Supreme Court Overrules 1983 Judgment Holding Old Rules Will Be Applicable To Vacancies Arising Prior To Amendments In Rules

"The consistent findings in these fifteen decisions that Rangaiah's case must be seen in the context of its own facts, coupled with the declarations therein that there is no rule of universal application to the effect that vacancies must necessarily be filled on the basis of rules which existed on the date which they arose, compels us to conclude that the decision in Rangaiah is impliedly overruled. However, as there is no declaration of law to this effect, it continues to be cited as a precedent and this Court has been distinguishing it on some ground or the other"

Senior Advocate Shri PS Patwalia assisted by AoR Shri Abhinav Mukerji appeared for the Appellant-State. Ld. Advocate Shri. Prasanjit Keshvani appeared for the Respondents and also Senior Advocate Shri. Ravindra Kumar Raizada assisted by AoR Ms Divya Roy appeared for other Respondents.

The Himachal Pradesh Recruitment and Promotion Rules, 1966 were made to govern the post of Labour Officer. In 2006, a letter was addressed to the Labour Commissioner intimating sanction for creation of additional posts in the department. This included 7 more posts for Labour Officers, thereby increasing the total posts for Labour Officers from 5 to 12. At that point of time, Respondents No. 1 to 3 were working as Labour Inspectors.

Within four months from the sanction of the additional posts, the 1966 Rules were amended. As per the New Rules, the recruitment to the post of Labour Officer is to be made by promotion as well as direct recruitment in the ratio of 75% and 25% respectively. Accordingly, the Government issued a notification creating 12 Labour zones in the State.

Respondents No. 1 to 3 approached the Administrative Tribunal challenging the proposed action of the Government in filling up 25% of the posts of Labour Officers by direct recruitment. Their contention was that the vacancies arose before the promulgation of the New Rules, and therefore, all the vacancies must be filled only by promotion.

The Tribunal directed the Government to consider the grievance raised in the Original Application as if it is a representation to it. The representation was considered and rejected by the Government. Challenging the rejection, the second Original Application was filed by the Respondents before the State Administrative Tribunal. While the matter was pending before the Tribunal, Respondents No. 4 to 6 were appointed to the posts of Labour Officers under the quota of direct recruitment.

Questioning the legality and validity of the appointments, Respondents No. 1 to 3 filed a Writ Petition before the High Court, which came to be allowed by the Division Bench of the High Court. Challenging the decision of the Division Bench, the State as well as the Respondents Nos. 4 to 6 filed SLPs before the Supreme Court.

The issue raised before the Supreme Court was whether the vacancies which arose before the introduction of the New Rules were to be filled only as per the Old Rules?

The Supreme Court took note of the decision in the case of Y.V. Rangaiah v. J. Sreenivasa Rao, where the Court had observed that the vacancies must be governed by the Old Rules.

To that end, the Supreme Court opined that "as the observation in Rangaiah's case has been construed as a general principle that vacancies arising prior to the amendment of rules are to be filled only as per the old rules, it is necessary for us to examine the correct position of law." To do the same, the Court examined the constitutional position and the status that governs the relationship between an employee and the State.

The Court also analysed the propositions emanating from the principles laid down in Roshan Lal Tandon v. Union of India, to opine that the observations in Y.V. Rangaiah v. J. Sreenivasa Rao do not reflect the correct position of law. In that context, the Court said "In view of the above principles, flowing from the constitutional status of a person in employment with the State, we have no hesitation in holding that the observations in Rangaiah that posts which fell vacant prior to the amendment of Rules would be governed by old Rules and not by new Rules do not reflect the correct position of law. We have already explained that the status of a Government employee involves a relationship governed exclusively by rules and that there are no rights outside these rules that govern the services. Further, the Court in Rangaiah's case has not justified its observation by locating such a right on any principle or on the basis of the new Rules."

The Court also referred to fifteen decisions which have distinguished Rangaiah's case. It was demonstrated that the wide principle enunciated therein is substantially watered-down, and almost all the decisions hold that there is no rule of universal application to the effect that vacancies must necessarily be filled on the basis of law existed on the date when they arose. The Court opined that the decision in Rangaiah is confined to the facts of that case.

With regard to the facts of the case, the Court reiterated that there is no right for an employee outside the rules governing the services. To that end, the Court held that "The 2006 rules, governing the services of the Respondents came into force immediately after they were notified. There is no provision in the said rules to enable the Respondents to be considered as per the 1966 Rules. The matter must end here. There is no other right that Respondents no. 1 to 3 can claim for such consideration.", and allowed the Appeal.