Dispute Between Promotees, Direct Appointees Over Inter-Se Seniority: SC Refers Matter To Constitution Bench

The Supreme Court while adjudicating upon a dispute between direct recruits and promotees over inter se seniority for the post of Inspector in Gujarat's Income Tax Department has referred the matter to the Constitution Bench for final disposal.

The Court held that the seniority fixed based on the decision in the case of Union of India & Ors. v. N.R. Parmar & Ors 2012 (13) SCC 340 has to be given effect as the decision in the case of K. Meghachandra Singh & Ors. v. Ningam Siro & Ors. 2020 (5) SCC 689 is applied prospectively and the inter se-seniority so fixed would be protected.

The Bench of Justice S. Abdul Nazeer and Justice Abhay S. Oka observed that "The decision in the case of K. Meghachandra requires reconsideration by a larger Bench in view of the fact that the binding decision of a Constitution Bench in the case of Mervyn Coutindo and another binding decision of a Coordinate Bench in the case of M. Subba Reddy were not placed for consideration before the Bench which decided the case of K. Meghachandra."

The case at hand dealt with a typical dispute between promotees and direct appointees over inter-se-seniority for the posts of Inspectors in the Income Tax Department in the State of Gujarat and it was mentioned in the Office Memoranda that the principle of rotation of quota would be followed for determining the inter-se seniority of promotees and direct recruits in the proportion of 2:1.

The appellants, who were promotees had approached the Supreme Court challenging the order of the Gujarat High Court wherein the seniority list dated February 13, 2018 was quashed and the seniority list of September 7, 2016 was restored with a clarification that only those direct recruits who were eligible and qualified in the recruitment year 2009-10, would be interspaced with 53 promotees who were promoted vide DPC dated June 29, 2009.

Senior Advocate Huzefa Ahmadi appeared for the appellants and submitted that a recruitment year was a calender year and not a financial year and further relied upon the decision in the case of N.R. Parmar's case (supra) and submitted that the vacancies arising during a particular year, should be reported in the same year and the recruitment advertisement should also be published in the same year and that no such condition was fulfilled in the present case. Therefore, the direct recruits could not be interspaced between the the promotees of the year 2009.

Senior Advocate Nidhesh Gupta appeared for the respondents and submitted that the appellants themselves had proceeded on the footing that recruitment year was a financial year and not calendar year, but the relevant year for determining the seniority was the year in which recruitment requisition was sent. He further relied upon the decision of this Court in the case of Hon'ble Punjab & Haryana High Court at Chandigarh v. State of Punjab & Ors. 2019 (12) SCC 496 and submitted that seniority has to be determined on the basis of roster and not on the basis of the date of joining of a particular stream.

Additional Solicitor General Vikramjit Banerjee represented the Income Tax Department and Union of India and submitted that a new OM had been issued on August 13, 2021 by DoPT, wherein it was clarified that the decision in the case of K. Meghachandra would have prospective operation, cases of inters se-seniority of direct recruits and promotees should not be disturbed during the period between the date of the decision in N.R. Parmar's case and the date of decision in K. Meghachandra's case.

The Issues dealt with were-

1. Whether the decision of this Court in K. Meghachandra's case is per incuriam or in the alternative, whether it requires reconsideration being in conflict with the decision of the Constitution Bench in the case of Mervyn Coutindo and the decision of a Bench of three Hon'ble Judges in the case of M. Subba Reddy & Anr. v. A.P. State Road Transport Corporation & Ors. 2004 (6) SCC 729.

2. Whether the recruitment year is a financial year or a calendar year.

3. Whether, in the facts of this case, the process of recruitment of direct recruits commenced in the very recruitment year in which the vacancies arose.

With regard to issue no. 1

The Apex Court observed that as on the date when the case of N.R. Parmar was decided, there was no rule which required that the inter-se-seniority of direct recruits and promotees to the post of Income Tax Inspectors should be fixed from the date on which a person is borne in the cadre as was held in the case of K. Meghachandra.

The Apex Court observed that the seniority list dated September 7, 2016 prepared in terms of N.R. Parmar case was correctly published and required to be restored with a clarification that direct recruits of 2009-10 should be interspaced with 53 promotees appointed during that year and further held that the amended seniority list dated 13th February 2018 was illegal as it was modified without giving an opportunity of being heard to the affected direct recruits.

"The seniority list dated 7th September 2016, which was the final seniority list, could not be modified without giving an opportunity of being heard to the affected candidates. Therefore, the amended seniority list dated 13th February 2018 was illegal." observed the Apex Court.

The Apex Court further held that the appropriate course of action would be to refer the question to a larger bench as the 'rotation of quota' or rota and quota system was being followed and observed that "If the promotees are recruited in the relevant recruitment year, but the process of recruitment of the direct recruits which commenced in the same recruitment year could not be completed in the same year, the direct recruits appointed subsequently will have to be interspaced between the promotees of the same recruitment year."

With regard to issue no. 2

The Apex Court observed that the appellants themselves have referred to the financial year while referring to the vacancies available in Income Tax Department in a particular year and the documents on record clearly showed that as far as the posts of Income Tax Inspectors were concerned, the vacancy or recruitment year was always reckoned as the financial year. "We have, therefore, no manner of doubt that till the year 2018, in relation to the recruitment and vacancies to the posts of Income Tax Inspectors, the financial year was being treated as the recruitment year or vacancy year." added the Court.

With regard to issue no.3

The Apex Court observed that though the process of recruitment of direct recruits commenced in the year 2009-10, the same could not be completed in the same recruitment year. "In this case, those who were eligible for direct recruitment were deprived of the opportunity as the process of recruitment could not be completed during the same recruitment year 2009-10 due to no fault on their part." added the Court.

Accordingly, the Court recommended a reference to a larger bench, interim relief to maintain status quo with respect to the posts held as of July 13, 2018 was vacated and seniority list dated February 13, 2016 was fixed on the basis of the impugned judgment and was subjected to the outcome of the appeal or the decision of the larger bench.

Cause Title- Hariharan & Ors. v. Harsh Vardhan Singh Rao & Ors.

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