Holding

The Court dismissed the review petitions, finding no substantive basis to overturn its earlier decisions on the seniority and quota rules.

Summary

The Supreme Court considered review petitions filed under Article 32 seeking to overturn its earlier decisions in S.G. Jaisinghani and the two Gupta cases concerning the seniority and quota rules for Income‑Tax Officers (Class I, Grade II). The petitioners argued that the Court had wrongly treated Rule 4 of the 1945 Recruitment Rules and the quota prescribed in the 1951 letter as statutory, that the quota was misapplied, and that new evidence showed the Government had withheld crucial files. The Court, after examining the historical facts, the statutory nature of the rules, and the lack of any fresh material, held that there was no substantive ground to revisit the earlier judgments. Consequently, the review petitions were dismissed without any order as to costs.

Issues considered

Whether Rule 4 of the Income‑Tax Officers (Class I, Grade II) Service Recruitment Rules is a statutory provision
Whether the quota rule of 1951 has statutory force and was correctly applied to promotions between 1951‑1956
Whether the seniority lists prepared after 1958 complied with the earlier judgments and the quota rule
Whether the Government’s failure to produce certain files constitutes a ground for review of the earlier decisions
Whether the Court may exercise its inherent power of review in the present circumstances

Legislation cited

Constitution of Indias. Article 14, s. Article 16, s. Article 309, s. Article 32
Government of India Act, 1935s. Section 241
Income‑Tax Officers (Class I, Grade II) Service Recruitment Rules, 1945
Income‑Tax Officers (Class I) Service (Regulation of Seniority) Rules, 1973

Subjects

seniorityquotapromotionservice lawconstitutional lawreviewArticle 14Article 16Income‑Tax ServiceRule 4statutory interpretationadministrative law

Judgment

811

KAMAL KANT! DUTTA AND ORS. A

v.
UNION OF INDIA AND ORS.

April 23, 1980
B
[Y. V. CIIANDRACHUD, C.J., N. L. UNTWAUA, P. S. KAILASAM,
D. A. DESAI AND E. S. VENKATARAMIAH, JJ.]

Review of Judgments of the Supreme Court of India under Airticle 1371 of
ihe Constitution read with Order XXL of the Supreme Court Rules, 1966-
Petitions filed under Article 32 of the Constitution indirectly invoking the review ·c
iurisdiction and seeking a revie1v of earlier decision of the'· Courts Held, there is
no substance in the request.

With a view to imp:roving the Income-tax administration, the Government
of India in consultation with the Federal Public Service Commission decided to
-reconstitute then existing income-tax services, Class I and II. Under the scheme
of reorganisation of the services set out in a letter dated September 29, 1944 D
of the Government of India Finance Department, the central service Class I
was to consist of (i) Commissioners of Income-Tax (ii) Assistant Commis-
·sioners of Income-Tax; (iii) lncome.-Tax Officers Grade I and (iv) Income-Tax
Officers Grade-II. Thus Income-Tax Officers Class I were to be of two
grades, Grade I and II; while Income-Tax Officers Class II were to consist of
one grade, namely, Grade III. Clauses (a) to (e) of paragraph 2 of the letter,
prescribed the mode of recruitment to the various posts in Class I and Class II, E
Under Clause (d) recruitment to Class I Grade II was 20% by promotion
from Class II, Grade III and 80% by direct recruitment via Indian Audit and
Accounts Service etc. examination. Rules regulating recruitment to the In-
come-Tax Officers (Class I, Grade II) service ''liable to alteration from year
io year" were published on May 26, 1945, by a resolution of the Finance
(Central Revenues) Department. Rule 3 provided that recruitment to Class I,
Grade !I's service shall be made (I) by competitive examination held in India F
in accrnlance with Part-II of the Rules and (ii) by promotion on the basis of
selection of Grade ill (Class II service, in accordance with Part lII of the
:Rules. By Rule 4 of the Government was to determine, subject to the provi•
sioos of Rule 3, the method or methods to be employed for the purpose of
·filling any particular vacancies, or such vacancies as may be required to be
filled during any particular period, and tho number of candidates to be recruited
by such method. Part ill of the Rules called (Recruitment by Promotion) G
provided by paragraph 21 that "recruitment by promotion shall be made by
selection from Grade-Ill Income-Tax Officers (Class II service) after consul-
i•tion with the Federal Public Service and that no officer shall have any claim
to such promotion as of right".
1ly a letter dated January 24, 1950 the Government of India laid down
certain rules of seniority: (a) as between direct recruits; (b) as between
promotees selected from Class II and ( c) as between direct recruits who com- H
pl_eted their probation in a given year and the promotees appointed in the same
year to Class r.
812 SUPREME COURT REPORTS [1980] 3 S.C.R.

A, On October 18, 1951 the Government of India addressed a letter to all the
Ccmn1issioners of Income·Tax titled "Income-Tax Officers, Grade-II (Class-
I service)-quota of vacancies filled by promotions" wherein it was outlined
that for a period of 5 years in the first instance 66 and 2/3 per cent of the
vacancies in Class-I, Grade-II would be filled by direct recrnittnent by a
combined. competitive examination and the remaining 33 and 1/3 per cent on
the basis of selection by promotion from Grade-III (Class-II service). Any
B surplus vacancies which could not be filled by promotion for want of suitable
candidates would be added to the quota of vacancies to be filled by direct re-
cruitment. By a letter dated September 5, 1952 the Government of India
revised with a retrospective effect the Rules of Seniority which were laid down
on January 24, 1950. Rule 1 (f)(iii) as framed on January 24, 1950 which
was to the effect that "the promotees who have been certified by the comm~s
sion in any calendar year sha.11 be senior to all direct recruits who complete
c their probation during that year or after and are confirmed with effect from
a date in that year or after" was revised on September 5, 1952 as "officers pro-
moted in accordance with the recommendations of .the Departmental Promo-
tion Committee before the next sitting of the Departmental Promotion Com-
mittee shall be senior to all direct recrui:ts appointed on the results of the
examinations held by the Union Public Service Commission during the calendar
year in which the Departmental Promotion Committee met during the three
D previous years". Rule l(f)(iv) of the 1952 Rules dealt with a special situation
in \Vhich an officer initially appointed to Class Il service was given seniority
in thei same manner as a departmental promotee, if subsequent to bis passing
the departmental examination he was appointed to Class I on the results of the
competitive examination. Rule 4 of Chapter IX of the Rules of Promotion of
the Central Board of Revenue Office Procedure Manual states that the pres·
cribed n1inimum service for an officer of Class-I, Grade-TI for promotion to
Er Grade-I is 5 years gazetted service including one year in Class-I, Grade-Il.
For a promotee from Cass-II the minimum period of service for promotion
t'o Class-I, Grade-I would be actually 4 years service in Class-II and one
year service in Oass-1, Grade--11.

In an appeal arising out of Writ Petition No. 189-D af 1962 filed by one
S. G. Jai Singhani (who is respondent No. 358 in Writ Petition No. 66 of 1974
F: and respondent No. S in Writ Petition No. 4146 of 1978), a constitutional Bench
of this Court held : {i) Rules I (f)(iii) and (iv) of the Seniority Rules framed
~·1952 did not violate Articles 14 and 16 since they·were·based on a reasonable
classification; (ii) Rule 4 of Chapter IX of the Central Board of Revenue
Office Procedure Manual did not lead to any discrimination as between direct
recruits and promotees, since the object of the rule was· really to carry out 'the
policy of Rule I (f) (iii) of the Rules of Seniority and not allow it to be defeated
G by the recruitment of 5 years' service in Oass-I, ·Grade-Il itself, before a
person could be considered for promotion to Class-I, Grade-I; (iii) Rule 4
of the Income-Tax Officers (Clas~I, Grade-II) Service Recruitment Rules
was a statutory rule to which a statutory duty was cast on the Government
to determine the method or methods to be employed for the purpose of filling
of the vacancies and the number of candid;ites to 'be recruited by. each method;
and that though in the letter of the Government of India dated October 18,
ll: 1951 there was no specific reference to Rule 4, the quota fixed by that
letter must be deemed to have been fixed in exercise of the statutory power
gi~en by Rule 4. There was, therefore, no discretion left to the Government of
K. K. DUTTA V. UNION 813

!India to alter that quota according to the exigencies of the situation or to A
.cJeviate from the quota in any particular year at its own wilt and pleasure. The
..quota rule) according to the Court, was linked up with the Seniority Rule and
unless it was strictly observed in practice it would be difficult to hold that the
:seniority rule contained in rule 1 (f) (iii) was not unreasonable and did not offend
Article 16 of the Constitution. The Court suggested that for future years the
'foster system should be adopted by framing an appropriate rule for \Vorking
out the quota between the direct recruits and the promotees and that a roster B
should be maintained indicating the order in which appointments \Vere made
-by direct recruitment and by promotion in accordance with the percentages fixed
under the statutory rule for each method of recruitment. Thus the direct
;recruit.3 succeeded substantially in their contentions, the quota rule acquired
statutory force, appointments of promotees in excess of the quota became bad
and it became obligatory for the Government to prepare a fresh seniority list.
Promotees found to have been appointed in excess of the quota admissible to c
·promotees had naturally to go down in the final gradation of seniority.
On July 15, 1968 the Govcrnn1ent prepared a fresh seniority list and filed it
.in the Supreme Court. That list failed to satisfy promotees as well as direct
recruits. Whether this seniority list was correct and in accordance with the
mandan1us which was issued by this Court in S. G. Jai Singhani's case, [1967]
2 S.C.R. 703 came up for consideration in four appeals which '\Vere disposed of
D
by a common judgment dated August 16, 1972 reported as Bishan Sarup Gupta
v: 'Union of India (first Gupta"s case) in [1975] Suppl. S.C.R. 491. The Court
was also called upon to examine the correctness of seven principles enumerated
iri the Government letter dated July 15. 1968 governing seniority. The first
principle was accepted as good. The second and the third principles were held
to be partially incorrect in so for as they excluded reference to all the pro-
motees of 1952. The Court held that the promoteesi of 1952 should be referred
to 'in the seniority list whether they are affected or not, the object being the as-
E
certainment of excess promotions. This Court further held that the rule dated
October 18, 1951 was not concerned with the ~onstitution of the cadre but
"was concerned with how permanent vacancies were to be filled" and, there-
fore, the promotees would be entitled to l/r3 of the vacancies in any particular
year whether or not there was direct recruitment by competitive examination in
that year. This ratio of 2 : 1 between the direct recruits and the promotees.
could not be made to depend on whether any direct recruits were appointed in
F
any particular year. It, therefore, became essential to detennine th'e actual
vacancies in the cadre but the Government put forward the plea even in this
·case as in Jai Singhani's) that it was impossible for them to give the exact
figure of vacancies in any particular year. According to the Court, when the
quota rule referred to vacancies it was implicit that the vacancies are those
which the Government wanted to fill up '\Vhatever may be the actual number
G
of vacancies available for being filled up. Any number of posts among the
promotees more than 1/3 of the total number of appoint,ments in the particular
·year was considered to be in excess of the quota available for promotees. The
Court rejected the argument that the quota rule which is co-related to vacan-
cies of permanent posts only and not to those in temporary posts. While
upholding the weightage allowed under Rule I (!)(iii) ro Class·II officers
·promoted to Class-I. Grade-II, the Court also held .that even after 1956,
the Government was entitled by reason of Rule 4 of the Recruitment Rules
H
of I 945 to follow the quora rule of 1951 as a rough guideline, "without
going through the trouble of putting the same on record in so many words" and
814 SUPREME COURT REPORTS [1980] 3 S.C.R.

A that in the normal course the Government was entitled to prepare the senio-
rity list till the end of 1958 in accordance with the quota rule of 195.1. In
regard to the position after year 1958 the Court came to the conclusion that '
~
the quota rule ceased to apply and came to an end on January 16, 1959,
when the sanction to upgrade 100 t'emporary posts in Class-II, Grade-III t0- I
Class-I, Grade-II was given by the President. The seniority rule then fell
with quota rule. On these considerations the Court held that the seniority
B list' was valid in regard to promotions made up tu January 15, 1959 to the
extent that it was prepared on the basis of the quota rule dated October 18,
1951 read with Seniority Rule l(f) (iii). As a corollary, the Court set
aside the seniority list of July 15_, 1968 and directed the Government to
prepare a fresh seniority list. The List for the· years 1955 to January 15,
1959 was directed to be prepared in accordance with the quota rule of 195 l
read with Seniority Rule l(f) (iii). The List to be effective from January
c 16, 1959 was directed to be prepared in accordance with the rules to be
made afresh by the Government.
On February 9, 1973 the President made rules called the fncome-Tax
(Class-I) Service (Regulation of Seniority) Rules 1973 under Article 309 of
the Constitution giving retrospective effect from January 16, 1969. In pursu-
ance of the liberty reserved to the parties under the Judgment in the first
Gupta's case the validity of the new seniority rules was challenged by the·
D
promoteeS once again. The challenge was considered and repelled by the Court
in Bishan Swamp Gupta etc. v. Union of India and Ors., [1975] 1 S.C.R. 104,
second Gupta's case~ When the new list of seniority was prepared. by the Gov-
ernment, in accordance with these rules, the Government had on its hand 7'5
promotees who though appointed earlier between 1956 and 1958 had no quota
post, for their absorption. The 73 promotees described as "spill-overs on
January 15, 1959'', as also those who were promoted subsequently had to be
E
absorbed in the Service, which could only be done by a special rule framed in
that behalf. The new seniority rule contained a formula for the absorption of
all promotees with effect from January 16, 1959 in posts allocated to them, ir
determined their seniority intel' se and last but not the least it determined their
seniority qua the direct recruits appointed from 1959. The. Court overruled'
the objection of the '73' spill-over promotees that since in the first Gupta's
case the cCourt had directed that they should be absorbed on a ';priority basis··.
F all of them should have been shown in the seniority list as having been ap-
pointed on January 16, 1959' en bloc and the direct recruits for that year
should have been shown thereafter. It was explai Jed that by use of the ex-
pression "priority basis" what was· meant by the Court was that the position of
the spill-over promotees as senkirs should not be prejudiced by claims made by
later promotees on the ground tha.t since the spill-over promotees were recruited
in excess of the quota, the later promotees whose promotion did not violate the
G quota rule had higher rights than, those 73. The Court further held that, when
the 73 spill-over appointments were made, there were no allocated or ear-
marked posts to which those promotees could have been validly appointed, the
ordinary consequence of which would have been their reversion to Cla.ss II po11ts
which they originally held.' So long as the· quota rule was in i!xistence.
appointments in excess of the quota, though invalid when n1ade, were atleast
Jiable to be regularised in subsequent years when vacancies were· avai1able-
H to the promotees as a C-Onsequence of the quota rule. Bur once the quota
rule ceased to exist on JanuarY 16, 1959, any possibility of the excess
appointments of the promotees being regularised vanished. It \Vas in order
K· K. DUTTA V. UNION 815

to overcome this injustice to the promotees, that the new rule was framed A
by the Government. The new rule was thus not only the direct outcome of
the judgment of the Court in the !st Gupta case, but it was founded on the
very principles on which the Income-tax Service had been constituted. The
Court finally said that it had also to be remembered that promotees appoint-
ed from January 16, 1959 onwards w·ere appointed on an officiating or ad-
hoc basis with notice that the question of their seniority was still undecided.
'fhis circmnstance coupled with the absence of clea.r allocation of posts, made B'.
ir impossible for the promotees to lay claim to seniority and contend that
they were· deprived of their natural seniority in violation of Article 16.

