Holding

Rule 328(2) is arbitrary, lacks a legitimate purpose, and cannot be enforced; the appellants' promotions were regular and they retain lien on their posts.

Summary

The appellants, originally appointed as Trade Apprentices and later promoted to Skilled Artisan, Instructor‑C (equivalent to Chargeman‑C) and Chargeman‑B, challenged Rule 328(2) inserted by the Railway Board, which retrospectively invalidated all promotions and service length accrued between August 1961 and March 1973. The High Court had upheld the rule, holding the promotions were merely interim and conferred no lien, but the Supreme Court examined whether the rule was within the Board's power under Rule 157 of the Railway Establishment Code and whether it was arbitrary or violative of Articles 14 and 16. The Court found that the appellants were regularly promoted on a permanent basis, that they possessed a lien on their posts, and that Rule 328(2) lacked any real objective and was therefore arbitrary. Consequently, the rule could not be given effect to the detriment of the appellants. The Supreme Court set aside the High Court judgment, quashed the impugned orders, and directed that the seniority of the appellants be fixed based on their regular promotions.

Issues considered

The validity and arbitrariness of Rule 328(2) inserted by the Railway Board under the Railway Establishment Code.
Whether the promotions of the appellants to Instructor‑C/Chargeman‑C and Chargeman‑B were interim/ad hoc and thus did not create a lien on the posts.
Whether the Railway Board had authority under Rule 157 of the Railway Establishment Code to frame Rule 328(2).
Whether Rule 328(2) violated Articles 14 and 16 of the Constitution by being discriminatory.
Whether the appellants have a lien on the post despite being appointed on an ad hoc basis.

Legislation cited

Indian Railway Establishment Codes. 157, s. 324, s. 325, s. 326, s. 327, s. 328

Subjects

Railway lawPromotionsSeniorityRule validityArbitrarinessLien on postAd hoc appointmentConstitutional lawArticles 14 and 16Railway Establishment Code

Judgment

A
HARIBANS MISRA AND OTHERS
v.
RAILWAY BOARD AND OTHERS

JANUARY 11, 1989

B IMURARI MOHON DUTT AND S. NATARAJAN, JJ.)

Civil Services: Lien-Holding of-Person appointed on ad hoc
basis cannot have lien on the post-Person can have lien on post and not
lien on place. ~;
•
Railway Establishment Code: Rules 157and 324 to 328-D.L. W.
c Varanasi-Railway employees appointed on permanent basis-Later
promoted-Insertion of Rule 328(2) by Correction Slip No. 70-Effect
of rule-Wiping out promotions granted to employees and also length of
service of nine years-Held rule 328(2) arbitrary and void-Not to be
given effect to.
D
The appellants in the appeal were appointed in or about January,
1959 as Trade Apprentices in Locomotive Component Works. In
August, 1961 there was a merger of Locomotive Component Works
with Diesel Locomotive Works, as a result of which all the members of
the staff of LCW were taken over by DLW. The appellants were
E appointed skilled artisans on July 19, 1962 after successfully completing
the training period of 3'h years. The channel for promotion to higher
posts was:

F
(1) Skilled Artisan, (2) Highly Skilled Grade-II, (3) Highly Skilled
Grade-I, (4) Chargeman-C, (S) Chargeman-B, (6) Chargeman-A, (7)
Assistant Foreman and (8) Foreman.

In September, 1963, the appellants were promoted to the post of
Instructor-C which was equivalent to the post of Charegman-C. The
'
posts were inter-changeable. The appellants were further promoted on
September 22, 1964 to the post of Chargeman-B. Some of the respon-
G dents in the appeal who were direct Recruits also competed with the
appellants for the post of Chargeman-B, but could not qualify in the
written test. 11-
On August 11, 1966, the General Manager, DLW prepared and
issued a seniority list of Chargeman-B. This list was challenged by
H certain direct recruits in a writ petition to the High Court. A Single
78
HARIBANS MISRA v. RAILWAY BOARD 79

...4.. Judge quashed the seniority list and also the guidelines/rules framed by
A
the General Manager, DLW on the basis of which the seniority list was
prepared, on the ground that the General Manager, DLW was not the
General manager of the Railway, and as such he had no authority to
frame the rules or the guidelines for the purpose of preparation of the
seniority list. It was further held that the guidelines/rules were violative
_,..\" of Articles 14 and 16 of the Constitution. B

