Supreme Court of IndiaPanchraj Tiwari vs M.P.State Electricity Board & Ors on 4 March, 2014Equivalent citations: 2014 LAB IC 2660, 2014 AIR SCW 3303, 2014 (5) SCC 101, (2014) 2 MAD LJ 764, (2014) 2 SCT 332, (2014) 141 FACLR 288, (2014) 3 LAB LN 310, (2014) 6 SERVLR 227, (2014) 3 ALLMR 430 (SC), (2014) 3 SCALE 401, (2014) 1 ESC 110, (2014) 2 JCR 312 (SC), (2014) 3 MPHT 117, (2014) 2 SERVLJ 117, (2014) 3 ALL WC 2386, 2014 (3) ADJ 23 NOCBench:Kurian Joseph,H. L. GokhaleIN THE SUPREME COURT OF INDIA

                       CIVIL  APPELLATE  JURISDICTION


                        CIVIL APPEAL NO. 4371 OF 2008


Panchraj Tiwari                                    … Appellant (s)

                                   Versus

M. P. State Electricity Board  and  others               … Respondent (s)



                               J U D G M E N TKURIAN, J.:1. Whether on integration/merger/amalgamation, is  it  permissible  to  have
   complete denial of promotion forever in the integrated  service,  is  the
   short question arising for consideration in this case.2. Appellant a graduate started his career as junior engineer on  23.09.1986
   in the Rural Electricity  Cooperative  Society,  Rewa.  During  1995,  it
   appears a policy decision was taken by the State Government  to  dissolve
   all  such  societies  and  merge  the  same  with  Madhya  Pradesh  State
   Electricity Board (hereinafter referred to as ‘MPSEB’). Accordingly,  the
   Managing Committee of the Rural Electricity Cooperative Society, Rewa was
   superseded in May, 1995 and a Superintending Engineer of  the  MPSEB  was
   appointed as Officer            In-charge. However, it took a  few  years
   to complete the formalities of the merger. Finally the Rural  Electricity
   Cooperative Society, Rewa was completely merged  with  the  MPSEB  w.e.f.
   15.03.2002.3. The principles of merger were clarified  by  the  MPSEB  after  prolonged
   correspondence as per Annexure P-12 dated 15.06.2004. For the purpose  of
   ready reference, we shall extract the contents:“Please refer to this office order cited under reference. It  is
      requested to issue necessary orders for absorption of employees of REC
      societies falling under your area of jurisdiction on the same terms  &
      conditions of the societies. The terms & conditions of  the  societies
      may be obtained from DE (STC), Jabalpur.Further other terms &  conditions  of  which  employees  can  be
      absorbed:-1.    The regular employees of the above societies shall be taken over
           on the same terms & conditions as existing in the Society except
           that no deputation allowance shall be paid.2.    Their pay scale will be the same which they were getting  before
           the absorption.3.    The above employees may not be transferred  out  of  the  circle
           concerned, so that no anomaly arises.4.    Their age of superannuation will be the same  as  applicable  in
           the societies.5.    Pension/gratuity will be payable to the  employees  absorbed  in
           the Board as per the rules/regulation of the concerned society.6.    Their designation will be maintained as it was in the society.”