The petitioners who were promotee Income-Tax Officers Class-r, Grade-
l! prayed for reconsideration of these three decisions S. G. Jai SinJ;hani v.
l!nion of India and Anr., [1967] 2 S.C.R. 703; Bishan Swarup Gupta v. [Inion
of Indio and Ors., \Finl Guptds case). [1975] Suppl. S.C.R. 495; Bis/uw C
SwarrJp Gupta e1c. v. Cir.ion of India and Ors .• (Second Gupta's case),. [1975]
1 S.C.R. 104- and to the extent S. G. Jai Singhani's case is relied upon in
ll11ion of India v. ilfalji Jangamayya etc., [1977] 2 S.C.R. 28, on the follow-
ing grounds :

1. The Conclusion that Rule 4 of the Income.Tax Officers (Class-I,
Grad&-11) Service Recruitment Rules is statutory and, therefore, the quota
D
pte9albcd by the Government of India for recruitment to Income-Tax Offi·
cers Class-I, Grade-II in exercise of the power conferred by Rule 4 would
be statutory, proceeds on an assumption not warranted by the provisions of
law bearing on the point and if both Rule 4 and the quota presumably pres-
cribed in exercise of the power conferred by Rule 4 are not shown to be
statutory, the foundation of which the edifice in S. G. Jai Singhanfs c.ase
rests is knocked down because it can be demonstrably established that neither
rule 4 nor the quota prescribed thereunder .was stautory in character but was E
at best an administrative instruction.

2. After the Court on an interpretation of the quota rule held that the quota
\Vas ielated to vacancies arising in the grade every year, the conclusion reached
did not conform to this finding but accommodated the so-called inability (now
shown to be factually incorrect) of the Government of India to give informa-
r{ tion to the Court about .the' vacancies ;in the grade every year with the result F
that the .whole calculation of spill-over is vitiated.
3. The mandamus issued in Jai Singllani's'case was misinterpreted by the
Government because even if the quota was statutory it was operative only
between 1951 and 1956 but the Government interpreted the mandamus w be
operative beyond 1956 and upto 1967 which misinterpretation has been pointed
out .ia the first Gupta's case. G
4. Jn the first Gupta's case while holding that the mandamus directing to
treat the quota statutory beyond 1956 was not justified yet till January 16,
1959, the Court itself indirectly accepted the quota rule as a guideline anrl
treated that there was a spill-over of 73 promotees. If Rule 4 was not statu-
tory and consequently the quota prescribed in exercise of the power which had
outlived. its prescribed span of life in 1956 could not be brought in to treat any
appoiatment as invalid on the ground that there was no allocated post for those H
appointeet treated as spill-over because under Rule 4 itself the Government harl
power to-detern1ine the method or methods to be employed for the purpose of
816 SUPREME COURT REPORTS [1980] 3 S.C.R.

A filling in particular vacancies or such vacancies as may be required to be· filled
in during any particular period and the number of candidates·. to be recruited (
by each method. '!'-

5. The action of the Government of upgrading 214 posts between 1959 and
196-Z from Class-II, Grade-II to Class I, Grade II was not open to question as
at that stage there was no quota rule and Rule 4 enabled the Government to
B make recruitment from either of the two sources in exercise of its executive
power. In regard to the second Gupta's case the Court introduced quota rule
retrospectively by the back door which is impermissible and its operation mani-
festly establishes its utter unfairness inasmuch as a direct recruit nor any where
in the department or may be a student may secure a march~over a promotee
\vhich has been working in Class-I, Grade-II.
Dismissing the petitions the Court,
HELD: Per Chandrachud, C.J. (On behalf of N. L. Untwalia, P. S.
Kailasam, E. S. Venkataramiah, JJ. and himself). (Majority view)
l. A consideration of certain historic fa.cts in this case makes it clear that
there is no &ubstance in the request made for a review of the de.cisions in Jai
Singhani v. [Inion of India and Ors., [1967] 2 S.C.R. 703; Bishan Swarup
Gupta v. Union of India and Ors. (1st Gupta's case) [1975] supplementary
D S.C.R.. 491; Bishan Swarup Gupta v. Union of India & Ors.; Second Gupta's
case [1975] I S.C.R. 104 and Union of lndia v, Malji Jangamayya [1977] 2
S.C.R. 28. [840 E-FJ

For nearly a- decade after 1950, appointments of promotees were made far
in excess of the quota available to them. So long as· the quota rule operated,
it \vas possible to regularise their appointments when posts within thCir quota
E became available in later years. But a ~omewhat unprecedented situation arose
by the upgrading of Class II posts to Class I grade II-100 of them on
January 16, 1959 and 114 en December 9, 1960. This massive upgrading of
posts brought about a colla-pse of the quota rule. Subsequent absorption in
posts which became available for being filled up later really mearui rngularisa-
tion of appointments, which is possible provided there is no excessive: deviation
from the quota rule. [840 G-H, 841 AJ
F
It is true that no blame can be laid at the doors of the pro-
motees on the score that they were appointed in excess of the quota avail~
able to them. Perhaps, their appointments must even have enabled the· admi-
nistration to tide over administrative stale-mate. But the tough problem which
the administration has to face is that whereas it is necessary to recognUe and
protect the claims of promotees who were appointed in excess of their quota,
it is equally necessary to ensure that the direct recruits do not suffer an undlle
set-back in service on account of the appointments of promotees. The con-
flicting claims of the two components of Service, both having an importance of
their own, have therefore to be reconciled. It was with that object that the
rules have been modified from time to time. The judgments rendered ~y this
Court in the aforesaid four cases show, without a. shadow doubt, bow every
effort was made to ensure that no hardship or injustice is caused to lh~ pro~
II n1ctees merely because their appointments exceeded their quota. (841 A..C]
2. It is not correct to say that the judg:meilt in Jai Singhani was based on
a concession or that the Court felt compelled to draw the particular conclusions
K. K. DUTTA V. UNION 817

therein because of the inability or refusal of the Financei lVIinistiy to produce A
the relevant files. The Court adopted what it considered in the circumstances
.to be a satisfactory and scientific method of ascertaining the number of vaca.ll-..
cies available for being filled up. lt came to the conclusion that the1 number
.,of actual appointments should determine the number of vacancies available
which ¥.ras a perfectly legitimate conclusion to draw. In the grey area where
service rules operate, more than one view is always possible to take without
"Sacrificing either reason or con1monsense but the ultimate choic~ has to be neces· B
sarily conditioned by serveral considerations ensurin_g justice· to as many as pos-
sible and injustice· to as few. There was no error in the conclusion in Jiti
Singlzani that Rule 4 of the Recruitment Rules was a statlltory rule Subse-
,quent decisions V.'ould show that there was hrirdly ooy dispute between the
-parties, at later stages at any rate, that Rule 4 was a statutory rule. (841 D-G]
f 3. No doubt, the. pron1otees should not be penalised for the mere rOO::Son
that those of them who were appointed after Ja-nuary 16, 1959 were appointed
C
on an officiating or ad hoc basis and had clear notice that the question of their
·seniority was still undecided. The circumstances attendant upon their appoint~
ments cannot, ho\vever, be wholly overlooked in determining whether the cons-
titutional constraints have been over-stepped. [841 H. 842 A]
4. It is not safe to test the constitutionality of a service rule on the
iouch stone of fortunes of individuals. No matter With what care, objectivity D
and foresight a rule is framed, some hardship, inconvenience or injustice is
bound to result to some members of the service. The paramount considera-
tion is the reconciliation of conflicting claims of two important constituents of
:Service, one of v,ihich brings fresh blood and the other mature experience.
[842 A-CJ
5. Though the promotees submitted in the Second Gupta case that the new E
·seniority rule was unfair to them, they were unable to put forward any rational
alternative. On the contrary the counter-affidavit dated August 31,. 1973 filed
in the Second Gupta case by Shri Mehra·, the· Deputy secretary Finance, shows
the fullness with which the Government had consulted all possible interests
·while framing the impugned rules of seniority. The gamut of reasonable
l)O~ibilities is fairly covered by the four alternatives referred to in Shri Mehra's
F
< affidavit The inconveniences and disadvantages flowing from the first three
alternatives would be far greater than those flowing from the fourth. Tha.t is
why the choice ultimately fell on the fourth alternative Under which the seniority
'between promotees and direct recruits was fixed alternately on a roster system,
vacancies being equally divided between promotees and direct recruits, for the
·entire period frnm 1959 up.to-date. The observation of the Court in the
·second Gupta's case at page· 119 shows how difficult it is to solve the jig-s5W'
:puzzle of service disputes. [842 C-H] G
6. The report of the 'Committee on petition9' of the Rajya Sabha, howso~
·ever, sincerely rnotiva-ted and fuJly dra\.\'Il cannot be given the importance1 which
the promotees seem to attach to it. Jn paragraph 16 of its Report the Com~
mittee does refer to certain files but those files appear to contain some notings
in regard to the direct recruitment only. The Committee has given a table of
·comparative appointments in paragraph 19 of its Report but it had to speculate
on an important aspect of the matter, M is shown by its own language, that H
the table shows the number of direct recruits which the Government wanted to
iake and "on the basis of which the promotees ,nust have- beeri given promo-
818 SUPREME COURT REPORTS (1980] 3 S.C.R.

A tions''. If indeed t~ relevant files were produced before the Committee, it
would not have expressed its sense of deep shock and resentment at the dis-
appearance of the files. Further para 32 of the Report shows that the C.Om-
mittee had to grope in the dark and indulge in a certain amount of speculation
on matters under its consideration. In the circumstances it has done as good a
job as a Committee can and no f11ult need to found with it. But nevertheless
the said Corun1ittee's report cannot displace the Court's judgments.
B [842 H, 843 A-C]
Even on n1erits there is no justificatio~ for considering lhe judgments
already rendered by this Cburt inasmuch as no fresh facts were brought to
notice by way of discovery of ncv,i and imJXlrtant evidence which would justify
reconsideration of the decisions already rendered by this Court after the most
careful examination of the competing contcn~ions. The report of the Rajya
c Sabha Committee on petitions shows that the relevant files are still not trace~
able. [843 E-F, G-H, 844 A]

Per Desai, J. {contra)
1. While, n0 doubt, the Supreme Court has constitutional po\ver tOt review
its decision, it is a power to be sparingly exeircised because any such review
has the tendency to unsettle que5tions which may' have been finally determined.
D The Supreme Court does not lightly undertake retview of its decisions more
especially where conflicting claims have been setUed by the decision of this.
Court and the whole gamut may have to be gone through over again on a
reconsideration of the decision. While exercising inherent power to reconsider
and review its earlier decision, the Suprme Court would naturaJly 1lik.e to impose
cerWl.in reasonable limitations and 'vould be reluctarnt to entert3in plea for
reconsideration and review all its earlier decisions, unless it is satisfied that
E there are compelling and substantial reasons to do so. It -is general judicfal
experience that in ma-tters of la'v involving questions of construing stntutory or
constitutional provisions, t\\'O views are often reasonably possible and when
judicial appronch has to make a choice between the two reasonable possible
views, the process of decision making- is often very difficult and delicate.
[846 A-B, 847 C, G-H, 848 A-BT
F In deciding 'vhether a reviev." is necessary, when two views. are po6Sible it
would not necessarily b~ an adequate reason for such review and revision to
bold that though the earlier view is reasonably possible view the alternative view
which is pressed on the subsequent occasion is more reasonable. The Court's
discretion should be· guided by such considerationl whether in the interest· of
public good or for any other va·lid or compulsive reason it is necessary that: the·
earJier decision should be revised. [848 B~C]
G Sajjan Singh v. State of Rajasthan, [1965] 1 S.C.R. 931; Kcsliav fllillJ Co..
Ltd. v. Com1nissioner of lncon1e Tax, Bon1bay North, [1965] 2 S.C.R. 908 &
921; Manganese ()re (India) Ltd. v. The, Regional Assistant Cornmissioner of ·-r-·
Sales Tax, labalpur, [19761 3 S.C.R. 99 applied.
2. Jai Singhani case proceeds on a concession that Rule 4 and the quota.
prescribed by the Government referable· to the power conferred by Rule 4 were,
R statutory in character. [848 D-E]
Income-tax service was reconstltuted on September 29, 1974. The Govern-·
ment of India classified the existing income-ta:ii::· service as Class I and Clas!I Il.
K. K. DUTTA V. UNION 819

