1
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS.5286-87 OF 2005
Bharat Sanchar Nigam Ltd. ... Appellant
Vs.
R. Santhakumari Velusamy & Ors. ... Respondents
With
CIVIL APPEAL NOS.3405, 4542, 4543, 4544, 4545 and 4546 of 2006
J U D G M E N T
R.V.RAVEENDRAN, J.
The appellant, Bharat Sanchar Nigam Ltd., is the successor of the
Department of Telecommunications, Ministry of Communications, and
Government of India (for short `government' or `telecom department'). The
question involved in these matters is whether rules of reservation will apply
to upgradation of posts.
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2. There were four grades of employees of telecom departments known
as Telegraphists or Telecom Operating Assistants in the Telecom
Department. Promotions from one grade to a higher grade were on the basis
of seniority/departmental examination. The telecom department introduced
an `One Time-Bound Promotion' scheme (`OTBP scheme' for short) in the
year 1983-84 under which regular employees who had completed 16 years
of service in a grade, were placed in the next higher grade. After some years,
the employees unions demanded a second time-bound promotion on
completion of 26 years of service in the basic grade, as Group C and Group
D cadres were only entitled to one-time bound promotion. The government
decided that a second time bound promotion was not feasible. However, to
provide relief from stagnation in the grade, the government decided to have
a Biennial Cadre Review (`BCR' for short) under which a specified
percentage of posts could be upgraded on the basis of functional
justification.
3. The BCR scheme was accordingly introduced vide Circular dated
16.10.1990. It was made applicable to those cadres in Group C and Group D,
for which one-time bound promotion scheme on completion of 16 years of
service in the basic grade was in force. Under the said scheme, employees
who were in regular service as on 1.1.1990 and had completed 26 years of
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satisfactory service in the basic cadres, were to be screened by a duly
constituted Committee to assess their performance and determine their
suitability for advancement and if they were found suitable, to be upgraded
in the higher scale. The upgradation was restricted to 10% of the posts in
Grade III. We extract below the relevant terms of the BCR from the Circular
dated 16.10.1990:
".......
(iii) Biennial Cadre Reviews will be conducted in respect of the eligible
cadre at the level of circles who control these cadres.
(iv) At the time of review the number of officials who have
completed/would be completing 26 years of service in the basic cadres
including time spend in higher scale (OTBP) will be ascertained. The
persons will be screened by the duly constituted Review committee to
assess the performance and suitability for advancement.
(v) In the Biennial cadre review, suitable number of posts will be
created by upgradation based on functional justification.
(vi) Creation of posts by upgradation will be in the scales indicated
below:
Basic scale of the Scale after OTBP Scale after BCR on
cadre after 16 years of completion of 26 years or
basic grade more
750-940 800-1150 950-1400
825-1200 950-1400 1200-1800
975-1540 1320-2040 1400-2600
975-1600 1400-2300 1600-2660
(10% of the posts in the pay
scale of 1600-2660 will be in
the pay scale of Rs.2000-3200
1320-2040 1600-2600 1640-2900
(10% of the posts in the pay
scale of 1640-2900 will be in
the pay scale of Rs.2000-
3200)
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(vi) xxx xxx xxx
(viii) Necessary posts will be created by upgradation under the powers
of CGMs in consultation with their accredited finance.
(ix) The first Biennial Cadre Review for eligible cadres/officials may
be conducted immediately covering the period upto 30.6.1992 to ascertain
the eligible officials who have completed/will be completing 26 years of
services or more as on the crucial dates, namely, the date of the review
01.1.1991, 01.7.1991 and 01.1.1992. The number of posts needed or
provide for the promotion of the eligible persons will be determined and
will be sanctioned/activated in four instalments the first immediately, the
second on 01.9.1991, the third on 01.7.1991 and the fourth on 01.1.1992.
With these posts, it should be possible be provide for promotion of those
employees who have completed 26 years of service or more on the above
crucial dates, subject to their otherwise being found fit. The criterion for
promotion will be seniority, subject to selection.
Order implementing the first instalment of cadre review should be issued
before 30.11.1990.
