Holding

The respondent did not acquire any vested right to promotion under the repealed rules, and the Tribunal was not justified in directing the Government to prepare and operate the panel.

Summary

The respondent, a Veterinary Assistant Surgeon in the Andhra Pradesh Animal Husbandry Department, filed an application seeking a promotion panel for the post of Assistant Director under the then‑applicable Rule 4 of the A.P. Subordinate Service Rules. The Andhra Pradesh Administrative Tribunal directed the Government to prepare and operate such a panel for the 1995‑96 period based on the repealed rules. The Government, however, had already decided to amend the service rules (A.P. Animal Husbandry Service Rules, 1996) and to defer filling vacancies until the new rules came into force. The Supreme Court examined whether the respondent had acquired any vested right to promotion under the repealed rules and whether the Tribunal’s direction was legally valid. Relying on precedents that a mere invitation to apply does not create an indefeasible right and that a policy decision not to fill vacancies is permissible if reasonable, the Court held that no vested right existed and the Tribunal erred in ordering the panel. Consequently, the appeals were allowed, the Tribunal’s order set aside, and no costs were awarded.

Issues considered

Whether a candidate acquires a vested right to promotion under repealed service rules.
Whether the Government's policy decision to defer promotion pending amendment of the rules is arbitrary or unlawful.
Whether the Administrative Tribunal was justified in directing the preparation and operation of a promotion panel under the repealed rules.

Subjects

promotionservice rulesvested rightadministrative tribunalpolicy decisionrepeal of rulespanel preparationanimal husbandryAndhra Pradeshadministrative law

Judgment

,. }

DR. K. RAMULU AND ANR. ETC. A
v.
DR. S. SURYAPRAKASH RAO AND ORS.

JANUARY 15, 1997

B
, ... ..,
[K. RAMASWAMY, S. SAGHIR AHMAD AND
G.B. PATTANAIK, JJ.)

Se1vice Law :

A.P. Subordinate Se1vice Rules/A.P. Animal Husband1y Se1vice Rules, c
1966.

Rules 314---Promotion-Assistant Surgeon to Assistant Director--G.O.
-"'' Repealing existing R1tle.1-T1ibwzal directing preparation of panel 011 the basis
::,,.. ~ of the repealed mle~-On appeal held : Policy decision taken by Govemmenl D
justified on the mate1ial available on recor~Respondent not acquired any
vested right for being considered for promotion in accordance with the
repealed Rule~-T1ibunal was not 1ight in directing the Govemment to prepare
and operate the panel for promotion to the post of Assistant Director of
Animal Husbandry Department in accordance with the repealed mies.
E
Shankan·an Dash v. Union of India, (1991] 3 SCC 47; State of Haiyana
v. Subhash Chander Maiwaha, (1974] 3 SCC 220; State of Bihar & Ors. v.
Md. Kalimuddin & 01:f., (1996] 2 SCC 7 and U.O.!. & 01:1-. v. KV Vijeesh,
j -"
(1996] 3 sec 139, relied on.
F
l I Y.V Rangaiah & 01:f. v.J. Sreenivasa Rao & 01:1·., [1983] 3 SCC 284;
P. Ganeshwar Rao & Ors. v. State of A.P. & 01~'., [1988] Supp. SCC 740;
1-.. P.Mahendranatlz v. State of Kamataka, [1990] 1 SCC 411; A.A. Caljone v.
Director of Education, (1983] 3 SCC 33; N. T. Dev v. Kamataka PSC, [1990]
3 SCC 157; Ramesh Kumar Clwudha & Ors. v. State of M.P. & Ors., (1996)
G
7 Scale 619 and Re : Cauvery Water Disputes T1ibu11al, [1993] Supp. 1 SCC
96, distinguished.
_,rf'
{
Union of India v. S.S. Uppal & Anr., (1996) 1 Unreported Judgments
(SC) 393 and Gajraj Singh Etc. v. The State Tramport Appellate T1ibunal &
01:1·. Etc., (1996) 7 SCALE 31, held inapplicable. H
287
288 SUPREME COURT REPORTS (1997] 1 S.C.R.

A CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 404-405
of 1997 Etc.

From the Judgment and Order dated 19.8.96 of the Andhra Pradesh
Administrative Tribunal in O.W. No. 1224/96 and M.A. No. 2039 of 1996.

B L.N. Rao, V.S. Reddy and S.U.K. Sagar for the Appellants.

G. Prabhakar for State of A.P. T ...

H.S. Gururaja Rao, S. Satyanarayana Rao and T.V. Ratnam for the
Respondents.
c
The following Order of the Court was delivered :

Leave granted.

