Shri Nagendu Bhattacharya And ... vs Bharat Sanchar Nigam Limited And ...
2006 Latest Caselaw 376 Del

JUDGMENT

S. Ravindra Bhat, J.

Page 0849

1. The Writ petitioners in these proceedings under Article 226 of the Constitution of India seek quashing of Rule 5 of the Recruitment Rules to the post of Assistants, framed on 4.7.2003, as well as a notification dated 4.10.2005 (by which they were asked to appear for the Limited Internal Competitive Examination ("LICE") for promotion to the grade of Assistant) and issued by the respondent (The Bharat Snachar Nigam Ltd., hereafter called 'BSNL').

2. The petitioners were working as Upper Division Clerks in the Department of Telecommunication (DOT), Central Government. At the time of formation of the BSNL, in the year 2000, several employees from the DOT were placed on deemed deputation basis w.e.f. 1.10.2000, with BSNL. It is not disputed that on 15.9.2000, an agreement was reached between employees of the DOT and Central Government outlining the broad understanding concerning the terms and conditions of the officers sent to the BSNL. One of the demands related to career progression of the Secretariat Staff, eventually to be absorbed by the BSNL. The relevant condition recording agreement on this aspect, at serial No. 11 reads as follows:

Channels of promotion would be maintained from those employees to get absorbed in the BSNL.

3. It is averred that as per the existing service conditions, promotions from the category of Upper Division Clerk to the next higher post of Assistant were to be made on the basis of seniority- cum-merit. This was contained in Rules 6 and 6-A of the Central Secretariat Service Rules, 1962. All the petitioners, upon being offered the opportunity of absorption opted for it, and were declared to be employees of BSNL w.e.f. 1.10.2000, by separate orders issued in the year 2002. It is stated that in fact they joined the respondent upon being relieved by the DOT. The petitioners also rely upon an Office memorandum issued on 7.8.2001, which stated as under:

After absorption there will be negotiations with the newly formed recognized union(s) regarding promotional avenues. Pending adoption of Standing Orders on promotional policy, the present promotion policy will continue to be followed by BSNL. Same rules relating to promotion would apply to the Secretariat staff as to the other BSNL employees.

Page 0850

4. It is averred that the sanctioned strength of Assistants in the BSNL was 97; reliance is placed upon an order dated 8.9.2003. The petitioners also rely upon another order 8.8.2003 to say that additional 36 posts of Assistants were added to the cadre and had to be be maned by CSS officers. It is therefore contended that the total cadre strength of of Assistants is 133.

5. On 4.7.2003, the BSNL framed and published recruitment rules for the post of Assistants (and other categories of employees). The rules pertaining to Assistants were known as the 'Assistants Recruitment Rules, 2003'. These provided the sanctioned strength of the cadre of Assistants to be 97. Column 11 provided two modes for filling the posts, namely:

1) 50% by promotion on the basis of LICE (Limited Internal Competitive Examination)

II) 50% by direct recruitment.

As per column 12, UDCs with 5 years service are eligible to compete in the LICE. These Rules , particularly, Rule 5 which prescribes the method of recruitment by promotion through limited departmental examination have been questioned as arbitrary.

6. By an order dated 18.8.2005 the BSNL notified the scheme and syllabus for the LIC. The written examination consisted of various subjects including general awareness, general English, computer fundamentals and service rules as part of Paper I, which is an objective type multiple choice test. Part-B comprising Paper-II called the "conventional test" comprised of Noting and drafting, and service rules. The standard of questions of general awareness and general English test prescribed were of Higher Secondary/10+2 level, the minimum qualifying marks indicated was 40% in each paper and 45% marks in the aggregate.