In the second cadre review, which will cover the period from 1.7.1992 to
30.6.1994, which should be completed before 01.7.1992, the required
number of posts needed to be released in half yearly instalments on
1.7.1992, 1.1.1993, 1.7.1993 and 1.1.1994 to cater for promotion of those
who would have completed 26 years of service on the four crucial dates,
will be ascertained and sanctions released in appropriate instalment so that
the promotions of eligible personnel could be notified on due dates.
......"
4. The Government issued the following clarification regarding
designations by circular dated 11.3.1991:
State of Entry Grade allotted
(i) Initial Entry (Basic grade) Grade I
(ii) OTBP scale Grade II
(iii) BCR scale Grade III
(iv) 10% of posts in BCR pay scales Grade IV
to be placed in pay scale of 2000-3200
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By letter dated 7.5.1993, the telecom department clarified that there were no
sanctioned posts in regard to 10% BCR and the number of posts depend
upon the number of BCR officials available; and that therefore no local
officiating arrangement could be made if an official in the 10% BCR retired
before the next review.
5. By circular dated 13.12.1995, the government formulated the
procedure regarding promotion to Grade IV. Under the said procedure,
promotions to Grade IV were to be based on seniority in the basic grade
from among the officers in Grade III subject to fitness determined in the
usual manner of OTBP. By a clarificatory Circular dated 1.3.1996, the
government issued a clarification that promotion to Grade IV would be
given from among officials in Grade III on the basis of their seniority in the
basic grade, subject to fulfillment of other conditions and that normal rules
of reservation would apply to promotions in Grade IV.
6. The circular of the telecom department dated 1.3.1996 applying rules
of reservations to promotions to Grade IV under BCR was challenged by the
All India Non SC/ST Telecom Employees Association on the ground that
principles of reservation would not apply for upgradation of existing posts
which did not carry any change in duties and responsibilities. The Central
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Administrative Tribunal, Ahmedabad Bench by its order dated 11.4.1997
(OA No.623/1996 - All India Non-Schedule Caste/Schedule Tribe Telecom
Employees Association v. Union of India) held that the department could not
apply reservation rules while upgrading the posts under the BCR scheme
and directed the department to take appropriate action for effecting
promotions to the upgraded posts without applying the reservation roster.
The writ petition (SCA No.7576 of 1997) filed by the government
challenging the said order of the Tribunal (Ahmedabad Bench) was
dismissed by the Gujarat High Court by order dated 24.3.1999. In view of
the said decision, the Government issued an order dated 8.9.1999 directing
that a Review DPC be held and all ineligible officers wrongly promoted to
Grade IV by application of reservation roster as per office order dated
1.3.1996, should be reverted back and all eligible officers should be placed
in Grade IV and their pay should be fixed notionally. As a consequence of
the said Circular dated 8.9.1999, the contesting respondents were reverted
from Grade IV to Grade III.
7. Feeling aggrieved, the contesting respondents filed applications before
the Madras Bench of the Tribunal. They challenged the validity of the said
order dated 8.9.1999 and sought its quashing and also sought a direction to
the government to permit them to continue in Grade IV. Similar applications
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were filed before the Tribunal's Bangalore Bench. A Full Bench of the
Tribunal at Bangalore allowed the applications by order dated 26.4.2000. It
held :
"Through the mechanism of grant of time-bound advancements to the
higher scales of pay with different designations, or through appointments
to posts which are upgraded with higher scales of pay within a given
cadre, entailing creation of additional posts or not, essentially what takes
place is a process of advancement/appointment to these higher scales of
pay. We are convinced that this process can only be treated as promotion
in the light of the principle laid down by the Hon'ble Supreme Court that
an appointment to a higher scale of pay even at the same post and even
without involving any additional responsibilities can still be a promotion.
Even if in a given situation, the creation of the upgraded posts with higher
scales of pay do not result in a net addition to the existing number of posts
in that cadre, but is specifically and explicitly created to remove
stagnation, to follows that those upgraded posts involving higher scales of
pay are in effect a substitute for promotion. It is so because either through
a regular promotion in terms of the Cadre and Recruitment rules or
through the creation of the upgraded posts in the same cadre with a higher
scale of pay what is sought to be achieved is the provision of opportunities
for career advancement which, in the circumstances, is synonymous with
promotional opportunities. Once this basic objective for the creation of
upgraded posts is understood and appreciated, we are of the firm opinion
that such provisions for career advancement through appointments to
upgraded posts cannot be treated for the purpose of reservation of special
categories like SCs and STs differently from appointments to posts which
are designated in particular as promotional posts. In our view, it is also
absolutely immaterial as to whether the mode of appointment to these
upgraded posts with higher scales of pay is by selection or by merely
applying the criterion of seniority subject to fitness. In fact, it is evident
that appointments to a number of posts which are specifically designated
as promotional posts are also made on the basis of seniority-cum-fitness.
