caselaws
Supreme Court of India
Kerala Transport Development … vs Basil T.K. on 31 January, 2022Author: Hon’Ble Dr. Chandrachud
Bench: Hon’Ble Dr. Chandrachud, Surya Kant
1
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No 806 of 2022
(Arising out of SLP(C) No 13067 of 2019)
Kerala Transport Development Finance
Corporation Limited …. Appellant(s)
Versus
Basil T K & Ors ….Respondent(s)
WITH
Civil Appeal No 808 of 2022
(Arising out of SLP(C) No 13179 of 2019)
Civil Appeal No 807 of 2022
(Arising out of SLP(C) No 13200 of 2019)
JUDGMENT
Dr Dhananjaya Y Chandrachud, J
1 Leave granted.
2
Signature Not Verified This batch of three appeals arises from the judgments of the Division Bench of
Digitally signed by
Sanjay Kumar
Date: 2022.02.04
16:27:33 IST
Reason:
the High Court of Kerala dated 12 April 2019 and 14 March 2019 in writ appeals
from a judgment of a Single Judge dated 6 December 2018.
2
3 The Kerala Transport Development Finance Corporation Limited 1 and its
Managing Director are the appellants in the first two appeals. In the third
appeal, the appellant, Aneesh Babu R2, seeks to challenge one of the directions
of the Single Judge by which it was directed that the seniority list is to be recast
by placing Sherith A and Basil T K 3, who are Managers, above him in the
seniority list.
4 The facts, insofar as they are material for a decision on the appeals, need to be
noted, at this stage. In 2000, the respondents were appointed as Assistant
Managers in the services of KTDFCL on contract for a period of one year, a
position on which they continued until 2006. The Service Rules framed by
KTDFCL were approved by the State Government on 22 February 2006. The
Government issued GO (MS) No. 15/2006 on 22 February 2006 to regularize the
services of one hundred and six contractual employees of KTDFCL. On 23
February 2006, the services of the respondents were regularized. However, on
12 February 2007, the State Government issued GO (MS) 4/2007 cancelling the
order of regularization on the ground that the appointments were not made
through a standard recruitment procedure and reservation as mandated by the
Constitution for the members of the Schedule Castes and Scheduled Tribes was
not provided In proceedings instituted under Article 226 of the Constitution. The
High Court, by its judgment dated 9 April 2007, quashed the G.O (MS) 4/2007
cancelling the regularization since the order was without issuing notice or
hearing the petitioners. KTDFCL was granted liberty to proceed in the matter
afresh. In pursuance of the direction of the Court, fresh notice was issued to the
respondents. The Government terminated the respondents’ employment on 12
September 2007 on the grounds that:- (a) the posts against which the
respondents were appointed were not available at the time of their appointment;
1 “KTDFCL”
2 “Aneesh Babu”
3 “Respondents”
3
(b) the service rules were in force at the rime and therefore, the initial
appointment of the respondents was irregular and the regularization was
consequently illegal. By its judgement dated 11 October 2007, the High Court
had observed that the six employees, including the respondents, stood on a
different footing compared to the rest of the retrenched employees since they
were appointed on a contractual basis through a selection process. Therefore,
the High Court set aside the termination of the employment of the respondents
and directed the Government to pass fresh orders after hearing the respondents.
5 In pursuance of the direction, a fresh notice was issued to the respondents. After
hearing the respondents, the Government by its order dated 25 April 2008
issued the following order:
“Accordingly, they were heard by the Transport
Secretary to the State Government on 16/1/2008.
The matter of regularization or otherwise of the
termination of those six persons’ service in the
K.T.D.F.C was examined in detail. It was found that
no deviation from the decision taken earlier in the
Government order read as the 3rd paper above was
necessary, the request for regularization in service
of K.T.D.F.C, put forth by S/Shri Basil T.K Mohanan,
P.K Sherith A, Radhakrishanan I.S, Smt. Sheeja C.V,
and Smt. Jasmy S is rejected.”
