:;... 'J.t was expressly admitted that the petitioners have been
allowed to hold posts included in Grade IV of the said
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SUPREME COURT REPORTS
[1986]
1 s.c.R.
Services, though on an ad hoc basis. Therefore, it carumt be <,~
said that the petitioners are not holding the posts in Grade
·
IV of the two Services. Neither the Govermoent has issued
orders of reversion to their former posts nor has anybody so
far questioned the right of the petitioners to continue in the
posts
which they are now holding. It would be unjust
to hold at this distance of time that the petitioners are not
holding the posts in Grade IV. However, it is not the case
that whenever a person is appointed in a post without following the Hules prescribed for appointment to that post, he \ _,.._
should be treated as a person regularly appointed to that
post. Such a person may be reverted from that post. (231 B-i!;
232 A]
In the instant case, where persons have been allowed to
function in higher posts for 15 to 20 years with due
deliberation it would be certainly unjust to hold that they
have no sort of claim to such posts and could be reverted
unceremoniously or treated as persons not belonging to the 1,.
Service at all, particularly where the Government is endowed ·
with the power to relax the Hules to avoid unjust results. The
Government
has
also not expressed its unwillingness to
continue
them in the said posts. The other contesting
respondents have also not urged that the petitioners should be
sent out of the said posts. There is no impediment even under
the Hules to treat the petitioners and others who are
similarly situated as persons duly appointed to the posts in
Grade iv because of the enabling provision contained in Bule
16. (232 B-E]
7. lf there is enormous departure from the Hules of >.
recruitment in making appointments over several years, it •
should be presumed that the excess appointment by promotion
had been made in relaxation of the Hules when power to relax
the Hules is available. (233 C-ll]
A. Janardluma v. Union of India & Ors. (1983] 2 s.c.R.
936; O.P. Singl.a & Anr. y. Union of India & Ors. (1985] 1
s.c.R. 351; G.s. Lamb& & Ors. v. Union of India & Ors. (1985]
3 s.c.R. 431; D.R. 11:1m, I.P.s. v. Union of India (1967] 2
s.c.R. 323 followed.
'"' ..
'I-.._
S.B. Patwardhan & Ors. etc. etc. v. State of Kaharaahtn
·
& On. (1977] 3 s.c.R. 755; Rajendra llarain Singh & Ors .....
NARENDER CHADHA v. u.o.r.
217
State of Bihar & Ors. [1980] 3 s.c.R. 450; Baleshnr Das &
Ors. etc. v. State of U.P. & Ors. etc. [1981] 1 S.C.R. 449;
P.S. Mahal & Ors. v. Union of India & Ors. [1984] 3 s.c.R.
847; Pran Krislma Goswami & Ors. v. State of West Bengal &
Ors. [1985] Supp. s.c.c. 221; D.K. Mitra & Ors. v. Union of
India & Ors. [1985] Supp. s.c.c. 243 referred to. Karam Pal &
Ors. etc. v. Union of Indis & Ors. [1985] 3 s.c.R. 271
distinguished.
8. By sticking to the quota rule as found in rule
8(l)(a), enormous prejudice would be caused to the petitioners
and others who are similarly situated, even though their
appointments have been made by deliberate deviation from the
rules. The just solution to it would be to treat the petitioners as persons duly appointed to the Services with effect
from the date on which they were promoted to the Grade IV
posts. [235 G-1!; 236 BJ
ORIGINAL JURISDICTION: Civil Miscellaneous Petition No.
2604 of 1985.
IN
Writ Petition No. 1595 of 1979.
(Under Article 32 of the Constitution of India.)
Petitioner No. 1 in person.
P.P. Rao, Uma Dutta and
Miss C.K. Suchitra for Petitioner Nos. 2 to 25.
Govinda Mukhoty and
P.K. Gupta for the Intervener.
R.K.
Garg,
R.K.
Jain
and
Gaurav
Jain
for
the
Respondents.
F.S. Nariman, A.K. Ganguli, R.D. Agarwala and C.V. Subba
Rao for the Respondents. (Union of India)
The Judgment of the Court was delivered by
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SUPREME COURT REPORTS
[1986] 1 S.C.R,
Vl!llKATARAMIAI,
J.