7. On 14.10.2005, the BSNL issued a notification proposing to hold LICE for promotion of UDCs to the grade of Assistants in the BSNL corporate office. The examination was to be held on 29th January, 2005. The petitioners impugned the Rules as also the second impugned order as arbitrary. It is alleged that they opted for BSNL service on the assurance that the existing terms and conditions and channels for career progression would be preserved. This meant that the condition applicable under the Central Secretariat Rules, i.e. the criteria of seniority-cum-fitness, for the purposes of promotion to the post of Assistants had to be followed as far as they were concerned. It is alleged that the BSNL's action in effecting a change of that criteria, and its replacement by a limited internal departmental examination is arbitrary and violative of Articles 14 and 16 of the Constitution. It is also alleged that vacancies existed in the grade of Assistants as on 4.7.2003 which had been filled through the old rules.

8. This Court had while issuing notice on 22nd October, 2005 left it open to the petitioners to apply and fill up forms for the test and reserved their right to maintain these proceedings. It is not in dispute that the departmental examination was held on 29.1.2006 and that some of the petitioners participated in the process.

Page 0851

9. The BSNL, in its counter affidavit has traced the genesis of its formation on 1.10.2000 and how personnel were drawn from the DOT on 'as is where is basis' by treating them as "deemed deputationists'. It is averred that the process of permanent absorption by eliciting options of various staff categories on deputation within it commenced in September 2001; the services of such optees including the petitioners were placed by the DOT w.e.f. 1.10.02 but giving the benefit of absorption from 1.10.2000. The BSNL avers that as on 8.1.02 the number of Secretariat post in the cadre of Assistants was 97; they were exclusively meant for regular Central Secretariat Service Assistants. It is averred that against the 97 posts allocations took place in 2004 when the BSNL optees in the grade of Assistants were placed at its disposal w.e.f. 24.3.04. Till that time, the cadre of Assistant was exclusively managed and controlled by the DOT.

10. As far as the new rules are concerned, it is averred that rationale behind introduction of limited competitive examination is to pick up and attract talent, by choosing non-executives, capable of the becoming executives and likely to contribute to the growth of the company. It is averred that apart from departmental examination as a channel for promotion of UDCs to the grade of Assistants, similar competitive examinations have been introduced to the other cadres like Junior Telecom Officers, Junior Accounts Officers, Assistant Directors. The post of Assistant is equivalent to the Junior Accounts Officer and Junior Telecoms Officers hence a similar pattern for promotion through Limited Departmental Examinations was introduced. As far as the vacancies are concerned it is averred that on acceptance of options of Group-B secretariat staff for permanent absorption which were called at the end of 2003, services of all BSNL optees were placed by DOT at the disposal of the BSNL w.e.f. 24.3.04. This resulted in 104 Assistants and 61 Section Officers being placed at the disposal of the BSNL as against the cadre strength of 97 and 52 respectively.

11. The BSNL states that even in the Central Government, consequent upon the restructuring of Central Secretariat Service, the promotion policy regarding assistants was changed in 2004; 75% is to be filled by direct recruitment on the basis of All India Graduate Examination; 10% through limited departmental examination and 15% by seniority. The BSNL also averred that while opting for absorption all employees, including the petitioners, furnished undertakings to be governed by its rules and regulations. The BSNL has averred that there were no vacancies in the cadre of Assistant as on 4-7-03 when the impugned rules came into force.

12. Mr. Kameshwar Rai, appearing on behalf of the petitioners contended that the BSNL was duty bound to continue with the previous promotion policy as per cause 11 of the agreement dated 14.9.2000. It clearly indicated that the petitioners, who were working as UDCs were entitled to be promoted as per their pre-existing conditions of service to the post of Assistants. The criteria under those rules was seniority. Learned counsel also relied upon the Office Memorandum dated 7th August, 2001 which provided in para 2 that the BSNL would continue to apply the existing rules and regulations.

