PANCHRAJ TIWARIversusM.P. STATE ELECTRICITY BOARD AND OTHERS

                    [2014] 3 S.C.R. 577


                   PANCHRAJ TIWARI                            A
                             v.
    M.P. STATE ELECTRICITY BOARD AND OTHERS
            (Civil Appeal No. 4371 of 2008)

                     MARCH 4, 2014
                                                              B
      [H.L. GOKHALE AND KURIAN JOSEPH, JJ.]

    SERVICE LAW:

     Merger of services - Consequences of- Services of c
employees under erstwhile Rural Electricity Co-operative
Society merged with Madhya Pradesh State Electricity Board
- Graduate Junior Engineer of Erstwhile Society claiming
promotion as Assistant Engineer as per MPSEB Circular
dated 15. 11. 1990 - Held: Absorbed employees of Rural D
Electricity Cooperative Societies, having due regard to their
date of appointment! promotion in each category in the
respective societies, shall be placed with effect from the date
of absorption, viz., 15.03.2002 as juniors to the junior-most
employee of the Electricity Board in the respective category E
- Thereafter, they shall be considered for further promotions
as per the rules/regulations of MPSEB - Appellant
accordingly shall be entitled to retrospective promotions at
par with and with effect from the dates on which the junior-most
graduate engineer in the parent service on the date of
absorption obtained such promotions - However, it is made F
clear that benefits till date need to be worked out only
notionally - Constitution of India, 1950 - Arts. 14 and 16.

    The appellant was appointed as Junior Engineer in
the Rural Electricity Co-operative Society, Rewa in 1986.     G
The Board of Directors of the society passed a resolution
on 27-12-1994 for his promotion as Assistant Engineer.
Meanwhile, a policy decision was taken by the State
Government to dissolve all such societies and merge the
                            577                               H
    578      SUPREME COURT REPORTS                [2014) 3 S.C.R.


A same with Madhya Pradesh State Electricity Board and,
  ultimately, the Rural Electricity Co-operative Society,
  Rewa was completely merged with the MPSEB w.e.f. 15-
  03-2002. Consequently, the employees of the society
  were taken over and absorbed in the MPSEB. Since the
B appellant was not promoted as an Assistant Engineer, he
  filed a writ petition before the High Court. The single
  Judge dismissed the writ petition and the Division Bench
  of the High Court dismissed his appeal.

          Allowing the appeal, the court
c
       HELD: 1.1 Chances of promotion are not conditions of
  service, but negation of even the chance of promotion
  certainly amounts to variation in the conditions of service
  attracting infraction of Arts. 14 and 16 of the Constitution.
D No employee has a right to particular position in the
  seniority list but all employees have a right to seniority since
  the same forms the basis of promotion. If after integration,
  only the chances of promotion are affected, it is only to be
  ignored. In the instant case, there is complete denial of
E promotion forever, which cannot be comprehended under
  the constitutional scheme of Arts 14 and 16 of the
  Constitution. [para 16-18] [585-E-G; 586-A]

      Tamil Nadu Education Department Ministerial and
  General Subordinate Services Association and others v. State
F of Tamil Nadu and others (1980) 3 sec 97 - referred to.

      1.2 Integration/merger of services means creation of
  a homogenous service by the merger of service
  personnel belonging to different services. Since it is not
G specifically provided as to the position of absorbed
  employees of the Rural Electricity Cooperative Society,
  Rewa in the integrated service, such employees are
  placed as junior to the junior-most officer of the category
  concerned in the MPSEB on the date of absorption, viz.,
H 15.03.2002. [para 6 and 9] [582-C; 583-A-BJ
    PANCHRAJ TIWARI v. M.P. STATE ELECTRICITY          579
              BOARD AND OTHERS
      R. S. Makashi and others v. I. M. Menon and others 1982 A
 (2) SCR 69 = (1982) 1 SCC 379; S. S. Bola and others v.
 B.D. Sardana and others 1997 (2) Suppl. SCR 507 = (1997)
 8 SCC 522; and Praful/a Kumar Das and others v. State of
 Orissa and others 2003 (4) Suppl. SCR 301 = (2003) 11 SCC
 614 - referred to.                                           B

      1.3 Having due regard to their date of appointment/
 promotion in each category in the respective societies,
 they shall be placed with effect from the date of
 absorption, viz., 15.03.2002 as juniors to the junior-most
 employee of the Electricity Board in the respective C
 category. Thereafter, they shall be considered for further
 promotions as per the rules/regulations of the MPSEB. All
 other principles/conditions of absorption shall remain as
 such. However, it is made clear that on such promotions,
 in the exigencies of service, the employee concerned D
 would also be liable to be transferred out of the circle, if
 so required. [para 19] [587-A-C]