The
perennial
dispute
regarding
seniority betweel\ direct recruits and promtees which exists
in almost all the departments of Government has not spared the
Indian Economic Service and the Indian Statistical Service
with which we are concerned in this case. This is the second
phase of the battle which is being waged in this Court.
Earlier certain persons who had been holding posts in .Grade IV
of these two Services had filed Writ Petition No. 1595 of 1979
under Article 32 of the Constitution of India praying for ·a
writ, direction or order in the nature of mandam.is directing
the Union of India to confirm or regularise the petitioners in
the posts held by them as and from the dates when they became
due for confirmation or regularisation in accordance with the
Indian Economic Service Rules, 1961 or the Indian Statistical
Service Rules, 1961 and to consider them for SirTuture promotions when due on the basis of such seniority. The said
petition was filed in a representative capacity with the leave
of the Court under Order I Rule 8 C.P.C. A few officers who
had been recruited as direct recruits to the posts in Grade IV
in the said departments were impleaded as respondents and they
were Sued in a representative capacity as representing all
other direct recruits who were likely to be affected by the
decision. After the above case was heard, the Court passed a
short order on February 1, 1984 which reads thus :
0 We are not able to understand why
the vacancies
available to the departmental candidates under Rule
8(ii) of the Indian Economic arui Indian Statistical
Services Rules, 1961, have not been filled up on
regular basis, We find that some of the departmental candidates (petitioners) have been holding
,_
the promtional posts on ad hoc basis for several
years. There appears to be no justification for
keeping them 'ad hoc' so long. We, therefore, issue
a Writ of Manda111.1s directing the Union of India to
fill up, within four weeks from today, the vacancies available to the departmental candidates under
Rule 8(ii) with effect from the date from which the
petitioners became entitled to be promoted on
regular basis. Their seniority will be determined
according to Rules. We wish to make it clear that
there is no question of any rotation system being "'(
applied under the Rules, as they exist now. The
i-.
,
NARENDER CHADll\. v. u.o.I. [VENKATARAMIAH, J. J
il9
writ petition is disposed of in these tertll9. Tnere
will be no order as to costs."
(Rule 8(ii) has to be read as Rule 8(l)(a)(ii))
The Union of India, as can be seen from the order set out
aboV'e, was directed to comply with the directions contained
therein within four weeks from the date of the order. On the
expiry of four weeks, stipulated by this Court, the Union of
lt1dia filed an application for extension of time to comply
with the directions contained therein fully. Time was extended
by the Court till April 30, 1984. On May 1, 1984 the Union of
India filed before the Court two sets of seniority lists in
respect of the above two Ser.tees, namely, lists based on the
principle of rotation and lists based on Rule 9-< of the
Indian Economic Service/Indian Statistical Service Rules.
Since on a perusal of the said lists it was found that the
position of some of the departmental promotees who had already
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put in nearly 15 years of service in Grade IV was worse than . I)
the position in which they were before the writ petition was
filed and were facing imminent threat of reversion to the
feeder posts from which they had been promoted several years
ago, the Court directed the petition tQ come up for hearing
before the Court on its re-Opening after summer vacation and
directed that ~
quo should be maintained in the meanwhile. Then on July 24, 1984 the Court while declining to
endorse either of the two seniority lists directed the Union
E
of India to implement the order dated February 1, 1984 on or
before 30th November, 1984. In the meanwhile the petitioners
filed Civil Miscellaneous Petition No. 2604 of 1985 complain-
·-<
ing that the Union of India had failed to comply with the
'
order made by thie Court and that action should be taken for
contempt against it. While opposing the application for
contempt, on behalf of the Union of India it was stated in the
course of the aH idavit sworn by Shri P. L. Sakarwal, Deputy
Secretary, l>P.partment of Economic Affairs, New Delhi thus
"23. In view of the submissions made above this
Respondent would urge that the directions of the
Hon'ble Court dated 1.2.84 in the matter of (i)
filling the vacancies under Rule 8(ii) and (ii) to
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fix the seniority according to Rules without the
application of rotation system, have been complied
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with bona fide and in a good faith. Rule 8(ii) of
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SUPREME COURT REPORTS
[1986] 1 s.c.R.
the IES Rules/lSS Rules provides for the quota for --\-
the departmental promotees and also the manner in
which the Select List for promotion by a duly
constituted DPC presides over by a Member of UPSC
has to be drawn. All the vacancies available to the
departmental candidates under Rule B(ii) up to the
end of 1983 have already been given to them by
issuance of Select Lists drawn from time to time.