Subsequently, the respondents filed another writ petition challenging the order
of the Government and seeking a direction to reinstate them in service with
consequential benefits with effect from 12 September 2007. By a judgment
dated 9 October 2009, a Single Judge of the Kerala High Court set aside the
order on following grounds:- (i) the order indicated no reason; (ii) in the earlier
challenge it was submitted before the Court that the respondents were
appointed against sanctioned posts; (iii) though the posts were not available
when the respondents were initially appointed, posts were created before they
were regularized; (iv) the service rules were framed before the respondents were
regularized. The High Court directed the reinstatement of the respondents in
4
service with retrospective effect from 12 September 2007. The direction of the
High Court, which is contained in paragraph 22 of its judgment, is extracted
below:
“22. For these reasons, I cannot sustain Ext. P22 and
therefore Ext.P22 will stand quashed. Respondents
are directed to reinstate the petitioners in service
immediately with retrospective effect from
12/9/2007. In the circumstances of this case, it is
ordered that the petitioners will not be entitled to
any monetary benefits for the period till they
are reinstated but, will be entitled to
continuity of service.”
(emphasis supplied)
6 Following the above decision of the Single Judge, a writ appeal was dismissed on
14 March 2012. On 28 April 2012, the State Government issued GO (MS) No
23/2012 directing that the respondents be reinstated with retrospective effect
from 12 September 2007 without any monetary benefits but with continuity of
service. Since the order of reinstatement did not provide clarity on promotions,
the respondents wrote to the State Government highlighting their grievance. The
Government issued a letter dated 3 November 2012 directing that the period
spent out of service may be ‘regularized as non-duty without forfeiture of past
service.’ The clarification is as follows:
“The Hon’ble High Court have granted only the
benefit of continuity of service to the employees
reinstated in the service of KTDFC and has not
allowed them any monetary benefits notionally or
otherwise. In order to provide continuity in service,
the period spent out of service may be regularized
as non-duty without forefeiture of past service.
Regarding the post of probation, the rules as states
in KTDFC Service Rules can be insisted.”
7 On 21 June 2013, the State Government clarified its earlier communication
dated 3 November 2012 to the effect that it would not adversely affect the
prospects of seniority or promotion. On 9 January 2014, increments in the salary
payable to the respondents were authorized without taking into account the
5
period from 12 September 2007 to 2 May 2012. The respondents instituted writ
proceedings contending that they were entitled to reckon the above period for
the grant of promotion and increments. During the pendency of the writ
proceedings, the respondents were promoted as Deputy Managers with effect
from 24 July 2014.
8 Consequent to a letter of the State Government dated 18 March 2016, a
Committee was constituted for the scrutiny of the seniority and promotion of
regular employees in the managerial service of KTDFCL. The Committee opined
that the respondents were eligible to be promoted as Deputy Managers from 24
February 2007; that, since the period spent out of service was to be treated as
‘non-duty’, the requirement of residency of one year in the post of Deputy
Manager for promotion to the post of Manager will be completed only on 13
October 2012 and that they would be eligible for promotion as Managers as on
14 October 2012. On 7 February 2017, a seniority list of Assistant Managers
and Deputy Managers as on 1 August 2016 was published in which the names of
respondents stood at Serial Nos 1 and 2 respectively with their date of
appointment being 23 February 2006, while the name of Aneesh Babu stood in
Serial Nos 3, whose date of appointment was 13 October 2008.
9 On 24 March 2017, the Staff Promotion Committee resolved to promote the
respondents as Managers, but referred the question as regards the eligibility
dates for promotion to the State Government. The State Government by its order
dated 5 July 2017, accepted the report of the Committee, without providing any
retrospective monetary effect. A provisional Seniority list of Managers as on 11
July 2017 was published on 15 July 2017, in which Aneesh Babu was placed in
S.No 1, while the respondents were placed in S.Nos 2 and 3. It was also stated
that the respondents are entitled to promotion as Manager with effect from 14
October 2012. On the other hand, Aneesh Babu, who was appointed as Assistant
6
Manager on contract basis on 27 September 2008 and was subsequently
regularized through an order dated 12 December 2014, with effect from 13
October 2008 was held to be entitled to be promoted as Manager on 11
December 2010 and as Chief Manager on 26 November 2011. The respondents
filed objections on the ground that the period when they stood retrenched must
be counted as service completed for the purpose of promotion. On 11
December 2017, the Staff Promotion Committee finalized the seniority list.
