Holding

The reorganisation of cadres and the preparation of the gradation lists are valid policy decisions, not violative of Articles 14 and 16, and are not subject to judicial review absent mala fide or arbitrary conduct.

Summary

The Orissa State Lift Irrigation Corporation Ltd. reorganised its three service cadres—Mechanical, Electrical and a Composite Mechanical‑Electrical cadre—into two cadres by amalgamating the composite cadre into either the Electrical or Mechanical wing. It invited objections, considered the options given by employees, and prepared two gradation lists based on seniority from the date of initial appointment and the scale of pay. Respondent No.1, an electrical diploma holder, challenged the gradation list alleging violation of his right to equality and promotion under Articles 14 and 16 of the Constitution. The High Court quashed the lists, but the Supreme Court held that such reorganisation is a policy decision permissible under administrative exigency and not subject to judicial review unless mala fide or arbitrary. The Court found the procedure fair, noted that there is no fundamental right to promotion—only a right to be considered—and therefore upheld the corporation’s gradation lists, allowing the appeals and dismissing the writ petition.

Issues considered

Whether the corporation's amalgamation of cadres and the resulting gradation lists violate Articles 14 and 16 of the Constitution.
Whether a fundamental right to promotion exists for public servants.
Whether the policy decision to reorganise cadres is amenable to judicial review.

Legislation cited

Constitution of Indias. Article 14, s. Article 16

Subjects

cadre amalgamationsenioritypromotionArticles 14 and 16judicial reviewpolicy decisionadministrative lawfundamental right

Judgment

DIRECTOR, LIFT IRRIGATION CORPORATION LTD. AND
A
ORS. ETC. ETC.
v. -
PRAVAT KIRAN MOHANTY AND ORS.

·FEBRUARY 12, 1991
B
[KULDIP SINGH AND K. RAMASWAMY, JJ.]

Civil Services: Orissa State Lift Irrigation Corporation Ltd.-
Reorganisation of set up-Amalgamation of composite cadre of Electri-
cal-Mechanical into Electrical or Mechanical cadre-Validity of-
Gradation List-Fitment of personnel of composite cadre as per date of

- initial appointment vis-acvis scale of pay-Consequent loss of seniority
and reduction in chances of promotion-Whether violative of Articles
14 and 16 of the Constitution-Right to promotion-Whether a funda-
c

mental right.

Constitution of India, 1950: Articles 14 and 16--Gradation D
List-Prepared consequent to amalgamation of cadres-Seniority and
chances of promotion affected-Whether violative of right to equality-
Right to Promotion-Whether a fundamental right.

Administrative Law: Judicial Review-Policy decision to reor-
~- ganise set up and amalgamate cadres on administrative exigency- E
Whether open to judicial review.

The Lift Irrigation Corporation Ltd. had three categories of
services, namely, Mechanical, Electrical and Composite unit of
Mechanical-Electrical when it was carved out of the Government
organisation. Subsequently, due to administrative exigency, the Corpo- F
ration decided to reorganise its set up and classify the employees into
two categories' namely, Electrical and Mechanical by amalgamating
the composite Electrical and Mechanical Engineering diploma holders
either in Electrical or Mechanical wing, and invited objections to the
scheme. It ·also called for options from persons holding only the compo-
site diploma, namely, Mechanical and Electrical Engineering Super- G
visors. On consideration of options received, the Corporation prepared
two gradation lists in the order of seniority from the respective dates of
appointment to the posts and higher scale of pay held by respective
persons and fitted them in the respective lists as per options.

Respondent No. 1, a diploma holder in Electrical Engineering, who H

341
342 . SUPREME COURT REPORTS [1991] 1 S.C.R .

was working as Sub-Assistant Engineer (Electrical) in Government
A
service, and had been drawn on deputation to the Corporation along.
with Respondents No. 6 and. 7, appellants in third appeal, holders of
double diploma in Mechanical and Electrical Engineering, and working
as Mechanical Supervisors, along with others, had not filed any objec-
tion to the scheme, but questioned before the High Court the grada-
B tion of Respondents No. 6 and 7 and others in the Electrical Wing.

The High Court quashed the gradation lists and directed the y-
Government and the Corporation to treat Respondent No. 1 and the
other respondents as belonging to two cadres of Sub-Assistant Engineer
(Electrical) and (Mechanical) respectively.
c Th~ Corporation, the State Government and the aggrieved
employees filed separate appeals, by special leave, contending that the
Corporation had the power to amalgamate the three sections into two,
due to administrative exigency and to prepare seniority lists from re-
spective dates of employees' initial appointment, etc.
D
Respondent No. 1 contended that his seniority as No. 2 in the
Electrical Wing could ilot be disturbed by taking Mechanical Super-
visors into the Electrical Wing offending his right to promotion
enshrined under Articles 14 and 16 of the Constitution. ·

