Holding

Seniority of candidates who pass the departmental examination beyond two years shall be reckoned from the date of passing, not from the date of appointment.

Summary

Mohan Lal and others appealed against an order of the Himachal Pradesh Administrative Tribunal concerning the inter‑seniority of direct‑recruits to the Excise and Taxation Inspectorate (Class III) Service. The dispute centered on the interpretation of Rule 11 and Rule 4 of the Himachal Pradesh Excise and Taxation Department (Inspectorate Staff Class III) (Examination) Rules, specifically whether candidates must pass the departmental examination within two years of appointment or may be allowed an extended four‑year period. The Court examined the wording of the rules, the conditions in the appointment letters, and the schedule of examinations prescribed under Rule 4. It held that the two‑year period is mandatory; candidates who pass after two years are entitled to seniority only from the date of passing the examination, not from the date of appointment. Consequently, the appeal was allowed, granting the respondents’ request that their seniority be reckoned from the date of passing the examination.

Issues considered

Whether the departmental examination for Excise and Taxation Inspectors must be passed within two years of appointment or may be extended to four years under the service rules.
How seniority should be calculated for candidates who pass the examination after the two‑year period.

Subjects

senioritydepartmental examinationprobation periodservice rulesHimachal Pradesh Excise and Taxationdirect recruitmentinter‑seniority

Judgment

A MOHAN LAL AND ORS.
v.
STATE OF HIMACHAL PRADESH THROUGH ITS
I
SECRETARY, EXCISE AND TAXATION DEPARTMENT,
GOVERNMENT SECRETARIAT, SHIMLA-2 AND ORS.
B MARCH 17, 1997

(K. RAMASWAMY AND G.T. NANAVATI, JJ.]

. Service Law:
c Himachal Pradesh Excise and Taxation Depa1tment Inspector:ite Staff
Class III Service (Seniority) Rules/Himachal Pradesh Excise and Taxatio11
Depaltment (I11spectorate Staff Class Ill) (Examinatio11) Rules :

Rule 11/Ru/e 4-Excise and Taxatio11 I11spectors-Direct recmit-
D ment-Seniority-After appoi11tment candidates to pass depa1tme11tal et-
a111i11ation within two years-Candidates who pass the etami11atio11 after two
years of appoi11t111ent-Held, their se11iority will be recko11ed from the date of
their passing the etaminatio11.

Ishwari Kumar & Ors. v. State of H.P. (C.A. No. 4258/92) decided on
E March 24, 1994, referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2417 of
1997.

From the Judgment and Order dated 28.10.96 of the Himachal
F Pradesh Administrative Tribunal, Shimla in O.A. No. 788 of 1995.

Arun Jaitley and Ms. Kamini Jaiswal for the Appellants.

O.P. Sharma, R.C. Gobrele, K.R. Gupta, Vivek Sharma, Ashok
Sudan, Mrs. Nanita Sharma for the Respondents.
G
AK. Sikri and Mrs. Madhu Sikri for the Respondent Nos. 18-20 and
35.

The following Order of the Court was delivered :

H Leave granted. We have heard learned counsel oil both sides.
1160
MOHAN LALv. STATE 1161

This appeal, by special leave arise from the order of the H.P. A
Administrative Tribunal, made on October 28, 1996 in O.A. No. 788/95.

The determination of inter-se seniority of the direct recruits is the
only question in this case. The appellants and the respondents came to be
selected by direct recruitment against vacancies in the permanent posts of
Excise and Taxation Inspectors in the H.P. Excise and Taxation Depart- B
ment (Inspectorate staff, Class III) Service. The question relates to the
interpretation of Rule 11 of the (seniority) service Rules read with Rule 4
(Examination) of the Rules. It is : whether examination has to be passed
within two years from the date of appointment on probation or within the
extended period of four years? If a candidate passes the examination within c
two years from the date of the appointment and joins the duty, indisputably
under Rule 11(3) of the Rules, un confirmation on the expiry of probation,
the seniority relates back to the date of appointment. The situation where
a candidate does not pass the examination within two years but within the
extended period of four years is dealt with under proviso to sub-rule (3) D
of Rule 11 which reads thus:

"11 (3) On the completion of the period of probation a person and
passing the prescribed examination the appointment authority
may-

(a) if his work and conduct is found statisfactory-
E

(i) confirm such person from the date of his appointment if
appointed against a permanent vacancy; or