Several appeals were preferred, one of them being by the Railway
Administration. The Division Bench while upholding the finding of the
Single Judge that the General Manager DLW was not competent to
--~ frame the rules/guidelines, disagreed with the finding that the rules/
guidelines were violative of Articles 14 and 16 of the Constitution.
c
-f Pursuant to the aforesaid judgment, the Railway Board issued an
Advance Correction Slip No. 70 inserting Rules 324 to 328 in the Rail-
way Establishment Manual after rule 323 in Chapter III. Rule 328(2)
provided that: 'selections and promotions made in the Diesel Locomo-
tive Works from August 1, 1961 upto the date of the notification of the D
rules shall not be invalid'. The amended rules came into effect from
March 11, 1973.

'
J-, The resultant situation was that Rule 328(2) vitally affected the
appellants by making invalid all the promotions given to them during
the period Angus! 1, 1961 to March 11, 1973 and the appellants were E
reverted back as Skilled Artisans.

'
The General Manager, DL W a Circular dated 7/Sth December,
1973 directed appellants to appear at the Trade test and further in-
/. formed that failure to do so would result in being passed over for
fixation of seniority in the Highly Skilled Grade-II. The representation F
against this Circular was turned down.

Aggrieved by the introduction of Rule 328(2) and also the issuance
of Circular by the General Manager DLW the appellants filed a writ
petition in the High Cour. The High Court overruled the contention
that the new rules inserted in the Railway Establishment Manual by G
the Advance Correction Slip No. 70, were invalid, and held that the
;1\ rules were quite valid and were not arbitrary or discriminatory. As
regards promotion of the appellants, the High Court took the view that
they were only interim and provisional an.d not regular and as such no
right was conferred on appellants to hold the posts to which they were
promoted. The High Court accordingly dismissed the writ petition. H
80 SUPREME COURT REPORTS [1989] 1 S.C.R.

On behalf of the appellants in the appeal by special leave it was
A
contended that Rule 328(2) as inserted in the Railway Establishment
Manual by the Advance Correction Slip No. 70 was invalid, that the
promotions of appellants up to the position of Chargeman-A could not
be set aside and appellants reverted back to their original position of
Skilled Artisans, and that the length of service of the appellants for a
B period of about 9 years has been completely wiped out by the said Rule
328(2).

Allowing the appeal and setting aside the judgment of the High
Court,

C HELD: I. By virtue of Rule 157 of the Railway Establishment
Code, the Railway Board has the power to frame rules, but such rules must
be framed with certain objects in view and must not be arbitrary. [90E]

2. The Court is always entitled to examine whether a particular
rule which takes away the vested right of a railway employee or seri-
D ously affects him with retrospective effect, has been made to meet the
exigencies of circumstances or has been made arbitrarily without any
real objective behind it. [90E-FI

3. The Railway Administration was to comply with the order ~
of the High Court and in compliance with the order, it should
E have prepared the seniority lists in accordance with the existing
rules. [90C-DI

'
4. It is curious, that instead of preparing the seniority list in
accordance with the existing statutory rules, as directed by the High

F
Court, the Railway Board amended the rules and inserted by the
Advance Correction Slip No. 70, among others, Rule 328(2). That rule
\
wipes out not only the promotions granted to the appellants up to the
post of Chargeman Grade-B, but also the length of service of.the appel-
lants for about nine years. [89F-G I

S. This Court does not find any objective or purpose behind the
G framing of Rule 328(2) to the serious prejudice of the appellants. The
said Rule is arbitrary and therefore, cannot be allowed to be operative
to the detriment of the appellants. [90F] "f,
6. The appellants were regularly promoted to the post of
Chargeman-C and thereafter to Chargeman-B. In these circum-
H stances, no justification is found for the Railway Board to incor-
HARIBANS MISRA v. RAILWAY BOARD [DUTI, J.J. 81

porate a new rule viz., Rule 328(2) to the serious prejudice of the A
appella!ltS. [90C I