The scheme provided for recruitment of income-tax officers Class I grade II
partly by promotion and partly by direct recruitment. The scheme was set out
in ·Ute Government of India Fmance Department (Central Revenues) letter
dated September 29, 1944. The quota prescribed therein has undergone a
rev.Won at a later dale. The rules being Pre-constitution Rules, their source
muSt be traced to the Government of India Act, 1935. Section 241 of the
1935 Act made provision for recruitment and conditions of service. Section
241 makes it cleiar that the power to make appointments in the case of service
of Federation and posts in connection with the affairs of the Federation was.
conferred on the Governor-General or such person as he may direct. The
power to 1nake rule~ in this behalf was confen·ed by sub-section 2 on tfie
Govemor-Genera·l or by some person or persons authorised by the Governor-
Gcneral to n1akc the rules for the purpose. But, the rules ware not made
either by the Goyemor-General or such person authorised by him. The rules
were made by the Finance Department and no material was placed to show that c·
the persons or the persons \Vho made the rules were authorised by the Govemor-
Geneml, under Section 241(2) of the 1935 Act in this behalf. The assump-
tion made, therefore, that Rule 4 of the .Rules are statutory and that the quota
prescribed in exercise of the power contfe1Ted by Rule 4 must be statutory is
ill-founded. This knocks out the entire foundation of the judgment of this
Court in Jai Singhani's case because this Court proceeded to hold that as the
quota tvas statutory, any recruitment made in excess of the quota in any given
year would be invalid and at bestJ ca·n be regularised by relegating such excess
appointments to the quota neix.t year. If Rule 4 and the quota referable to the
power conferred by Rule 4 were not statutory but were merely executive instruc-
tions, its violation \VOUld not render any appointment in excess of it invalid
but ot best would be irregular and in this case on [l! plain reading of Rule 4 it
wollid not even be irregular. [848 G-H, 849 A-El
-+ 3'. ln P. C. Sethi & Ors. v. U11io11 of India & Ors.' this Court held t:.._1.at in
E
thei absence of any statutory rulels it wasi open to the Government in exercise of
its executive power to i~sue administrative instructions \vith regard to constitu-
tion and reorganisation of service· as long as· there is no viola4.ion of Articles 14
and 16 of the Constitution. ff the. present Rule 4 enables the Governn1ent to
preScribe method to be employed for the purpose of filling in any particular
vacancy or such v<1cancit:s as may be required to be filled in durin_'( aity parti- F
. ( ' cular period n·nd the number of candidates to be' recruited by each method atfd
if the ~o-called quota is not statutory but merely a guideline, the Government
-.,, when'evt-r 1naking appointments would be acting in exercise of power conferred
by -Ruk· 4 w·hich leaves it to the discretion, of the Government to decide from

.. what ·source recruitment should be made and what must be the quantum of
vacancies that 1nust be filled in at a given po~nt of 'time and such appointment
could ::at be said to be invalid. f849 E-Hl
G
Alternatively, even if the assumption made in Jai Singharzi'.s case that Rule
4 and the quota referable to the exercise of powei::. conferred by Rule 4 is un-
'f I
questionable yet \vhcn this Court held that the quota is rela-ted to tha vacancies,
the decision procecUing on an incorrect plea thar the information about the·
nluiiber of vacancies in a year is not available, is unsustainable flor two reasons,
namtly, (l) tha·t the files are now produced; (2) in the abseince of information
about "the vacancies available the Court could not have invalidated any appoint~
rii.Cnt. on the assu1nption that appointment from the source of promotees was in
exte111; of the quota. [850 A-BJ
820 SUPREME COURT REPORTS [1980) 3 S.C.R.
A On a plain reading of Rules 3,, 4 and 5, it is clear that the quota \\'as related
to vacancies and at one stage \that was accepted. On this finding unless the fac.t
situation is clearly established showing vacancies year to year it ~·ould be
impossible· to hold that in a-ny year there was excess in either source. Suppose
there \Vere 90 vacancies in a year and the quota was 66-2/3 for direct recruits
and 33 113 for pr;o1notees it would be open to the Government to promote 30
persons irrespective of the; fact whether 60 direct recruits have become available
B or not. The assumption made that the recruitment made in a given yeM front
both the sources would furnish information. about the vacancies in a year would
lead to a rather unfair conclusion inasmuch as the action of the Government
in acting in a- certain manner without due regard to the quota rule \vould work
hardship on appointees even though on a correct calculation of vacancies the
appointments may be valid and legal. [850 C-E]
c 4. The Government understood the mandamus issued in Jai Singlzani's case
as covering the whole pericxl from 1951 to 1967. When this was questioned
in the First Gupta's case this, Court held that the quota rule proprio vigor£'
operated between 1951 to 1956 and if there were promotions in any year in
excess of rhc quota, those promotions were merely invalid for that year but
they were. not invalid for all time and they could be regularised. by being
absorbed in the quota for the later years. So adjusting the quota at any,- rate
D
up to 1956, the quota rule on its O\Vll strength evaporated because. it \\138 to rn~
in operation for a period of five years and no fresh quota rule was issued by
the Government. Therefore, after 1956 Rule, 4 remained in force- in1 all its
rigour and was not hedged in by a-ny quota. Rule 4 permitted the Govelm-
ment to make recruitment from either source without fettering its discretioP.; by
any quota rule which it was not bound to prescribe·. On January 16, 1-·19~9
E Government in the Ministry of Finance i.nformed the Commissioners. of Income-
tax that the President had sanctioned the upgrading to Class l of one hundrtd
+
temporary posts of Income-Tax Officers Class II. On December 19, 1960·
there was further upgrading of 114 posts from Class II to Class I. Betwe<m
1959 and 1962 these 214 posts were filled in by promotees. Now in the- First
Gupta's case, this Comt held even though the quota expired in 1956 yet :the
Government of India adopted it as a guideline. May be it may be so. .But,
F it cannot be sa-id that any appointment inJ breach of the' guideline neither statu-
tory nor even having the fragrance· of any executive instruction becomes invalid \').. ·
more so, when the Government had power to make appointment from either
source t.:ninhibited by any quota rule under Rule 4. Yet the Court found that i'f
between 1956 and 1959 when one hundred pests came to be upgraded there was
a spi11-over of 73 persons and because of the huge departure from guidelines
the weightage rule giving seniority to the promotees by 2 to 3 years was crusl:ted .;,v-
G under its O\VllJ debris. Again, Rule 4 is overlooked or by-passed when say;ing
that there was a spill-over of 73 promotees· between 1956 and 1959, nor could
it be said that the upgrading of 214 posts and filling them up by promotees
would be in any \\ ay even irregular much less invalid because Rule 4 enables·
1 ,,,
the Government to draw fr6m either _source. [851 A-G]

5. In the Second Gupta's case in view of the decisio111 in the First Gupta's
case, a fresh seniority rule was prepared and it was made retroactive· from
H January 16, 1959. It, inter alia, provides that the relative seniority a_mon_gst
the promotees and the direct recruits. sha11 be in the ratio of 1 : 1 and - .the
same shalt be so determined and regulated in accordance \Vith a roster m~in-
K. K. DUTTA V, UNION Bil

tained for this purpose which shall follow the following sequence. namely,
promotee; direct recruit, promotee; direct recruit etc. This method of roster
undoubtedly introduces a quota by the back door. Once a roster is introduced
promotee direct recruit, promotee direct recruit etc. even if some promotees have
come in a bulk and if at a later date some direct recruits are appointed in bulk
while preparing roster an earlier date-promotee will have to yield bis place to a
later date direct recruit. Bluntly translated it means that the ditect recruit
who was never in service when promotee was promoted probably he may be• a B
student, he may not have even passed the competitive exairo.ination, yet lie may
come into the picture challenge· one who has already been serving in the
department for a number of years. To illustrate in the new seniority list pre-
'~
pared by the Government pursuant to the order made· by this Court in the
Fir.st Gupta's case and upheld by this Court in the Second Gupta's case a pro-
motee of 1962 will have to yield bis place to a direct recruit of 1966.
[851 G-H, 852 A-DJ c
6. &rvice jurisprudence hardly permits a1 situation where a man not in'
service comes and challenges something which has been done much before he
came into service and gets such an advantage which on the face of it appear
to be unfair. But apart from this, even in 1959 there was no quota ruh.': and
1

assuming that the old service rule giving weightage to the pron1otees crushed
under weight of large nun1ber of promotees being promoted it would not be
open to the Government to so prepare a fresh seniority list which cannot be
given effect to unless a roster is introduced \vhich introduces quota by the back
door and which is so unfair in its operation that promotees of 1962 will have
to yield p]ace to direct recruits of 1966. Under the old weightage rule, promo-
tees were given weightage for seIVice of 2 to 3 yearn over direct recruits because
direct recruits wer~ llllahle to undertake regula.r assessment work for a period
of 2 to 3 years when they were, more or less under training \\.'bile promotees
have been doing this work for a number of years and whose experience is E
reflected in the weightage. The whole thing now appears to be in the reverse
gear in that an uninitiated direct recruit takes precedence over an experienced
promotee. The unfairness of the new rule is :writ large on the face of the
record. [852 &HJ
7. The fresh seniority rule violates another important rule well--Tecognised
principle in the service jurisprudence that in the abs(:nce of any valid rule of F
seniority date of continuous officiation provides a valid rule of seniority. This
role is completely crucified upon two unsustainable assumptions that a quota
rule having guideline sanction is made imperative in character and assumed to
be in force between 1956 and 1959, and that even though Government in exercise

. of power conferred by Rule 4 fOr its own necessity promoted 214 promotees to
the upgraded post, yet they niust yield to some future direct recruits who may
come to the department at a later date. This Court sustained the decision hold· G
ing ·that these were ad hoc appointments and there are no regular posts, for
these. promotees. This approach wholly overlooks the fact and the force of
Rule 4. [853 A-CJ
8. Certainty and continuity demand that this Court should not reopen
settled decisions or reopen closed questions unless under compelling necessity.
It may be that the fate of Income-Tax Officers promoteeS and direct recruits
may rest with the three decisions of this. Court. Unfairness to some of them H
may ·itself not provide a good and compelling reason for reopening and recon~
sidering the decisions. [853 C-DJ
822 SUPREME COURT REPORTS [1980] 3 S.C.R.

A Jai Singllani and the Two Gupta cases are being quoted, times wit.bout
number before this Court for the principles enunciated therein. These deci-
sions, therefore, affected subsequent decisions of this Court as \Yell as the
High Courts and some of the principles. enunciated in these three cases stand
in sharp contrast to other decisions of this Court an<l in fact this Court itself
feJt it nee1;ssary to warn that it may become necessary to reconcilei these con-
flicting decisions. The three· decisions a:'e· incorrect in the light 0£ the mate--
B rials TIO\V placed, especially the files which were withheld fron1 the Court and
the Committee. A strong case has been made out for reconsideration of these
decisions. [853 E-F, 854 C-D]

N. D. Chauhan & Ors. v. State of Rajasthan & Ors. [1977] I S.C.R. 1037
and 1053 referred to.

ORIGINAL JURISDICTION : Writ Petition Nos. 66/1974 & 4146/1978.
(Under Article 32 of the Constitution)
V. M. Tarkunde, J. N. Haldar, Rathin Dass and A. K. Sanghi, for
the Petitioners in WP 66/74.
D Dr. Y. S. Chitale, Mukul Mudgal and B. R. Aggarwal for the Peti-
tioners in WP No. 4146/78.
S. N. Kackar, Sol. Genl. R. N. Sachthey, E. C. Agarwala and Miss
A. Subhashinifor RR 1-3 in WP 66 and RR 1-2 in WP 4146.
Ram Panjwani, Raj Panjwani, S. K. Bagga and Mrs. S. Bagga for
;E R. 4 in WP 4146 and Intervener (Gujjar Mal.). '
Ram Panjwani, Bishamber Lal, Raj Panjwani and Vijay Panjwani
for the R. 6 in WP No. 4146 and R. 358 in WP 66.
Yogeshwar Prasad and Mrs. Rani Chhabra for the R. 7 in WP
4146.
'F
A. K. Sanghi for the Interveners (Hari Narain and L. S. Chakra-
varty).
•
The Judgment of Y. V. Chandrachud, C.J., N. L. Untwalia, P. S.
Kailasam and E. S. Venkataramiah, JJ. was delivered by Chandrachud,
C.J. D, A. Desai, J. gave a dissenting Opinion.
CHANDRACHUD, C. J.-The disputes between promotees and direct
recruits in various departments of the Government seem to have no ·~--
end.· No sooner does one round of litigation come to a decision than r
, is another round started by one party or the other, sometimes alleging,
as in these Writ Petitions, that important facts and circumstances were
11 not taken into consideration in the earlier proceedings either because
they were suppressed or because, though cited, they were overlooked
or misunderstood. A virtual review is thus asked for, opening flood
K. K. DUTTA 1". UNION (Char.drachu.d, C.J.) 823

:gates to fresh litigation. There are few other litigative areas than A
disputes between members of various services inter se, where the prin-
·Ciple that public policy requires that all litigation must have an end can
apply with greater force. Public servants ought not to be driven or
required to dissipate their time and energy in court-room battles.
Thereby their attention is diverted from public to private affairs and
their inter se disputes affect their sense of oneness without which no B
institution can function effectively. The constitution of Service Tri-
bunals by State Governments with an apex Tribunal at the Centre,
which, in the generality of cases, should be the final arbiter of contro-
versies relating to conditions of service, including the. vexed question
·Of seniority, may save the courts from the avalanche of writ petitions
and appeals in service matter'. The proceedings of such Tribunals c
can have the merit of informality and if they will not be tied down to
strict rules of evidence, they might be able to produce solutions which
will satisfy many and displease only a few. There are always a few
whom nothing can please.
The three petitioners in Writ Petition No. 66 of 1974 are all pro- D
motees. Petitioner No. I, Kamal Kanti Dutta, was appointed as an
Inspector of Income-tax on December, 7, 1950 and after passing the
departmental examination he was promoted an Income-tax Officer,
·Class II on June 21, 1954. Ori January I, 1966 he was promoted as
Income-tax Officer, Class I, which post he was holding 6n the date of
the petition, February 8, 1974. Petitioners 2 and 3, Bikash Mohan E
Das Gupta and Sushi! Ranjan Das, were promoted as Inspectors of
Income-tax in April, 1955. The former was promoted as l.T.O.,
·Oass II in December, 1957 and as l.T.O., Class I, in May, 1971 while
the latter was promoted as I.T.O., Class II, in August, 1973.
Respondents I to 5 to the petition are the Union of India, Secretary F
to the Ministry of Finance, the Central Board of Direct Taxes, Secre-
tary to the Ministry of Home Affairs and the Union Public Service
• -Commission respectively. Respondents 6 to 357 who were recruited
directly as LT.Os., Class I, were appointed on probation as Class I
{)iicers after Petitioner No. I was promoted to that cadre on January,
1, 1966. Respondents 280 to 357 were appointed on probation as I.T.Os., G
Gass I, after Petitioner No. 2 was promoted to that cadre in May 1971.

y Respondent No. 358, S. G. Jaisinghani, who was recruited directly
as I.T.O., Class I, in 1951 was holding the rank of Assistant Commis-
sioner of Income-tax on the date of the petition. He was posted at the
relevant time as the Deputy Director of Investigation, New Delhi. H
Respondent 359, Mohan Chandra Joshi, who was recruited directly
as I.T.O., Class I, in 1953 was also holding a similar rank and was

--i
824 SUPREME COURT REPORTS
I
A working as Deputy Secretary, Ministry of Defence, Government of
India.
In Writ Petition No. 4146of1978 the Petitioner, Hundraj Kanyalal
Sajnani, was appointed directly on the recommendation of the Union
Public Service Commission as I.T.O., Class II (Trainee) on July l, 1947.
B After successfully completing the period of probation, he passed the
departmental examination for LT.Os. in July 1950. In 1959-60 he
was promoted as I.T.O., Class I, and was confirmed in tha.t cadre with
effect from December 9, 1960. He was promoted as an Assistant
Commissioner of Income-tax.with effect from December 17, 1969.

c Respondents 1 to 3 to that petition are the Union of India, the
Chairman of the Central Board of Direct Taxes and the Union Public
Service Commission respectively. Respondents 4 to 8 are B. D. Roy,
S. G. Jaisinghani, M. C. Joshi, B. S. Gupta and M. Jangamayya res-
pectively. These officers have figured in certain well-known decisions
of this Court, as a result of which their names have become house-
D hold words in service jurisprudence. In fact, Shr; B. S. Gupta figures
in two cause-titles known as •the first Gupta cam' and the 'Second
Gupta case'. Respondents 4, 7 and 8 are Assistant Commissioners of
Income-tax while respondents 5 and 6 are working as Deputy Direc-

E
tors of Investigation.