Page 0852

13. Learned counsel contended that the respondent BSNL was duty bound not only by the agreement and the memorandum of 2001 but also as a matter of law to protect the existing terms and conditions of service so far as promotions were concerned. He relied upon the judgments of the Supreme Court reported B.S. Yadav and Anr. v. Chief Manager, Central Bank Of India ; Life Insurance Corporation Of India And Ors. Appellants v. S. S. Srivasta , S. P. Dubey, Appellant V. Madhya Pradesh State Road Transport Corporation ; and Process Technicians And Analysts' Union, Appellant v. Union Of India . Learned counsel submitted that any change that would fundamentally alter existing conditions enuring to the benefit of employees absorbed by the transferee organization is unreasonable and arbitrary. Learned counsel submitted that requiring the petitioners who had put in between 15 to 20 years of service to qualify in a departmental test is harsh and unreasonable. It was submitted that most of them are overage and have been stagnating in the post for long periods of time. If they are to compete, as a condition, for promotion, it would act greatly to the prejudice.

14. Learned counsel also submitted that the documents on record established that at least 72 vacancies were available in the grade of Assistants which had to be filled as per the pre-existing recruitment rules. It was contended that as per several judgments of the Supreme Court, the proposition that existing vacancies are to be filled only as per old rules and not on the basis of policies or rules framed subsequent to the occurrence of such vacancies, had been established. Counsel relied upon the decision Y.V. Rangaiah and Ors. v. J. Sriniwasarao and Ors. and also the judgment Dr. K. Ramulu and Anr. Appellants v. Dr. S. Suryaprakash Rao and Ors. for the purpose. It was contended that the impugned rules can be made operative only prospectively from 4.7.2003 and cannot in any manner be applied to fill vacancies which arose earlier.

15. Mr. Alakh Kumar, appearing for the BSNL submitted that there was nothing arbitrary so far as the recruitment rules or the impugned notifications were concerned. He submitted that the BSNL being an independent and autonomous body, acted within the scope of its powers to formulate the promotion policy. There is no fetter, express or implied, either in law or under the Constitution upon the BSNL's jurisdiction to formulate and implement recruitment and promotion policies having regard to its functioning. He submitted that the only limitation upon the exercise of such policy framing power, is the duty to be non-arbitrary and act in consonance with reason.

Page 0853

16. It was contended on behalf of the BSNL that the decision to insist upon qualifying in a limited departmental examination for promotion to the post of Assistants was in line with a similar condition in respect of some other posts. This was done on the basis of a conscious and uniform policy having regard to the need for ensuring efficiency and attracting talent. Learned counsel contended that the Court, in exercise of jurisdiction under Article 226 would not comment on the wisdom or otherwise of an administrative policy; it cannot also sit in appeal over such policy. He relied upon the judgment of the Supreme Court reported as State of J&K v. Shiv Ram Sharma , to say that the administrative authority can prescribe qualifications in the matter or promotion to different posts and that there is no indefeasible right of any official to claim promotion to a higher grade to which qualifications can be changed, or prescribed by the employer and that there is no guarantee that the rules framed by the employer would always be favorable to the official or employee.

17. As far as the the point regarding vacancies was concerned, counsel for the BSNL contended that the letter dated 8.8.03 of the DOT clearly stipulated that 97 posts of Assistants allocated to BSNL, had to be filled up only by CSS cadre assistants; those posts were centrally controlled by DOT till permanent absorption of such employees. The exercise of processing the options of such Assistants concluded only in 2004 when 104 employees were accommodated against 97 posts. Consequently, there were no vacancies when the rules came into effect on 4.7.03. It was also contended that 36 posts of UDCs had been upgraded as Assistants in BSNL in 2002 and meant only for the 36 ad hoc Assistants working as such who were regularised to the post. It was therefore contended that the argument about vacancies existing and having to be filled on the basis of previous rules, has no force. Counsel also contended that Rangaiah's case had to be read in the context of facts of the case and there cannot be any absolute rule that even after new recruitment policies or regulations are framed, employees could continue to insist upon, and seek enforcement of, old rules.

