Supreme Court: In an appeal arising out of special leave petition, challenging the judgment of Gujarat High Court, wherein the seniority list dated 13-02-18 was quashed, and the seniority list of 07-09-16 was restored with a clarification that only those direct recruits who were eligible and qualified in the recruitment year 2009-10, shall be interspaced with 53 promotees who were promoted, the division bench of S. Abdul Nazeer and Abhay S. Oka* said that the decision in K. Meghachandra Singh v. Ningam Siro, (2020) 5 SCC 689 needs reconsideration by a larger bench and held that the interim relief will have to be vacated and seniority will have to be fixed based on the impugned judgment, subject to the outcome of the decision of the larger bench. Further, 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.
In the case at hand, the dispute is a typical dispute between promotees and direct appointees over inter-se-seniority. The dispute is about the posts of inspectors in the Income Tax Department in Gujarat.
The Court framed the following issues:
Whether the decision of this Court in K. Meghachandra Singh (supra)is per incuriam or in the alternative, whether it requires reconsideration being against the decision of the Constitution Bench in the case of Mervyn Coutindo v. Collector of Customs, (1966) 3 SCR 600 and the decision in the case of M. Subba Reddy v. A.P. SRTC, (2004) 6 SCC 729.
If the decision of this Court in Union of India v. N.R. Parmar, (2012) 13 SCC 340 stands overruled, in view of its prospective overruling, whether the inter-se-seniority of the direct recruits and the promotees in the facts of this case could be determined as per the decision in N.R. Parmar’s case.
The Court said that though the process of recruitment of direct recruits to the post of Income Tax Inspectors commenced in the recruitment year 2009-10, the same could not be completed in the same recruitment year. This is not a case where an adequate number of direct recruits could not be recruited even though the recruitment was done in the recruitment year itself. 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 due to no fault on their part.
Thus, it was held that the decision in the case of K. Meghachandra(supra) requires reconsideration by a larger bench because the binding decision of a constitution bench in the case of Mervyn Coutindo(supra) and binding decision of a coordinate bench in the case of M. Subba Reddy(supra) were not placed for consideration before the bench which decided the case of K. Meghachandra(supra).
Further, it said that, even if the case of K. Meghachandra(supra) was correctly decided, the decision shows that N.R. Parmar (supra) has been prospectively overruled by observing that the decision will not affect the inter-se-seniority already fixed based on the case of N.R. Parmar(supra) and the same was protected. It is also held that the decision will apply prospectively except where seniority is to be fixed under the relevant rules from the date of vacancy / the date of advertisement.
In this case, as on the date when the case of N.R. Parmar (supra) 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 born in the cadre. In the facts of the case, the seniority list was correctly published in terms of the decision in the case of N.R. Parmar(supra) by interspacing those direct recruits who were eligible in the recruitment year 2009-10 and were appointed against the vacancies of the said year with 53 promotees who were promoted. The seniority list was later modified without giving an opportunity of being heard to the affected direct recruits.
Therefore, while the Court recommended a reference to a larger bench, it said that the interim relief will have to be vacated and seniority will have to be fixed based on the impugned judgment, subject to the outcome of the appeal or the decision of the larger bench, as the case may be.
Whether the recruitment year is a financial year or a calendar year and 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.
The Court said that the documents on record clearly show that as far as the posts of Income Tax Inspectors are concerned, the vacancy or recruitment year was always reckoned as the financial year. Therefore, the Court held that there is 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.
The Court said that the following questions need to be decided by a larger bench of five Judges:
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Whether the decision in the case of K. Meghachandra(supra) can be said to be a binding precedent in the light of the law laid down by the constitution bench in the case of Mervyn Coutindo(supra)and the law laid down by a coordinate bench in the case of M. Subba Reddy(supra)?
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In absence of specific statutory rules to the contrary, when the ‘rotation of quota’ rule is applicable, whether the seniority of direct recruits who were recruited in the recruitment process which commenced in the relevant recruitment year but ended thereafter, can be fixed by following ‘rotation of quota’ by interspacing them with the direct recruits of the same recruitment year who were promoted earlier during the same year?
[Hariharan v. Harsh Vardhan Singh Rao, 2022 SCC OnLine SC 1717, decided on 14-12-22]
*Judgment by: Justice Abhay S. Oka.
*Apoorva Goel, Editorial Assistant has reported this brief.