7. A person can have lien on a post a111l. not a liell •m a place.
There can be no doubt tbat a persol1 appointed to a post on l!d hoc 11asis
cannot have any lien on the post. It is only when a person is app9intell
on a perma!lent basis, he cal1 claim lien on the post tQ wliich lie is so B
appointell. [87F-G] ·

I 8. It is not corre~t to Sl!Y that tlie 11ppell311ts were 11ppointed or
~ promoted to the pust of l!JStructor-C or Charge11111n-C O!l a11 ad hoc
basis or by way of a.n interi!ll meas11re, as held by tlie High Court. If
I hey were appointed on ad hoc or p11rely temPl!r@ry basis they coul.d not C:
have beel1 promQted to tlie post 1>f C:liarge1113n,B allll Office Qrller
NI). 25 dated Ja1111arY 22, 1\166 wouh! liave bee11 quite i11c<msiste11t with
sucli ad hoc or temporary appQintments. [87G,H]

<), l)irected that 1tespon<1ent Nos. 1 and 2 shall not give effect to
Rule 328(2) as inserted in. the Railway Estal1lis!i111ent Manual by the O
·\dvance Correction Slip No. 70 in the case of appellants and 1tespon-
dL•nt Nos. 3 to 6, Orders dated l)ecember 7 /8th, 1973 and January 7,
1974 are quashell, Fµrther <lirectell that 1tespor1dent Nos, 1 and 2 Ii'! the
.;
seniority of appellants and respo!lden\s ~ to, 6 O!I the basis of tlieir prQ-
motions to p()sts oflnstructor/Chargel!lan-C and Charge111a11•B· [918,C]

- CIV!L APPELLATf: JUR!SPIC:TION: Civil Appeal No. 1643
of 1984, ·

Fr()m th" JudgmeQt an.d Order datecl 6.7.1982 of tile Allahabad
High C:qurt in Writ Petition No. 1499 of 1974
f
G .L. Sanghi, Mrs. S. Pixit and Pradeep Misra for \lie Appel)ants.

Kuldip Singh, Additiom1l Solicitor Gep.eral, Ashok K. Srivas,
tava, C.V. Subba Rao, Mrs. sush!Da S11ri ap.d A. Subba Rao for the
Respondents.

The Judgment of the Court was deliverecl by

DUTT, J. This appeal by special leave is clirec!ecl !!gains\ ttw
judgment of the Allahabad High Court <:!isf!lissing tile writ petili\>!l of
the appellants wliereby they Challenged inter a/iii tlie valic!lty qf rule
328(2) of the Railway Establishment Code as aniendeg !?y tpe Railway H
82 SUPREME COURT REPORTS [1989] 1 S.C.R.

A Board by Advance Correction Slip No. 70. +
The appellants were appointed Trade Apprentices in Locomo-
tive Component Works (for short 'LCW') in or about January, 1959.
There was a merger of LCW with Diesel Locomotive Works,
Varanasi, (for short 'DLW') on August 1, 1961, as a result of which, all
B the members of the staff of LCW were taken over by DLW. On July
19, 1962, the appellants were appointed Skilled Artisans after success-
fully completing a training for three years and a half. The regular
channel of promotion to higher posts from the post of Skilled Artisan
is in the following order:-

1. Skilled Artisan.
c
2. Highly Skilled Grade-II.

3. Highly Ski:led Grade-I. .-
D 4. Chargeman-C.

5. Chargeman-B.

6. Chargeman-A.

-
E 7. Assistant Foreman.

8. Foreman. /...

It is apparent from the above channel of promotion that the next
higher post to which the appellants could be promoted was the post of
F Highly Skilled Grade-II. In September, 1963, the appellants were,
however, promoted to the post of Instructor-C which is equivalent to
the post of Chargeman-C. There is a controversy between the parties
as to whether the post of Instructor-C was an ex cadre post or not.
According to the appellants, it was an interchangeable post with
Chargeman-C. We shall have occasion to consider the question later in
G this judgment. It may be stated, however, that there is no dispute that
the post of Instructor-C is a selection post and the appellants were
selected and promoted to existing vacancies in that post. The next post
to which the appellants were promoted on September 22, 1964 is the
post of Chargeman-B upon their selection by a constituted Selection
Board on a regular basis. Some of the respondents, who are direct
H recruits, also competed with the appellants for the post of Chargeman-
HARIBANS MISRA v. RAILWAY BOARD IDUTI, J.J 83
.-!._ B, but they could not qualify themselves in the written test. To comp-
A
lete the narrative, it may be stated that the appellants have now been
promoted to the post of Chargeman-A.