It will be difficult to appreciate the nature of the relief sought in these.
•
Writ Petitions without a proper understanding of the history of the
litigation leading to these petitions. That history is quite checkered.
One of the principal grievances of the petitioners is that some ohhe
previous decisions rendered by this Court are erroneous and that some
have not been properly understood and interpreted while framing
F rules of seniority. That makes it necessary to refer to the previous.
proceedings leading to the present controversy.
With a view to improving the income-tax administration, the
Government of India, in consultation with the Federal Public Service
Commission, decided to reconstitute and classify the then existing
G Income-tax Services, Classes I and II. The scheme of reorganisation
of the Services was set out in a letter dated September 29, 1944 of the
Government oflndia, Finance Department (Central Revenues), which
was sent to all the Commissioneri oflncome-tax. The Central Service,
Class I was to consist of (I) Commissioners of Income-tax, (2) Assistant
Commissioners of Income-tax, (3) Income-tax Officers, Grade I and·
H (4) Income-tax Officers, Grade JI. The Central Service, Class II
comprised Income-tax Officers, Grade III. Thus Income-tax Officers,.
Class I were to be of two grades, Grades I and II, while Income-tax
. K. K. DUTTA v. UNION (Chandraclzud, C.J.) 825

Officers, Class II, were to consist of one grade, namely, Grade Ill.
Clauses (a) to (e) of paragraph 2 of the aforesaid letter prescribed
modes of recruitment to the various posts in Class I and Class II.
Clause (d) which prescribed the mode of recruitment to the post of
Income-tax Officer, Class I, Grade II, said :
Recruitment to Grade-II will be made partly by promotion
and partly by direct recruitment. 80 per cent of the vacancies
·arising in this Grade will be filled by direct recruitment via
the Indian Audit & Accounts and Allied Service Examination.
The remaining 20 per cent of vacancies will be filled by pro-
motion on the basis of selection from Grade III (Class II Ser-
vice), provided that suitable men upto the number required are c
available for appointment. Any surplus vacancies which '
cannot be filled by promotion for want of suital:>le randidates
will be added to the quota of vacancies to be filled by direct
recruitment via the Indiaµ Audit and Accounts etc. Services
examination.

Rules regulating recruitment to the Income-tax Officers (Class I,
' Grade II) Service, "liable to alteration from year to year", were pub-
' lished on May 26, 1945 by a resolution of the Finance Department
(Central Revenues). Rule 3 provided that reeruitment to Class I,
Grade II Service shall be made (i) by competitive examination held
in India in accordance with Part II of the Rules and (ii) by promotion E.
on the basis of selection from Grade III (Class II Service) in accordance
with Part III of the Rules. By rule 4, the Government was to deter-
mine, subject to the provisions of rule 3, the method or methods to be
employed for the purpose of filling any particular vacancies, or such
vacancies as may require to be filled during any particular' periop,
F.
and the number of -candidates to be recruited by each method. Part
III of the Rules called 'Recruitment by Promotion' provided by para-
• graph 21 that recruitment by promotion shall be made by selection
from among Grade III Income-tax Officers (Class II Service)lafter con-
sultation with the Federal Public Service Commission and that no
officer shall have any claim to such promotion as of right.

By a letter dated January 24, 1950 the Government of India laid
do,wn certain rules of seniority (a) as between direct recruits, (b) as '
between promotees selected from Class II, and (c) as between direct
recruits who completed their probation in a given year and the pro-.
motees appointed in the same year to Class I.
H
On October 18, 1951, the Government of India addressed a letter to
allth~ Commissioners of Income-tax on the subject 'Income·tax Officers,
14-463 SCl/80

•
•
826 SUPREME COURT REPORTS [1980] 3 S.C.R.

A Grade II (Class I Service)-quota of vacancies filled by promotion·.
The letter says :
' The Government of India have had under consideration the
question of increasing the proportion of vacancies reserved fqr
promotion from Class II Income-tax Officers in Class I. It I

B has been decided in consultation with the Union Public Service '
Commission and in modification of para 2(d) of the Finance
Pep!. (Central Revenues) letter No. 195-Admn. (IT)/39 dated
the 29th September, 1944 that for a period of five years in the
first instance 66/2-3 %of the vacancies in Class I, Grade II, will
c be filled by direct recruitment via combined competitive exami-
nation . and the remaining 33! % by promotion on the basis
of selection from Grade III (Class II Service). 'Any surplus
vacancies which cannot be filled by promotion for want of
suitable candidates will be added to tbe quota of vacancies to be
filled by direct recruitment.
By a Jetter dated September 5, 1952, the Govemment of India
D
revised with retrospective effect the rules of seniority which were laid
down on January 24, 1950.
Rule l(f)(iii) as framed on January 24, 1950 read thus :
The pr0motees who have been certified by the Commission
E in any calendar year shall be senior .to all direct recruits who
complete their probation during that year or after and are
confirmed with effect from a date in that year or after.
The rule as revised on September 5, 1952 read thus :
Officers promoted in accordance with the reeommenda~
tion of the Departmental Promotion Committee before the
next meeting of the Departmental Promotion Committee sha!''
be senior to all direct recruits appointed on the resul~ of the
examinations held by the Union Public Service Commission
during the calendar year in which the Departmental Promotion
Committee met and the three previous years.
-0
Rule l(f)(iv) of the 1952 Rules dealt with a special situation in which
an officer initially appointed to Class II service is given seniority in the
same manner as a departmental promotee, if subsequent to his passing -Y-
the departmental examination he is appointed in Class I on the
;esults of the competitive examination.
H
Rule 4 of Chapter IX of the "Rules of Promotion of the Central
Board of Revenue Office Procedure Manual states, that the prescribed
K. K. DUTTA v. UNION (Chandrachud, C.l.) 827

minimum service for an officer of Class I, Grade II for promotion to A
Grade I is 5 years gazetted service including 1 year in Class I, Grade
II. For a promotee from Class II, the minimnm period of service for
promotion to Class I, Grade I, would be actually 4 years service
in Class II and 1 year service in Class I, Grade II.
B
In 1962, S. G. Jaisinghani (who is respondent No. 358 in Writ
Petition No. 66 of 1974 and respondent No. 5 in Writ Petition No.
4146 of 1978) filed Civil Writ No. 189-D of 1962 in the High Court of
Punjab under Article 226 of the Constitution, challenging the validity
of th.e seniority rnles in regard to Income-tax Service, Class I, Grade II
as also the actual implementation of the 'quota' rule, as infringing c
Articles 14 and 16(1) of the Constitution. Promotees who were
likely to be affected by the decision of the Writ Petition were added as
respondents 4 to 126 to that Petition. Jaisinghani who was recruited
directly as an Income-tax Officer, Class I (Grade II), raised four princi-
pal contentions :
D
(i) Rule l(fJ(iii) of the seniority rules as "framed in 1952 was
based upon an unjustifiable classification between direct
recruits and promotees after they had entered Class I,
Grade II· Service. On the basis of that classification, pro-
motees were given seniority over direct recruits of the
same year and with weightage of three previous years. All E
officers appointed to Class I, Gr.ade II Service formed one
class and after being recruited to that class, no distinction
could be made between direct recruits and promotees.
(ii) Rule l(f)(iv) was discriminatory because though the peti-
tioner, Jaisinghani, qualified in the same competitive exa- p
mination of 1950 for appointment to Class I, Grade II
Service as respondents 4, 5 and 6 to that petition, they
• were treated as senior to him by the operation of the arti-
ficial rule by which. they were regarded as "deemed pro-
motees", since they were appointed to Class II, Grade III
Service in 1947. All the four of them were appointed to G
Class I, Grade II Service in !951 and therefore the period
of service put in by respondents 4, 5 and 6 in Class II,
Grade III Service cannot be counted for fixing their seniority
vis-a-vis the petitioner.

(iii) Rule 4 of Chapter IX of the 'Central Board of Revenue H
Office Procedure Manual' leads to discrimination as bet-
. ween direct recruits and promotees; and that
828 SUPREME COURT REPORTS [1980] 3 s.C.R.

A (iv) during the years 1951 to 1956, there was excessive recruit-
ment of 71. promotees, in violation of the quota rule of 2 : 1
contained in Government of India's letter dated October
18, 195L The quota fixed by that letter must be deemed
to have been fixed in exercise of the, statutory power given
by rule 4 of the Income-tax Officers (Class I, Grade II)
B Service Recruitment Rules published on May 26, 1945.

A full Bench of the Punjab High Court, Circuit Bench, Delhi, rejec-
ted the writ petition, holding that the principles for determining senio-
rity between direct recru,its and promotees laid down in rules l(f}
(iii) and (iv), 1952 were not discriminatory, that the quota rule an-
c nounced by the Government of India were, merely a policy statement
and had no statutory force, that departure from the quota rule did not
give rise to any justiciable issue and that the promotion rule governing
promotions from Class I, Grade U to Class I, Grade I was not dis-
criminatory and ultra vires of Articl1' 14 and 16 of the Constitution.

D In appeal, a Constitution Bench of this Court held that rules l(f)(iii)
and (iv) of the seniority rules framed in 1952 did not violate Articles
14 and 16 since they were based on a,reasonable classification and that
rule 4 of Chapter IX of the 'Central Board of Revenue Office
Procedure Manual' cannot be held to lead to any discrimination as
between direct recruits and promotees, since the object of the rule was
E really to carry out the policy of ~le l(fJ(iii) of the Rules of Seniority ,+
and not allow it to be defeated by the ,requirement of five years service
in Class I, Grade II itself, before a person could be considered for
promotion to Class I, Grade J. On the question of excessive recruit-
ment of promotees from. 1951 to 1956 in violation of quota rule, the
Court had directed the Secretary of the Finance Ministry, during the
F
hearing of the appeal, to furnish information regarding the number of ,~ ,
vacancies which had arisen from year to year from 1945 onwards, '- ~
the nature of the vacancies-permanent or temporary-the chain of ~
vacancies and such other details which were relevant to the matters
pending before the Court. In his affidavit dated January 31, 1967 Shri
G R. C. Dutt, Finance Setretary, said that he was not able to work out,
in spite of his best endeavours, the number of vacancies arising in a
particular year. However, a statement, Ex. E. was furnished to the
Court showing the number of officers recruited by the two methods of '""(
recruitment to Class I Service during the relevant years. The Court
found that it was not clear from Shri Dutt's affidavit whether the quota
ff rule was followed strictly for the years in question ar d noted that in the
absence of fig1lres of permanent vacancies in Class I, Grade II, for the
relevant years, the Solicitor General was unable to say to what extent

..
K. K. DUTTA v. UNION (Chandrachud, C.J.) 829

there had been deviation! from that rule. Rejecting the submission
of the Solicitor General that the quota rule was merely an administra-
tive direction, the Court held rtiat rule 4 of the Income-tax Officers
(Class I, Grade II) Service Recruitment Rules was a statutory rule
nnder which a statutory duty was cast on the Government to determine
the method or methods to be employed for the purpose of filling the
vacancies and the number of candidates to be recruited by each method;
and that, though in the letter of the Government of India dated October
.. 18, 1951 there was no specific reference to rule 4, the quota fixed by
that letter must be deemed to have been fixed in exercise of the statutory
power given by rule 4. There was therefore no discretion left with the
Government of India to alter that quota according to the exigencies·
of the situation or to deviate from the quota, in any particular year, at
c
its own will and pleasure. The quota rule, according to the Court,
was linked up with the seniority rules and unless it was strictly observed
in practice it would be difficult to hold that the seniority rule contained
in rule l(f)(iii) was not unreasonable and did not offend Article 16 of the
Constitution. The Court expressed its conclusion thus : D
We are aocordingly of the opinion that promotees from
Clltss II, Grade III to Class I, Grade II Service in excess of
the prescribed quotas for each of the years 1951 to 1956 and
onwards have been illegally promoted and the appellant is entit-
led to a writ in the nature of mandamus com manding respondents
E
I to 3 to adjust the seniority of the appellant and other officers
similarly placed like him and to prepare a fresh seniority list in
accordance with law after adjusting the recruitment for the
period 1951 to 1956 and onwards in accordance with the quota
rule prescribed in the letter of the Government of India No.
I;'. 24(2)-Admn. I.T./51 dated October 18, 1951. We, however, F
wish to make it clear that this order will not affect such Class II
Officers who have been appointed permanently a~ Assistant
• commissioners of Income Tax. (emphasis supplied).