Action is in process to prepare further Select List
in respect of the vacancies available to the
,
officers till the end of the year 1984. As regards
seniority, the Hon'ble Court had ordered to fix the
senfority according to the Rules and without the
application of the rotation system. The revised
seniority l:i.sts prepared by this Respondent and
finalised after inviting objections etc. from the
concerned officers have been framed according to
the Rules i.e. in terll8 of the provisions of Rule
9-C of the IES Rules/lSS Rules and without appli-
~
cation of the rotation system. This Respondent,
-
would, therefore, urge with respect ad all humility
that he has ·Complied with the directions of the
Hon:'ble Court bona fide and in good faith. However,
if there is any slip on the part of this Respondent
in carrying out the directions of this Hon'ble
Court of if the Hon 'ble Court considers that the
orders should have been executed in any other
msnner, this llespOndent would tender unconditional
apology and will be duty bound to obey and iq>lement, such orders directions as this Hon'ble Court
may deem fit or pleased to issue in the circumstan-
:>-
ces of the case."
In the meanwhile certain direct recruits also intervened
in the course of the said petition and requested that they
should be heard before any order was passed by the Court on
the contempt application. While the order passed by the Court
on February 1, 1984 did not require any clarification at all,
since the parties tried to place different interpretation on
it, prayer was made by the Union Government as stated aboVe
seeking further clarifications in the light of certain recent
decisions rendered by this Court, we gave opportunity to all ,_
...
the parties to mske their submissions once again. Availil!i
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NARENDER CllADHA v. U. 0. I. [VENKATARAMIAH, J. ]
221
themselves of the opportunity given by the Court learned
counsel for the pronX>tees
and the direct recruits have
virtually reargued the matter. It should be stated here that
A
no specific stand was taken on this occasion by the Union
Government except bringing to the notice of the Court the
relevant provisions of law. On its behalf it was submitted
B
very fairly by Shri F.S. Nariman, that there was no intention
on the part of the Government or any of its officers to flout
the order of the Court passed earlier and that if the Court
found that there has been any mistake in the preparati= of
the lists of seniority, those lists would be prepared afresh
in the light of any direction that may be given by the Court
in the course of these proceedings. Having regard to the facts
C
of the case and the events that have followed the order passed
by this Court on February 1, 1984; we do not feel called upon
to take any action for contempts against the Union Government
or any of its officers for not obeying the 'orders of this
Court. We have, however, found it necessary to consider the
matter again in the, light of the submissions made by the
D
parties and issue fresh directions in this case. We' feel that
a detailed order is also called for in the circumstances of
the case.
The Indian Economic Service Rules, 1961 and the Indian
Statistical Service Rules, 1961 (hereinafter referred t,o as
E
'the Rules' ) which are nX>re or less identical with regard to
the questions involved in this case were notified on November
1, 1961 and these Services were constituted with effect from
that date by ,encadering numerous posts carrying economic and
statistical functions in the various ministries of the Government of India. These Services were meant to comprise a pool of
officers having appropriate qualifications for performing the
aforesaid technical functions involved in various posts. The
strength of the various grades of the Indian Economic Service
at the initial constitution of the Service, i.e., on November
1, 1961 was Grade 1 -
15, Grade II - 15, Grade Ill - 95 and
Grade IV - 199 a Total 324 posts. The strength of the vsrious
grades of the Indian Statistical Service at the initial
constitution of the Service, i.e., on November
1,
1961 was
Grade I - 8, Grade II- 7, Grade Ill - 54 and Grade IV - 116 Q
Total 185 posts.
The officers of Grade I to Grade IV are classified as
Class-I Officers. The authorised permanent strength of each of
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[19861 i s.c.R.
the Services is to be fixed by the Controlling Authority with
._,_..