10 The respondents instituted a writ petition before the High Court challenging the
seniority list to the extent that the Expert Committee as well as the Government
had come to the conclusion that they were not entitled to count the period of
service from 12 September 2007 to 2 May 2012 towards increments and
promotion. It was their contention that they are entitled to be promoted as
Managers with effect from 24 February 2008 and as Chief Manager from 22
February 2009. KTDFCL raised the following contentions supporting the decision
to place the respondents after the Aneesh Babu in the Seniority List:
(i) If the retrenched period of more than four years was considered as actual
service, then the respondents would have been permitted to rejoin on 2 May
2012 at the highest promotional post of Chief Manager since the residency
period for promotion from Assistant Manager to Deputy manager, and Deputy
Manager to Manger is one year each;
(ii) The High Court by its judgment dated 9 October 2009 directed the
reinstatement of the respondents without monetary benefit. They were only
entitled to continuity of service. The direction that they are entitled to continuity
of service only means that there will not be any forfeiture of their previous
service from 23 February 2006 to 12 September 2007;
(iii) Under the service rules, non-duty period cannot be counted for any service
7
benefits, including probation and promotion;
(iv) Aneesh Babu was appointed as Assistant Manager on 13 October 2008
through direct recruitment after undergoing a three-tier selection process.
Though the job notification was for regular appointment, he was appointed on
contract basis consequent to the decision of the Government. Subsequently, the
Government rectified its decision and regularized his appointment in 2014 with
effect from 13 October 2008. The Expert Committee had noted that his
appointment was erroneously classified on ‘contract basis’ at the time of
appointment. This error was rectified later. The service of Aneesh Babu in
KTDFCL was considered for calculating the residency periods for the purpose of
promotion;
(v) The respondents were originally promoted as Deputy Manager with effect
from 24 July 2014. The one year residency period would only be completed on
24 July 2015. However, by holding that the respondents would be entitled to be
promoted as Manager with effect from 14 October 2012, they were promoted
without serving in the post of Deputy Manager even for a day since they served
as Assistant Manager till 23 July 2014; and
(vi) The committee followed a uniform procedure of counting their service in
KTDFCL for calculating residency period for the purpose of promotion. The only
period that was not calculated with respect to the respondents was the period
they spent out of service due to the retrenchment.
11 On 6 December 2018, a Single Judge of the High Court allowed the petition and
directed KTDFCL to grant promotion to the respondents, treating the period
during which they were kept out of service, as notional service in the post of
Manager and Chief Manager. The Single Judge arrived at this conclusion on the
grounds that: (i) the Government on 21 June 2013 had informed the respondents
8
that the period during which they were kept out of service would not affect their
prospect of promotion; (ii) the respondents were unable to perform their duties
since they were unjustly terminated from service, which was subsequently
rectified by the High Court; (iii) Aneesh Babu was granted promotion reckoning
the service rendered by him in the post of Assistant Manager for promotion to
Deputy Manager and Manager. However, according to the Service Rules, actual
service in each of the posts is a requirement. If the benefit of promotion is
denied to the respondents on that ground, it must be denied to Aneesh Babu as
well on the ground of parity; and (iv) the High Court, while directing the
respondents to be reinstated directed that continuity of service must be
provided. A writ appeal filed against the judgment of the single Judge has been
dismissed by the Division Bench on 14 March 2019.
12 When the Special Leave Petitions came up for hearing before this Court on 3 July
2019, the Court, while issuing notice, summarized the submissions which were
urged on behalf of KTDFCL. The order dated 3 July 2019 records thus:
“Mr. V. Giri, learned Senior Counsel has submitted
that in the order of the learned Single Judge dated 9
October 2009 (Annexure P1), it was specifically
observed that the employees would be entitled to
reinstatement with continuity of service without any
monetary benefits for the period till they are
reinstated. However, in the order of the learned
Single Judge dated 6 December 2018 (which
resulted in the impugned order of the Division
Bench), there was a direction to the effect that the
original petitioners will be entitled to the fixation of
pay reckoning the period during which they were
kept out of service, but they shall also be granted all
benefits on the basis of fixation of pay. The Special
Leave Petition has been instituted in view of this
anomaly.
Issue notice, returnable in eight weeks.”