18. The first point to be decided is whether the recruitment rules, framed in 2003, particularly, Rule 5, which prescribes for promotion through LICE is arbitrary. The attack to the rules is that the Petitioners had been assured that career progression or promotional channels as per existing rules which applied to them before their absorption in the BSNL, would continue to govern them, and that the employer cannot change such rules. The basis of the submission, is the agreement of 2000, which had stated that the existing manner of promotion, through application of the seniority rule, would be followed.

19. The issue as to "vested right" of employees insisting that their right to promotion or seniority, on the strength of rules existing at the time of their appointment being continued had come up for consideration on a number of Page 0854 occasions before the court. In State Of Maharashtra vs Chandrakant Anant Kulkarni it was held that mere chances of promotion are not conditions of service and the fact that there was reduction in the chances of promotion due to change of conditions did not justify intervention of the court. In All India State Bank Officers' Federation v. Union of India it was held that:

It was also submitted that the change in the policy was completely arbitrary and without any reason. We are unable to accept this contention. The respondent-Bank is a business organization and it must identify the best available talent in the organization for holding challenging assignments in the top executive grades. There is nothing wrong if the Bank devised a policy defining the eligibility norms on a realistic basis and devised a system whereby the best available talent would be chosen to man the critical positions. Keeping this objective in view the changes in the promotion policy have been made. It is always for the employer to see how to promote and utilize the best talent available in the organization. The promotion policy originally framed in the year 1975 has been amended from time to time. The changes have now been made in 1989 keeping in mind the requirement of the Bank and based on the experience of the Bank in regard to making selection for promotion. The changes so made cannot be regarded as arbitrary and the Court cannot sit in appeal and decide as to what is good for the institution. Under the new policy the petitioners are also eligible for consideration and they cannot have any grievance because certain persons who were eligible under the old policy, but in practice were not considered for promotion, are now considered under the new policy. The object of the new policy seems to be not only to redress the injustice to those officers resulting on account of the difference between the rules and the practice but also with the object of selecting the best talent for the top executive posts.

The right of a public employer, or the State, to change conditions of service, was explained by the Supreme Court in P.U. Joshi v. Accountant General , as follows:

10. We have carefully considered the submissions made on behalf of both parties. Questions relating to the constitution, pattern, nomenclature of posts, cadres, categories, their creation/abolition, prescription of qualifications and other conditions of service including avenues of promotions and criteria to be fulfillled for such promotions pertain to the field of policy is within the exclusive discretion and jurisdiction of the State, subject, of course, to the limitations or restrictions envisaged in the Constitution of India and it is not for the statutory tribunals, at any rate, to direct the Government to have a particular method of recruitment or eligibility criteria or avenues of Page 0855 promotion or impose itself by substituting its views for that of the State. Similarly, it is well open and within the competency of the State to change the rules relating to a service and alter or amend and vary by addition/subtraction the qualifications, eligibility criteria and other conditions of service including avenues of promotion, from time to time, as the administrative exigencies may need or necessitate. Likewise, the State by appropriate rules is entitled to amalgamate departments or bifurcate departments into more and constitute different categories of posts or cadres by undertaking further classification, bifurcation or amalgamation as well as reconstitute and restructure the pattern and cadres/categories of service, as may be required from time to time by abolishing the existing cadres/posts and creating new cadres/posts. There is no right in any employee of the State to claim that rules governing conditions of his service should be forever the same as the one when he entered service for all purposes and except for ensuring or safeguarding rights or benefits already earned, acquired or accrued at a particular point of time, a government servant has no right to challenge the authority of the State to amend, alter and bring into force new rules relating to even an existing service.

