Holding

Employees have a right to be considered for promotion, and the court may direct a statutory body to frame an appropriate promotion scheme, leading to the dismissal of the appeal.

Summary

The respondents, a small cadre of engineers employed by the Food Corporation of India (FCI), alleged that they had been denied any promotional avenue for over thirty years despite recommendations of the Fifth Pay Commission. They filed a writ petition seeking a direction to the statutory body, a 'State' within Article 12, to frame a promotion scheme; the Calcutta High Court allowed the petition and the Division Bench affirmed. During the pendency, FCI introduced a selection‑grade scheme benefitting some respondents, but the appellants contended that this did not constitute a genuine promotional scheme and that promotion was not a fundamental right. The Supreme Court held that while promotion is not a fundamental right, employees have a right to be considered for advancement and the court may direct the employer to devise a proper scheme. It affirmed that the High Court was correct in ordering the framing of a promotion scheme and dismissed the appeal with costs.

Issues considered

Whether employees of a statutory body classified as a 'State' are entitled to a right to promotion under Articles 14 and 16 of the Constitution.
Whether the lack of a promotional avenue for a specific category of employees amounts to a violation of constitutional rights warranting judicial direction.
Whether the introduction of a selection‑grade scheme constitutes a valid promotional scheme for the purpose of the writ petition.

Legislation cited

Constitution of Indias. Art.12, s. Art.14, s. Art.16
Food Corporation of India Act, 1964

Subjects

PromotionService lawConstitutional lawArticles 14Articles 16State employerStagnationPay CommissionSelection gradeWrit petition

Judgment

(2008] 2 S.C.R. 412
+
A FOOD CORPORATION OF INDIA & ORS.
v. ,
PARASHOTAM DAS BANSAL & ORS.
(Civil Appeal No. 991 of 2008)
FEBRUARY 5, 2008
B
[S.B. SINHA AND G.S. SINGHVI, JJ.]
I
Service law - Promotion - No avenue for certain A
categories of employees appointed with a statutory body -
c Recommendations of Pay Commission- Non-implementation
- Challenge to - Writ petition allowed by High Court - During
pendency, scheme framed for promotion to selection grade
and some employees obtained benefit thereunder- On appeal
held: Employee has a right to be considered for promotion
D and not a fundamental right of promotion - It is within the realm
of the statutory authority that how the employees would be
structured but by reason thereof, it cannot tinker with their
essential fundamental right- Introduction of grant of selection
grade did not provide for a promotional scheme - It was
E available to a limited number of employees - More so benefit
of promotion was available to unionised employees - Thus,
order of High Court upheld - Food Corporation of India, 1964.
Constitution of India, 1950 - Articles 14, 16 and 226 - ;.'
· Promotion - No avenues, resulting in stagnation - Interference
F by court - Held: Court has jurisdiction to issue necessary
direction to frame a Scheme.·
The respondents were appointed in the engineering
section of the appellant-Food Corporation of India. They
· were stagnant for past 30 years as there was no
G promotional avenue for them. Several other categories of
employees filed applications for formulation .of suitable
schemes of organizational structure. The Fifth Pay
Commission made recommendation but the same were
not implemented. Some of the employees filed writ petition.
H 412
FOOD CORPORATION OF INDIA & ORS. v. 413
PARASHOTAM DAS BANSAL & ORS.

It was also contended that the scheme had already been A
introduced for medical officers working in appella(lt's
organization. During pendency of the writ petition,
..
scheme was framed for promotion to selection grade and
some of the respondents obtained benefits. The Single
Judge of the High Court allowed the writ petition. The B
Division Bench upheld the order. Hence the present
-. appeal.
.. · Dismissing the appeal, the Court
HELD: 1.1 Appellant is a 'State' within the meaning c
of Article 12 of the Constitution of India. An employee of a
State although has no fundamental right of promotion, it
has a right to be considered therefor. What is necessary
is to provide an opportunity of advancement; promotion
being a normal incidence of service. [Para 9) [418-C-D]
D
Dr. Ms. O.Z. Hussain v. Union of India 1990 Supp. SCC
688; Mis. Ujagar Prints etc. etc. -v. Union of India and Ors. AIR
1989 SC 972; Council of Scientific and Industrial Research
and Anr. v. K. G. S. Bhatt and Anr. 1989 (4) SCC 635 - referred
to. E
1.2 When employees are denied an opportunity of
promotion for long years (in the instant case 30 years) -on
the ground that he fell within a category of employees
excluded from promotional prospect, the Superior Court
will have the jurisdiction to issue necessary direction. If F
there is no channel of promotion in respect of a particular
group of officers resulting in stagnation over the years,
the Court although may not issue any direction as tO in
which manner a scheme should be formulatec;J- or_ by
· reason thereof interfere with the operation of existing G
channel of promotion to the officers working in different
departments and officers of the Government but 'th.e -·
""" jurisdiction to issue direction to make a scheme cannot
be denied to a Superior Court of the country. [Paras 12
and 13) [419-G-H; 420-A-B] H
414 SUPREME COURT REPORTS [2008] 2 S.C.R.