13 As stated earlier, the challenge by KTDFCL to the judgment of the Division Bench
lies within a narrow compass. While advancing his submissions, Mr V Giri, senior
counsel appearing on behalf of KTDFCL, adverted to the following directions
9
issued by the Single Judge:
“Therefore, there shall be a direction to the
respondents to grant promotion to the
petitioners reckoning the period during which
they were kept out of service treating the same
as notional service, to the post of Manager and
also Chief Manager. On the basis of such
promotion, Ext.P20 shall be revised assigning
the petitioners seniority above the 4th
respondent. Petitioners will also be entitled to
fixation of pay reckoning the period during
which they were kept out of service and they
shall be granted all benefits on the basis of
such fixation of pay. This shall be done within a
period of ‘three months’ from the date of
receipt of a copy of the judgment.”
14 As a result of the above directions, the respondents have been held to be
entitled to the fixation of pay, reckoning the period during which they were kept
out of service. There is no dispute over this part. However, besides the above
direction, it has been directed that “they shall be granted all benefits on the
basis of such fixation of pay”. Mr V Giri submitted that the latter part of the
direction would be inconsistent with the earlier decision of the Single Judge
dated 9 October 2009 in terms of which the respondents were held entitled to
reinstatement with effect from 12 September 2007, but, without monetary
benefits for the period till they were reinstated.
15 So far as the above grievance of KTDFCL is concerned, Mr Roy Abraham, counsel
appearing on behalf of the respondents, has fairly clarified that the respondents
do not claim arrears of salary for the period during which they were out of
service, namely, from 12 September 2007 until the date of reinstatement.
16 Besides the concession which has been made on behalf of the respondents, it is
clearly evident from the earlier order of the Single Judge dated 9 October 2009,
that the respondents who were directed to be reinstated were held not to be
entitled to any monetary benefits for the period till they were reinstated.
10
According to the order, reinstatement from 12 September 2007 entitles them to
continuity of service. The direction in the judgment of the Single Judge dated 6
December 2018 to the effect that respondents would be entitled to the fixation
of pay by reckoning the period of service during which they were kept out of
service is consistent with the earlier judgment. However, the further direction
that they shall be granted all benefits on the basis of such fixation of pay needs
to be clarified to the extent that they shall not be entitled to any payment of
arrears of salary for the period during which they were out of service.
17 The surviving issue in this batch of appeals, however, relates to the issue of
seniority as between the respondents and Aneesh Babu, who has filed the third
appeal. In this context, Mr V Giri appearing for KTDFCL submitted that he does
not take or adopt any specific position as regards the seniority between the
contesting parties.
18 Mr Kuriakose Varghese, counsel appearing on behalf of Aneesh Babu, submitted
that his client was appointed originally as an Assistant Manager following a due
process of selection. The submission is that despite the fact that he was
appointed following a due process of recruitment, he was initially appointed on a
contractual basis on 13 October 2008, but the injustice to him was rectified and
he was eventually regularized on 12 December 2014 with effect from the original
date of appointment.
19 On the other hand, it was submitted by Mr Kuriakose Varghese that the
respondents were appointed purely on a contractual basis and it was as a result
of the initial order of regularization dated 23 February 2006 that they came to be
recruited as regular employees. Following the cancellation of that order on 12
February 2007, there was another round of proceedings which ultimately
culminated in the order of the Single Judge dated 9 October 2009. In this
11
context, it was sought to be urged that the consequence of the direction to grant
continuity of service would mean that the services of the respondents would
have to be treated as unbroken and uninterrupted. Counsel sought to make a
distinction between continuity and continuous service, urging that the
respondents had not fulfilled minimum residency requirements when they were
promoted as Deputy Mangers and Managers and since his client did so, he must
rank higher in seniority in the post of Manger.
20 Hence, it is urged that at the time when Aneesh Babu fulfilled the residency
requirement of one year in each of the subsequent posts as Deputy Manager
and Manager, he was the only eligible candidate for promotion to the post of
Chief Maanager. As a consequence, the subsequent reinstatement in service of
the respondents should not allow them to steal a march in seniority over Aneesh
Babu. Reliance has been placed on the Service Rules governing KTDFCL. That in
essence is the submission of Mr Kuriakose Varghese.