20. In the decision reported as State of J&K v. Shiv Ram Sharma , relied upon by the respondent, it was held as follows:

6. The law is well settled that it is permissible for the Government to prescribe appropriate qualifications in the matter of appointment or promotion to different posts. The case put forth on behalf of the respondents is that when they joined the service, the requirement of passing matriculation was not needed and while they are in service, such prescription has been made to their detriment. But it is clear that there is no indefeasible right in the respondents to claim for promotion to a higher grade to which qualification could be prescribed and there is no guarantee that those rules framed by the Government in that behalf would always be favorable to them. In Roshan Lal Tandon v. Union of India it was held by this Court that once appointed, an employee has no vested right in regard to the terms of service but acquires a status and, therefore, the rights and obligations thereto are no longer determined by the consent of the parties, but by statute or statutory rules which may be framed and altered unilaterally by the Government. The High Court has also noticed that there was an avenue provided for promotion but the prescription of the qualification was not favorable to the respondents. The principle of avoiding stagnation in a particular post will not be with reference to a particular individual employee but with reference to the conditions of service as such. As long as the rules provide for conditions of service making an avenue for promotion to higher grades, the observations made in T.R. Kothandaraman case1 stand fulfillled. In that view of the matter, we do not think the High Court was justified in allowing the writ petitions filed by the respondents.

Page 0856

21. The law must be therefore, taken as well settled that reduction in chances of promotion by itself does not constitute an actionable cause, warranting intervention of the court, in judicial review. The fact that the petitioners had been given some assurance about the continuation of their service conditions, does not fetter the power of the BSNL, to bona fide formulate a new recruitment or promotion policy. If such restrictions are to be read into what is an exclusive executive domain, the courts would be placing unwarranted impediments upon administrative functioning, which is necessarily a dynamic process, assimilating and responding to changing times, and challenges. I am also of the opinion that the judgments in B. S. Yadav; S. S. Srivastava's case; S. P. Dubey's case, and the Process Technicians And Analysts' Union, relied upon by the petitioners, can be of no assistance in these proceedings. In those judgments, the court upheld the challenge to conditions of services relating to retirement age, which had been preserved by the new or transferee organization, upon a complaint of discrimination made by fresh recruits of the new organization. In order to conclude that the condition requiring qualification in the departmental test is arbitrary, there must be something shocking or ex-facie perverse or unreasonable. Such evidence is lacking. The rationale in support of the test, i.e. that personal from other cadres too have to undergo similar tests as preconditions for promotion, and that the methodology is aimed at ensuring efficiency and picking up talent, for upward career mobility, subserves the larger interest of the employer.

22. The second point relates to whether there were vacancies, that had arisen under the old rules, which were to be filled in accordance with the provisions of such old rules. Counsel for the petitioner had relied upon Y.V. Rangaiah's case . The facts of the case show there was an omission to prepare the promotion panel in time as per rules then in force and that the amended rules dispensed with the original provision for considering LDCs along with UDCs for promotion, adversely affecting their promotional prospects. Here, nothing was shown that there was any obligation to prepare periodic panels. Moreover, the adverse impact upon the petitioners, as explained above is not of such magnitude as to be called arbitrary. The judgment in Rangaiah was explained in a three judge decision of the Supreme Court, in Delhi Judicial Services Association -V- Delhi High Court , where it was held that where the process of selection not having been started and even the advertisement itself not having been issued, (such advertisement having been issued only subsequent to the amendment of the Rules), the contention that posts had to be filled up under the pre-amended rules, merely because the Page 0857 posts had been created while the amended rules had not come into force, could not be countenanced. Thus, the rule in Rangaiah's case (supra) does not admit of universal, invariable application. In the present case too, no process of recruitment, to fill up the vacancies had been initiated prior to the 2003 rules; no obligation to prepare periodic panels was shown.

23. Quite apart from the above conclusion, I am of the opinion that the petitioners' assertion that there were a number of vacancies prior to the enforcement of the impugned rules, is also ill founded. The BSNL, in its affidavit has shown that as against 97 vacancies, 104 CSS Assistants had been sent for absorption after their cases were processed. It was also averred that 36 upgraded posts were included; the incumbents to those posts had been upgraded in 2002. The complete list of all the Assistants, is a matter of record. These show that the petitioners' allegation about some vacancies having existed prior to the framing of the impugned rules, is unfounded.

24. In view of the above findings, I am of the opinion that the petitions are without any merit. They are accordingly dismissed, without any order as to costs.