Holding

No indefeasible right accrued to the diploma‑holder Junior Engineers by the grant of CDC, and the vacancies must be filled under the 2004 Service Rules as the Government has taken a conscious decision not to fill them under the repealed 1941 Rules.

Summary

The Punjab Irrigation Department had temporarily assigned Current Duty Charge (CDC) to 20 diploma‑holder Junior Engineers (outstanding category) to perform the duties of Sub‑Divisional Officers (SDOs) under a proviso to Rule 5 of the 1941 Service Rules. The CDC was withdrawn in 2005, prompting the engineers to file writ petitions alleging a vested right to promotion. The High Court held that vacancies arising under the 1941 Rules should be filled according to those rules and set aside the withdrawal order. On appeal, the Supreme Court observed that the CDC was a stop‑gap measure, not a promotion, and therefore no indefeasible right accrued to the engineers; the withdrawal did not give rise to a cause of action. The Court further held that the 1941 Rules had been repealed by the 2004 Rules and that the Government had consciously decided to fill the vacancies under the 2004 Rules, which provide a 25% promotional quota for diploma‑holders based on seniority‑cum‑merit. Consequently, the High Court order was set aside and the State was directed to fill the posts within three months under the 2004 Rules. The appeals were disposed of in favour of the State.

Issues considered

Whether any indefeasible right accrued to the diploma‑holder Junior Engineers (outstanding category) for promotion to the post of SDO by virtue of being given Current Duty Charge, and whether a cause of action arose by withdrawing the CDC.
Whether the vacancies that arose under the 1941 Service Rules should be filled under the repealed 1941 Rules or under the 2004 Service Rules which became effective on 9 July 2004.

Subjects

service lawcurrent duty chargepromotionvacancy fillingrepealed rulesconscious decisionseniority‑cum‑meritoutstanding meritdepartmental service rules

Judgment

A STATE OF PUNJAB AND ORS.
v.
ARUN KUMAR AGGARWAL AND ORS.

MAY 4, 2007

B [H.K. SEMA AND V.S. SIRPURKAR, JJ.]

Service Law:

Punjab Irrigation Department (Group-A) Service Rules, 1941: Rules 3,
C 5 and 19.
Promotion-SDO-Old 1941 Rules or new 2004 Rules-Applicability
of-20 Junior Engineers diploma-holders (outstanding category) were given
Current Duty Charge (CDC) to look after the charge ofSDOs-The CDC was
D given under proviso to Rule 5 of the 1941 Rules, who otherwise did not
possess the qualifications specified under Rule 3 of the said Rules-The CDC
was subsequently withdrawn-The diploma-holders (outstanding category)
filed various writ petitions-It was contended that a regular enquiry was
registered by the State Vigilance Bureau for tampering/stage-managing
outstanding reports by the Junior Engineers for getting CDC and the same
E was still under investigation-The 1941 Rules were repealed by the 2004
Rules-The High Court allowed the writ petitions and held that since the
vacancies arose under the 1941 Rules, they should be filled up on the basis
of the 1941 Rules and directed the appellant to fill up the posts under the
Government instructions issued on various dates-The High Court fiirther
F held that the vacancies should be filled up by following the criteria indicated
under the instructions for determination of outstanding merit-Correctness
of-Held: No indefeasible right has accrued to the diploma-holder Junior
Engineers (outstanding category~ by virtue of giving Current Duty Charge
(CDC) to the post of SDO for regularization in the post-It was purely a
stopgap arrangement, neither based on seniori1y nor efficiency and no cause
G ofaction arose by withdrawing the same-The manner in which the certificates
of outstanding merit categories were obtained by diploma-holders is of grave
concern-The Government has taken a conscious decision not to fill up the
vacancy under the old Rules and that such a decision has been validly taken
keeping in view the facts and circumstances of the case-The State Government r- -
H 8
STA TE OF PUNJAB v. ARUN KUMAR AGGARWAL 9
"'! is directed to fill up the vacant posts in accordance with the 2004 Rules A
within a period of three months from the date of this judgment-High Court
judgment set aside-Punjab Irrigation Department (Group-A) Service Rules,
2004.

The respondents were diploma-holder Junior Engineers. 20 Junior
Engineers diploma-holders (outstanding category) were given Current Duty B
Charge (CDC) to look after the charge ofSDOs. The CDC was given under
proviso to Rule 5 of the Punjab Irrigation Department (Group-A) Service Rules,
1941, who otherwise did not possess the qualifications specified under Rule
3 of the said Rules. The CDC was subsequently withdrawn.