A State of Tripua & Ors. v. K.K. Roy 2004 (9) SCC 65 -
referred to.
1.3 Respondents constituted 1 % of the total work
force. A huge financial benefit was given to unionised
employees constituting 85 % strength of the total work
8 force by giving career progression scheme as well as the
selection grade. It is really of some significance that the
promotional avenues alleged to be existed for the cadre
of Assistant Engineers were not taken before the Single
Judge of High Court. A ground was taken in the
C Memorandum of the Letters Patent Appeal. Even the same
does not appear to have been pressed. No affidavit has
ever been filed by the appellant making averments of the
said fact. The submission that the cadre of Assistant
Engineers is not important for the appellant for providing
D promotional avenue to them, is rejected. [Paras 18 and
20] [422-B-D]
1.4 It cannot be understood how the cadre of Medical
Officers would be important, as like the respondents, they.
also do not contribute towards the main functions of the
E appellant. Such a plea is wholly untenable. An employee
· is an employee. How the employees would be structured
is undoubtedly within the realm of the statutory authority
but by reason thereof, it cannot tinker with their essential
fundamental right. [Para 21] [422-E-F]
F
1.5 The introduction of grant of selection grade does
not provide for a promotional scheme. It is available to a
limited number of employees. By reason thereof a
promotional scheme cannot be said to have been fr~med.
G The scheme of Accelerated Career Progression is distinct
and different from grant of selection grade. Although such
a provision has been made for the unionized employees
but even then they are also entitled to grant of selection
grade as well. [Para 23] [422-G-H; 423-A]
H
+
FOOD CORPORATION OF INDIA & ORS. v. 415
PARASHOTAM DAS BANSAL & ORS. [S.B. SINHA, J.]
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 991 A
of 2008
From the final Judgment and Order dated 15.9.2006 of
the High Court of Calcutta at Calcutta in APO No. 269/2003.
Amarendra Sharan, A.S.G., S. Chandra Shekhar and Amit B
Anand Tiwari for the Appellants.
't
. ~
Soumitra Ghose Chaudhuri, Parijat Sinha, R. Rea Sinha,
S.C. Ghosh and Snehasish Mukherjee for the Respondents.
The Judgment of the Court was delivered by c
S.B. SINHA, J. 1. Leave granted.
2. Appellant is a statutory body constituted under the Food
Corporation of India Act, 1964. Its functions, inter alia, are relate
to procurement and distribution of food grains. It, inter alia, D
implements the food policy of the Government of India. The Act
provides for regulation making power. Pursuant thereto or in
furtherance thereof regulations have been made laying the
promotion policy of its officers known as FCI (Staff) Regulations.
3. Respondents herein were appointed in the Engineering E
section. Although Food Corporation is not an engineering
oriented organization, services of engineers are necessary for
maintenance of godowns and other structures. They constitute
about one per cent of its total work force. Admittedly, respondents
were stagnated. There was no promotional avenue for them. F I