The Court suggested that for future years the roster system should be
adopted by framing an appropriate rule for working out the quota bet- G
ween the direct recruits and the promotees and that a roster should be
maintained indicating the order in which appointments are made by
direct recruitment and by promotion in accordance with the percentages
fixed under the statutory rule for each method of recruitment.

In Writ Petition No. 5 ~f 1966 filed by Mohan Chandra Joshi under H.,
Article 32 of the Constitution, a similar mandamus was' issued by the
Court. Mohan· Chandra Joshi, like Jaisinghani, was recruited dfrectly

... ;
830 SUPREME COURT REPORTS (1980] 3 S.C.11.

A as Income-tax Officer, Class I, Grade II, with the only difference that
he was appointed in 1953 while Jaisinghani was appointed in 1951.
Thus the direct recruits succeeded substantially in their contentions.
the quota rule acquired statutory force, appointments of promotees in
excess of the quota became bad and it became obligatory for the Govern-·
B ment to prepare a fresh seniority ,list. Promotees found to have been
appointed in excess of the quota admissible to promotees had naturally
to go down in the final gradation of seniority.
The aforesaid decision was given by this Court on February 2,

··~
1967. But, in spite of the mandamus issued by it, Government did not
prepare a fresh seniority list for over a year, which led to the filing of a
c contempt petition by Jaisinghani and Joshi. Those proceedings were
dismissed by this Court on. November 6, 1968. In the meanwhile,
on July 15, 1968, the Government prepared a fresh seniority list and
filed it in this Court. That list failed to satisfy promotees as well as
direct recruits.
D Two writ petitions were filed in the Delhi High Court to challenge
the fresh seniority list : one by B. S. Gupta, a promotee of 1962 and the
other by M. C. Joshi, a direct recruit who had succeeded in the eerlier
round of litigation in this Court. .These writ petitions were heard by
two separate Benches of the Delhi High Court. Writ Petition No.
196 of 1970 filed by B. S. Gupta was dismissed whereas Writ Petition
E No. 550 of 1970 filed by .M. C. Joshi was substantially allowed. Setting
aside the seniority list, the High Court gave a direction that another
seniority list be prepared in the light of its judgment.
The decision of the Delhi High Court in the aforesaid two writ peti-
tions was challenged in this Court in four appeals : one by Il. S. Gupta
F against the dismissal of his Writ petition and the other three by (i) the
Government, (ii) .M. C. Joshi and (iii) 5 promotees. In all these
appeais, the only question or consideration was whether the seniority
list prepared on July 15, 1968 was correct and in accordance with the
mandamus issued by this Court in Jaisinghani v. Union of India and
Ors.(1 J. These appeals were heard together and were disposed of by
G a judgment dated August 16, 1972 which is rep~rted in Bishan Sarup
Gupta v. Union of India and Ors.(2).
While preparing the seniority list the Government understood the
mandamus issued in Jaisinghani(}) as covering the entire period from
1951 to 1967. For doing that it could not be blamed, since the man-
B damus issued in Jaisinghani~) clirected the Government to adjust the
- ( ! ) [1967] 2 S.C.R. 703.
(2) [1975] Suppl. S.C.R. 491.
K. K. DUTTA v. UNION (Chandrachud, C.l.) 8 31

seniority of various officers for the period 1951 to 1956 "and onwards", A
though the argument regarding excessive recruitment of the promotees
was confined to the years 1951 to 1956. Palekar, J. speaking for the Court
in Bishan Sarup Gupta (Supra) observed in the first instance that this
Court could not possibly have in mind a seniority list which took in
promotees after 1956 and that therefore under the mandamus issued
B
by this Court, appointments of promotees in excess of the quota could
only be taken into consideration in relation to the period 1951 to 1956.
The reason for the use of the words "and onwards" was explained to
be that Government should be able to push down exceis promotions
to later years in order that such promotions could be absorbed in the
lawful quota available for later years. c
In Blshan Sarup Gupta---the Court was called upon to examine
the correctness of. seven principles enumerated in the Government
letter dated July 15, 1968 governing seniority. The first principle was
accepted as good. The second and the thirdh>rinciples were held to be
partially incorrect in so far as they excluded reference to all the pro- D
motees of 1952. The Court held that the promotees of 1952 should
be referred to in the seniority list whether they are affected or not, the
obje"ct being the ascertainment of excess promotions.

The (ourth principle set out in the letter of July 15, 1968 which is
important for our purpose reads thus : E

In view of the difficulty in working out the vacancies aris-
ing in each year the total number of direct recruits and pro-
motees in each year have been taken into account for the pur-
. pose of implementing the quota rule.
F
··4J This Court held that the rule dated October 18, 1951 was not con-
cerned with the constitution of the cadre but "was concerned with how
pe(lllaneat vacancies were to be filled" and therefore the promotees
would. he entitled to l /3 of the vacancies in any particular year whether
or not there was direct recruitment by competitive examination in that G
year. This ratio of 2 : l between the direct rerruits and the promotees
could not be made to depend on whether. any direct recruits were
appointed in any particular year. It therefore became essential to
determine the actual vacancies in the cadre but even in B. S. Gupta
the Government put forward the plea that it was impossible for them
to give the exact figure of vacancies in any particular year. Counsel R
who appeared for the promotees in that case filed a chart marked
Annexu re I which, according to him, showed the correct number of
832 SUPREME COURT IU!PORTS (1980] 3 s.c.R.

A vacancies in the particular years. The Court, however, ' foundit im-
possible to determine the actual vacancies on the basis of the figures
given in that chart. In the circumstances, the Court considered it
reasonable to accept the number of appointments made in the parti-
cular years as substantially representing the actual vacancies available
. for being filled up. One of the reasons which the Court gave in sup-
•B port of this conclusion was that when the quota rule referred to vacan-
cies, it was implicit that the vacancies are those which the Govc111ment
.
wanted to fill up, whatever may be the actual number of vacancies
available for being filled up. Thus, if in the year 1953, 53 pos~ were
filled by direct recruits and 38 by promotees, the total number of vacan-
c cies which were intended by the Government to be filled in W4>'*1 be
91. Promotees would be entitled to hold 1/3 of ,these namely, 30.
·~.
8 promotees therefore could be said to have been appointed in excess
of the quota available for ptomotees. This was.in fact what the Gov-.
ernment had done while preparing the fresh seniority list, though it
had wrongly calculated the vacancies with effect from the ye11r 1953
.D instead of doing so w.e.f. the beginning of the year 1952. There were
no promotions in 1951. and therefore, the question of appointment of
promotees in excess of their quota did not arise for that year.

The argument advanced on behalf of the direct recruits that the
quota rule should be co·related to vacancies in permanent posts only
and not to those in temporary posts was rejected by the Court.
The Court upheld the 5th principle under which Class II Officers
promoted to Class I, Grade II, were allowed weightage und1:r rule
l(f)(iii).!
The Court then considered the question whether the quota rule
F could be applied after the year 1956. It held that even after I9S6, the
Government was entitled by reason of rule 4 of the Recruitment .Rules
of 1945 to follow the quota rule of 1951 as a rough guideline, "With-
out going to the trouble of putting the same on record in so many
words". The Court observed that if the rule is followed as a gul'de-
line, a slight deviation from the quota would be permissible but if
there was an "enormous deviation", other considerations ma.Jr arise.
Taking into consideration the relevant circumstances, the Court came
to the conclusion that in. the normal course the Government was
entitled to prepare the seniority list till the end of 1958 in accordance
with the quota rule of 1951.

H In regard to the position after the year 1958, the Court came to the
'. cone! us ion that the quota rule ceased to apply and came to an end on
January 16, 1959 when the sanction to upgrade 100 temporary posts in
K. K. DUTTA v. UNION (Chandrachud, C.l.) 833

class II, grade III to class I, grade II was given by the President. The A
seniority rule then· fell with the quota rule .. On these considerations
it was held that the seniority list was valid in regard to promotions
made upto January 15, 1959 to the extent that it was prepared on the
basis of the quota rule dated October 18, 1951 read with the seniority
rule l(f) (iii).
B
This position made it necessary for the Court to consider as to how
the inter se seniority between the direct recruits and the promotees
was to be fixed after January 16, 1959, if the seniority rule l(f)(iii)
ceased to be operative from that date·. Several suggestions were made

f to the Court with a view to evolving a fair and just seniority rule.
The COurt declined to be drawn into any such exercise and preferred
to leave it to the Government to devise a fair and just seniority rule, if
necessary, in consultation with the U.P.S.C. As a corollary, the
"
Courf8et aside the seniority list of July 15, 1968 and directed the Gov-
ernmimt to prepare a fresh seniority list. The list for the years 1955
to January 15, 1959 was directed to be prepared in accordance with the
quotll rule of 1951 read with seniority rule l(f)(iii). The list to be
D
effective from January 16, ]959 "(as directed to be prepared in accor-
dance with rules to be made afresh by the Government.

Principles (6) and (7) did not survive for consideration separately
in view of the position mentioned above. ·
I
The Court kept the proceedings pending OJ). its file to enable the
Government to prepare a fresh seniority list in the light of the directions
given by it within six months from the date of the order. Liberty
was given to the parties to apply to the Court after the list was file!!.
F
The judgment in B.S. Gupta ~(supra) was given on August 16, 19n.
On February 9, 1973, the President made rules called the Income-tax
(Class I) Service (Regulation of Seniority) Rules, 1973. These Rules
· were made under Article 309 of the Constitution· and were given re-
trospective effect from Januafy 16, 1959. In pursuance of the liberty
resel'VC)d to the parties under the judgment in B.S. Gupta, the validity
of the new Seniority Rules was challenged by the promotees. That G
challenge was considered and repelled by this Court in Bishan Sarup
<Jupta etc. v. Union of India & Ors. etc. etc.,(1) the 2nd Gupta case.
Rule 3 of the new Seniority Rules of 1973 reads thus :
"3. Seniority of Officers-The seniority of the Income-tax
Officers iu the Class I service shall be regulated as from the H.
(I} (197;] t S.C.R. 104.
834 SUPREME COURT REPORTS (1980] 3 s.c.~.

A
date of commencement of these rules in accordance with the
provisions hereinafter contained namely :-
(i) the seniority among the promotees inter se shall be deter-
mined in the order of selection for such promotion and
the officers promoted as a result of any earlier selection
8 shall rank senior to those selerted as a result of any
subsequent selection;
(ii) the seniority among the direct recruits inter se shall be deter--
mined by the order of merit in which they are selected for
such appointment by the Union Public Service Commission
and any person appointed as a result of an earlier select-
c ion shall rank senior to all other persons appointed as a
result of any subsequentselection; and
(iil) the relative seniority among the promotees and the·
direct recruits shall be in the ratio of 1 : 1 and the same
shall be so determined and regulated in accordance with
D a roster maintained for the purpose, which shall follow
the following sequence, namely :-
(a) promotee;
(b) direct recruit;
(c) promotee;
E (d) direct recruit; and so on".
When the new list of 'seniority was prepared by the Government irt
accordance with these rules, the Government had on its hands 73-
promotees who, though appointed earlier between 1956 and 1958,
hll(l no quota posts for their absorption. The 73 promotees, describ-
F ed as "spillovers .on January 16, 1959" as also those who were pro-
moted subsequently had to he absorbed in the Service, which could'
only be done by a special rule framed in that behalf.
The method adopted in the preparation of this list was, accord_ing
to Palekar, J., who spoke again for the Constitution Bench in the 2ntf .
G Gupta case, "simple enough", though the wording of die rule "is not .
happy". The simple method adopted by the Government was like
this : The seniority list from serial No. l to serial No. 485 relating.
to the period from 1951 to January 16, 1959 was prepared in accor-
dance with the quota rule read with the seniority rule which prevailed
until January 16, 1959. At serial numbers 486 to 1717 are office~
R who had to be accommodated from January 16, 1959 in accordance
with the new seniority rules. Since under rule 3 (iii), the first post in
the roster has to go to a promotee and the next to a direct recruit,
K. K. DUTTA v. UNION (Chandrachud, C.l.) 835

serial No. 486 goes to a promotee, serial No. 487 to a direct recruit
and so on. Promotees whose ranking is below serial No. 485 are
either out or the 73 spillovers as on January 1959, or are those who
were appointed later. Thus, the new seniority rule contains a formula
for the absorption of all promotees with effect from January 16, 1959
in posts allocated to them, it determines their seniority inter se and
last but not the least, it determines their seniority qua the direct re-
cruits appointed from 1959.
The Court over-tu led the objection of the 73 spillover promotees
that since, in the: 1st Gupta case, the Court h~d directed that they should
be absorbed on-a "priority basis•', all of them should have been shown
in tire seniority list as having been appointed on January 16, 1959 en
bloc and the direct recruits for that year should' have been shown
of
thereafter. It was explained that by the use the expression "priority
basis", what was meant by the Court was that tbe position of the spill-
over promotees as seniors should not be prejudfoed by claims made
by later promotees on the ground that since the spillover promotees
were recruited in excess of the quota, the later promotees whose pro-
motion did not violate the quota rule bad higher.rights than those·73.
The principal contention of the promotees in the 2nd Gupta. case
was this : As the quota rule collapsed on January 16, 1959 the spill·
over promotees as also those who were promoted thereafter must be
deemed to have been validly appointed in accordance with rule 4 of E
the Recruitment Rules of 1945. Since there was no seniority or quota
rule in existence for determining the seniority of promotees que the
direct recruits, the natural seniority linked with the' earlier date of
appointment must be respected. It could not be altered to the detriment
of the promo tees since to do so would violate Article 16 of the Consti-
F
tution. This contention 'was rejected by the Court on the ground
that when the 73 spillover appointments were made, there were no
allocated or earn\arked posts to which those promotees could have
been validly appointed, the ordinary consequence of which would have
been their reversion to Class II posts which they originally held. So
long, as the quota rule was in existence, appointments in excess of the G
quota, though invalid when made, were at least liable to be regularised·
in subsequent years when vacancies were available to the promotees
'as a conse'fuence of the quota rule. But once the quota rule ceased
to exist on January 16, 1959, any possibility of the excess appoint-
ments of the promotees being regularised vanished. It was in order
, to overcome this injustice to the promotees, that the new rule was H
framed by the Government. The new rule was thus not otily the
direct outcome of the judgment of the Court in the 1st Gupta case,
836 SUPREME COURT REPORTS [1980] 3 S.C.R.