Therefore, the adoption of that latter criterion for appointment to a
upgraded post by itself cannot make such an appointment as non-
promotional appointment. On this score drawing a distinction between
upgradation and promotion based on the nomenclature only does not
appear to be tenable."
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8. The Full Bench of the Tribunal differed from the decision of its
Ahmadabad Bench and held that the decision of the Gujarat High Court
affirming the said decision was also of no assistance as it was at variance
with the decisions of this Court in Union of India vs. S.S. Ranade - 1995 (4)
SCC 462, Lalit Mohan Deb v. Union of India - 1973 (3) SCC 862, State of
Rajasthan vs. Fateh Chand Soni - 1996 (1) SCC 562, and Ram Prasad vs.
D.K. Vijay - 1999 (7) SCC 251. It held that the BCR upgradation to Grade
IV in the telecom department amounted to promotion, attracting reservation
for SCs and STs.
9. Following the said decision of the Full Bench of the Tribunal, the
Madras Bench of the Tribunal by order dated 25.7.2000 allowed the
applications filed by the contesting respondents herein and directed the
government to restore the contesting respondents to their promoted posts
which they were holding before the order dated 8.9.1999. The
Telecommunication Department challenged the said order of the Tribunal by
filing a batch of writ petitions before the Madras High Court. The Madras
High Court, by the impugned order dated 18.10.2004, dismissed the writ
petitions upholding the order of the Tribunal.
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10. The said order is challenged in these appeals by special leave by the
appellant. The appellant has put forth the following contentions :
(i) There is a clear distinction between upgradation and promotion. While
promotion involves advancement in rank, grade or both and is always a step
towards advancement to higher position, grade or honour, upgradation does
not involve promotion to a higher position and the pedestal of the employee
remains the same and the employee is merely conferred some financial
benefits by granting a higher pay scale, to overcome stagnation. The BCR
scheme introduced as per order dated 16.10.1990 was a scheme of
upgradation and not promotion.
(ii) Where there is only upgradation of existing posts, with creating
additional posts, principles of reservation would not apply. The Tribunal and
the High Court committed a serious error by treating upgradation as a
promotion to which reservation rules would apply. The Tribunal and the
High Court ought to have followed the decision of this Court in All India
Employees Association (Railways) vs. V.K. Agarwal - 2001 (10) SCC 165
and the decision of the Gujarat High Court dated 24.3.1999 in Special Civil
Application No.7576 of 1997 - Union of India vs. All India Non SC/ST
Telecom Employees Association.
11. Article 16(4) enables the State to make any provision for reservation
of appointment or posts in favour of any backward classes of citizens.
Article 16(4A) enables the State to make any provision for reservation in
matters of promotion, with consequential seniority, to any class or classes of
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posts in the services under the State in favour of Scheduled Castes and
Scheduled Tribes, which in the opinion of the State, are not adequately
represented in the services under the State. As upgradation involves neither
appointment nor promotion, it will not attract reservation. Upgradation
involves mere conferment of financial benefits by providing a higher scale
of pay. If there is mere upgradation of posts, as contrasted from promotion,
reservation provisions would not apply. [See : All India Employees
Association (Railways) vs. V.K. Agarwal - 2001 (10) SCC 165 and Union of
India vs. V. K. Sirothia - 2008 (9) SCC 283]. In V.K. Agarawal this Court
held :
"It appears from all the decisions so far that if as a result of
reclassification or readjustment, there are no additional posts which are
created and it is a case of upgradation, then the principle of reservation
will not be applicable. It is on this basis that this Court on 19.11.1998 had
held that reservation for SC and ST is not applicable in the upgradation of
existing posts and CA No.1481 of 1996 and the connected matters were
decided against the Union of India. The effect of this is that where the
total number of posts remained unaltered, though in different scales of
pay, as a result of regrouping and the effect of which may be that some of
the employees who were in the scale of pay of Rs.550-700 will go into the
higher scales, it would be a case of upgradation of posts and not a case of
additional vacancy or post being created to which the reservation principle
would apply. It is only if in addition to the total number of existing posts
some additional posts are created that in respect of those additional posts
the reservation will apply, but with regard to those additional posts the
dispute does not arise in the present case. The present case is restricted to
all existing employees who were redistributed into different scales of pay
as a result of the said upgradation."