~
Appellant itself had ·approached the Union of India for
creation of prol'Tlotional avenue and formulating schemes
providing for Assured Carrier Promotion. Admittedly, several
other categories of employees filed writ applications praying
for a direction upon the appellant to formulate suitable schemes G
of organizational structure. Indisputably, a recommendation in
'Y that behalf was also made by Fifth Central Pay Revision
Commission.
4. As the recommendations contained in the report of the
H
416 SUPREME COURT REPORTS [2008] 2 S.C.R.
+
A Pay Commission were not implemented, a writ petition was filed --("

by some of the employees. In the said writ petition, a contention
was raised that such a scheme had already been introduced
for medical officers working in the appellant's organization
pursuant to or in furtherance of a judgment rendered by the High
B Court of Judicature at Andhra Pradesh. In its counter affidavit,
the appellant, inter alia, averred :
"With reference to paragraph No.12 of the Writ Petition, I ...
.l
repeat and reiterate my submissions and statements
contained in the earlier paragraphs and state that the main
c function of the Corporation is procurement, distribution of
the food grains, with little scope for promotion of the
Engineers who were appointed in the Corporation to look
after the skeleton work relating to godown construction
and its maintenance. They have genuine cause and their
D grievance is being taken care by formulating scheme of
selection grade scales for all the stagnating Executives.
xxx xxx xxx
With reference to paragraph No.2 of the writ application,
E I state that the Corporation's main functions are
procurement/distribution of food grains. The Engineers
have been appointed to look after the maintenance of
godowns and other buildings of FCI. As far as stagnation
in FCI is concerned, it is stated that not only the Assistant
F Manager (Engineering) are stagnating but other
employees are also facing this problems. The Corporation -t-
is trying to resolve the problem by framing its own schemes
regarding upgradation of posts and creating selection
grade scales in consultation with the Government of India.
This proposal is already under active consideration of
G
Government of India and final decision of the Government
is already under active consideration of Government is y
still awaited."
5. During pehdency of the said writ petition, a scheme was.
H framed for promotion to selection grade. Some of the
+, FOOD CORPORATION OF INDIA & ORS. v. 417
PARASHOTAM DAS BANSAL & ORS. [S.B. SINHA, J.]
~ respondents have obtained the benefits thereunder. A
6. A learned Single Judge of the Calcutta High Court, upon
constdering the pleadings of the parties as also other materials
· brought on records held :
"It appears that save and except the engineers of the FCI, B
all categories particularly the unionized employees (Group
'; C) get 2 and 3 promotions, due to the availabilities of
.._
promotional opportunities in their respective cadres. These
unionized peoples sought for implementation for ACPs
scheme for them in spite of the fact that they were not c
coming within the four corners of the said scheme. It
appears from letter dated 29th April, 2000 that FCI entered
into a memorandum of settlement with unionized
employees but the petitioners are officers of Group 'B'
staffs. In the said memorandum of settlement, the FCI
D
formulated a scheme of organizational restructure for those
unionized employees. In spite of such fact, the FCI again
sought permission from the Central Government by letter
dated May 14, 1999 to give further monetary benefits to
them Such permission, however, was rejected by the
Central Government by letter dated April 20, 2000. Thus, E
it cannot be contended that the Government of India has
rejected the recommendation of ACPs scheme for the
petitioners. The said rejection was for approval of ACPs
Scheme for unionized employee who already got 2 or 3
-+ promotions in their service life besides the benefit of F
scheme entered by memorandum of settlement. Therefore,
it does not appear that the recommendation for engineers
has been rejected. It is, therefore, clear that FCI never
recommended the case of engineers to the Government
of India and as such, no question of rejection of such G
...,.. recommendation arose."
7. It also took into consideration the action taken by the
Government of India in relation to the Assistant Managers
(Quality Control). The learned Single Judge noticed that the
H
418 SUPREME COURT REPORTS [2008] 2 S.C.R.