On August 11, 1966, the General Manager of DLW prepared
certain seniority lists including a seniority list of Chargeman-B on the
basis of the rules or guidelines framed by him. The said seniority list B
~
was challenged by certain direct recruits by filing writ petitions before
a learned Single Judge of the Allahabad High Court. The learned
Single Judge quashed the seniority list and also the guidelines or rules
framed by the General Manager, DLW, on the basis of which the
~ seniority list was prepared. The principal ground on which the senio-
rity list and the rules or guidelines framed by the General Meeting,
DLW, were quashed by the leaarned Single Judge was that the c
General Manager, DLW, was not the General Manager of the Railway
¥- and, as such, he had no authority to frame rules or guidelines for the
purpose of preparation of the seniority list. Further, the learned Judge
held that the said rules or guidelines dated August 11, 1966 were
violative of Articles 14 and 16 of the Constitution of India. D

Several appeals were preferred against the judgment of the
learned Single Judge including one preferred by the Railway Adminis-
!ration before the Division Bench of the High Court. While upholding
~--
the finding of the learned Single Judge that the General Manager,
DLW, was not competent to frame rules or guidelines, the Division E

. Bench could not agree with the finding of the learned Single Judge that
the said rules or guidelines were violative of Articles 14 and 16 of the
Constitution. It was observed that there would have been no objection
if the General Manager, DLW, had utilised the relevant statutory
j rules in drawing up the seniority list but, admittedly, the rules in
question were 'ignored. Further, the Division Bench pointed out that F
all the conceq1ed employees in the writ petition agreed before the
learned Single Judge that the seniority list might be prepared on the
basis of the relevant rules contained in the Railway Establishment
Code and the Railway Establishment Manual. The Division Bench
also found that the DLW project was not a temporary project, but
appeared to be a permanent project. Upon the above findings, the G
Division Bench upheld the quashing of the seniority list and directed
"r· the General Manager, DLW, to prepare a fresh seniority list in the
light of the statutory provisions contained in the Railway Establish-
ment Code and the Railway Establishment Manual.

After the aforesaid judgment of the Division Bench of the High H
84 SUPREME COURT REPORTS [1989] 1 S.C.R.

A Court, what the Railway Board did before preparation of any seniority
list. by the General Manager, DLW, was to issue Advance Correction
Slip Nq . 70 inserting rules 324 to 328 in th.e Railway Establishment
Manual after rule 323 in Chapter IIL Qf \he rules, so inserted, that
which vitally affecte<l the appellants is rule 328(2) which provides as
f()llows:-,-,-
B.
"328(2), Selection and promotiolls made in the piesel
Locomotive works flom 1.8 . 1961 up to the date of notifica-
tion of these ru!es shall 11ot be valid."

The R11les were !!lllended by the Board by virtue of its power under
Q r\lle 1~7 whi~b, provides (hat the Railway Bqard have full powers to
111<1.l<:.e mies of general applic!lti0 n to non,ga;<ette<J railway serva11ts
µn<Jer tb,eir cqllfroL The \l.;ite of !JO\ificatior\ of tb,e amende<J Rules is
Mllx~h 11, 1973, l!l view qf m!e }28(2), !h.e proll\otio!ls wb,ich were
grnnted to the !IPPel!ants frnm A.11gl!s\ ·L 1'161 up to March 11, 1973
shllll not lie va\i.<!.Needless \Q sa_y,rn!e 3;!8(2) has vitally ;i,ffected the
P ;ippe\lants by i@k.i!lg hwa!ig ;i,11 the pro111QtiQ11s given \o th.em between
the saig perfod. As a res11It, the appell.a!lts wer~ revert.I'd. \lack to the
pqsition of Sk.il!e<.l Artisans, ·