21 At the outset, while considering the submissions, it needs to be noticed that the
Kerala Transport Development Finance Corporation Rules 4 contains a definition of
the expression “Approved Probationer”. The provisions for promotion are
contained in Rule 13. Rule 18 provides for the determination of seniority in the
following terms:
“18. Seniority
(a) Seniority of a person in a service, class, category or
grade shall unless he has been reduced to a lower
rank as punishment be determined by the date of
order of his first appointment to such service, class
category or grade.
Provided that the seniority of persons appointed
direct, otherwise than on advice of the Commission
shall be in accordance with the ranked list of
approved candidates.”
4 “Service Rules”
12
22 In the present case, the respondents who were initially regularized in service on
23 February 2006 were aggrieved by the cancellation of the order of
regularization dated 12 February 2007. The judgment of the Single Judge dated
9 October 2009 set aside the order by which the regularization of the
respondents was cancelled and there was a direction to reinstate them in service
with retrospective effect from 12 September 2007. This clearly implies that they
were entitled to the benefit of continuity of service. The cancellation of their
regularization stood effaced. However, the Single Judge directed that they shall
not be entitled to any monetary benefits for the period till they are reinstated. In
other words, no arrears of salary were granted. The respondents have, upon
their regularization, been promoted as Deputy Managers and Managers. The
appointment of the respondents as Deputy Managers and Managers are not in
question. There is no challenge to their promotions. The Single Judge of the High
Court has come to the conclusion that since respondents stand reinstated with
effect from 12 September 2007 and the order by which the regularization was
cancelled has been quashed, necessary consequences under the law would have
to follow. There can be no manner of doubt that Aneesh Babu who was
appointed to the service on 13 October 2008 could have any legitimate
grievance in regard to the position of the respondents following the order of
reinstatement.
23 The Court has been informed that, as a matter of fact, all the three employees
(the respondents and Aneesh Babu) are presently holding the post of Manager.
The next promotion which is available is to the post of Chief Manager. The
promotion to the post of Chief Manager would be governed by the Service Rules
and Regulations. The judgment of the Single Judge granting the benefit of
seniority to the respondents is a plain consequence of the earlier judgment
dated 9 October 2009 and the provisions for seniority contained in Rule 18 of the
Service Rules. Rule 18 of the Service Rules provides for seniority of a person in a
13
service, class, category or grade on the basis of the date of the order of the first
appointment to such service, class, category or grade. The respondents were
appointed to the post of Assistant Manager in 2000, whereas, Aneesh Babu was
appointed in 2008. Both the respondents and Aneesh Babu’s service were
regularized retrospectively from their initial date of appointment. The judgment
of the Single Judge dated 9 October 2009, saves the respondents continuity of
service. Therefore, there was no justification to exclude the period during which
the respondents were not in service due to the illegal termination of
employment, which was subsequently set aside, given that the High Court
expressly saved the continuity of service. The contention that the respondents
did not satisfy the one year residency rule in the post for the purpose of
promotion is without merit. The only distinction between the respondents and
Aneesh Babu is that unlike the former, the latter was in service throughout.
Aneesh Babu, though appointed in 2008 in the post of Assistant Manager was
regularized retrospectively only in 2014. Inspite of not fulfilling the one year
residency criteria in each post (that is as Deputy Manager and Manager), he was
still promoted taking into account his service as the Assistant Manager. However,
this distinction between the parties diminishes in view of the direction of the
Single Judge to grant continuity of service to the respondents. Therefore, we find
no error in the impugned judgment. However, it only needs to be clarified that
since the respondents as well as Aneesh Babu hold the post of Manager from
which the next promotion is to the post of Chief Manager, the promotional post
of Chief Manager shall be filled up in accordance with the applicable Service
Rules and regulations.
24 As regards the appeals by KTDFCL, we clarify that the judgment of the Single
Judge dated 6 December 2018 shall stand modified to the extent that the
respondents shall not be entitled to arrears of salary for the period between
2007 and 2012 when they were out of service. The rest of the directions of the
14
Single Judge, as affirmed by the Division Bench, are maintained, subject to the
clarification that the promotion to the post of Chief Manager shall take place in
accordance with the Service Rules and Regulations.
25 The appeals shall stand disposed of in the above terms.
26 Pending application, if any, stands disposed of.
…..…..…….………..……………….………..J.
[Dr Dhananjaya Y Chandrachud]
…..…..…….………..……………….………..J.
[Surya Kant]
New Delhi;
January 31, 2022
-S-
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