       1.4 It is provided in the conditions of service of the
   MPSEB as per Circular dated 15.11.1990 that a graduate E
   Junior Engineer having four years of regular satisfactory
   service can be considered for promotion to the post of
   Assistant Engineer after appropriate training. The
   appellant accordingly shall be entitled to retrospective
   promotions at par with and with effect from the dates on "F
   which the junior-most graduate engineer in the parent
   service on the date of absorption obtained such
   promotions. However, it is made <;lear that benefits till
, date need to be worked out only notionally. The
 · 1mpugned judgment is set aside. [para 10, 19 and 20] [583- G
   8-C; 587-A, C-D]
                     Case Law Reference:
     1982 (2) SCR 69            referred to      para 14
     1997 (2) Suppl. SCR 507 referred to         para 14     H
    580      SUPREME COURT REPORTS                    [2014] 3 S.C.R.


A         2003 (4) Suppl. SCR 301       referred to        para 14
          (1980) 3 sec 97               referred to        para 17

        CIVIL APPELLATE JUR1SDICTION : Civil Appeal No.
    4371 of 2008.
B
         From the Judgment & Order dated 27 07.2007 of the
    Division Bench of the Madhya Pradesh at Jabalp·ir in Writ
    Appeal No. 1361 of 2006.

C       Rohit Kumar Singh, Prashant Bhushan, Daya Krishan
    Sharma for the Appellant.

          Ashiesh Kumar for the Respodents.

          The Judgment of the Court was delivered by
D         KURIAN, J. 1. Whether on integration/merger/
    amalgamation, is it permissible to have complete denial of
    promotion forever in the integrated service, is the short question
    arising for consideration in this case.

E      2. Appellant a graduate started his career as junior
  engineer on 23.09.1986 in the Rural Electricity Cooperative
  Society, Rewa. During 1995, it appears a policy decision was
  taken by the State Government to dissolve all such societies
  and merge the same with Madhya Pradesh State Electricity
F Board (hereinafter referred to as 'MPSEB'). Accordingly, the
  Managing Committee of the Rural Electricity Cooperative
  Society, Rewa was superseded in May, 1995 and a
  Superintending Engineer of the MPSEB was appointed as
  Officer In-charge. However, it took a few years to complete the
G formalities of the merger. Finally the Rural Electricity
  Cooperative Society, Rewa was completely merged with the
  MPSEB w.e.f. 15 03.2002.

         3. The principles of merger were clarified by the MPSEB
    after prolonged correspondence as per Annexure P-12 dated
H
  PANCHRAJ TIWARI v. M.P. STATE ELECTRICITY                581
       BOARD AND OTHERS [KURIAN, J.]
15.06.2004. For the purpose of ready reference, we shall           A
extract the contents:

          "Please refer to this office order cited under
    reference. It is requested to issue necessary orders for
    absorption of employees of REC societies falling under         B
   ·your area of jurisdiction on the same terms & conditions
    of the societies. The terms & conditions of the societies
    may be obtained from DE (STC), Jabalpur.

         Further other terms & conditions of which employees
    can be absorbed:-                                              C

     1.    The regular employees of the above societies shall
           be taken over on the same terms & conditions as
           existing in the Society except that no deputation
           allowance shall be paid.                                D
     2.    Their pay scale will be the same which they were
           getting before the absorption.

     3.    The above employees may not be transferred out
           of the circle concerned, so that no anomaly arises.     E
     4.    Their age of superannuation will be the same as
           applicable in the societies.

     5.    Pension/gratuity will be payable to the employees
           absorbed in the Board as per the rules/regulation       F
           of the concerned society.

     6.    Their designation will be maintained as it was in the
           society."
                                                                   G
                                          (Emphasis supplied)

     4. The principles of absorption as extracted above would
clearly show that the employees of the society have been taken
over and absorbed in the MPSEB. However, their pay-scale
on the date of absorption was protected, their designation was     H
    582       SUPREME COURT REPORTS                     [2014] 3 S.C.R.


A   maintained as it was in the society at the time of absorption
    and the age of superannuation, pension and gratuity of such
    employees were to be governed by the rules/bylaws of the
    society concerned.

B         5. Though it may appear that there are some conditions
    which are normally not found in the principles of integration, the
    fact remains that the employees of the erstwhile society which
    merged with the MPSEB, have been absorbed in the service
    of MPSEB.