A reason for rejection of their claim was that they were already
covered under the scheme of reorganisational structure as was
agreed to by the parties by way of settlement dated 29th April,
. 2000. It further took notice of the fact that the Kera la High Court
had quashed the said order. The writ petition, on the said
s grounds, was allowed.
8. The Division Bench of the High Court affirmed the said
view.
9. Appellant is a 'State' within the meaning of Article 12
c of the Constitution.of India. An employee of a State although
· has no fundamental right of promotion, it has a right to be
considered therefor. What is· necessary is to provide an
opportunity of advancement; promotion being a norma·1
incidence of service.
D 10. This Court in Dr. Ms. O.Z. Hussain v. Union of India
[1990 Supp. SCC 688], opined :
"7. This Court, has on more than one occasion, pointed
out that provision for promotion increases efficiency of the
public service while stagnation reduces efficiency and
E makes the service ineffective. Promotion is thus a normal
incidence of service. There too is no justification why while
similarly placed officers in other ministries would have the
benefit of promotion, the non-medical 'A' Group scientists
in the establishment of Director General of Health Services
F would be deprived of such advantage. In a welfare St~te,
it is necessary that there should be an efficient public
service and, therefore, it should have been the obligation
of the Ministry of Health to attend to the representations of
the Council and its members and provide promotional
G avenue for this category of officers. It is, therefore,
necessary that on the model of rules framed by the Ministry
of Science and Technology with such alterations as may
be necessary, appropriate rules should be framed within
four months from now providing promotional avenue for
H ·the 'A' category scientists in the no n-medical wing of the
-i
FOOD CORPORATION OF INDIA & ORS. v. 419
PARASHOTAM DAS BANSAL & ORS. [S.S. SINHA, J.]
..,..
. Directorate." A
11. The question also came up for consideration in Mis.
Ujagar Prints etc. etc. v. Union of India & Ors. [AIR 1989 SC
972] and Council of Scientific and Industrial Research & Anr.
v. K. GS. Bhatt & Anr. [(1989) 4 SCC 635]. In the latter decision,
8
this Court held :
-.., "It is often said and indeed, adroitly, an organisation public
""" ... or private does not 'hire a hand' but engages or employees
a whole man. The person is recruited by an organisation
not just for a job, but for a whole career. One must, therefore, c
be given an opportunity to advance. This is the oldest and
most important feature of the free enterprise system. The
opportunity for advancement is a requirement for progress
of any organisation. It is an incentive for personnel
development as well. (See : Principles of Personnel
D
Management by Flipo Edwin 8. 4th Ed. p. 246). Every
management must provide realistic opportunities for
promising employees to move upward. "The organisation
that fails to develop a satisfactory procedure for promotion
is bound to pay a severe penalty in terms of administrative
costs, misallocation of personnel, low morale, and E
ineffectual performance, among both non-managerial
employees and their supervisors". (See : Personnel
Management by Dr. Udai Pareek p. 277). There cannot
be any modern management much less any career
planning, man-power development, management F
development etc. which is not related to a system of
promotions."
12. When employees are denied an opportunity of
promotion for long years (in this case 30 years) on the ground
G
that he fell within a category of employees excluded from
'
\
(
'Y promotional prospect, the Superior Court will have the
jurisdiction to issue necessary direction.
13. If there is no channel of promotion in respect of a
particular group of officers resulting in stagnation over the years, H
420 SUPREME COURT REPORTS [2008] 2 S.C.R.

A the Court although may not issue any direction as to in which --f
manner a scheme should be formulated or by reason thereof
interfere with the operation of existing channel of promotion
to the officers working in different departments and officers
of the Government but the jurisdiction to issue direction to
B make a scheme cannot be denied to a Superior Court of the
country.
,-
14. This Court in State of Tripua & Ors. v. K.K. Roy [(2004) A
9 sec 65], upon taking into consideration some of the earlier
decisions of this Court, held :
c
"6. It is not a case where there existed an avenue for
promotion. It is also not a case where the State intended
to make amendments in the promotional policy. The
appellant being a State within the meaning of Article 12 of
the Constitution should have created promotional avenues
D
for the respondent having regard to its constitutional
obligations adumbrated in Articles 14 and 16 of the
Constitution of India. Despite its constitutional obligations, ~
the State cannot take a stand that as the respondent herein
accepted the terms and conditions of the offer of
E appointment knowing fully well that there was no avenue
for promotion, he cannotresile therefrom. It is not a case
where the principles of estoppel or waiver should be
applied having regard to the constitutional functions of the
State. It is not disputed that the other States in India/Union
F of India having regard to the recommendations made in +-
this behalf by the Pay Commission introduced the Scheme
of Assured Career Promotion in terms 'whereof the
incumbent of a post if not promoted within a period of 12
years is granted one higher scale of pay and another upon
G completion of 24 years if in the meanwhile he had not
been promoted despite existence of promotional avenues. ""("
When questioned, the learned counsel appearing on behalf
of the appellant, even could not point out that the State of
Tripura has introduced such a scheme. We wonder as to
H why such a scheme was not introduced by the appellant
"" + FOOD CORPORATION OF INDIA & ORS. v. 421
PARASHOTAM DAS BANSAL & ORS. [S.B. SINHA, J.]
.,..
like the other States in India, and what impeded it from A
doing so. Promotion being a condition of service and
having regard to the requirements thereof as has been
pointed out by this Court in the decisions referred to
hereinbefore, it was expectea that the appellant should
have followed the said principle." B