A but it was founded on the very principles on which the Income-tax
Service had been constituted. The Court finally said that it had also
to be remembered that promotees appointed from January 16, 1959
onwards were appointed on au officiating or ad-hoc basis with notice
that the question of their seniority was still undecided. This ci1rcum-
stance, coupled with the absence of clear allocation of posts, made it
B impossible for the promotees to lay claim to seniority and contend
that they were deprived of their natural seniority in violation of
Article 16.
Shri V.M. Tarkunde who appears on behalf of the petitioners in
Writ Petition No. 66 of 1974 has made a fresh challenge to the aew
seniority list prepared in pursuance of the rules dated February 9,
1973 the validity of which was upheld by this Court in the 2nd Gupta
case (Supra). According to the learned counsel, the decision in
Jaisinghani (Supra) suffers from the following three infirmities :
(i) It was assumed in that case that the appointments of pro-
motees were in excess of the quota available to them because
the relevant files were not made available to the Cou.rt,
nor indeed was the necessary data placed before the Court,
even though during the hearing of the appeal the C011r;t
had asked the Secretary of the Finance Ministry to f1ir-
nish information in that behalf. In the absence of such
information, the Court made an assumption which was
unjustified, that the total number of vacancies a vailab.le
for promotees was equal to the total number of appoit)t-
ments actually mad~. If, for example, 10 direct recruits
and 20 promotees are appointed in a particular year. it
cannot be assumed either that only 30 vacancies a.i:e
F available for being filled up in that year or that only 30
appointments are intended to be made by the Govern-
ment during that year. The proper inference for the
Court to draw, in the absence of material which ought
to have been produced by the Governm,ent, was that. if
appointments were to be made of direct recruits and
G proril.gtees in the proportion of 2 : I, and if 20 promotees
were in fact appointed, the Government desired to appoint ·~-·
40 direct recruits but could only appoint 10, probably
because of the non-availability of suitable candidates for
direc.t recruitment.
··:It was wrongly assumed or held that rule 4 of the Income-
tax Officers (Class I, Grade II) Service Recruitment Rules
was a statutory rule..
K. K. DUTTA v. UNION (Chandrachud, C.J.) 8 31

(iii) It was wrongly assumed that I 00 posts in Class II, Grade
III, and 114 posts in the same cadre which were upgraded
as Class I, Grade II posts on January 16, 1959 and Decem·
ber 9, 1960 respectively were exclusively allotted to pro-
motees and were in fact filled in by the appointment of
promotees. '

In regard to the decision in the 2nd Gupta case (Supra) it is con-
tended that the decision suffers from the following infirmities :
(i) It was wrongly held there\n that the 73 spillover promotees
as on January 16, 1959 could not be given priority en bloc,
even thoµgh it was directed in the judgment in the 1st
Gupta Case (supra) that they should be dealt with on a
c
'"priority basis". ·
(ii) It was wrongly held that 214 promotees were appointed in
excess of the quota available to the promotees.
(iii) The conclusion that no distinction can be made between
promotees and direct recruits once they belong to a com- D
mon cadre was erroneous, as a result of which the pro-
motees were unjustly deprived of their right to weightage.
(iv) The provision in rule 3 (iii) of the new Rules of seniority
of 1973 that direct recruits and promotees will be appointed
in the ratio of 50 : 50 cannot work to the advantage of E
the promotees because the measure of 50 percent is fixed
by the new rules in relation to the actual appointments
made, whereas the old proportion of 2 : r was in relation
to the actual number of vacancies available for being filled
in.
Learned counsel has demonstrated with the help of some of the
F
instances in the new seniority list, as to how promotees have been
treated unfairly and unjustly in comparison with direct recruits. One
such instance is that a direct recruit, Hrushikesh Mishra, who was
appointed on July 3, 1966 is placed at serial No. 1001 while one of the
petitioners, Kamal Kanti Dutta, who was appointed six months earlier G
on January I, 1966 is placed at serial No. 1318. Another instance
cited is that of a promotee, V. R. Hiremath, who was appointed on
March 1, 1956 but is placed at serial No. 486, the first 485 officers hav·
ing been ranked according to the quota rule read wi.th the seniority
rule which prevailed till January 16, 1959. Hiremath, it is contended,
not having been appointed in excess of the quota should have been H
given his seniority, on al·count of the three years· weightage, with
effect from March 1, 1953. In the process, he has lost a benefit spread
838 SUPREME COURT REPORTS (1980] 3 S.C.R.

,A over not only three but six years, because his ran)dng has been made
according to the new rule in relation to the date January 16, 1959.
These contentions were adopted by Dr. Y.S. Chitale who appears
on behalf of. the petitioner H.K. Sajnani in Writ Petition No. 4146
of 1978. It may be mentioned that in Writ Petition No. 66 of 1974
of K.K. Dutta and others which was filed on February 8, 1974 no
demand was made for the review of the decisions earlier given by this
Court on the points under consideration. The request for review of
those decisions was made for the first time by the petitioners by para-
graph 3 of their supplementary affidavit in rejoinder which was filed
in this Conrt in April 1978. By paragraph 45 of his Writ p,etition,
which was filed on June 27, 1978 Sajnani did contend that the afore-
said judgments be reviewed since they were wrongly decided. Sajnani
asked by paragraph 51 of his petition, and so did the petitioners in.the
companion petitions asked by their supplementary rejoinder, that the
decision of this Court in Union of India v. M. Jangamayya(l) should
also be reviewed.
j)
In his writ petition, Sajnani has cited several specific instances in
support of his contention that under the new seniority rules, the!Pro-
motees have been treated with an evil eye and an uneven hand. His
complaint is that direct recruits who are "15 years junior in age and
15 years junior in experience had been placed above him"; and that
the seniority list;dated April 15, 1978 of Assistant Commissioners of
Income-tax, which is the basis of further promotion to the post of
Commissioner of Income-tax, does not include his name at all, though
he has ·been working as an Assistant Commissioner ever since 1969
when he was selected by the competent authority with the concurrence
of the U.P.S.C., after putting in 22 years of service as an I.T.O., out
of which 10 years' service was rendered in Class I itself. Sajnani
also prays that the seniority list dated April 15, 1978 for the cadre of
Assistant Commissioners be set aside as violating Articles 14 and 16(1)
of the Constitution.
In addition to these grounds which are pressed upon us for review-
ing our decisions in Jaisinihani, 1st Gupta case, 2nd Gupta case and
Jangamayya, (supra) the petitioners have placed strong reliance on the
findings ofthe 49th Report of the Committee on Petitions of the Rajya
Sabha, which was presented on January 9, 1976. A full text of that
Report is extracted at pages 242 to 363 of the compilation filed l;>y the
writ petitioners in this Court.
It appears from that report that at the sitting of the Rajya Sabha
held on the 23rd August, 1974, Shri Kali Mukherjee, M.P., presented
(I) [1977J 2. S.C.R. 2.8

..
K. K. DUTTA v. UNION (Chandrachud, C.J.) 839

, ;a petition signed by Shri R.C. Pandey, General Secretary, AU India A
Federation of Income-tax Gazetted Services Associations, New Delhi,
!Praying for the repeal of the Income'tax Officers (Class I Service)
(Regulation of Seniority Rules, 1973) and for the framing of fresh
seniority rules in lieu thereof. The Committee heard the represen-
tatives of (i) promotees on whose behalf the petition was presented to
the Rajya Sabha; (ii) the Ministry of Finance and (iii) the direct re- B
.cruits who were represented by the Indian Revenue Service Associa-
tion. After going through the evidence, the memoranda and the files
11upplied by the Ministry of Finance the Committee observed :
" ...... the Department from 1944 till today has been working
in a very haphazard, irregular and unscientific way. They c
made policies, rules, etc. and then went on deviating from
them to suit certain exigencies. Instead of meeting the new
situation or the demands of the Department in a scientific or
rational way, ad-hocism prevailed. This led to litigation for
nearly two decades. Since the year 1944, the Department has
.made so many commissions and o=issions in its long work- D
ing, thereby it has provided arguments to both the direct re-
<eruits and promotees which have been advocated by them force-
fully. This has created bitterness and a picture of civil war in
the Department. It would facilitate our understanding if we
look at the various points, like vacancies, quota, seniority,
weightage, confirmations, recruitments or promotions to tem- E
porary and permanent vacancies, etc. in a proper perspective."
The Committee examined the files produced beforeit by the Ministry,
expressed its sense of "shock" at the plea of the Ministry that files of
vital matters were not traceable and concluded that the new seniority
rules of 1973 should be scrapped. The Co=ittee recommended, F
inter alia, :
,, "The entire concept of a co=on seniority~ist should be given .
up. The existing common seniority list of 1973 be replaced
by two sets of seniority lists consisting of direct recruits and
promotees respectively, on the basis of the dates of their appoint·
' ment. The integration of the two channels which.maybe tum· G
ed into two cadres should not be done at the level of I.T.Os.
but after the level of Assistant Commissioners."
The Committee hoped that with the separation of the two seniority
lists, the controversy of inter se, seniority will be resolved and the
hardship caused to the 434 officers promoted between 1956 to 1966
R
will be relieved. The Committee made certain calculations accord-
ing to which, the correct number of spill-over promotees as on Jan-

ii
840 SUPREME COURT REPORTS [1980) 3 S.C.R. I
i
uazy 16, 1959 was 15 and not 73. Observing in paragraph 7(i) that the ~
A
Parliament owes responsibility in service matters too and that the
executive is answerable to the Parliament for its actions, the Com-
mittee concluded its Report with the observation :
" ...... if necessary, a special law could be enacted and in·
corporated in the Ninth Schedule of the Constitution so that
B
no further scope is left for disputes and litigation and the De-
partment would start functioning as an efficient and well-knit
unit and fulfil its intended role in combating the evils of black- ,.,
money and tax evasion and ensuring the stability and progress of
our country."
c It is not necessary to go into complications arising out of the random
placement of statutes, rules and notifications in th~ 9th Schedule, but
we do hope that, some day, the promised millannium will come.
· The Solicitor General and the other learned counsel who appear
for the respondents resisted with great stoutness the attempt of the
D petitioners to reopen decisions rendered by this Court in dispute&
between promotees and direct recruits of the Income-tax Service.
The respondents contend tha~ everyone of the arguments now pre·
sented before us has been already considered carefully in the earlier
dec.isions and the petitioners' demand for review is only yet a.nother·
attempt to retrieve a lost cause. The learned Solicitor General also
E pressed upon us the need for treating the matter as closed. Reviews, he
contends, should not be granted save in exceptional circumstances
and at any rate, he says, no solution in service matters ean ever satisfy
both the p;omotees and .direct recruits in an equal measure.
\

Having considered these rival submissions carefully we are of .the
F opi~~on tha; ~here is .no sufbstah ncde in _the r~qu;s~ ~nahde ~n hbehalfoGf the r\ii,.
pet1lloners 1or a review o t e ecmons m ;azsmg am, t e 1st 11pta "1 ~
case, the 2nd Gupta case and Jangamayya (supra). 'I

Certain historic facts have to be borne in mind while considering
the points raised before us. It is necessary to recall that for nearly a
G decade after 1950, appointments of promotees were made far in excess
of the quota available to them. So long as the quota rule operated, it
was possible to regularise their appointments when posts within their
quota became available in later years. But a somewhat unprecedent·
ed situation arose by the upgrading of Class II posts to Class I, Grade
11,-100 of them on Janvary 16, 1959 and 114 on December 9, 1960.
H This massive upgrading of posts brought about a collapse of the quota
rule. Subsequent absorption in posts which become available for being
filled up later really means regularisation of appointments, which i&

"
K. K. DUTTA v. UNION ( Chandrachud, C.J.) 8 41

possible provided there is no excessive deviation from the quota rule. A
We quite appreciate that no blame can be laid at the doors of the
promotees on the score that they were appointed in excess of the quota
available to them. Perhaps, their appointments must even have en·
abled the administration to tide over administrative stalemate. But
the tough problem which the administration has to face is that where·
as it is necessary to recognise and protect the claims of promotees B
• who are appointed in excess of their quota, it is equally necessary to
ensure that the direct recruits do not suffer an undue set back in service
on account of the excessive appointments of promotees. jThe con-
flicting claims of the two components of Service, both having an im-

f portance of their own, have therefore to be reconciled. It was with
that object that the rules have been modified from time to time. The
judgments rendered by this Court in matters which the petitioners want
c

to be reopened show, without a shadow of doubt, bow every effort
wa' made to ensure that no hardship or injustice is caused to the pro-
motees merely because their appointments exceeded their quota.
It is not correct to say that the judgment in Jaisinghani (supra) D
was based on a concession or that the Court felt compelled to draw the
particular conclusions therein because of the inability or refusal of the
Finance Ministry to produce the relevant files. The Court adopted
what it considered in the circumstances to be a satisfactory and scienti-
fic method of ascertaining the number of vacancies available for being
---( filled up. It came to 'the conclusions that the number;or actual appoint- E
ments should determine the number of vacancies available which, with
great respect, was a perfectly legitimate conclusion to draw. In the
grey area where service rules operate, more than one view is always
possible to take without sacrificing either reason or commonsense;
but the ultimate choice has to be necessarily conditioned by several
r considerations ensuring justice to as many as possible and injustice F
·l to as few. We also find it impossible to hold that thei:e was any error
,. ' in the conclusions in Jaisin!!hani [(supra) that rule 4 of the Recruitment
Rules was a statutory rule. Subsequent decisions would show that
1here was hardly any dispute between the parties, at later stages at any
' rate, that rule 4 was a statutory rule. G
The other objections raised against the judgments in the various
cases partake more or less of the same character and must be over-
7' -ruled for similar reasons.