·the guidance of the Ministry of Finance in,accordance with the
provisions of the Rules. It is required to be based on the
following principles:
1) it shall be assumed that 8(J per cent of the
total number of semi-permanent posts are likely to
be continued indefiniteiy in one form or lllll)ther,
and
shall
be
provided
for
in the permanent
strength; and
2) all the purely temporary posts and 20 per cent
of the semi-permanent posts shall be excluded for
purposes of determining the permanent strength.
The Ministry of Home Affiars (Departtm!nt of Personnel and
Administrative Reforms) advised by a Board known as the Indian
Economic Statistical Service Board is designated as the
Controlling Authority under rule 6 of the Rules. Initial
constitution of both the Services was required to be done in
accordance with rule 7. Under that Rule
the Union Public
Service Comm1ssion was required to constitute a Selection
Colllllittee with a Chairman or a Member of the colllllission as
President, not more than two representatives of the participating Ministries and the Chief Economic Adviser in the
Ministry of Finance (Department of Economic Affairs) to determine the suitability of departmental candidates for .appoint:
tm!nt to the different grades and to prepare an order of
preference for each grade for the initial constitution of the
Service. On receipt of the Committee's report the Commission
was required to forward its recomtm!ndations to the Government
and such recommendations might include a recomtm!ndation that a
person considere<I suitable for appointtm!nt to a grade might,
if a sufficient number of vacancies were not available in that
grade, be appointed to a lower grade. The departmental candidates who were
not absorbed at the initial constitution of
the Service were to continue to work as on the date of the
initial constitution and were given the opportunity to apply
(and getting selected if they were found suitable) for future
vacancies. We are infor...d that the notifications regarding
the initial constitution of these two Services were issued by
the middle of February 1, 1964 with effect from February 15,
1964. Future maintenance of these two Services is governed by
'-\
•
NARENDER CHADHA 'v. u.o.I. [VENKATARAMIAH, J.]
223
rule 8 of the ,Rules. Initially rule 8, which is relevant for
the purposes of this case read as follows :
"8. (I) Future maintenance of the Service - after
the initial constitution of the Service has been
A
completed by appointment of departmental candidates
B
or otherwise, vacancies shall be filled as hereinafter provided.
(a) Grade IV - Assistant Director.
(i) Not less than 75 per cent of the vacancies in
this grade shall be filled by direct recruitment
through an open competitive examination to be held
by the Commission in the manner prescribed in
Schedule U. Provided that 25 per cent of the said
quota for direct recruitment may be set apart for a
maximum peiod of 5 years for absorption of officers
considered suitable for appointment at the initial
constitution of the Service but who could not be so
appointed in the absence of vacancies.
(ii) Not more than 25 per cent of the vacancies in
this grade shall be filled by selection from among
officers serving in offices under the Government in
Economic posts recognised for this purpose by the
Controlling Authority who shall perpare a list of
such posts in consultation with the commiss1on. The
Controlling Authority may, in conaultation with the
Commission, add to or 111Qdify. ,the list from time to
time. The selection will be made from amongst those
who have completed at least 4 years of service in
those posts on the basis of merit with due regard
to seniority by the Controlling Authority on the
advice of the Commission •••••••••• "
Rule 8(l)(a) now reads thus :-
"8.(1) Future maintenance of the service; after the
initial constitution of the service had been
completed by appointment of departmental candidates
or otherwise and after promotions in accordance
with sub-rule (2A) of Rule 7 have taken place,
vacancies shall be filled as hereinafter provicjed.
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SUPREME COURT REPORTS
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(a) Grade IV - Assistant Director.
(i) Not less than 75 per cent of the vacancies in
this grade shall be filled by direct recruitment
through an open competitive examination to be held
by the Commission in the manner prescribed in
Schedule H. Provided that 25 per cent of the said
quota for direct recruitme.nt may be set apart for a
maxirum
period of
5 years for absorption of
officers considered suitable for appointment at the
initial constitution of the service but who could
not be so appointed in the absence of vacancies.