We have heard learned counsel for the parties.
D
These appeals by special leave arise from the Order of the Andhra
Pradesh Administrative Tribunal, made on June 5, 1996 in O.A. No.
1224/96 and Order made on 19.8.1996 in Review M.A. No. 2039/96 in O.A.
No. 1224/96.

E The facts are, very fairly, not in dispute. Respondent No. 1 both sets
of appeals is a Veterinary Assistant Surgeon in A.P. Animal Husbandry
Department. He filed 0 .A. seeking direction for preparation of a panel of t
candidates for promotion as Assistant Director under Rule 4 of the A.P. •
Subordinate Service Rules (for short, the 'General Rules'). The Tribunal
directed the respondent - Government to prepare and operate the panel
F for the years 1995-96 for promotion to the post of Assistant Director in the
A.P. Animal Husbandry Service. Calling that order in question, these
appeals have been filled by the contesting respondents as well as by the
State.

Shri L. Nageshwara Rao, learned counsel for the appellants, has
G raised three-fold contention. It is firstly submitted that the respondent has
no right to be considered for promotion as Assistant Director. Secondly,
even if he has got such a right to appointment to the post, the Government
have power to revise its policy of appointment and appointment requires
to be made in accordance with the revised policy. The direction given by
H the Tribunal is contrary to the policy decision taken by the Government, f
DR. K.RAMULUv. DR.S.SURYAPRAKASHRAO 289
• )'
namely, to reconsider the policy of promotion in the Service and to make A
rules afresh in the place of existing Rules. In this premise, the Tribunal has
committed manifest error in directing the Government to prepare, finalise
and operate. the panel for the years 1995-96 for promotion as Assistant
Director of the AP. Animal Husbandry Department. Shri H.S. Gururaja
Rao, learned senior counsel appearing for the first respondent, in the main
B

-· 'I"
appeals, has contended that the first respondent has a right to be con-
sidered to promotion to the post in accordance with the Rules existing in
the year 1995-96. The Rules made afresh do not take away the right of the
firs~ respondent to be considered in accordance with the existing Rules.
Rule 4 read with Rule 3 of the General Rules gives mandate to the
Government to prepare the panel by September 30 of every year to be c
operative till the end of December .of the succeeding year. or preparation
of the fresh Panel, whichever is earlier. In this case, since the process of
the preparation of the panel has already been commenced for filling up
the existing vacancies, the Government is required to complete the
preparation· of the panel, finalise the panel and operate the panel. The
::I'
" D
Tribunal, therefore, was right in giving the impugned direction. He also
contended that the right given by the Tribunal cannot be taken away by the
Rules made prospectively w.e.f. June 12, 1996, the date on which the
amended Rules made in G.P. Ms. No. 54 of Animal Husbandry & Fisheries
Department, Government of A.P. came into force.
E
In view of the rival contentions, the question that arises for con-
sideration is : whether the view taken by the Tribunal is correct in law? It
is seen that AP. Animal Husbandry Service Rules, 1996 made in G.O. Ms.
No. 54 of Animal Husbandry & Fisheries Department dated June 6, 1996
(for short, the 'Rules') came into force with effect from .June 12, 1996. The F
Rules repealed the existing Rules made in G.O. Ms. No. 729 dated
24.9.1977. The Rules prescribe· four classes of services. Class 'A' consists
of Category-I, Director of Animal Husbandry, Category-II, the Additional
f'> Director, Category-Ill, the Joint Director, Category- IV, the Deputy Direc-
tor, Category-V, the Assistant Director and Category-VI, the Veterinary
Assistant Surgeons. It is prescribed at the end that "all the posts in each
G
category are inter-changeable for the purpose of seniority, promotion,
~~"' transfer and postings". It is not in dispute that prior to the Rules came into
time under the old Rules (for short, the 'repealed Rules), for the purpose
of promotion in each category, each class of post was considered to he a
separate unit. The Government had appointed one-man Commission ·H