Thi: Gelleral Mam1ger, DLW, by his circular dated Decell\ber _.,.~
7/8, 1973 \lire~ted the lJppellants tq appear at the trade test. it was
E further <!iregte{I tha.t if ttie s.tilff concem\ld would fai! to appear in the
tr<1de \es\, they WOl!ld be p;!ssed over for fixation of seniority in the
H;ig!ily Skille\I Qrl!de-II, al\hqugh the appellants hacl in 1962 qossed ""
tile p()si\ion of Highly i;ki!led Gracle,IJ. The appellants made a
represe11tatio11 Mains( the said circl!Jar to the (Jenera! Ma11ager, \_
I>LW, on I>ecelliber 12, 1973 . TJiat rnpresen\atio11 was tl!med down {\.
F by thi; G1rnera! Ma11a,ger on the gro\!Dd th at in yiew of the said rule
n8(:2), the ~lailll for either higher posjtiqns or exemption from passing
a11y tracle test W'!S. not tenable. It was also stated th!lt if the ap!l'l!lants
woulcl fail \o appear in the trade test, they would be passed over for
fixation of seniority in the Highly Skilled Grade-II.

G Being aggrieved by the introduction of the s.aid rule 328(2)
c)jrectly affecting the appellants and also the said circular of the
Gi:neral Manager, PLW, requiring the appellants to appear at the
trade test for the purpose of preparation of the seniority list in Highly
~kil!t:<.l Ora\:le-II, t!ie <1ppel!ants filed a writ Pe!itio!l before the High
. Coqrt. Tue High Court ()Verruled the co!llen\jon pf \he apppella.nts
·.1!'
H t!il!t th., 11ew rules, whiel! have been insef\ecl in t!le Rili!way ~sta\llish,
HARIBANS MISRA v. RAILWAY BOARD [DUTI, J.I 85

~ ment Manual including rule 328(2) by the Advance Correction Slip A
No. 70 by the Railway Board by virtue of its power under rule 157 of
the Railway Establishment Code, were invalid. The High Court held
that the said rules were quite valid and were not arbitrary or dis-
criminatory as contended on behalf of the appellants. In regard to the
promotions of the appellants. The High Court took the view that they
were only interim and provisional and not regular promotions under B
the normal rules, and that such provisional selection and promotions
conferred no rights on the appellants to hold the posts to which they
were promoted. Upon the above findings, the High Court dismissed
the writ petition. Hence this appeal by special leave.

Mr. Sanghi, learned Counsel appearing on behalf of the appel-
lants, has challenged before us the validity of rule 328(2) as inserted in c
the Railway Establishment Manual by the Advance Correction Slip
No. 70. It has been already noticed that in view of the said rules, the
promotions of the appellants up to the position of Chargeman-A stand
set aside and the appellants are reverted back to their original position
of Skilled Artisan. In other words, the length of service of the appel- D
lants for a period of about nine years has.been completely wiped out by
rule 328(2).

The High Court took the view that the promotions which were
granted to the appellants were by way of interim measure and did not
confer on them any title to the posts to which they were promoted. In E
support of that view, the High Court has referred to the order of the
General Manager, DLW, dated May 14/16, 1962 which reads as
follows:-

f "As an interim measure, all supervisory technical posts in
the Mechanical Department will be treated as ex cadre
posts and promotions will be regulated by selection."
F

Before considering the question of the validity of rule 328(2), we
may first of all examine whether the promotions of the appellants up to
the post of Chargeman-B were by way of interim measures, as found
by the High Court, and/or whether such promotions are permissible by G
the Rules or not. In this connection, we may refer to the circular of the
Railway Board dated May 27, 1963 regarding the procedure to be
followed for filling up selection posts (non-gazetted). The Board
directed that if the requisite number of staff was not available in the
grade next to the grade for which the selection was being held, the
administration could go to the lower grade in order to make up four H
86 EUPREME COURT REPORTS 11989] 1 S.C.R.

A times the number required to be called up for selection but, in no case, A

can the eligibility be extended to staff in the grade lower than three
times. This ciruclar of the Board is quite consistent with rule 216 of the
Railway Establishment Manual. Rule 216 also provides for a similar
procedure. The direction of the Board read with the provision of rule ~
216 clearly empowers the administration to select persons from two
B grades lower than the post to which promotion was to be made.