(ii) Not more than 25 per cent of the vacancies in
this grade shall be filled by selection from among
officers serving in offices under the Govern11Ent in
Economic posts recognised for this purpose by the
Controlling Authority who shall prepare a list of
such posts in consultation with the Commission. The
Controlling Authority may, in consultation with the
Commission, add .to or modify the list from time to
time. The selection will be made from amongst those
who have completed at least 4 years of service on a
regular basis in these posts on the basis of merit
with due regard to seniority by the Controlling
Authority on the advice of the Commission.
Provided that if any junior person in an office
under the Government is eligible and is considered
for selection for appointment against these vacancies, all persons senior to him in that off ice
shall also be so considered notwithstanding that
they may not have rendered 4 years of service on a
regular basis in their posts. 0
After the initial constitution of the two Services was
completed it was
found that a number of posts carrying
Economic/Statistical functions could not be considered for
inclusion in the officers' Grades due either to misunderstanding or to inadvertence. Further as the process of formation of
the Indian Economic Service and the Indian Statistical Service
was prolonged for number of years and the need for appointing
more officers in the said Departments during that long period
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NARENDER CHADHA v. u.o.I. [VENKATARAMIAH, J.]
225
also arose gradually several posts carrying economic/statistical functions were created. Although rule 8 provided that not
less than 75 per cent of the vacancies in Grade IV should be
filled up by direct recruitment through an open competitive
examination to be held by the Union Public Service Commission
in the manner prescribed in Schedule II to tne Rules and
further provided that not more than 25 per cent posts of the
vacancies in that grade should be filled by selection from
among officers serving in the offices under the Government in
Economic/Statistical posts recognised for that purpose by the
Controlling Authority, no direct recruitment -waF. resorted to
till about the year 1968. In the meanwhile a large number of
persons in the feeder posts were appointed to the posts in
Grade IV from time to .time from the year 1962 onwards although
the orders promoting them stated that they had been promoted
only temporarily. It is not disputed that all those promotees
have been holding those posts continuously till now without
being reverted to the feeder posts from which they had been
promoted. Some have retired from those posts on attaining the
age of superannuation.
We shall reproduce below one of the notifications issued
in connection with the prorootion to the posts in Grade IV of
such officers, some of whom are the petitioners in this
A
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petition. It reads thus :
E
"GOVERNMENT OF INDIA
PLANNING COMMISSION
Yojana Bhawan, Parliament Street
New Delhi-!, the 20th/23rd November '65
NOTIFICATION
No.F.8(10)/65-ADM.I: The President is pleased to appoint
F
the following Economic Investigators Grade I, Planning Commission, as Research Officers in the Commission in a temporary
G
capacity with effect from the 6th November 1965 (forenoon),
and until further orders :-
Shri K.V. Vishwanathan
Shri S.N. Padro
Shri C.L. Kapur
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Smt. K. Passi
Shri Narendra Chaddha
Shri R.N. Mokhey
Shri N. Srinivasan
Shri K. Suryanarayana
Shri P .N. Radhakrishnan
Shri B.R. Kharbanda
Shri Kamla Prasad
Shri M.M. Gupta
Shri S.P. Kumar
Sd/-
(N.S. Gidwani)
(Deputy Secretary to the Government of India)
...................................................
All these officers excepting Shri P.N. Radhakrishnan are either permanent or quasi-permanent in
+
the grade of Economic Investigators. Shri Radha-
~'
krishnan is quasi Permanent in the grade of Senior
Computor. The promotion of all is in the direct
line.
"
..................................................
In another order of promotion i.ssued while promoting
another officer by name Jagdish Chandra on November 21, 1966
it was mentioned that his promotion to the post of Research
Officer was in direct line of Economic Investigator Grade
I/ll. It should be stated here that although rule 8 (1)
(a)
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provided that not less than 75 per cent of the vacancies in '..
Grade IV of the two Services should be filled up by direct •
recruitment through an open competitive examination to be held
by the Commission in the manner prescribed in Schedule II to
the Rules and that not more than 25 per cent of the vacancies
in the Grade could be filled up by a selection from among
G
officers
serving
in
offices
under
the
Government
in
Economic/Statistical posts recognised for this purpose by the
Controlling Authority, the prescribed quota of appointment
fi:om the two different sources, referred to above, was not
maintained right from the commencement of the Constitution of
the Services. The initial constitution of the two Services was'\-
H
completed under rule 7 of the Rules with effect from February "' •
15, 1964 as mentioned earlier. Thereafter rule 7A was added.