.
290 SUPREME COURT REPORTS (1997] 1 S.C.R.
A headed by Sri V. Sundaresan, l.A.S. to go into the anomalies into the
operation of the Rules. The report was submitted by Sundaresan Commis-
sion on July 25, 1990. It would appear from the record that even as on
November 22, 1988, a decision was taken by the Government in the Animal
Husbandry Department to amend the repealed Rules by making necessary
B chcnges. While the process was going on, after the receipt of the report of
the Sundaresan Commission, the Government had called for the comments
from the Director of Animal Husbandry Department. The Director had y ...
submitted his comments on September 20, 1995. Thereafter, several meet-
ings were held to follow up the matter of amendment of the repeale j Rules.
The Ruks ultimately came to be made. It is also clear from the record that
C the Government had taken decision not to fill up any of the vacancies until
the repealed Rules were duly amended. After tht; direction issued by the
Tribunal, the Department was advised to make temporary promotion
pending finalisation of the Rules. The Director submitted the proposal to
prepare the penal and several sittings were fixed to consider the cases but
D the same could not materialise.
In this perspective, the question arises: whether the omission on the
part of the Government in preparing and finalising· the panel for promotion
of the Assistant Veterinary Surgeons to the post of Assistant Director is
Vitiated by any inaction on the part of the Government and whether it is
E in violation of Rule 4 of the General Rules? All first appointment to the
State Service and all promotions/appointments by transfer shall be made
on grounds of merits and ability and shall be made in accordance with the
special Rules. It also envisages that list of approved candidates requires to
be prepared in accordance with the Rules. It shall be prepared ordinarily
F during the month of September every year on the basis of estimated
vacancies sent in terms of sub-clause (iv) and 30th of s·eptember shall be
reckoned as the qualifying date to determine the eligibility of the candidate
for such appointment, which shall cease to be in force on the afternoon of
the 31st December of the succeeding year or till the new panel is prepared, {
G whichever is earlier. Second proviso to the Rule provides that if the
vacancies are not available for the particular panel period, subject to the
appointing authority recording a certificate to that effect; or "where the
appointing authority does not consider it necessary", it is not necessary to t~
prepare the panel. At this stage, it is necessary to emphasise that the
H opinion of the Government by the proviso would not be arbitrary. As
DR. K. RAMULU v. DR. S. SUR YAPRAKASH RAO 291
rightly pointed out by Shri L. Nageshwara Rao, the decision not to prepare A
the panel should be on valid and relevant considerations and it should not
be arbitrary decision taken by the Government. The object of Rule 4 is that
all eligible candidates should be considered in accordance with the Rules.
Panel should be finalised and operated so as to give an opportunity to the
approved candidates to scale higher echelons of service which would
B
augment the efficacy of service, inculcate discipline and enthuse officers to
assiduously work hard and exhibit honesty and integrity in the discharge of
their duties. Nonetheless, it is seen that clause (ii) of the second proviso
gives power to the State Government not to prepare the panel and to
consider the cases though the vacancies are available, as stated earlier,
pending amendment of the Rules or recasting the Rules afresh. The c
Government have taken conscious decision not to fill up any of the pending
vacancy until the process is completed which they had started on "ad-
ministrative grounds". As seen, the process was completed and the Rules
have come into force w.e.f. June 12, 1996.
D
In the light of the above factual matrix and the legal setting, the
question is : whether the Tribunal was right in directing the Government
to prepare and operate the panel in accordance with its directions? The
Constitution Bench of this Court in Shankafsan Dash v. Union of India,
(1991] 3 sec 47, had considered the question in an analogous situation.
Therein pursuant to the selection made by the UPSC for appointment to · E
the Civil Services, a list of l.P.S. officers was prepared and the appellant
was one of the candidates in the waiting list. The Government of India had
taken a decision not to fill up the vacancies except to the extent of the
Scheduled Tribe candidates who were selected and were in the waiting list.
The appellant therein filed O.A. which was dismissed by the Tribunal. On F
appeal, this Court held thus :

"It is not correct to say that if a number of vacancies are notified
for appointment and adequate number of candidates are found fit,
the successful candidates acquire an indefeasible right to be ap- G
pointed which cannot be legitimately denied. Ordinarily the
notification merely amounts to an invitation to qualified candidates
to apply for recruitment and on their selection they do not acquire
any right to the post. Unless the relevant recruitment rules so
indicate, the State is under no legal duty to fill up all or any of the
vacancies. However, it does not mean that the State has the licence H
292 SUPREME COURT REPORTS [1997] 1 S.C.R.

A of acting in an arbitrary manner. The decision notto fill up the
vacancies has to be taken bona fide for appropriate reasons. And
if the vacancies or any of them are filled up, the State is bound to
respect the comparative merit of the candidates, as reflected at
the recruitment test, and no discrimination can be permitted. This
correct position has been consistently followed by this court, and
B we do not find ·any discordant note in the decisions in State of
Haryana v. Subhash Chander Marwah_a, Neelima Shangla v. State
of Haryana, or Jatendra Kumar v. State of Punjab".