The next circular dated November 2, 1963 of the General ,
Manager, DLW_, regarding the formation of panel for promotion of
mechanical supervisors and instructors is significant. The said ciruclar
clearly provided that all staff in Mechanical Department including
instructoral staff under the Principal Technical Training School in two
c grades below the grade for which selection was going to be held, were
eligible. The Skilled Artisans having not less than one year's service
were permitted to apply for the post of Instructor in the grade of
Rs.205-280 (AS) which is equivalent to that of Chargeman-C. In the
channel of promotion, which has already been noticed above, the
D feeder post for promotion to the post of Chargeman-C is Highly
Skilled Grade-I but, in view of the said circular dated May 27, 1963 of
the Board read with rule 216 of the Railway Establishment Manual,
persons holding posts two grades below the post to which the promo-
tion was to be made, that is, the post of Instructor which is equivalent
to the post of Chargeman-C, were allowed to apply for the same. The __,-
E reason for the said circular or the said rule is that at all times suitable
candidates might not be available and just to avoid administrative
inconvenience, the promotions are given from posts below the feeder
post. The said circular of the General Manager, DLW, dated
November 2, · 1963 does not show that the promotion to the posts of
selection and/or promotion to the posts of Instructors would be by way ~
F of interim measure or ad hoc arrangement. In the absence of any such
indication, it will not be unreasonable to presume that such promo-
tions were anything other than by way of interim measure or ad hoc
arrangement, as contended on behalf of the respondens. In view of the
said circular dated November 2, 1963, the appellants applied for the
posts of Instructors and they were selected after the requisite tests. In
G the office order No. 3421 dated December 30, 1963, appointing the
appellants to the post of Instructor (Machinist Gr.-C), it is clearly
stated that they are appointed to the post of Instructor (Machinist
Gr.-C) against existing vacancies.

Again, a similar circular dated July 18, 1964 was issued from the
H office of the General Manager, DLW, with regard to the filling up of
HARIBANS MISRA v. RAILWAY BOARD [DlJIT, J.J 87

...J.... the posts of Chargeman-B in the scale of Rs.250-380 (AS). It was A
clearly stated in the circular that the staff in the Mechanical Depart-
ment in two grades below the grades for which the selections would be
held, were eligible to apply. The appellants applied for the post and
had to appear at the written and viva voce examinations. Some of the
private respondents also appeared in the said examinations along with
the appellants but they failed, while the appellants succeded and were B
empanelled for appointment to the post of Chargeman (Machinist)-B.
In view of such an empanelment, the appellants were appointed
Chargemen-B in the grade of Rs. 250-380 against existing vacancies
sometime in February, 1965.

We may now refer to a very significant document which is office C
order No. 25 dated January 22, 1966. In that order, it is stated that the
staff mentioned therein will have their paper lien maintained in the
Shops/Division as mentioned against each and will seek their promo-
tions in their respective Division/Shops. In the list annexed to the said
order, the present designation of the first appellant has been
mentioned as "Instrnctor-B" and his revised position or designation as D
"Chargeman-B". In the last column under the heading "placed where
lien is kept", it is stated that his lien is kept under the production
Engineer (PE). The present and revised designation of the appellant
Nos. 2 and 3 have been shown as Chargeman-B. The place of lien of
the appellant No. 2 has been stated to be under the Production
Engineer, while that of the third appellant has been stated to be under E
the Works Manager (B). It is urged on behalf of the respondents that
the said officer order No. 25 does not show that the appellants have
any lien on the posts of Chargeman-B. It only mentions that they have
a lien on certain places. We are unable to accept this contention. A
person may have lien on a post and not a lien on a place. And all that
the said order means that they have lien on the post of Chargman-B, F
but in certain places under either the Production Engineer or !Jie
Works Manager. There can be no doubt that a person appointed to a
post on an ad hoc basis cannot have any lien on the post. It is only
when a person appointed on a permanent basis, he can claim lien on
the post to which he is so appointed. It is, therefore, not correct to say
that the appellants were appointed or promoted to the post of G
Instructor-C or Chargeman-C on an ad hoc basis or by way of an
interim measure, as held by the High Court in the impugned judg-
ment. If they were appointed on ad hoc or purely temporary basis,
they could not have been promoted to the post of Chargeman-B and
the said order No. 25 dated January 22, 1966 would have been quite
inconsistent with such ad hoc or temporary appointments. H
88 SUPREME COURT REPORTS [1989] 1 S.C.R.