                                                         (Emphasis supplied)4. The principles of absorption as extracted above would clearly  show  that
   the employees of the society have been taken over  and  absorbed  in  the
   MPSEB. However, their pay-scale on the date of absorption was  protected,
   their designation was maintained as it was in the society at the time  of
   absorption and the age of superannuation, pension and  gratuity  of  such
   employees were  to  be  governed  by  the  rules/bylaws  of  the  society
   concerned.5. Though it may appear that there are some conditions  which  are  normally
   not found in the principles of integration, the  fact  remains  that  the
   employees of the erstwhile society which merged with the MPSEB, have been
   absorbed in the service of MPSEB.6. Integration/merger of services means creation of a homogenous service  by
   the merger of service personnel belonging to different  services.  Though
   it is difficult to have a perfect coalescence of  the  services  on  such
   merger, the principle of equivalence is to be  followed  while  absorbing
   the employees, to the extent possible.7. Though integration of services thus postulates equation of posts,  it  is
   not invariably necessary to prepare the seniority list on  the  basis  of
   the pay drawn by the incumbent in the equated category. It is always open
   to the authority concerned to adopt a just and the equitable principle on
   fixation of seniority.8. Once a service is merged with another service, the  merged  service  gets
   its birth in the integrated service  and  loses  its  original  identity.There cannot be a situation,  where  even  after  merger,  absorption  or
   integration, such services which were merged or  absorbed,  still  retain
   their original status. If so, it  is  not  an  absorption  or  merger  or
   integration, it will only be a working arrangement without any functional
   integration.9. In the instant case, the undisputed factual and legal  position  is  that
   there is absorption of the employees of the Rural Electricity Cooperative
   Society, Rewa with the MPSEB. The Society has been deregistered, there is
   only one service thereafter and thus there is functional integration.  On
   the basis of  the  protection  of  the  designation  and  pay-scale,  the
   employees have to be posted in the equivalent category. Since it  is  not
   specifically provided as  to  the  position  of  such  employees  in  the
   integrated service,  it  is  a  settled  equitable  principle  that  such
   employees are placed as junior to the junior-most officer of the category
   concerned in the MPSEB on the date of absorption, viz., 15.03.2002.10. It is provided in  the  conditions  of  service  of  the  MPSEB  as  per
   Circular  dated  15.11.1990  that  a  graduate  Junior  Engineer   having
   satisfactory service of four years of regular service can  be  considered
   for promotion  to  the  post  of  Assistant  Engineer  after  appropriate
   training. The appellant started his career as a graduate engineer in  the
   Rural Electricity Cooperative Society, Rewa  in  1986.  He  also  claimed
   promotion on the basis of such circular. The Board of  Directors  of  the
   appellant’s society passed a Resolution on 27.12.1994 for  his  promotion
   as Assistant Engineer. By that time the steps for dissolution of society,
   it appears had already started. The Board of Directors was  dissolved  in
   May, 1995 and a Superintending Engineer of the  MPSEB  was  appointed  as
   Officer In-charge of the society. The said officer forwarded the proposal
   of promotion of the appellant as an Assistant Engineer to the MPSEB.11. It appears, the Registrar of the Cooperative Societies as well as  MPSEB
   have taken the stand that the appellant had not been  duly  selected  for
   promotion as Assistant Engineer in terms of Rule 18 of the  Society.  The
   Rule reads as follows:“18. SELECTION AND APPOINTMENT

      The selection of suitable candidate  for  filling-up  a  post  in  the
      society as well as for making  selection  for  promotion  of  eligible
      candidates shall be made by a selection committee to be constituted by
      the Board, consisting of the Chairman, a member of  the  Board  to  be
      elected by the  Board,  divisional  Deputy  Registrar  of  Cooperative
      Society, Divisional Engineer, M.P. Electricity Board and the  Managing
      Director of the Society.Dearness allowances to employees borne on regular establishment  shall
      be admissible as applicable to the employees of M.P.E.B. from time  to
      time with previous approved of  the  Registrar  Cooperative  societies
      M.P.




      Dearness allowances to employees  borne  on  regular  estt.  shall  be
      admissible as sanctioned by the M.P.E.B. to the similar categories  of
      employees.”