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NARENDER CllADHA v. u.o.I. [VENi<ATARAMIAH, J.]
227
That rule was added by a notification dated December 24, 1966
and it has been amended subsequently by a notification dated
February 12, 1972. Rule 7A made special provision regarding
certain departmental candidates who were to.be absorbed in the
two Services. It provided that notwithstanding anything contained in rule 8 of the Rules, the Controlling Authority on
the
advice of the Board
should constitute a
Selection
Committee for the purpose of appointing officers who were
departmental candidates to the Services in question. A departmental candidate who was not selected for appointment for any·
grade in the Services could continue to hold the post which he
was holding then and might be considered by the Controlling
Authority on the advice of tne Board for appointment to the
service at the subsequent stage .or stages in consultation with
the Commission. It further provided that any departmental
candidate, referred to in sub-rule (1) of rule 7A who did not
on a selection to any Grade in the Service desire to be
absorbed in the service might continue to hold the post held
by him immediately before. the selection as if he had not been
selected. The validity of rule 7A was questioned by some of
the direct recruits, who were appointed in the year 1968 in
the High Court of Delhi by a Writ Petition. We understand that
the said writ petition has been transferred to the file of the
Central Administrative Tribunal and the said writ petition is
still pending. We are not concerned here with ·the merits of
the contentions urged by the contesting parties in those
proceedings. We are concerned in this case only with the
question of seniroity as betWen direct recruits and promotees.
From the statements annexed to the counter-affidavit
filed by Shri V. Subramanian, Director in the Department of
Economic Affairs, it is seen that in the Indian Economic
Service there were. 3 vacancies for direct recruits in the year
1964, 18 in the year 1965, 80 in the year 1966 and 12 in the
year 1967,·Nobody was recruited directly to those posts during
those years. In the year 1968 there were 11 vacancies for
direct recruits but 32 were recruited directly during that
year. In 1969 there were 6 vacancies for direct recruits and
31 were recruited, in 1970 there were 33 vacancies for direct
recruits, in 1971 there were 12 vacancies for direct recruits,
in 1973 there were 25 vacancies for direct recruits, in 1974
~ there were 20 vacancies for direct recruits and in 1975 there
/i were 11 vac.ancies for direct recruits. By the year 1984 in all
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[1986 J 1 s.c.R.
there were 435 vacancies for direct recruits out of which only
342 posts were filled up by direct recruitment. In all 93
posts intended for direct recruits remained unfilled and JOOst
of them were held all along by persons who had been proJOOted
from the feeder posts. The position in the Indian Statistical
Service was JOOre or less the same. As against a total of 303
vacancies meant for direct recruits between the
years 1964
and 1984 only 275 direct recruits were appointed. In this
department also the posts which remained unfilled had been
held by the persons who were departmental candidates. It is
alleged in the counter-affidavit filed on behalf of the Union
of India of which the deponent is Shri P.G.
Lele,
Deputy
Secretary in the Department of Personnel and Administrative
Reforms that many of the departmental candidates had been
allowed to hold posts including in Grade IV of the aforesaid
Services purely on ad hoc and ex gratia basis. The relevant
part of the counter-affidavit is to be found in paragraphs 21
to 24 thereof. It is unfortunate that even though the
proJOOtees have been dischargin_g their duties to the best of
their ability and receiving salary and allowances from the
Government for the services rendered by them, it is alleged in
the course of the said counter-affidavit that what was being
paid to them was by way of grace. This statement adds insult
to injury. If the Government felt that they were not competent
to discharge their duties and they had not been appointed
permanently to the posts held \>Y them, it was open to it to
revert them to their posts from which they had been proJOOted
leaving it open to them to question the orders of reversion in
Court. The Government was in need of their services and the
petitioners have been holding these posts for nearly 15 to 20
years. It is not fair to say at this distance of time that the
Government W88 only keeping them in their posts as a matter of
grace. Be that 88 it may, it is seen that the Departmental
ProJOOtion Committee met only thrice between 1965 and 1984,
i.e.