(emphasis supplied)
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The decision of this Court in V.K. Sirothia arose from a decision of the
Allahabad Bench of the Tribunal which expressed a similar view (in V.K.
Sirothia vs. Union of India - O.A. No.384/1986). The Tribunal held :
"The restructuring of posts was done to provide relief in terms of
promotional avenues. No additional posts were created. Some posts out of
existing total were placed in higher grade to provide these avenues to the
staff who were stagnating. The placement of these posts cannot be termed
as creation of additional posts. There were definite number of posts and
the total remained the same. The only difference was that some of these
were in a higher grade. It was deliberate exercise of redistribution with the
primary object of betterment of chance of promotion and removal of
stagnation."
The Union of India challenged the said order of the Tribunal and this Court
by a brief order dated 19.11.1998 (Union of India vs. V.K. Sirothia - 2008
(9) SCC 283) dismissed the appeal by a brief order. The relevant portion of
the said order is extracted below :
"The finding of the Tribunal that "the so-called promotion as a result of
redistribution of posts is not promotion attracting reservation" on the facts
of the case, appears to be based on good reasoning. On facts, it is seen that
it is a case of upgradation on account of restructuring of the cadres,
therefore, the question of reservation will not arise. We do not find any
ground to interfere with the order of the Tribunal."
12. We may next consider the concepts of `promotion' and `upgradation'.
In Lalit Mohan Deb, this Court explained the difference between a
promotion post and a selection grade :
"It is well recognised that a promotion post is a higher post with a higher
pay. A selection grade has higher pay but in the same post. A selection
grade is intended to ensure that capable employees who may not get a
chance of promotion on account of limited outlets of promotions should at
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least be placed in the selection grade to prevent stagnation on the
maximum of the scale. Selection grades are, therefore, created in the
interest of greater efficiency."
In Tarsen Singh vs. State of Punjab - 1994 (5) SCC 392, this Court defined
`promotion' thus :
"Promotion as understood under the service law jurisprudence means
advancement in rank, grade or both. Promotion is always a step towards
advancement to a higher position, grade or honour."
13. In S.S. Ranade the scope and meaning of the word `promotion' was
considered. The issue in that case was whether a Commandant (Selection
Grade) held a higher rank than a Commandant and consequently entitled to
be superannuated at a later age of 58 years instead of 55 years. This Court,
following the decision in Lalit Mohan Deb, held as follows:
"Undoubtedly, a Commandant who becomes a Commandant (Selection
Grade) secures a promotion to a higher pay scale. But it is a higher pay
scale in the same post. The use of the word 'promotion' in Rule 6 and the
Constitution of a Departmental Promotion Committee for selection of
Commandant (Selection Grade) in Rule 7, do not necessarily lead to the
conclusion that the promotion which is contemplated there is necessarily a
promotion to a higher post. Promotion can be either to a higher pay scale
or to a higher post. These two Rules and the use of the word 'promotion'
there do not conclude the issue.
xxx xxx xxx
In the present case, an element of selection is involved in granting
selection grade because there is no automatic promotion to the selection
grade pay scale. But this factor is not decisive. In the present case also, as
in the above cases, Selection Grade posts are created entirely for the
purpose of granting some relief to those who have very limited avenues of
getting promotion to a higher post. That is why a higher pay or pay scale is
granted in the same post. Thus, by its very nature, a selection grade post
cannot be considered as a higher post for the purposes of Rule 9.
...Because the creation of a selection grade in the same post stands on a
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very different footing. By its very nature a selection grade provides a
higher pay or a higher pay scale in the same post. The beneficiary of a
selection grade does not thereby occupy a post which is higher in rank
than the post earlier occupied by him."