~
15. Mr. Amarendra Sharan, learned Additional Solicitor
;. General of India, however, submitted that the High Court
committed a serious error in holding that the respondents had
been stagnating in their posts. Drawing our attention to ground
' No.21 in the Memo of Appeal filed before the Division Bench of c
the Calcutta High Court against the judgment of learned Single
Judge, it was submitted that there were four promotional avenues
available to them, namely, from Assistant Manager to Deputy
Manager, from Deputy Manager to Joint Manager, from Joint
Manager to Manager and from Manager to Executive Director. D
It was further submitted that even by reason of introduction of
selection grade, about 113rd of the officers in the cadre of
" Assistant Engineer have benefited therefrom.
16. We have noticed hereinbefore the stand taken by the
appellant itself in its counter affidavit filed before the Calcutta E
High Court. When a categorical statement was made therein,
we fail to understand as to how the same could have been
resiled from. Respondents constitute about one per cent of the
total work force. A huge financial benefit has been given to
unionized employees constituting 85 per cent strength of the F
total work force by giving career progression scheme as well
as the selection grade.
17. Furthermore, this Court in Civil Miscellaneous Petition
No.19864 of 1989 in Writ Petition No.1044 of 1984 wherein
G
the appellant was a party directed enforcement of the report of
~
a High Powered Committee in regard to revision of pay scale,
addition·a1 dearness allowance, pensionary and other benefits
etc. Pursuant thereto, a committee was constituted. A final report
was submitted by the said Committee on 2.11.1988. As the
H
~ "'
422 SUPREME COURT REPORTS [2008] 2 S.C.R.

..,.
A Central Government did not act thereupon expeditiously, this
Court issued certain directions. in regard to the implementation '~
of the recommendations made in the report from the dates
specified therein.
18. It is really of some significance that the promotional
B
avenues alleged to be existed for the cadre of Assistant
Engineers were not taken before the learned Single Judge. A .,,
ground was taken in the Memorandum of the Letters Patent .A
Appeal. Even the same does not appear to have been pressed.
No affidavit has ever been filed by the appellant making ...
c averments of the said fact.
19. Admittedly, a direction was issued by the Andhra
Pradesh High Court to the appellant for framing a scheme for
medical officers, stands implemented.
D 20. So far as the contention of the learned counsel that the
cadre of Assistant Engineers is not important for the appellant
for providing promotional avenue to them is concerned, the same ~
is stated to be rejected. ;
r-[
E 21. We fail to understand how the cadre of Medical Officers
would be important, as like the respondents, they also do not ~
contribute towards the main functions of the appellant. Such a
plea even otherwise is whqlly untenable. An employee is an
employee. How the employees would be structured is
undoubtedly within the realm of the statutory authority but by ...,.
F
reason thereof, it cannot tinker with their essential fundamental
right. j
I·
22. We wish such a plea had not been raised by the
appellant before us.
G
23. So far as introduction of grant of selection grade is ¥

concerned, the same does not provide for a promotional '1"
!
scheme. It is available to a limited number of employees. By •
reason thereof a promotional scheme cannot be said to have
been framed. The scheme of Accelerated Career Progression
H
FOOD CORPORATION OF INDIA & ORS. v. 423
PARASHOTAM DAS BANSAL & ORS. [S.B. SINHA, J.]

is distinct and different from grant of selection grade. We have A
noticed hereinbefore that although such a provision has been
made for the unionized employees but even then they are also
entitled to grant of selection grade as well.

• 24. For the reasons aforementioned, there is no merit in
this appeal. It is dismissed accordingly with costs. Counsel's 8
fee assessed at Rs.50,000/- (Rupees fifty thousand only) .
•• N.J. Appeal dismissed.

_/