(ii) Confirm such person from the date from which a permanent
F
vacancy occurs; if appointed against a temporary vacancy; or

(iii) declare that he has completed his probation satisfactory if
there is no permanent vacancy; or

(b) if his work or conduct has not been, in its opinion, satisfactory G
and in the case of non-passing of prescribed departmental ex-
amination-

(i) dispense with his services, if appointed by direct appointment
or if appointed otherwise revert him to his former post, or deal
within such other manner as the terms and conditions of his H
1162 SUPREME COURT REPORTS I1997] 2 S.C.R. -4
A previous appointment; permit; or

(ii) extent his period of probation and thereafter, pass such orders
as it could have passed on the expiry of the first period of proba-
tion. This shall also apply mutatis mutandis to the departmental
examinations;
B
Provided that the total period of probation and the time allowed
.for passing the departmental examinations, including extension, if
any shall not exceed four years."

C It appears that series of orders came to be passed by the Administra- ---
tive Tribunal and one arising therefrom was decided by this Court. In the
first round of litigation in which one Sud was the applicant, the Tribunal
had held that the seniority would be conferred on those who passed within
two years from the date of joining the service. and those who passed
D subsequently would rank juniors to them. In the case of Mohan Lal & Ors.
in the second set of litigation, it was held that those who passed the test
within two years, would get seniority from the date of joining the post and
those who passed within the extended period of four years, would rank
inter-se seniority from the date of the passing of the test. In case of those
who did not pass the examinations within the extended period of four years,
E it would be open to the State Government to have their services terminated
or to take such action as would be open to them. The first litigation has
reached this Court. This Court in lsliwari Kumar & Ors. v. State of H.P.
(CA No. 4258/92] decided on March 24, 1994 had held that such of the
candidates ~ho passed the examinations within two years and were con-
F firmed after passing the departmental tests, would get seniority from the
respective dates of their joining the post and the date of passing the
.departmental test relates back to the date of the appointment. But those
who passed the examination after the said two years, would get seniority
from the date of passing and would rank junior to those who passed the
examination within two years. In this appeal, the third set of litigation, the
G question arises: whether the period of passing the test within two years by
taking four chances is mandatory or not? In that behalf, it is necessary to
read Rule 11 of the Rules which reads as under:

"11. (1) Persons appointed to the service shall remain on probation
H for a period of two years.
MOHANLALv.STATE 1163

Provided that- A
(a) the incumbents shall within two years of the ap-
pointment, pass the departmental examinations
prescribed by the Government from time to time and;

(b) the Government may exempt in exceptional cases B
any person from passing any or all such departmental
examinations.

Provided further that-

(a) any period, after such appointment, spent on c
deputation on a corresponding or higher post shall
count towards the period of probation.

(b) any period of officiating appointment to the Service
shall be reckoned as period spent on probation, but no D
person who has officiated shall, on completion of the
prescribed period of probation, be entitled to be con-
firmed unless he is appointed against a permanent
post/ vacancy.

(2) If, in the opinion of the appointing authority, the work or E
conduct of a person during the period of probation is not satisfac-
tory or he fails to pass the prescribed departmental examination
within two years of his appointment, it may -

(a) if such person is recruited by direct appointment, dispense with
his services and
F

(b) if such person is recruited otherwise-

(i) revert him to his former post; or
G
(ii) deal with him in such other manner as the terms
and conditions of the previous appointment permit.

(3) On the completion of the period of probation a person and
passing the prescribed examination the appointment authority
m~- H
1164 SUPREME COURT REPORTS [1997] 2 S.C.R. --i
A (a) if his work and conduct is found satisfactory-

(i) confirm such person from the date of his appoint·
ment if appointed against a permanent vacancy; or

(ii) confirm such person from the date from which a
B permanent vacancy occurs; if appointed againt a tern-
. porary vacancy; or

(iii) declare that he has completed his probation satis-
factory if their is no permanent vacancy; or

c (b) if his work or conduct has not been, in its opinion, satisfactory
and in the case of non-passing of prescribed departmental ex-
amination-

(i) dispense with his services, if appointed by direct
appointment or if appointed otherwise revert him to his
D former post, or deal within such other manner as the
terms and conditions of his previous appointment; per-
mit; or

(ii) extend his period of probation and thereafter, pass
E such orders as it could have passed on the expiry of the
first period of probation. This shall also apply mutatis
mutandis to the departmental examinations;

Provided that the total period of probation and the time allowed
for passing the departmental examinations, including extension, if
F any shall not exceed four years."