(emphasis supplied)
On facts, this Court found that the respondent therein required a promotion
which resulted in occupation of a post which was higher in rank than the
post earlier occupied, to get the relief of longer service. This Court held that
though his promotion from Commandant to Commandant (Selection Grade),
resulted in a promotion to a higher pay scale, that was not sufficient to grant
relief to the respondent therein as his promotion to selection grade did not
involve advancement to a higher post.
14. In Fateh Chand Soni, this Court following Ranade defined
`promotion' thus:
"The High Court, in our opinion was not right in holding that promotion
can only be to a higher post in the service and appointment to a higher
scale of an officer holding the same post does not constitute promotion. In
the literal sense the word "Promote" means "to advance to a higher
position, grade, or honour". So also "Promotion" means "advancement of
preferment in honour, dignity, rank or grade". [See: Webster's
Comprehensive Dictionary, International Edition, p. 1009]. "Promotion"
thus not only covers advancement to higher position or rank but also
implies advancement to a higher grade. In service law also the expression
"Promotion" has been understood in the wider sense and it has been held
that "Promotion can be either to a higher pay scale or to a higher post."
(emphasis supplied)
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15. The distinction between upgradation and promotion was spelt out by
a Full Bench of the Kerala High Court in N.G. Prabhu vs. Chief Justice,
Kerala High Court - 1973 (2) Lab. IC 1399, thus :
"Promotion is, of course, appointment, to a different post carrying a higher
scale of pay in the service. If, to better the conditions of service of the
incumbents in posts in the same category the scale of pay of all the posts
in the category is raised, the incumbents would naturally get the higher
scale of pay. But in such a case it may not be proper to characterize the
event as a promotion to higher posts though a benefit of a higher scale of
pay is obtained by all concerned. In other words, if the upgradation relates
to all the posts in a category naturally, there is no sense in calling it a
promotion of all the persons in that category. That is because there is no
question of appointment from one post to another. Parties continued to
hold same posts but get a higher scale of pay. It may be that it is not all the
posts in a particular category that are so upgrade, but only a part of it.
Normally, the benefit of such upgradation would go to the seniors in the
category. They would automatically get a higher scale of pay. That is
because though their posts continue in the same category a higher scale of
pay is fixed for those posts. It is appropriate then to say that the seniors
have been nominated to the higher grade which has been so created by
upgradation. This phenomenon does not differ from the case where all the
posts are upgraded and, it appears to us that those who get the higher
grade cannot be said to have been `promoted' because here again there is
no question of appointment from one post to another. They continue to
hold the same post, but because of seniority in the same post they are
given a higher scale of pay. When a person is nominated to the higher
scale of pay from time to time based on seniority, it may perhaps be
loosely termed as a promotion."
16. But even in cases where no additional posts were created, but where a
process of selection was involved in the upgradation, the process has to be
considered not as an upgradation simplicitor, but a process of promotion and
therefore the principles of reservation would be attracted. We may refer to
the Constitution Bench decision of this Court in Ram Prasad (supra) where
this Court held that appointment from senior scale to selection scale is a
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promotion though it may not be a promotion to a higher position and
consequently the reserved candidates are entitled to be promoted to the
selection scale by way of roster points. For this purpose, the Constitution
Bench relied upon the decision of Fateh Chand Soni.