E Allowing the appeals, this Court,

HELD: 1.1 The Government or the Corporation, due to adminiS-
trative. exigencies, is entitled to and has power to reorganise the existing
cadres or amalgamate some or carve out separate cadres. The decision
to amalgamate the existing cadres by reorganising them into two cadres
F being a policy decision, taken on administrative exigencies, is not open ~ lo-:-.
to judicial review unless it is mala fide, arbitrary or bereft of any . \.
discernible principle. [345E, G]

1.2 On account of amalgamation into two cadres by absorbing the
personnel working in the composite cadre, namely, Electrical-Mechani-
G cal in either Electrical or Mechanical cadre, and their adjustment, the
order of seniority of the employees working in Electrical or Mechanical
cadres is likely to be reviewed. When the persons in the composite
Electrical-Mechanical cadre opted to the Electrical cadre, they were
entitled to be considered for their fitment in the cadre as per the senio-
rity from the date of their initial appointment vis-a-vis their scale of
H pay. This was the procedure adopted by the Corporation in fixing the
DIRECTOR v. MOHANTY [RAMASWAMY, J.) 343

inter se seniority. The procedure adopted is j~, fair and reasonable and A.
beneficial to all the employees without affecting their scales of pay or losing
the seniority from the date of initial appointment. [345G-H, 346A-B]

Undoubtedly, in this process, the first respondent lost some place
in seniOrity which is consequential to amalgamation. He has not been
B
deprived of his right to be considered for promotion; only his chances of
promotion have been receded.

1.3 There is no fundamental right to promotion. An employee has
only right to be considered when it arises, in accordance with the rele-

·-
)
vant rules. [346C]

1.4 In the circumstances, the High Court was not right in holding .
c
that the gradation list prepared by the Corporation was in violation of
Respondent No. 1's right to equality enshrined in Article 14 read with
Article 16 of the Constitution, and that he was unjustly denied of the
same. [3460]
D
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 699
of 1985.

From the Judgment and Order dated 17.5.1984 of the Orissa
High Court in O.J.C. No. 936of1979.
E
G.L. Sanghi, Adv., R.K. Mehta, Ms. Uma Jain, M.A. Firoz and
P. N. Misra for the appearing parties.

The Judgment of the Court was delivered by

K. RAMASWAMY, J. These three appeals are against the
judgment of the Orissa High Court in O.J.C. No. 936 of 1979. The
Division Bench allowed the writ petition and quashed the gradation
lists of sub-Asstt. Engineers (Elec,trical) and Sub-Asstt. Engineer
(Mechanical), Annexures .5 & 6 before the High Court and the promo- ·
tions given to the respondents Nos. 4 and 5 therein Annexure 7. The G
· Government and the Corporation were directed to consider the ques-
tion of promotion treating the writ petitioner and the respondents as
belonging to two cadres of Sub-Asstt. Engineer (Electrical) And
(Mechanical). These three appeals were filed, one by the Corporation,
another by the State Government and the third one by the aggrieved
employees. H
344 SUPREME COURT REPORTS (1991] 1 S.C.R.

The facts are simple. Shri Bidura Charan Mohapatra, the 6th
A respondent/first appellant in the third appeal, a diploma holder in
Mechanical and Electrical Engineering, was appointed as Mechanical
Supervisor on August 24, 1962 in the pay scale of Rs.215-396. Shri
Parijat Ray, the 7th respondent/2nd appellant, equally possessed of
diploma ~n Electrical and Mechanical Engineering, was appointed in
B the same. scale of pay as a Mechanical Supervisor on November 5,
1962. Shri P.K. Mohanty, the writ petitioner in the High Court and the
respondent in these appeals holds diploma in Electrical Engineering
and was appointed as Hand Driller in the pay-scale of Rs.100-155, on
October 23, 1963 and Sub-Assistant Engineer (Electrical) in the pay-

-
scale of Rs.185-325 on September 1, 1965. The Lift Irrigation Corpo-
ration Ltd., a part of the Government Organisation, was carved out
c separately and the three persons alongwith others were drawn on
deputation from the Government service to the Corporation in the
' year 1963. Three categories of services were existing in the Corpora-
tion, namely, Mechanical, Electrical and Mechanical-Electrical Com-
posite unit. In the year 1971, three tentative gradation lists were pre-
D pared for classification purpose· of those three divisions as Sub-
Assistant Engineer (Mechanical), Sub-Assistant Engineer (Electrical),
Supervisors, Electrical and Mechanical which includes Electrical
Supervisors, Mechanical Supervisors, Drilling Supervisors and Fore-
man-cum-Instructors. In 1977 the Corporation decided to reorganise
its set up and/to classify the employees into two categories, namely,
E Sub-Assistant Engineer (Electrical), Sub-Assistant Engineer
(Mechanical) to attend to the respective works, namely, mechanical
and electrical. The Corporation invited objections to amalgamate
Composite Electrical and Mechanical Engineering Diploma Holders,
either in Electrical or Mechanical Wing. Options were called for from
-
the persons holding only the composite diploma, namely, Mechanical
F and Electrical Engineering Supervisors. The respondent-writ peti-
tioner did not file any objection to the scheme. On consideration of
the objections filed by others, two gradation lists were prepared in the
order of seniority from the respective dates of appointment to the
posts and higher scale of pay held by respective persons and fitted
them in the respective lists as per options. As stated earlier the respon-
G dent questioned their gradation in the Electrical Wing in the High
Court and the High Court quashed it and the appellants obtained leave
of this Court under Art. 136. .