A reading of this Rule would clearly indicate that a person appointed
to a service shall remain on probation for a period of two years. The
appointment letters issued to the parties indicate the conditions. One of
the conditions, namely condition No. (vi) envisaged as under :
G
"(iv) He shall have to pass the departmental examination in respect
of both the Exercise & Taxation within two years of his joining the
duty failing which his services are liable to termination."

Therefore, it specifies that a candid~te appointed to the post on
H probation shall have to rass the departm~ntal ~xamination in respect of
MOHAN LAL v. STATE 1165

both the Excise and Taxation within two years of his joining the duty. A
Rule 4 of the Rules provide as under :

"4. Conduct of Examinations :

(i) The Departmental Examination for the Excise and Taxation B
Inspectors of the Excise and Taxation Department, Himachal
Pradesh shall be held twice a year about the third week of the
April and first week of November, or on such other dates as are
notified by the Excise and Taxation Commissioner. The dates and
the place of the examination will be notified before hand in the
Himachal Pradesh Rajpatra. c
(ii) The deputy Excise and Taxation Commissioner, (North and
South Zones) shall forward to Excise and Taxation Cominissioner,
Himachal Pradesh before 15th January and 15th August, each year
or within one month after the publication of the results of the last D
examination whichever is later the names of the officers who intend
to sit for the examination together with the subjects in which they
wish to be examined.

(iii) The examination will be conducted by the HP Institute of
Public Administration, Fair Lawns, Shimla." E
A reading of this rule relating to conduct of examination would
indicate that the Government shall hold the examinations twice a year
between 3rd week of April and 1st week of November, or on such other
dates as are notified by the Excise and Taxation Commissioner. The
examination so conducted by the Institute of Public Administration, Shimla F
shall be in the manner prescribed in Paragraph (ii) of Rule 4 of the Rules.
It is, therefore, clear that the Government is required to conduct the
examinations twice a year and the candidates are required to pass the
examinations within two years from the date of joining the post on proba-
tion. The Rule does not give four chances to every candidates. They shall G
pass the departmental examination within two years. On successful com-
pletion of probation and declaration thereof, his seniority would relate
back to the date of appointment.

We are not concerned with the action to be taken by the Government
for such of those candidates who did not pass the examinations within the H
(1997] 2 S.C.R. '
SUPREME COURT REPORTS
~
1166

A prescribed two years period or extended period of four years of the
probation. We are concerned with a case of two sets of persons, i.e., those
who passed the examinations within two years and another set of officers
who sat for the examination within two years but passed the examination
beyond two years. It is a case where the respondents themselves sought for
the relief in the QA that their seniority would be reckoned from the date
B of their passing the d.!partmental examination. They have given the detaiis
of their date of joining the duty and passing of the examination which show
that D.S. Sandi) had joined the post on june 26, 1977 and he passed his
examination on July 16, 1979 D.R. Dewan joined the duty on July 5, 1979
while he passed the departmental examination on October 19, 1981, in
c other words, beyond two years.

Shri O.P. Sharma, learned senior counsel appearing for the respon-
dents, contends that they had applied for examination in the month of
January; their applications were duly forwarded; examination were re-
quired to be conducted in April; instead, they were conducted in the month
D of May and the results were declared in the ·month of October and,
therefore, they cannot be blamed for the delay in passing the examinations
beyond two years. In the light of the results announced and in the light of
the examinations conducted vis-a-vis the operation of the Rules, the ques-
tion is: whether the seniority of the respondents Sandi! and Dewan would ,
E relate back to the date of their appointment or from the date of their
passing the examination? In the light of the prayer, they have themselves
made that their seniority should be declared from the date of their passing
the examination and in the light of the conditions of service and operation
of the Rule, we hold that their seniority will be reckoned from the date of
their passing the examination.
F
The ,Proforma respondents sought to contend they they are governed
by the Rules operating in the years 1963 and 1964 and that these Rules
have no application to them. We need not express any opinion on that. We
are informed that the matter is pending in the Tribunal. It would be for
G the Tribunal to consider their claims in accordance with law.

The appeal is accordingly allowed. No costs.

R.P. Appeal allowed.

H