                                                         (Emphasis supplied)12. It is the case of the appellant that since the Board  of  Governors  had
   already been dissolved and since  it  had  been  decided  to  absorb  the
   employees of the society in the Board, there was no  point  in  following
   the process of selection in terms of  the  regulations  of  the  society.
   Thus, the rejection was challenged before the High Court.13. Learned Single Judge dismissed the writ  petition  on  the  ground  that
   writ against a cooperative society  was  not  maintainable.  However,  in
   appeal, it was admitted by the Board that the society had already  merged
   with the Electricity Board and, hence, case was heard  on  merits  before
   the Division Bench. It is the stand of the High Court in appeal that  the
   principles of integration, as extracted above, cast no obligation on  the
   Electricity Board to give promotion to the appellant. The obligation  was
   only to absorb the appellant by protecting the designation and  pay-scale
   and continue as such. In other words, since the appellant was absorbed as
   a Junior Engineer, he should continue forever as Junior Engineer till his
   retirement.  We are afraid that the stand cannot be justified.14. As held by this Court inR.S. Makashi and others  v.  I.  M.  Menon  and
   others[1], the courts will not interfere with the decision and principles
   of integration unless it is shown that they are  arbitrary,  unreasonable
   or unfair. No doubt, there is no vested right for an employee to  have  a
   particular position in the integrated or  merged  service.On  equitable
   considerations, it is always open to the  authorities  concerned  to  lay
   down the principles with regard to the fixation of seniority as  held  by
   this Court inS. S. Bola and others v. B.D.  Sardana  and  others[2]  andPrafulla Kumar Das and others v. State of Orissa and others[3].  However,
   in the instant case, equivalence has been decided since  designation  and
   pay-scale was protected. What remains is only the seniority.15. It is open to the authority concerned to lay down  equitable  principles
   with regard to fixation of seniority in the merged cadre. Once a  service
   gets merged with another service, the employee concerned has a  right  to
   get positioned appropriately in the merged service.  That  is  the  plain
   meaning of ‘absorption’. The MPSEB, having  absorbed  the  appellant  and
   other employees, cannot maintain a stand that even after absorption  they
   will retain  a  distinct  identity  in  the  equated  cadre  without  any
   promotion as enjoyed by their compeers in the parent service. That  is  a
   plain infraction of the equity clause guaranteed underArticles 14and16of the Constitution of India.16. Chances of promotion are not conditions  of  service,  but  negation  of
   even the chance of  promotion  certainly  amounts  to  variation  in  the
   conditions of service attracting infraction ofArticles 14and16of  the
   Constitution of India. No employee has a right to particular position  in
   the seniority list but all employees have a right to seniority since  the
   same forms the basis of promotion.17. An employee has always an interest  to  seniority  and  a  right  to  be
   considered for promotion. If  after  integration,  only  the  chances  of
   promotion are affected, it would have been only a case of heartburn of an
   individual or a few individuals which is only to be ignored, as  held  by
   this Court in Tamil Nadu Education  Department  Ministerial  and  General
   Subordinate Services Association and others v. State of  Tamil  Nadu  and
   others[4].18. Instant is a case where there is complete denial  of  promotion  forever
   which cannot be comprehended under the constitutional scheme ofArticles
   14and16of the Constitution of India.In this context, we  shall  refer
   to a beautiful discussion on this aspect inS. S. Bolacase  (supra)  at
   paragraph 153. The relevant portion reads as follows:“153.        xxx        xxx                xxx               xxx






       AB. A distinction between right to be considered for promotion and an
      interest to be considered for promotion has  always  been  maintained.
      Seniority is a facet of interest. The rules prescribe  the  method  of
      recruitment/selection. Seniority is governed by the rules existing  as
      on the date of consideration for promotion. Seniority is  required  to
      be worked out according to the existing rules. No  one  has  a  vested
      right to promotion or seniority. But an officer  has  an  interest  to
      seniority acquired by working out the rules. The seniority  should  be
      taken away only by operation of valid law. Right to be considered  for
      promotion is a rule prescribed by conditions of service. A rule  which
      affects chances of promotion of a  person  relates  to  conditions  of
      service. The rule/provision in an Act merely affecting the chances  of
      promotion would not be regarded as varying the conditions of  service.
      The chances of promotion are not conditions of service. A  rule  which
      merely affects the chances of promotion does not amount to  change  in
      the conditions of service. However, once a declaration of law, on  the
      basis of existing rules, is made  by  a  constitutional  court  and  a
      mandamus is issued or direction given for its enforcement by preparing
      the seniority list, operation  of  the  declaration  of  law  and  the
      mandamus and directions issued by the  Court  is  the  result  of  the
      declaration of law but not the operation of the rules per se.”
                                                         (Emphasis supplied)19. In the above circumstances, we set aside the  judgment  in  appeal.  The
   absorbed employees of the Rural Electricity Cooperative Societies, having
   due regard to their date of appointment/promotion in each category in the
   respective societies, shall be  placed  with  effect  from  the  date  of
   absorption, viz., 15.03.2002 as juniors to the  junior-most  employee  of
   the Electricity Board in the respective category. Thereafter, they  shall
   be considered for further promotions as per the rules/regulations of  the
   MPSEB. All other principles/conditions  of  absorption  shall  remain  as
   such. However,  it  is  made  clear  that  on  such  promotions,  in  the
   exigencies of service, the employee concerned would also be liable to  be
   transferred out of the circle, if so required.20. The appellant accordingly shall be entitled to retrospective  promotions
   at par with and with effect from  the  dates  on  which  the  junior-most
   graduate engineer in  the  parent  service  on  the  date  of  absorption
   obtained such promotions. However, we make it clear  that  benefits  till
   date need to be worked out only notionally.21. The appeal is allowed as above. There is no order as to costs...…….…..…………J.
                                                       (H. L. GOKHALE)



                                                                ..……………………J.
                                                       (KURIAN JOSEPH)
New Delhi;March 4, 2014.-----------------------[1]    (1982) 1 SCC 379
[2]     (1997) 8 SCC 522
[3]    (2003) 11 SCC 614
[4]    (1980) 3 SCC 97

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