In paragraph 8, this Court considered the ratio in State of Haryana
C v. Subhas Chander Marwaha, [1974] 3 SCC 220 wherein though the vacan-
cies were existing and select list candidates were available, pursuant to the
recommendation made by the High Court not to appoint any candidate
who had secured less than 55% marks, the Government acted upon it and
did not appoint the candidates in the waiting list. When they claimed their
D right to appointment, and the order was issued by the High Court for filling
up all the vacancies from persons in the waiting list, this Court had laid
that though the candidates were waiting in the list, they had no right to be
appointed. It was held that the plea of arbitrariness does not arise since
the Government have taken a decision not to appoint any of the persons
who secured less than 55% of the marks. This Court also has pointed out
E in Shankarsan Dash case that when the Government have taken a conscious
policy decision not to fill up the vacancies, the decision must be reasonable
and not arbitrary. Since it was a policy decision it could not be interfered
with: It was held that the .vacancies for the Scheduled Tribe candidates
were being filled up for the reason that vacancies reserved for them were not
F being filled up due to 11011-availability of the select candidates. The decision
to fill up the vacancies reserved for Scheduled Tribe candidate was justified
on the ground that non- filling up of the vacancies belonging to the general
candidates cannot be characterized as arbitrary decision. It was observed
that "the fact that it was not' for the Public Service Commission to take a
decision in this regard was emphasised in this judgment. None of these
G decisions, therefore, supports the appellant". Thus it could be seen that if
the decision of the Government is supported by valid reasons, it cannot be
stated that the decision taken by the Government as arbitrary. ~-

This position was reiterated by this Court in State of Bi/tar & Ors. v.
H Md. Kalimuddin & Ors., [1996] 2 SCC 7. Therein, the Government of Bihar
DR. K. RAMULU v. DR. S. SURYAPRAKASH RAO 293
~

1
also have taken a decision to· revise the police of reservation and pending A
decision the appointments· of the wait listed candidates were deferred. The
High Court, however, approached the matter and gave direction thus :

"The Panel thus does not appear to be violative of the reservation
policy of the State. So far as the proposed rules of recruitment are
concerned, the details of which have not been furnished from B
which it could be gathered as to whether any substantial or drastic
~ "I'
deviation is sought to be made from the existing rules regarding
the procedure of recruitment except that training is no longer to
be a necessary qualification or condition of eligibility I do not want
to go into the correctness of the policy of the State dispensing with c
the necessity of the training as a condition of eligibility. However,
I have serious doubt whether appointment of untrained teachers
in preference to the trained ones who are already in panel and
available for appointment can be said to be in public interest."

't This Court further held thus : D

"The ultimate outcome of that exercise is not fully brought out on
record but it is obvious that the State Government was not acting
mala fide and merely with a view to denying appointment to the
respondents herein. Merely because notwithstanding the
E
availability of trained personnel the State Government was inclined
to change the rules in that behalf does not appear to be valid
ground for contending that the Government had acted mala fide.
Without knowing the nature of change it was not open to the High
""· Court to anticipate.the policy and brand it as unreasonable."
F
In paragraph, 9 it was observed that "we are of the opinion that even
if it is assumed that the panel or select list had not expired at the date of
filing of the writ petition, the refusal on the part of the Government to
make appointment from the panel or select list, vide letter dated 27.5.1993,
could not be condemned as arbitrary, irrational and or mala fide.
G
The same ratio was reiterated in U.0.l. & Ors. v. KV. Vijeesh, (1996)
',..-; 3 SCC 139, paras 5 and 7. Thus, it could be seen that for reasons germane
to the decision, the Government is entitled to take a decision not to fill up
the existing vacancies as on the relevant date. Shri H.S. Gururaja Rao,
conh:nds that this Court in Y. V. Rangaiah & Ors. v. J. Sreenivasa Rao & H
294 SUPREME COURT REPORTS [1997) 1 S.C.R.
A Ors., [1983) 3 sec 284 had held that the existing vacancies were required
to be filled up as per law prior to the date of the amended Rules. The mere
fact that Rules came to be amended subsequently does not empower the
Government not to consider the persons who are eligible prior to the date
of appointment. It is seen that the case related to the amendment of the
B Rules prior to .the amendment of the Rules. Two sources were available
for appointment as sub-Registrar, namely, UDCs and LDCs. Subsequently,
Rules came to be amended taking away the right of the LDCs for appoint-
ment as sub-Registrar. When the vacancies were not being filled up in
accordance with the existing rules, this court had pointed out that prior to
the amendment of the Rules, the vacancies were existing and that the
C eligible candidates were required to be considered in accordance with the
prevailing Rules. Therefore, the mere fact of subsequent amendment does
not take away the right to be considered in accordance with the existing
Rul.es. As proposition of law, there is no dispute and cannot be disputed.
But the question is : whether the ratio in Rangaiah's case would apply to
D the facts of this case? The Government therein merely amended the Rules,
applied amended Rules without taking any conscious decision not to fill
up the existing vacancies pending amendment of the Rules on the date the
new Rules came into force. It is true, as contended by Mr. H.S. Gururaja
Rao, that this Court has followed the ratio therein in many a decision and
those cited by him are P. Ganeshwar Rao & Ors. v. State of A.P. & Ors.,
E (1988] Supp. SCC 740; P. Mahendranath v. State of Kamataka, [1990) 1 SCC
411; AA. Caljon v. Director of Education, [1983) 3 SCC 33; N.T. Dev v.
Kamataka PSC, [1990) 3 SCC 157 and Ramesh Kumar Choudha & Ors. v.
State of M.P. & Ors., [1996) 7 Scale 619. In none of these decisions, situation
which has arisen in the present case had come up for consideration. Even
F R~le 3 of the General Rules is not of any help to the respondent for the
reason that Rule 3 contemplates making of an appointment in accordance
with the existing Rules.