We appreciate that the promotees shouldjnot be penafoed for the
mere reasons that those of them who were appointed after January 16, H·
1959 were appointed on an officiating or ad-hoc basis and had clear
·natice that the question of their seniority was still undecided. The
!S-463 SCI/80
842 SUPREME COURT REPORTS [1980] 3 S.C.R.

A circumstances attendant upon their appointments cannot, however,
be wholly over-looked in determining whether the,constitutionalcon,
straints have been over-stepped.
In regard to the individual instances cited before us as exemplify-
ing the injustice caused to the Promotees, it is not safe to test the
B constitutionality of a service •ule on the touchstone of fortunes of
individuals. No matter with .what care, objectivity and foresight a
rule is framed, some hardship, inconvenience or injustice is
bound to result to some members of the service. The paramount
consideration is the reconciliation of conflicting claims of two impor-
tant constituents of Service, one of which brings fresh blood and the
..
C other mature experience.
The counter-affidavit dated August 31, 1973, filed in the 2nd Gupta
case (supra) by Shri Mehra, Deputy Secretary, Ministry of Finance,
shows the fullness with which the Government had consulted
all possible interests while framing the impugned rules of :seniority.
D The gamut of reasonable possibilities is fairly covered by the four
alternatives referred to in Shri Mehra's affidavit. The inconveniences
and disadvantages flowing from the first three alternatives would be far
greater than those flowing from the 4th. That is why the choice ulti-
mately fell on the 4th alternative, uuder which the seniority between
promotees and direct recruits was fixed alternately on a roster sys-
E tem, vacancies being equally divided between promotees and direct
recruits, for the entire period from 1959 up-to-date. Though the pro-
motees submitted in the 2nd Gupta case ~(supra) that the new seniority
rule was unfair to them, they werelunable to put forward any rational
alternative, a fact which is noted at page 119 of the Report. That led
the Court to remark : ·
F "They are indeed pleased with the increase in the promotional
chances. But they are sore that the artificial rule of seniiority
which gave them weightage, has been removed. They do not
dispute that by the increase in their ratio in Class I service,
a larger number of Class II officers will, in course of time get a
chance to be appointed by promotion as Assistant Commis- l
G
sioners. But they are sorry that their chances to be promoted
to posts higher than that of the Assistant Commissioner are now
retarded by the removal of the weightage."

This shows how difficult it is to solve the jig-saw puzzle of service
disputes.
D
The Report of the 'Committee on Petitions' of the Rajya Sabha,:
howsoever sincerely motivated and fully drawn, cannot be given the
K. K. DUTTA v. UNION (Chandrachud, C.J.) 843

importance which the promotees seem to attach to it. It is urged A
that the findings of the Committee are authentic because the Finance
Ministry had made the relevant files available to it. We do not think
that this argument is well-founded. In paragraph 16 of its Report,
the Committee does refer to certain files but those files appear to . con-
tain some notings in regard to the direct recruitment only.[ne:ccrrmi-
tte e has given a table of corr.parative appointments in paragraph 19 of
its Report, but it bad to speculate on an important asp<et oftbc matter,
as is shewn by its own language, that the table shows the mmter of
• direct recruits which the Government wanted to take and"cn the basis
of which the promotees must have been given promotions". (empha-
sis supplied). If indeed the relevant files were produced before the c
Committee. it would not have expressed its sense of deep ' shock
and resentment at the , disanearance of the files. We share the con-
cern of the Committee which is expressed in paragraph 32 of its Report;
thus :
~'It is
strange that many of the files which could probably
have thrown light on the question of excess pre motion, are repor- D
ted 'missing' or 'not available'. The conclusion is inescapable
th at these losses of files are far frcm teing accidental. We can
o nly conclude that important information was deliterately
withheld fr cm the Supnme Court as well as frcm the Ccrrmittee.
Had the Ccmmittee teen allcwed access to the file relating to the
E
Seniority Rules framed in 1973, we cculd have kncwn scir.c
more facts".

This st.ows that the Ccrrmitke, tea, h<d to grcpe in the dark and
indulge in a certain amount of speculaticn on matters under its con-

•
sideration. In the circumstances. it bas done as good a job as a Com-
mittee can and we desire to find no fault with its Report. But we can- F
not accept the sulmission pressed uron us by the petitioners that the
Committee's Report must displace our judgments. n
It shall have been noticed that we have refused to reconsider our
• decisions not so much because of the view taken in the various cases
cited by the learned Solicitor General, like Safjan Singh v. State of G
Rajasthan,(I) that this Court should not review its decisions tea readily,
as because, on merits, we see no justification for reconsidering the
judgments already rendered by this Court. No fresh facts are brought
to our notice, by way of discovery of new and important evidence,
which would justify reconsideration of the decisions already rendered
by this Court after the most careful examination of the competing H
(!) (1965] I S.C.R. 933, 947, 948.
844 SUPREME COURT REPORTS . [1980] 3 S.C.L

A contentions. The report of the Rajya Sabha Committee on Peti-
tions shows, as already indicated, that the relevant files are "till' not
traceable.
The petitions are accordingly dismissed but there will be no order
as to costs.
B
DESAI, J.-1 have carefully gone through the Judgment prepared
by My Lord the Chief Justice but I regret my inability to agree with the
same.

The history, chronology of events, contentions canvassed an(the
c three decisions of this Court disposing of the contentions have been
so succinctly drawn up in the miin judgment that its repetition would
merely be an idle form1lity. I would, therefore, straightaway deal
with the points raised in these petitions.

The petitioners who are prom)tee Incom~ Tax Olbers Class I,
D Grade II, pray for reconsideration of the three decisions sp"cifically
S.G. Jaisinghani v. Union of India & Ors.( 1) Bishan Sarup Gupta v·
Union of India & Ors.(2) ('1st Gupta case' for short) and)Bishan Sarup
Gupta etc. etc. v. Union of India & Ors. etc. etc.(3) ('2nd Gupta case'
for short), and to the extent the first mentioned case is relied upon in
Union of India etc. v. Ma/ji Jangamayya etc.,(4) on the ,following
E grounds :
I. The conclusion that rule 4 of the Income Tax 0 fficers
(Class I, Grade II) Service Recruitment Rules is statutory
and, therefore, the quota prescribed by the Government
of India for recruitment to Income Tax Officers Class I,
F Grade II in exercise of the power conferred by rule 4 would
be statutory, proceeds on an assumption not warranted
by the provisions of law bearing on the point and if bath ...
rule 4 and the quota presumably prescribed in exercise of
the power conferred by rule 4 are not shown to be statutory,
the foundation on which the edifice in Jaisinghani"s(l) case
G rests is knocked out because it can be dem~nstrably esta-
blished that neither rule 4 nor the quota prescribed there-
under was statutory in character but was at best an admi-
nistrative instruction.

(l) [1967] 2 S.C.R. 703.
H (2) \1975] Suppl. S.C.R. 491.
(3) [1975] I S.C.R. 104.
(4) [1977] Z S.C.R. 28.
K. K. DUTTA v. UNION (Desai, J.) 845

2. After the Court on an interpretation of the quota rule A
held that the quota was related to vacancies arising in the
grade every year, the conclusion reached did not conform
to this finding but accommodated the so called inability
(now shown to be factually incorrect) of the Government
of India to give information to the Court about the vacan-
• cies in the grade every year with the result that the whole B
calculation of spill over is vitiated.

• 3. The mandamus issued in Jaisinghani's case was misinter-
preted by the Government because even if the quota was
statutory it was operative only between 1951 and 1956
but the Government interpreted the mandamus to be ope- c
rative beyond 1956 and npto 1967 which misinterpretation
has been pointed out in the first Gupta case.
4. In the 1st Gupta case while holding that the mandamus
directing to treat the quota as statutory beyond 1956 was
not justified yet till January 16, 1959, the Court itself in- D
directly accepted the quota rule as a guideline and treated
that there was a spill over of 73 promotees. If rule 4 was
not statutory and consequently the quota prescribed in
exercise of the power which had outlived its prescribed span
·of life in 1956 could not be brought in to treat any appoint-
ment as invalid on the ground that there was no allocated E
post for those appointees treated as spill over because
under rule 4 itself the Government had power to determine
the method or methods to be employed for the purpose of
filling in particular vacancies or such vacancies as may
be required to be fil)ed in during any particular period
and the number of candidates to be recruited by each me- F
thod.
5. The action of the Government in upgrading 214 posts bet-
ween 1959 and 1962 from Class II, Grade III to Class I.
Grade II was not open to question as at that stage there
• was no quota rule and rule 4 enabled the Government to G
make recruitment from either of the two sources in exer-
cise .of its executive power. In upholding the seniority
rules in 2nd Gupta case the Court introduced quota rule
retrospectively by the back door which is impermissible
and its operation manifestly establishes its utter unfair-
ness inasmuch as a direct recruit not any where in the De- Ii
partment or may be a student may secure a march over
a promotee who has been working in Class I, yrade II.
846 SUPREME COURT REPORTS (1980] 3 S.C.R.

A While no doubt this Court has constitutional power to review its
decision, it is a power to be sparingly exercised because any such review
has the tendency to unsettle questions which may have been finally
determind. In fact, learned Solicitor-General appearing for the
Union of India warned us that the credibility of this Court is at stake
if it goes on re-opening and reviewing propositions which havejbeen
B
finally determind by this Court. Whose credibility is at stake would
be pre>ently pJintei out because.the examination of this ugly aspect
could hive been s;nrd if srrcl:t a contention was not canvassed. Re·
•
peatedly the GJvernment of India kept back material from this Court
filing affidavit after affidavit showing its inability to provide such im·
portant information on which the decision of the Court would turn
c even thougl:t it can now be demonstrably established that such mate-
rial and information was with tl:te Government. If the Government
of India had not withheld such material information;which has been
rather adversely commented upon not by the Court but by the Legis·
lature, the credibility of the department would be exposed. Reference
D may be made in this connection to the 49th Report of Committee on
Petitions presented on January 9, 1976, to Rajya Sabha Secretariat,
set up to dispJse of a petition filed by one R.C. Pandey, General Secre·
tary, All India Federation of Income Tax Gazetted Services Asso-
ciations, praying for repeal of the Income Tax Officers (Class I Service)
(Regulation of Seniority) Rules, 1973, and for the framing of fresh
E seniority rules in lieu thereJf. While dispJsing of til'ts petition., the
observation pertinent to the point under discussion may be extracted:

"The Committee is shocked at the pleas of loss of vital
records taken by the administration. In response to the Corn•
F
rnittee's requests relating to important files the administration
has taken a similar plea. The Committee asked for a file which
could possibly show the correct position on the question whether
the 80 : 20 quota during the period 1945-50 was really opera-
tive. The file is reported missing. Another file reported mis-
sing is that relating to the framing of the recruitment rules,
G 1945. The file relating to Shri R.C. Dutt's affidavit (filed in
Jaisinghani's case) is also not available. Even the very recent
file relating to the framing of Seniority Rules, 1970, is reported
as 'not available'. On our insistence they have produced a
thick sheaf of papers said to be 'reconstructed file'. H
is strange that many of the files which could probably have
H thrown light on the question of excess promotion, are reported
'missing' or 'not available'. The conclusion is inescapable that
these losses of files are far from being accidental. We can only
K. K. DUTTA v. UNION (Des«>, !.) 847

conclude that important information was de/iberately''withheld A
from the Supreme Court as well as from the Committee".
(emphasis supplied)
On these observation*he credibility submission would not only stand
squarely answered, but need not deter us from going into the points
B
made in these petitions.

However, this Court does not lightly undertake review of its deci-
• sions, more especially where conflicting claims have been settled by a
decision of the Court and the whole gamut may have to be gone
through over again on a reconsideration of the decision. The approach
of the Court on a plea of reconsideration has been spelt out in Sajjan
c
Singh v. State of Rajasthan,(') where a plea for reconsideration of the
decision of this Court in Sri Sankari Prasad Singh Deo v. Union of
India & State of Bihar,(2) was repelled observing as under :
"It was, however, urged before us during the course of
the hearing of these writ petitions that we should reconsider D
the matter and review our earlier decision in Sankari Praiad's
case, It is true that the Constitution does not place any res-
triction on our powers to review our ear1ier decisions or even
to depart from them and there can be no doubt that in matters
relating to the decision of constitutional points which have a
significant impact on the fundamental rights of citizens, we E
would be prepared to review our earlier decisions in the interest
of public good. The doctrine of stare decisis may not strictly
apply in this context and no one can dispute the position that
the said doctrine should not b~ permitted to perpetuate erro-
neous decisions pronounced by this Court to the detriment
p
of general welfare. Even so, the normal principle that judg-
ments pronounced by this Court would be final, cannot be
ignored and unless considerations of a substantial and compel-
ling character make it necessary to do so, we should be slow
to doubt the correctness of previous decisions or to depart
from them".
G
Similarly, in the Keshav Mi/is Co. Ltd. v. Commis<ioner of Income Tax,
Bombay North,(3) it was held that while exercising inherent power to
reconsider and review its earlier decisions this Court would naturally
like to impose certain reasonable limitations and would be reluctant
(!) [l965J 1 s.c.R. 931 H
(2) [1952] S.C.R. 89
(3) [1965] 2. S.C.R 908 at 921.
848 SUPREME COURT REPORTS [1980] 3 S.C.R.