A At this stage, it will be pertinent to refer to the counter affidavit ~
of the Railway Administration in the previous writ proceedings. In
paragraph 15 of the counter affidavit, it has been stated inter alia that
the post of Junior Instructor carries the same scale of pay as
Chargeman- 'C' and that the two posts being of the same rank and
scale, staff of the one post could be transferred to the other post and
13 vice versa. This statement in the counter affidavit of the Railway
Administration clearly indicates that the post of Instructor-C and
Chargeman-C are interchangeable posts. Further, it is stated as
follows:-

"Respondent Nos. 8 to 11 (which include the three appel-
lants herein) in the first instance offered for the post of
c Instructors in grade Rs.205-280 (equivalent to Chargeman-
'C' grade) and they were selected by duly constituted Selec- -°'(
tion Board. Subsequently they offered for the post of
Chargeman-B grade Rs.250-280 (AS) and were promoted
as such after having been selected by a Selection Commit-
D tee. Respondents Nos. 8 to 11 were appointed to grade
Rs.205-280 and subsequently to grade Rs.250-280 after
having been selected by a duly constituted Selection Board·
"
_,.).,
In the circumstances, we are of the view that the appellants were ·
E not appointed on an ad hoc or a purely temporary basis by way of
interim measure as held by the High Court, but they were appointed
on a permanent basis in the post of Instructor or Chargeman Grade-C,
which are interchangeable posts and, thereafter, promoted to the post
of Chargeman Grade-B. The appointment or promotion of the appel- L
!ants to the post of Chargeman-C from the post of Skilled Artisan or to''\
F Chargeman-B were made in accordance with the circular of the .
Railway Board and/or in accordance with rules 216 of the Railway
Establishment Manual. It cannot, therefore, be said that the appel-
lants were promoted to the post of Chargeman-C illegally or in viola-
tion of any rule. There is a controversy between the parties as to
whether the post of Instructor-C is an ex cadre post or not. It is submit-
G ted on behalf of the respondents that the post of Instructor-C being an
ex cadre post, the appellants could not be appointed or promoted to
the post of Chargeman-C. This contention is unsound and is fit to be -1'
rejected. It is the clear case of the Railway Administration, as pointed
out above, that the posts of fostructor-C and Chargeman-C are
interchangeable posts. Even assuming that the post of Instructor-C is .
H an ex cadre post, nothing turns out on that inasmuch as according to
HARIBANS MISRA v. RAILWAY BOARD [DUTI, J.[ 89

L_ the Railway_ Administration itself, the two posts being of the same A
rank and scale, the staff of one post could be transferred to the other
post and vice versa. The appellants might have been appointed to the
post of Instructor-C, but they were transferred to the post of
Chargeman-C and, therefore, there was no difficulty in promoting
them to the post of Chargeman-B.
B
Now, we may consider the question as to the propriety
otherwise of rule 328(2) as inserted in the Railway Establishment
Manual by the Railway Board in exercise of its power under rule 157 of
the Railway Establishment Code. It has already been noticed that in
the previous writ proceedings the Division Bench of the High Court
quashed the seniority list and directed the General Manager, DLW, to C
prepare a fresh seniority list in the light of statutory provisions con-
tained in the Railway Establishment Code and the Railway Establish-
ment Manual. The Principal ground for quashing the seniority list was
that the General Manager, DLW, had no authority to frame guidelines
or rules for the purpose of preparing the seniority list. It has also been
noticed that while the learned Single Judge took the view that the D
guidelines or rules framed by th<; General Manager were. violative of
Articles 14 and 16 of the Constitution, the Division Bench took a
contrary view and after considering the rules or guidelines. in detail
came to the finding that none of the guidelines or rules framed by the
General Manager was contrary to the provisions of Articles 14 and 16
of the Constitution. Indeed, the Division Bench was of the view that E
no objection conld be taken to the said rules or guidelines, but it had
to quash the seniority list framed on the basis of such guidelines or
rules inasmuch as the General Manager had no authority to frame such
rules or guidelines. Accordingly, the Division Bench directed the
f General Manager to prepare the seniority list in accordance with the
existing statutory rules. F