It is seen that since the Government have taken a conscious decision
not to make any appointment till the amendment of the Rules, Rule 3 of
G the General Rules is not of any help to the appellant. The ratio in the case
of Ramesh Kumar Choudha & Ors. v. State of M.P. & Ors., (1996) 7 SCALE
619 is also not of any help to the respondent. Therein, this Court had
pointed out that the panel requires to be made in accordance with the
existing Rules and operated upon. There cannot be any dispute on that
H proposition or direction issued by this Court. As stated earlier, the Govern-
DR. K. RAMULU v. DR. S. SURYAPRAKASH RAO 295

ment was right in taking a decision not to operate Rule 4 of the General A
Rules due to their policy decision to amend the Rules. He then relies on
paragraph 14 of the unreported judgment of this Court made in Union of
India v. S.S. Uppal & Anr, (1996) l Unreported Judgments SC 393. Even
that decision is not of any help to him. He then relies upon the judgment
of this Court in Gajraj Singh Etc. v. The State Transporl Appellate Tribunal B
& Ors. Etc., (1996) 7 SCALE 31 wherein it was held that the existing right
saved by the repealed Act would be considered in accordance with the
Rules. The ratio therein is not applicable because the existing Rules do not
,. '"I save any of the rights acquired or accruing under the Rules. On the other
'
\ hand, this Court had pointed out in paragraph 23 thus :
c
"Whenever an Act is repealed it must be considered,. except as to
transactions past and closed, as if it had never existed. The effect
thereof is to obliterate the Act completely from the record of the
Parliament as if it had never been passed it, (sic) it never existed
except for the purpose of those actions which were commenced, D
prosecuted and concluded while it was existing law. Legal fiction
is one which is not an actual reality and which the law recognises
and the court accepts as a reality. Therefore, in case of legal fiction
the court believes something to exist which in reality does not exist.
It is nothing but a presumption of the existence of the state of
affairs which in actuality is non-existent. The effect of such a legal E
fiction is that a position which otherwise would not obtain is
deemed to obtain under the circumstances. Therefore, when Sec-
tion 217(1) of the Act repealed Act 4 of 1939 w.e.f. July 1, 1989,
the law in act 4 of 1939 in effect came to be non- existent except
as regards the transactions, post and closed or save." F

Re : Cauvery Water Disputes Tribunal, [1993) Supp. 1 SCG: 96 also
does not help the appellant. Therein when the judgment of this Court had
become final, the Governor issued an ordinance not to implement the
judgment of this Court. The Constitution Bench, therefore, had held that
since the judgment was allowed to become final, it is not open to the G
Government not to implement the judgment by issuing an ordinance hold-
ing that it amounts to interference with power of judicial review of this
Court.

Thus, we hold that the first respondent has not acquired any vested H
296 SUPREME COURT REPORTS [1997] 1 S.C.R.
A right for being considered for promotion in accordance with the repealed
Rules in view of the policy decision taken by the Government which we
find is justifiable on the material available from the record placed before
us. We hold that the Tribunal was not right and correct in directing the
Government to prepare and operate the panel for promotion to the post
B of Assistant Directors of Animal Husbandry Department in accordance
with the repealed Rules and to operate the same.

The appeals are accordingly allowed. The order of the Tribunal is
set aside but, in the circumstances, without costs.

G.N. Appeals allowed.