A to entertain plea for reconsideration and review of its earlier deci-
sions, nnless it is satisfied that there are compelling and substantial
reasons to do so. It is general judicial experience that in matters of
law involving questions of construing statutory or constitutional
provisions, two views are often reasonably possible and when judicial
approach has to make a choice between the two reasonably possible
B views, the process of decision-making is often very difficult and deli-
cate. In deciding whether a review is necessary when two views are
possible it would not necessarily be an adequate reason for such review
and revision to hold that though the earlier view is a reasonably pos- •
sible view, the alternative view which is pressed on the subsequent
occasion is more reasonable. The Court's discretion should be guid-
c ed by such consideration whether in the interest of public good or
for any other valid or compulsive reasons it is necessary that the
earlier decision should be revised. This view was '.re-affirmed in
Manganese Ore (India) Lta. v. The Regional Assistant Commissioner
of Sales Tax, Jaba/pur.(I)
D Bearing these principles in mind, it is necessary to examine whether
a case for reconsideration of the three earlier decisions is made out
by the petitioners or.. not.
Jaisinghani's case.· proceeds on a concession:that rule 4 and the l
quota prescribed by the Government referable to the power! conferred
E by rule 4 were statutory in character. This is borne out, by the obser-
vation of the Court which may be extracted :
"It is not disputed that rule 4 of the Income Tax Officers,
Class I, Grade II Service Recruitment Rules is a statutory
rule and there is a statutory duty cast on the Government under
this Rule to determine the method or methods to be employed
for the purpose of filling the vacancies or number of candidates
to be recruited by each method".
Income Tax Service was reconstituted on September 29, 1944.
The Government of India classified the existing Income Tax Service
as Class I and Class II. The scheme provided for recruitment of
•
G
Income Tax Officers Class I, Grade II partly by promotion and partly
by direct recruitment. The scheme was set out in the Government
of India, Finance Department (Central Revenues) letter dated Sep-
tember 29, 1944. The quota prescribed therein has underi;one a revi-
sion at a later date. It thus appears that the rules were pre.. Consti-
H tntion Rules and, therefore, their source must be traced to the Gov-
ernment of India Act, 1935 ('1935 Act' for short). Section 241 of the
(I) [1976] 3 S.C.R. 993.
K. K. DUTTA v. UNION (Desai, I.) 849

1935 Act made provision for recruitment and conditions of service. A
A bare perusal of the section would show that the power to make
appointments in the case of service of Federatfon and posts in con-
nection with the affairs of the Federation was conferred on the Gov-
ernor-General or such person as he may direct. The power to make
rules in this behalf was conferred by sub-s. (2) on the Governor-General
or by some person or persons authorised by the Governor-General
t<J make the rules for the purpose. On an examination of the rules
nnder discussion no material was placed on record to show that the
• rules were made either by the Governor-General or such person as
authorised by him. As pointed out a little while ago, the rules were
made by the Finance Department and no material was plae<d to show
-that the person or the persons who made tbe rules were autborised
c
'by the Governor-General under s. 241(2) of the 1935 Act in this be-
half. The assumption made, tberefore, that rule 4 of the Rules was
statutory and that the quota prescribed in exercise of the power con-
ferred by rule 4 must be statutory, is ill-founded. This knccks out
the entire foundation of the judgment of this Court in Jaisinghani's D
case because this Court proceeded to hold that as the quota was sta-
.tutory any recruitment made in excess of the quota in any given year
would be invalid and at best can be rcfularised by relegating such
excess appointments to the quota next year. If rule 4 and the quota
referable to the power conferred by rule 4 were not statutory but were
merely executive instructions, its violation wculd r:ot render any E
appointment in excess of it invalid, but at best would be irregnlar and
in this case on a plain reading of rule 4 it would not even be irregnlar.
In P.C. Sethi & Ors. v. Union ~f India & Ors.,(l) this Court held
that in the absence of any statutory rules it was open to the Govern-
ment in exercise of its executive power to issue administrative ins-
F
tructions with regard to constitution and reorganisation of service
as long as there is no violation of Articles 14 and 16 of the Constitu-
tion. If the parent rule 4 enables the Government to prescribe method
to b,e employed for the purpose of filling in any particular vacancy
or such vacancies as may be required to be filled in during any parti-
cular period and the number of candidates to be recruited by each G
method and if the so called quota is not statutory bnt merely a gnide-
line, the Government whenever making appointment would be acting
in exercise of power conferred by rule 4 which leaves it to the discretion
of the Government to decide from what source recruitment should be
made and what must be the quantum of vacancies that must be filled
in at a given point of time and such appointment could not be said B
to be invalid.
(1) [1975] 3 S.C.R. 201.
850 SUPREME COURT REPORTS [1980] 3 S.C.R.
A
Alternatively, even if the assumption made in Jaisinghani's case
that rule 4 and the quota referable to the exercise of power conferred
by rule 4 is unquestionable yet when this Court held that the quota is
related to the vacancies, the decision proceeding on an incorrect plea
that the information about the number of vacancies in a year is not
B available, is unsustainable for two reasons, namely, (l) that the files
are now produced; and (2) in the absence of information ;,bout the
vacancies available the Court could not have invalidated any appoint-
ment on the assumption that appointment from the source of pro-
motees was in excess of the quota. On a plain reading of rules 3, 4 •
and 5 it appears crystal clear that the quota was related to \ acancies
c and at one stage that was accepted. On this finding unless tho fact
situation is clearly established showing vacancies year to year it would
be impossible to hold that in any year there was in excess in either
source. Supp0se there were 90 vacancies in a year and the quota
was 66-2/3 for direct recruits and 33-1/3 for promotees, it would be
open to the Government to promote 30 persons ;rrespective of the
D fact whether 60 direct recruits have become available or not. The
assumption made that the recruitmellt made in a given year from
both the sources would furnish information about the vacancies in a
year would lead to a rather unfair conclusion inasmuch as the action
of the Government in acting in a certain manner without due re:gard
to the quota rule would work hardship on appointees even though
E on a correct calculation of vacancies the appointments may be valid
and legal.

1"he mandamus issued in Jaisinghani's case \\'Us as under :

F "We are accordingly of the opinion that promotees from
class II, grade III to class I, grade II service in excess of thie
prescribed quotas for each of the years 1951 to 1956 and on..
wards have been illegally promoted and the appollant is en-
titled to a writ in the nature of manda1nus commanding res-
pondents I to 3 to adjust the seniority of the appellant and
G other officers similarly placed like him and to prepare a fresh
s1miority list in accordance with law after adjusting the recruit..
ment for the period 1951 to 1956 and onwards in accordance
with the quota rule prescribed in the letter of the Government
of India No. F.24(2)-Admn. I.T./51 dated October 18, 1951.
We, howenr, wish to m1b it clear tlnt this order will not affect
such class II Officers who have been appointed permanently as
Assistant Commissioners of Income-Tax. But this order will
apply to all oth;r offioors i1duding tho30 w:10 hwe boen ap-
K. K. DUTTA v. UNION (Desai, J.) 851

pointed Assistant Commissioners of Income Tax l'rov1sionally A
pursuant to the orders of the High Court".

The Government understood the mandamus as covering the whole
period from 1951 to 1967. When this was questioned in the !st Gupta
case, this Court held that the quota rule Proprio vigor operated between
1951 to 1956 and if there were promotions in any year in excess of B
the quota those promotions were merely invalid for that year but
they were not invalid for all time and they could be regularised by
being absorbed in the quota for the later years. So adjusting the
quota at any rate upto 1956, the quota rule on its own strength
~-
evaporated because it was to be in operation for a period of five
years and no fresh quota rule wa> issued by the Government. c
Therefore, after 1956 rule 4 remained in force in all its rigour and
was not hedged in by any quota. Rule 4 permitted the Govern-
ment to make recruitment from either source without lettering its
discretion by any quota rule which it was not bound to prescribe.
On January 16, 1959, Government in the Ministry of Finance
informed the commissioners of Income Tax that the President had D
sanctioned the upgrading to class I of I 00 temporary Posts oflncome
Tax Officers, Class JI. On December 19, 1960, there was further up-
grading of 114 posts from class II to class I. Between 1959 and 1962
these 214 posts were filled in by prornotees. Now. in the !st Gupta
case this court held that even though the quota rule expired in 1956,
yet the Government of India adopted it as a guideline. May be, it E
may be so. Does any appointment in breach of the guideline neither
statutory nor even having the fragrance of any executive instruction
become invalid more so when the Government had power to make
appointment from either source uninhibited by any quota rule under
rule 4? Yet the Court found that between 1956 and 1959 when 100
F
• posts came to be upgraded there was a spillover of 73 persons and
because of the huge departure from'' guidelines the weightage
rule giving seniority to the promotees by 2-3-years was crushed under
its own debris. Again, with respect it must be confessed that rule
• 4 is overlooked or bypassed when saying that there was a spillover of
73 promotees between 1956 and 1959. Nor could it be said that the G
upgrading of 214 posts and filling them up by promotees would be
in any way even irregular much less invalid because rule 4 enables
Government to drs.\v from either source.

In the 2nd Gupta case in view of the decision in ]st Gupta case a
fresh seniority rule was prepared and it was made retroactive from H
January 16, 1959. If, the inter a/ia, provides that the relative seniority
amongst the promotees and the direct recruits shall be in the ratio of
852 SUPREME COURT REPORTS [1980] 3 S.C.R.

A 1 : 1 and the same shall be so determined and regulated in accordance
with a ro~ter maintained for the purpose, which shall follow the
following sequence, namely :
(a) Promotee ;!
(b) direct recruit;
B
(c) promotee,
(d) direct recruits, and 'o on.

This methed of roster undoubtedly intrcduces a quota by the back
door. Once a roster is introduced promotee direct rucruit, promotee
c direct rucruit etc. even if some promotees have come in a bulk and if at
a later date some direct 'recruits are appointed in bulk, while prepar-
ing roster[an earlier date promotee will have'.to yield~his place to a later
date direct recruit. Bluntly translated it means that the direct recru,it
who was never in service when promotee was promoteed, probably
he may be a student. May be he may not have even passed the com-
D petitive examination, yet he may come into the picture and challenge
one who has already been servmg in the Department for a number of
years. To illustrate, in the new seniority list prepared by the Govern-
ment pursuant to the order made by this Court in the 1st Gupta case
and upheld by this Court in 2nd Gupta case a promotee of 1962 will
have to yield his place to a direct recruit of 1966. With utmost hesita-
E
tion I must say that service jurisprudence hardly permits a situation
where a man not in service comes and challenges some thing which
has been done much before he came in to service and gets such an
advantage which on the face of it appears to be unfair. But apart from
this, even in 1959 there was no quota rule and assuming that the old
F service rule giving weightage to the promotees crushed under that
weight of large number of promotees being promoted, it would not, '""
be open to the Govenment to so prepare a fresh seniority list which
cannot be given effect to unless a roster is introduced which introduces
quota by the back door and which is so unfair in its operation that pro-
mo tees of 1962 will have to yield place to direct recruits of 1966. Now
G under the old weightage rule promotees were given a weightage for '
service of 2-3 years over direct recruits because direct recruits were
unable to undertake regular assessment work for a period of 2-3
years when they were more or less under training while promotees have
been doing this work for a number of years and their experience is
reflected in the weightage. The whole thing now appears in the reverse I
H gear in that an uninitiated direct recruit takes precedence over an
experienced promotee. The unfairness of the new rule is writ large
on the face of it.
K. K. DUTTA v. UNION (Desai, J.) 853

This rule violates another important rule well recognised in the A
ser vice jurisprudence that in the absence of any valid rule of seniority
d ate of continuous officiation provides a valid rule of seniority. This
rule is completely crucified under two unsustainable assumption that
a quota rule having guideline sanction is made imperative in character
and assumed to be in force between 1956 and 1959, and that even
though Government in exercise of power conferred by rule 4 for its own B
necessity promoted 214 promotees to the upgraded posts yet they
mnst yield place to some future direct recruits who may come to the
• department at a later date. This Court sustained the position holding
that these were ad hoc appointments, and there were no regular posts for
those promotees. This approach wholly overlooks the effect and the
force of rule 4.
c
Certainty and continuity demand that this Court should not reopen
settled decisions or reopen closed questions unless under a compelling
necessity. It may be that the fate of Income Tax Officers, promotees
and direct recruits, may rest with the three decisions of this Court.
Unfairness to some of them may itself not provide a good and compe- D
lling reason for reopening and reconsidering the decisions. Therefore,
;f that were the only point for our consideration I would have unhesi-
tatingly agreed with the decision rendered by My Lord the Chief
Justice. But there is a further compelling necessity which impels me
to pen these few lines.
E
Jaisinghani and the two Gupta cases are being quoted times with-
<mt number before this Court for the principles enunciated therein.
These decisions, therefore, affect,subsequent decisions·of this Court as
well as the High Courts. And some of the principles enunciated in
these three cases stand in sharp contrast to other decisions ohhis
Court and in fact this Court itself felt it necessary to warn that it F

,, may become necessary to reconcile these conflicting decisions. In
this connection reference may be made to N. K. Chauhan and Ors. v.
State of Gujarat and Ors.,(') where this Court after referring to two
sets of decisions charting two different courses, observed as under :
"After all, we live in a judicial system where earlier curial wis- G
dom, unless competently over-ruled, binds the Court. The de-
cisions cited before us start with the leading case in Mervyn Cou-
tindo & Ors. v. Collector of Customs, Bombay (2) and close with
the last pronouncement in Badami v. State of Mysore and Ors.(l)
This time-span has seen dicta go zigzag but we see no difficulty
H
(1) [1977] I SC.R. 1037 at 1053.
(2) [1966] 3 S.C.R. 600.
•(3) [1976] 1 S.C.R. 815.
854 SUPREME COURT REPORTS (J 980] 3 S.C.R.

A in tracing a common thread of reasoning. However, there are
divergencies in the ratiocination between Mervyn Coutindo
(supra) and Govind Dattatray Kelkar and Ors. v. Chief Controller
of Imports and Exports and Ors., (1) On the one hand and S. G.
Jaisinghani v. Union of India (supra) Bishan Sarup Guptav.
Union of Ind1a (supra) Union ofIndia and Ors. v. Bishan Sarup
B Gupta (3), and A. K. Subraman and Ors. v. Union of India (2) on
the other, especially on the rota system and the year being
regarded as a unit, that this Court may one day have to
harmonize the discordance unless Government wakes up to the
need for properly drafting its service rules so as to eliminate '

c litigative waste of its servants' energies". :~
It is not for a moment suggested and I say so with utmost respect
that the aforementioned three decisions are incorrect. In
the light of the materials now placed especially the files which were
withheld from the Court and the Committee the only view that I
express is that enough compelling and necessary material has been
D placed on record making out a strong case for reconsideration of these .
decisions. Accordingly, in my view the present two petitions deserve·
to be placed before a larger Bench to be constituted by the Hon'ble
Chief Justice of India.

E ORDER
In view of the majority opinion the Writ Petitions are dismissed
with no order as to costs.

S. R. Petitions dismissed.

...

'

(I) [1967] 2 S.C.R. 29.
(2) (1975] 2 S.C.R. 979.