The contention of the appellants is that the respondent has no
right to be kept in a particular wing. The Corporation, with a view to
H create two categories, namely, Mechanical and Electrical sought to
DIRECTOR v. MOHANfY [RAMASWAMY, J.] 345

amalgamate the third Composite Mechanical/Electrical .Wing and
sought for options from the persons holding the composite posts. This ' A
was taken due to administrative exigency. The Corporation has power
to carve out by amalgamating three sectipns, into two divisions and to
prepare the seniority lists from the respective date of their initial
appointment, etc. The High Court, therefore, was unjustified to quash
the gradation lists. It was contended for the respondent by Sri Misra, B
his learned counsel, that the persons from the three wings are only
deputationists holding lien on Government posts. The Corporation did
not frame any scheme of its own to appoint its own employees, nor
given options to all the deputationists for confirmation as its emp-
loyees. So long as the employees are continuing on deputation, they are ;
entitled to have seniority in the respective wings: The writ petitioner
admittedly has been working on the Electrical Wing and was No. 2 in ' C
the order of seniority as Sub-Assistant Engineer (Electrical). His right ,
to seniority, cannot be disturbed by taking Mechanical Supervisor into
the Electrical Wing, offending his right to promotion enshrined under
Arts. 14 and 16 of the Constitution.
D
The writ petitioner holds only Diploma in Electrical Engineer-
ing. S/Shri Bidura Charan Mohapatra and Parijat Ray hold double
diploma of Mechanical and Electrical Engineering. It is settled law
that the Government or the Corporation, due to administrative
exigencies, is entitled to and has power to reorganise the existing ·
cadres of amalgamate some or carve out separate cadres. The pre- E
existing three separate cadres, namely, Electrical, Mechanical and the ·
composite cadre, namely, Electrical-Mechanical were sought to be 1

amalgamated into two cadres by absorbing the personnel working in
the composite cadre, namely, Electrical-Mechanical in either Electri-'
cal cadre or Mechanical cadre. Options have been called for in that
regard from all the persons working in the Electrical-Mechanical cadre, F
and the appellants exercised their options for absorption in Electrical
cadre. The employees working in the Electrical and Mechanical cadres'
were also aware of the same. It was, therefore, open to the respondent,
to raise any objection to the policy at that stage. But he failed to so.
The decision to amalgamate the existing cadres by reorganising intd
two cadres was a policy decision taken on administrative exigencies, G
The policy decision is not open to judicial review unless it is mala fide,
arbitrary or bereft of any descernable principle. On account of the
amalgamation and adjusting the composite Electrical-Mechanical
cadre in either of the Electrical or Mechanical cadre as per the options
given, the order of seniority of the employees working in Electrical or
Mechanical cadres is likely to be reviewed. When the persons in the H
346 SUPREME COURT REPORTS rt991) I S.C.R,

A composite Electrical-Mechanical cadre opted to the Electrical cadre,
they are entitled to be considered for their fitment to the cadre as per
the seniority from the date.of their initial appointment vis-a-vis their
scale of pay. This was the procedure adopted by the Corporation in
fixing the inter se seniority. The procedure adopted is just, fair and
reasonable and beneficial to all the employees without effecting their
B
scales of pay or loosing the seniority from the date of initial appoint-
ment. Undoubtedly, in this process the respondent/writ petitioner lost
some place in seniority which is consequential to amalgamation. He
has not been deprived of his right to be considered for promotion, only
his chances of promotion have been receded. It was not the case of the

.C
respondent that the action was actuated by mala fide or colourable
exercise ofpower. Ther-e-is·no.fundamental right to promotion, but an
employee has only right to be considered for promotion, when it
--1"
-
arises, in accordance with the relevant rules. From this perspective in
our view the conclusion of the High Court that the gradation list pre-
pared by the Corporation is in violation of the right of the respondent/
writ petitioner to equality enshrined under Art. 14 read with Art. 16 of
D
the Constitution, and the respondent/writ petitionl!r was unjustly
denied of the same is obviously unjustified.

The appeals are accordingly allowed and the writ petition stands
dismissed. But in the circumstances, parties are directed to bear their
respective costs.
E
N.P.V. Appeals allowed.