C      6. Integration/merger of services means creation of a
  homogenous service by the merger of service personnel
  belonging to different services. Though it is difficult to have a
  perfect coalescence of the services on such merger, the
  principle of equivalence is to be followed while absorbing the
D employees, to the extent possible.

          7. Though integration of services thus postulates equation
    of posts, it is not invariably necessary to prepare the seniority
    list on the basis of the pay drawn by the incumbent in the
E   equated category. It is always open to the authority concerned
    to adopt a just and the equitable principle on fixation of seniority.

          8. Once a service is merged with another service, the
    merged service gets its birth in the integrated service and loses
    its original identity. There cannot be a situation, where even
F   after merger, absorption or integration, such services which
    were merged or absorbed, still retain their original status. If so,
    it is not an absorption or merger or integration, it will only be a
    working arrangement without any functional integration.

G      9. In the instant case, the undisputed factual and legal
  position is that there is absorption of the employees of the Rural
  Electricity Cooperative Society, Rewa with the MPSEB. The
  Society has been deregistered, there is only one service
  thereafter and thus there is functional integration. On the basis
H of the protection of the designation and pay-scale, the
   PANCHRAJ TIWARI v. M.P. STATE ELECTRICITY                583
       BOARD AND OTHERS [KURIAN, J.]
employees have to be posted in the equivalent category. Since       A
it is not specifically provided as to the position of such
employees in the integrated service, it is a settled equitable
principle that such employees are placed as junior to the junior-
most officer of the category concerned in the MPSEB on the
date of absorption, viz., 15.03.2002.                               B

     10. It is provided in the conditions of service of the MPSEB
as per Circular dated 15.11.1990 that a graduate Junior
Engineer having satisfactory service of four years of regular
service can be considered for promotion to the post of
Assistant Engineer after appropriate training. The appellant C
started his career as a graduate engineer in the Rural Electricity
Cooperative Society, Rewa in 1986. He also claimed
promotion on the basis of such circular. The Board of Directors
of the appellant's society passed a Resolution on 27.12.1994
for his promotion as Assistant Engineer. By that time the steps D
for dissolution of society, it appears had already started. The
Board of Directors was dissolved in May, 1995 and a
Superintending Engineer of the MPSEB was appointed as
Officer In-charge of the society. The said officer forwarded the
proposal of promotion of the appellant as an Assistant Engineer E
to the MPSEB.

     11. It appears, the Registrar of the Cooperative Societies
as well as MPSEB have taken the stand that the appellant had
not been duly selected for promotion as Assistant Engineer in       F
terms of Rule 18 of the Society. The Rule reads as follows:

    "18. SELECTION AND APPOINTMENT

    The selection of suitable candidate for filling-up a post in
    the society as well as for making selection for promotion       G
    of eligible candidates shall be made by a selection
    committee to be constituted by the Board. consisting of the
    Chairman. a member of the Board to be elected by the
    Board. divisional Deputy Registrar of Cooperative Society,
    Divisional Engineer, M.P. Electricity Board and the             H
    584      SUPREME COURT REPORTS                   [2014] 3 S.C.R.


A         Managing Director of the Society

          Dearness allowances to employees borne on regular
          establishment shall be admissible as applicable to the
          employees of M.P.E.B. from time to time with previous
8         approved of the Registrar Cooperative societies M.P.

          Dearness allowances to employees borne on regular estt.
          shall be admissible as sanctioned by the M.P.E.B. to the
          similar categories of employees."

c                                               (Emphasis supplied)

       12. It is the case of the appellant that since the Board of
  Governors had already been dissolved and since it had been
  decided to absorb the employees of the society in the Board,
D there was no point in following the process of selection in terms
  of the regulations of the society. Thus, the rejection was
  challenged before the High Court.

       13. Learned Single Judge dismissed the writ petition on
  the ground that writ against a cooperative society was not
E maintainable. However, in appeal, it was admitted by the Board
  that the society had already merged with the Electricity Board
  and, hence, case was heard on merits before the Division
  Bench. It is the stand of the High Court in appeal that the
  principles of integration, as extracted above, cast no obligation
F on the Electricity Board to give promotion to the appellant. The
  obligation was only to absorb the appellant by protecting the
  designation and pay-scale and continue as such. In other words,
  since the appellant was absorbed as a Junior Engineer, he
  should continue forever as Junior Engineer till his retirement.
G We are afraid that the stand cannot be justified.

