A three-judge Bench of Justice UU Lalit, Justice Hemant Gupta, and Justice S. Ravindra Bhat has held that promotion and seniority shall be considered from the date of appointment of the candidate and not retrospectively from the date of vacancy arose.

The Court also held that no appointee from any channel (direct recruits or promotees) can claim seniority from a date before his or her appointment.

Senior Counsel Mr. R Basant appeared for the Appellants – PRIs before the Apex Court.

In this case, the Appellants were aggrieved by the order of the Andhra Pradesh High Court which had set aside the order of the Central Administrative Tribunal (CAT) in a batch of ten original applications. The CAT's order had allowed those applications and had directed proper fixation of inter se seniority of Inspectors of Central Excise, as between direct recruits and promotees. Aggrieved, the promotee inspectors preferred an appeal before the Supreme Court.

The High Court had held that the vacancy register had no relevance for the purpose of promotion of in-service candidates and such promotions could be only in proportion to the respective quota, based on indents placed by the department with the Staff Selection Board for direct recruitment.

The Court had also held that the length of the continuous service followed by regularisation cannot be counted for the purpose of seniority since the quota rule had not been infringed.

The Appellants contended before the Apex Court the method of calculation of promotee quota vacancies was flawed.

Further, it was argued that on behalf of the PRIs that the method of calculation of vacancies should be based on the vacancy register. Also, the Appellants contended that the department's interpretation of the quota rule was untenable for the purpose of reckoning seniority, the quota for PRIs was taken to be one-third of the total vacancies available and filled by direct recruitment.

The Apex Court noted that Central Excise and Land Customs Group-C Recruitment Rules, 1979 are silent about the principle on which inter se seniority of DRIs and PRIs is to be fixed.

The Court while referring to the OM of 1986 observed that the main issue before it was the application of Clause 4 and 5 of the OM 1986 in the background of 1979 rules which provided for 75% by direct recruitment and 25% by promotion.

The Bench further noted that the issue, in this case, was whether the ratio of the PRIs had to be drawn with respect to the intended vacancies for the DRIs.

The Court that the Respondent and the Central Government justify the impugned judgment, contending that the PRIs had to be treated as ad-hoc promotees in terms of the 1986 OM because firstly, the proportion in which they were appointed against promotional vacancies were in excess of the proportion available to DRIs, given the number of requisitions made to SSC and, secondly, that there cannot be an assumption that the benefit of regularization to PRIs would include seniority over the DRIs who were appointed later, but were entitled to be treated as their seniors.

Further, the Court placed reliance on K.V. Subba Rao & Ors. v. Government of Andhra Pradesh to hold that promotion and seniority shall be reckoned from the date of appointment, not retrospectively from the date when the vacancy arose.

"…From the above discussion, it is clear that no appointee from any one channel (direct recruits or promotees) can lay claim to seniority from a date before her or his appointment," the Bench opined.

The Court while holding that the High Court's judgment was clearly erroneous observed that the promotions of the PRIs had to be treated as regular.

Furthermore, the Bench noted, "The other aspect – which the High Court ignored, is that a number of vacancies were filled from amongst the quota for compassionate appointment, and the sports quota. They were not reported to the SSC. In such circumstances, to treat the promotees as exceeding the quota set apart for them (though as a matter of fact, they were accommodated within the quota) is not warranted. Furthermore, the materials on record also show that though there was a ban on direct recruitment, it did not apply to vacancies which were to be filled up by way of promotion in terms of the Recruitment Rules."

The Court held that High Court fell into an error while setting aside the order of the CAT which the Apex Court directed to be restored.

In the light of these observations, the Court allowed the appeal of the PRIs and noted, "The date of appointment of direct recruits the date for counting seniority- it is not from the date of receipt of the dossiers from the recruiting authorities or the date of recommendation. Resultantly seniority of direct recruits appointed after 01.03.86 has to be revised only from the date of their respective appointments but not earlier to 01.03.1986 as was done in the impugned seniority list."

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