It is curious that instead of preparing the seniority list in accor-
dance with the existing statutory rules, as directed by the High Court,
the Railway Board amended the rules and inserted by the Advance
Correction Slip No. 70, among others, rule 328(2) which has been
extracted above. That rule wipes out not only the promotion granted. G
to the appellants up to the post of Chargeman Grade-B, but also the
length of service of the appellants for about nine years. The appellants
have been directed by the order dated december 7/8, 1973 of the
General Manager to appear in a trade test in respect of the post of
Highly Skilled Artisan Grade-II, otherwise their seniority in the said
post will be passed over. In other words, the appellants are in a way H
90 SUPREME COURT REPORTS [1989) 1 S.C.R.

A reverted to the post of Skilled Artisan which they were holding before __,...
their promotion to the post of Instructor/Chargeman-C. No reason
appears to have been given for the introduction of rule 328(2) by the
Advance Correction Slip No. 70. It was not the case of the Railway
Administration in the previous writ proceedings that the promotions
that were given to the appellants were purely on an ad hoc basis. The
B High Court in the previous writ proceedings did not also find that the )-_
appellants' promotion to the post of Instructor/Chargeman-C or to the
post of Chargeman-B were on ad hoc basic. We have, after considering
the relevant facts, come to the finding that the appellants were regu-
larly promoted to the post of Chargeman-C and, thereafter, to )..._.!'-
Chargeman-B. In the circumstances, we do not find any justification
C for the Railway Board to incorporate a new rule, that is, rule 328(2) to
the serious prejudice of the appellants.

The Railway Administration was to comply with the order of the
High Court and in compliance with the order, it should have prepared
the seniority lists in accordance with the existing rules. It is not the
D case of the Railway Administration that under the existing rules the
seniority list could not be prepared. There is, therefore, no reasonable
justification for the Railway Board to insert in the Railway Establish-
ment Manual rule 328(2). There can be no doubt that by virtue of rule
157 of the Railway Establishment Code, the Railway Board has the A.
power to frame rules, but such rules must be framed with certain
E objects in view and must not be arbitrary. The Court is always entitled
to examine whether a particular rule which takes away the vested right
of a railway employee or seriously affects him with retrospective
effect, has been made to meet the exigencies of circumstances or has
been made arbitrarily without any real objective behind it. In the
instant case, we do not find any objective or purpose behind the fram-
F ing of rule 328(2) to the serious prejudice of the appellants. In other
words, rule 328(2) is arbitrary and, therefore, cannot be allowed to be
operative to the detriment of the appellants. The only justification for
rule 328(2) as advanced by the learned Counsel for the respondents is
that as the appellants we.re promoted on ad hoc basis to the posts of
Chargeman-C and Chargeman-B, they had no right to hold these posts
G and, accordingly, they were to be reverted to the post of Skilled Arti-
san. This contention of the respondents does not find support from the
counter affidavit filed by the Railway Administration in the previous
writ petition nor does it appear from any order or circular of the
Railway Board or the Railway Administration in support of the same.
Moreover, we have on a conspectus of the facts and circumstances and
H the circulars of the Railway Administration come to the finding that
HARIBANS MISRA v. ·RAILWAY BOARD [DUTI, l.J 91

the appellants were not promoted on an.ad hoc basis .. A

For the reasons aforesaid, the appeal is allowed and the judg-
ment of the High Court is set aside. It is directed that the respondents
Nos. 1 and 2 shall not give effect to rule 328(2) as inserted in the
Railway Establishment Manual by the Advance Correction Slip No. 70 B
in the cases of the appellants and the respondents Nos. 3 to 6. The
impugned orders dated December 7/8, 1973 and January 7, 1974 are
quashed. The respondents Nos. 1 and 2 are further directed to fix the
seniority of the appellants and the said respondents Nos. 3 to 6 on the
basis of their promotions to the posts of Instructor/Chargeman-C and
Chargeman-B.
c
There will be no order as to costs.

N.V.K . Appeal allowed.

...