17. In Fateh Chand Soni (supra), the issue was whether seniority in the
selection grade (in the Rajasthan Police Service) was to be fixed on the basis
of date of appointment to the selection scale or on the basis of seniority in
the senior scale irrespective of the date on which appointment was made to
the selection scale. This Court held that appointment to the selection scale of
an officer in the senior scale in the service constituted promotion and
seniority in the selection scale had to be fixed on the basis of the date of
selection and a person selected and appointed as a result of an earlier
selection would rank senior to a person who is selected and appointed as a
result of a subsequent selection. We note below the reasoning of this Court :
"In Lalit Mohan Deb v. Union of India, the pay scale of all the Assistants
in the Civil Secretariat in Tripura was Rs.80-180 and on the basis of the
recommendations of the Second Pay Commission appointed by the
Government of India the scales were revised and 25% of the posts were
placed in the Selection Grade in the scale of Rs. 150-300 and the rest
continued in the old pay scale of Rs.80-180. For the purpose of filling the
Selection Grade posts, a test was held and those who qualified in the said
test were appointed to the Selection Grade. The Assistants in the Selection
Grade and the Assistants in the old pay scale were doing the same type of
work. This Court observed that "provision of a Selection Grade in the
same category of posts is not a new thing" and that "a Selection Grade is
intended to ensure that capable employees who may not get a chance of
promotion on account of limited outlets of promotions should at least be
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placed in the Selection Grade to prevent stagnation on the maximum of the
scale" and that "Selection Grades are, therefore created in the interest of
greater efficiency". The Court took note of the fact that the basis for
selection of some of the Assistants to the Selection Grade scale was
seniority-cum-merit which is one of the two or three principles of
promotion widely accepted in the administration and, therefore, the
creation of Selection Grade in the category of Assistants was not open to
challenge. In that case, the Court had proceeded on the basis that the
appointment to the higher grade amounted to promotion.
The Rules governing appointment to the Selection Scale in the Service
also envisage that such appointment constitutes promotion. The relevant
provision is contained in Rule 28(A) of the Rules which prescribes the
criteria, eligibility and procedure for promotion to Junior, Senior and other
posts encadred in the Service. Under sub-rule (5) of Rule 28(A) promotion
from the lowest post or category of post in the Service to the next higher
post or category of post in the Service is required to be made strictly on
the basis of seniority-cum-merit. Sub-rule (6) of Rule 28(A) provides that
selection for promotion to all other higher posts or higher categories of
posts in the Service shall be made on the basis of merit and on the basis of
seniority-cum-merit in the proportion of 50:50."
(emphasis supplied)
18. In Dayaram Asanand Gursahani v. State of Maharashtra - 1984 (3)
SCC 36 a three Judge Bench of this Court held :
".........As mentioned earlier, the selection grade post is not a post to
which promotion has to be made nor is there any efficiency bar rule
attached to it. Further it is not shown that the Governor had issued any
executive instructions as it had been done in Sant Ram Sharma v. State of
Rajasthan and Anr. (1968) 1 SCR 111 and in Lalit Mohan Deb and Ors.
v. Union of India and Ors. (1973) 3 SCC 862 enabling the High Court to
withhold increments in the extended pay scale which is in this case called
as selection grade pay scale. The pay scale to which a judicial officer is
entitled is a condition of service which can be regulated by a statute or
rules made under the proviso to Article 309 or by executive instructions
issued under Article 162 of the Constitution. It cannot come within the
range of the expression 'control' in Article 235 of the Constitution. (See
B.S. Yadav and Ors. etc. v. State of Haryana and Ors. etc. (1981) 1 SCR
1024). It is only where there is such a law, rule or executive instruction,
the High Court may act under Article 235 of the Constitution to sanction it
or to refuse to sanction it. We are of the view that in the present case the
mere nomenclature given to the extended pay scale as the selection grade
pay scale does not lead to the inference that there is an element of
selection involved in sanctioning it. In the circumstances it should be
17
treated as just an extended pay scale which forms part of the pay scale of
Rs. 900-1800 as clarified in two Government orders sanctioning the
selection grade posts. ........."
The aforesaid decision in Dayaram Asanand Gursahani was distinguished in
Fateh Chand Soni on the following reasoning :
"The High Court has referred to the decision of this Court in Dayaram
Asanand Gursahani v. State of Maharashtra and Ors. [1984] 2 SCR 703,
wherein, after considering the resolution of the State Government
sanctioning the post of District Judge in the Selection Grade, this Court
has held that the said resolution did not indicate that there was any process
of promotion by selection or otherwise from the cadre of District Judges to
the Selection Grade District Judges. In the particular facts of that case it
was held that mere nomenclature given to the extended pay scale as the
Selection Grade pay Scale does not lead to the inference that there is no
element of selection involved in sanctioning it and that it should be treated
as just an extended pay scale which forms part of the pay scale. The
position in the present case is, however, different. Here the Selection Scale
is a separate scale and is not an extension of the Senior Scale. Moreover
appointment to the Selection Scale is made by selection on the basis of
merit and seniority-cum-merit in accordance with Rule 28(A) of the
Rules."