          14. As held by this Court in R.S. Makashi and others v. I.
    M. Menon and others, 1 the courts will not interfere with the
    decision and principles of integration unless it is shown that they
    are arbitrary, unreasonable or unfair. No doubt, there is no
H
   PANCHRAJ TIWARI v. M.P. STATE ELECTRICITY                  585
       BOARD AND OTHERS [KURIAN, J.]

vested right for an employee to have a particular position in the     A
integrated or merged service. On equitable considerations, it
is always open to the authorities concerned to lay down the
principles with regard to the fixation of seniority as held by this
Court in S. S. Bola and others v. B.O. Sardana and others2
and Prafulla Kumar Das and others v. State of Orissa and              B
others. 3 However, in the instant case, equivalence has been
decided since designation and pay-scale was protected. What
remains is only the seniority.

     15. It is open to the authority concerned to lay down            c
equitable principles with regard to fixation of seniority in the
merged cadre. Once a service gets merged with another
service, the employee concerned has a right to get positioned
appropriately in the merged service. That is the plain meaning
of 'absorption'. The MPSEB, having absorbed the appellant
                                                                      0
and other employees, cannot maintain a stand that even after
absorption they will retain a distinct identity in the equated
cadre without any promotion as enjoyed by their compeers in
the parent service. That is a plain infraction of the equity clause
guaranteed under Articles 14 and 16 of the Constitution of India.
                                                                      E
      16. Chances of promotion are not conditions of service,
but negation of even the chance of promotion certainly amounts
to variation in the conditions of service attracting infraction of
Articles 14 and 16 of the Constitution of India. No employee
has a right to particular position in the seniority list but all      F
employees have a right to seniority since the same forms the
basis of promotion.

     17. An employee has always an interest to seniority and
a right to be considered for promotion. If after integration, only    G
the chances of promotion are affected, it would have been only
a case of heartburn of an individual or a few individuals which
is only to be ignored, as held by this Court in Tamil Nadu
Education Department Ministerial and General Subordinate
Services Association and others v. State of Tamil Nadu and
others. 4                                                             H
    586        SUPREME COURT REPORTS                       [2014] 3 S.C.R:

A      18. Instant is a case where there is complete denial of
  promotion forever which cannot be comprehended under the
  constitutional scheme of Articles 14 and 16 of the Constitution
  of India. In this context. we shall refer to a beautiful discussion
  on this aspect in S. S. Bola case (supra) at paragraph 153.
B The relevant portion reads as follows:

          "153. xxx )()()(             )()()( )()()(


          AB. A distinction between right to be considered for
          promotion and an interest to be considered for promotion
c         has always been maintained. Seniority is a facet of
          interest. The rules prescribe the method of recruitmenU
          selection. Seniority is governed by the rules existing as on
          the date of consideration for promotion. Seniority is
          required to be worked out according to the existing rules.
D         No one has a vested right to promotion or senioritv. But
          an officer has an interest to seniority acquired by working
          out the rules. The seniority should be taken away only by
          operation of valid law. Right to be considered for promotion
          is a rule prescribed by conditions of service. A rule which
E         affects chances of promotion of a person relates to
          conditions of service. The rule/provision in an Act merely
          affecting the chances of promotion would not be regarded
          as varying the conditions of service. The chances of
          promotion are not conditions of service. A rule which
F         merely affects the chances of promotion does not amount
          to change in the conditions of service. However, once a
          declaration of law, on the basis of existing rules, is made
          by a constitutional court and a mandamus is issued or
          direction given for its enforcement by preparing the
G         seniority list. operation of the declaration of law and the
          mandamus and directions issued by the Court is the result
          of the declaration of law but not the operation of the rules
          per se."

                                                       (Emphasis supplied)
H
  PANCHRAJ TIWARI v. M.P. STATE ELECTRICITY              587
      BOARD AND OTHERS [KURIAN, J.]
     19. In the above circumstances, we set aside the judgment A
in appeal. The absorbed employees of the Rural Electricity
Cooperative Societies, having due regard to their date of
appointment/promotion in each category in the respective
societies, shall be placed with effect from the date of
absorption, viz., 15.03.2002 as juniors to the junior-most B
employee of the Electricity Board in the respective category.
Thereafter, they shall be considered for further promotions as
per the rules/regulations of the MPSEB. All other principles/
conditions of absorption shall remain as such. However, it is
made clear that on such promotions, in the exigencies of        c
service, the employee concerned would also be liable to be
transferred out of the circle, if so required. ·

     20. The appellant accordingly shall be entitled to
retrospective promotions at par with and with effect from the
dates on which the junior-most graduate engineer in the parent D
service on the date of absorption obtained sµch promotions.
However, we make it clear that benefits till date need to be
worked out only notionally.

     21. The appeal is allowed as above. There is no order as   E
to costs.

R.P.                                        Appeal allowed.