19. In view of the decisions in Dayaram Asanand Gursahani, Fateh
Chand Soni and Ram Prasad, the position that emerges is that even where
the upgradation does not involve appointment to a different or higher post,
but is as a result of a promotional process involving selection, then the
principles of reservation are attracted.
20. In Union of India vs. Pushpa Rani - 2008 (9) SCC 242, this Court
examined the entire case law and explained the difference between
upgradation and promotion thus :
18
"In legal parlance, upgradation of a post involves transfer of a post from
lower to higher grade and placement of the incumbent of that post in the
higher grade. Ordinarily, such placement does not involve selection but in
some of the service rules and/or policy framed by the employer for
upgradation of posts, provision has been made for denial of higher grade
to an employee whose service record may contain adverse entries or who
may have suffered punishment. The word `promotion' means
advancement or preferment in honour, dignity, rank, grade. Promotion
thus not only covers advancement to higher position or rank but also
implies advancement to a higher grade. In service law, the word
`promotion' has been understood in wider sense and it has been held that
promotion can be either to a higher pay scale or to a higher post.
Once it is recognized that additional posts becoming available as a result
of restructuring of different cadres are required to be filled by promotion
from amongst employees who satisfy the conditions of eligibility and are
adjudged suitable, there can be no rational justification to exclude
applicability of policy of reservation while effecting promotions, more so
because it has not been shown that procedure for making appointment by
promotion against such additional posts is different than the one
prescribed for normal promotion.
Policy contained in Letter dated 9.10.2003 has been framed with a view to
strengthen and rationalize the staffing pattern. For this purpose, the
Ministry of Railways undertook review of certain cadres. The basis of the
review was functional, operation and administrative requirement of the
Railways. This exercise was intended to improve efficiency of
administration by providing incentives to existing employees in the form
of better promotional avenues and at the same time requiring promotees to
discharge more onerous duties. The policy envisaged that additional posts
becoming available in the higher grades as a sequel to restructuring of
some of the cadres should be filled by promotion by considering such of
the employees who satisfy the conditions of eligibility including minimum
period of service and who are adjudged suitable by the process of
selection. This cannot be equated with upgradation of posts which are
required to be filled by placing existing incumbents in the higher grade
without subjecting them to the rigor of selection. It has therefore to be held
that the Railway Board did not commit any illegality by directing that
existing instructions with regard to the policy of reservation of posts for
SC and ST will apply at the stage of effecting promotion against the
additional posts. The Tribunal committed serious illegality by striking
down para 14 of letter dated 9.10.2003. Matters relating to creation and
abolition of posts, formation and structuring/restructuring of cadres,
prescribing the source/mode of recruitment and qualifications, criteria of
selection, evaluation of service records of employees fall within the
exclusive domain of employer. What steps should be taken for improving
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efficiency of the administration is also the preserve of the employer.
Power of judicial review can be exercised in such matters only if it is
shown that the action of the employer is contrary to any constitutional or
statutory provision or is patently arbitrary or is vitiated by mala fides. The
court cannot sit in appeal over the judgment of the employer and ordain
that a particular post be filled by direct recruitment or promotion or by
transfer. The court has no role in determining the methodology of
recruitment or laying down the criteria of selection. It is also open to the
court to make comparative evaluation of the merit of the candidates. The
court cannot suggest the manner in which the employer should structure or
restructure the cadres for the purpose of improving efficiency of
administration."
(emphasis supplied)
In Pushpa Rani, this Court while considering a scheme contained in the
letter dated 9.10.2003 held that it provided for a restructuring exercise
resulting in creation of additional posts in most of the cadres and there was a
conscious decision to fill-up such posts from promotion from all eligible and
suitable employees and, therefore, it was a case of promotion and,
consequently, reservation rules were applicable.
21. On a careful analysis of the principles relating to promotion and
upgradation in the light of the aforesaid decisions, the following principles
emerge :
(i) Promotion is an advancement in rank or grade or both and is a step
towards advancement to higher position, grade or honour and dignity.
Though in the traditional sense promotion refers to advancement to a higher
post, in its wider sense, promotion may include an advancement to a higher
pay scale without moving to a different post. But the mere fact that both -
20
that is advancement to a higher position and advancement to a higher pay
scale - are described by the common term `promotion', does not mean that
they are the same. The two types of promotion are distinct and have different
connotations and consequences.
(ii) Upgradation merely confers a financial benefit by raising the scale of
pay of the post without there being movement from a lower position to a
higher position. In an upgradation, the candidate continues to hold the same
post without any change in the duties and responsibilities but merely gets a
higher pay scale.
(iii) Therefore, when there is an advancement to a higher pay scale without
change of post, it may be referred to as upgradation or promotion to a higher
pay scale. But there is still difference between the two. Where the
advancement to a higher pay-scale without change of post is available to
everyone who satisfies the eligibility conditions, without undergoing any
process of selection, it will be upgradation. But if the advancement to a
higher pay-scale without change of post is as a result of some process which
has elements of selection, then it will be a promotion to a higher pay scale.
In other words, upgradation by application of a process of selection, as
contrasted from an upgradation simplicitor can be said to be a promotion in
its wider sense that is advancement to a higher pay scale.
(iv) Generally, upgradation relates to and applies to all positions in a
category, who have completed a minimum period of service. Upgradation,
can also be restricted to a percentage of posts in a cadre with reference to
seniority (instead of being made available to all employees in the category)
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and it will still be an upgradation simplicitor. But if there is a process of
selection or consideration of comparative merit or suitability for granting the
upgradation or benefit of advancement to a higher pay scale, it will be a
promotion. A mere screening to eliminate such employees whose service
records may contain adverse entries or who might have suffered punishment,
may not amount to a process of selection leading to promotion and the
elimination may still be a part of the process of upgradation simplicitor.
Where the upgradation involves a process of selection criteria similar to
those applicable to promotion, then it will, in effect, be a promotion, though
termed as upgradation. A
(v) Where the process is an upgradation simplicitor, there is no need to
apply rules of reservation. But where the upgradation involves selection
process and is therefore a promotion, rules of reservation will apply.
(v) Where there is a restructuring of some cadres resulting in creation of
additional posts and filling of those vacancies by those who satisfy the
conditions of eligibility which includes a minimum period of service, will
attract the rules of reservation. On the other hand, where the restructuring of
posts does not involve creation of additional posts but merely results in some
of the existing posts being placed in a higher grade to provide relief against
stagnation, the said process does not invite reservation.
22. In this case, the BCR scheme did not involve creation of additional
posts but merely restructured the existing posts as a result of which 10% of
the posts in Grade III were placed in a higher grade (Grade IV) to give relief
22
against stagnation. This is evident from the terms of the BCR scheme and
the clarification contained in the letter dated 7.5.1993 that no posts were
sanctioned, as far as 10% BCR was concerned.
23. In this case, the BCR scheme dated 16.10.1990 provided that the
persons who had completed 26 years of service would be screened by a duly
constituted Review Committee to assess the performance and suitability for
advancement. The screening was for the limited purpose of finding out
whether the service record of the employee contained any adverse entries or
whether the employee had suffered punishment. The screening process did
not involve consideration of comparative merit nor involve any selection.
The 10% posts were upgraded strictly by seniority subject to screening. This
is evident from the terms of BCR scheme and the Circular dated 13.12.1995
which provided that the promotions to Grade IV were to be based on
seniority in the basic grade from among the officers in Grade III, subject to
fitness determined as per OTBP manner, that is screening to ascertain
whether there are any adverse comments or punishment against the
employee concerned.
24. To sum up, the BCR scheme was an upgradation scheme to give relief
against stagnation. It did not involve creation of any new posts. It did not
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involve advancement to a higher post. It did not involve any process of
selection for conferment of the benefit of higher pay-scale. The upgradation
was given to the senior most 10% of BCR scale employees in Grade III
strictly as per seniority. BCR scheme as per circular dated 16.10.1990 was
thus a scheme for upgradation simplicitor without involving any creation of
additional posts or any process of selection for extending the benefit. Such a
scheme of upgradation did not invite the rules of reservation.
25. We accordingly allow these appeals, set aside the orders of the High
Court and the Tribunal and dismiss the Original Applications challenging
the order of the telecom department dated 8.9.1999.
.................................J.
(R V Raveendran)
New Delhi; .................................J.
September 6, 2011. (Markandey Katju)