The diploma-holders (outstanding category) filed various writ petitions. C
Many grounds were cited supporting the decision to withdraw the CDC. One
such ground was that a regular enquiry was registered by the State Vigilance
Bureau for tampering/stage-managing outstanding reports by the Junior
Engineers for getting CDC and the same was still under investigation. The
1941 Rules were repealed by the Punjab Irrigation Department (Group-A) D
Service Rules, 2004.

The High Court allowed the writ petitions and held that since the
vacancies arose under the 1941 Rules, they should be filled up on the basis
of the 1941 Rules and directed the appellant t'o fill up the posts under the
Government instructions issued on various dates. The High Court further E
held that the vacancies should be filled up by following the criteria indicated
under the instructions for determination of outstanding merit. Hence the
appeal

The following questions arose before the Court:-

(!) Whether any indefeasible right has been accrued to the diploma- F
holders (outstanding category) for promotion to the post of SDO by
virtue of being given Current Duty Charge by an order dated
21.6.2001 and whether any cause of action arose by withdrawing the
. same by an order dated 22.06.2005?

(2) Whether the Punjab Irrigation Department (Group-A) Service G
Rules, 1941 or the Punjab Irrigation Department (Group-A) Service
Rules, 2004 which became effective from 9.7.2004 will be applied for
filling up the vacancies which arose during 2000-01 under the old
./ 1941 Rules for promotion to the post ofSDO (Irrigation Department-
in the State of Punjab? H
10 SUPREME COURT REPORTS (2007] 6 S.C.R.

A Disposing of the appeal, the Court

HELD: I. No such right much less indefeasible right has accrued to
the diploma-holder Junior Engineers (outstanding category) by virtue of giving
Current Duty Charge (CDC) to the post ofSDO for regularization in the post.
It was purely a stopgap arrangement, neither based on seniority nor efficiency
B and no cause of action arises by withdrawing the same by the order dated
22.6.2005. [Para 15) (15-G-H)

Ramakant Shripad Sinai Advalpalkar v. Union of India, (1991) Supp. 2
SCC 733 and Stateo/Haryanav. S.M Sharma, [1993) Supp. 3 SCC 252, relied
on.
c 2.1. The Punjab Irrigation Department (Group-A) Service Rules, 1941
were repealed by the Punjab Irrigation Department (Group-A) Service Rules,
2004. The reason why the 1941 Rules were repealed by the new Rules appears
to be that there was no channel of promotion for diploma-holders under the
old Rules. The only provision on which diploma-holders could be accompanied
D was proviso to Rule 5 which deals with the relaxation of the Rules.
(Para 17) (16-C-D)

2.2. Now under the 2004 Rules the diploma-holders are entitled to 25%
out of the 40% promotional quota. The criteria of outstanding merits are
also done away with by the new 2004 Rules and now the criteria applicable
E for promotion is seniority-cum-merit. [Para 17) (16-F]

3. In the 1941 Rules, there was no provision for promotion quota for
diploma-holders. Instead, under the proviso to Rule 5 relaxation of the Rules
provided to the extent of outstanding merit for diploma-holders. The
outstanding merit category has been done away with by the new 2004 Rules.
F In the 2004 Rules, the diploma-holders are entitled to 25% out of the 40%
promotional quota. (Para 19) (17-E-F)

4. From the record it appears that the Government also constituted DPC
for the category of outstanding merit candidates on various dates. On all these
days, although the date was fixed, but no DPC was conducted. This would also
G indicate that the Government was keeping in its mind the impending new Rules
of2004. [Para 23] (18-F]

Dr. K. Ramulu v. Dr. S. Suryaprakash Rao, (1997) 3 SCC 59, relied on.

5. The manner in which the certificates of outstanding merit categories
R were obtained by diploma-holders is of grave concern. It is disclosed in the
STA TE OF PUNJAB v. ARON KUMAR AGGARWAL 11
'I
impugned order that the certificates of outstanding merit categories were A
obtained by tampering/stage managing and manipulation by the :liploma-
holders Junior Engineers for getting CDC of the post of SDO. This has cast
a serious doubt of the credibility of the outstanding merit categories. It is
also disclosed that an enquiry was also registered by the State Vigilance
Bureau. It was found extremely difficult to sift the gain from the chaff. This
is one of the reasons that persuaded the appropriate authority for taking a B
conscious decision not to fill up the post under the 1941 Rules.
[Para 28] [20-E-F]

6. There is no quarrel over the proposition of law that normal Rule is
that the vacancy prior to the new Rules would be governed by the old Rules
and not by the new Rules. However, in the present case, it has already been
c
held that the Government has taken a conscious decision not to fill up the
vacaricy under the old Rules and that such a decision has been validly taken
keeping in view the facts and circumstances of the case. [Para 30] [21-C]

Subhash Chander Sharma v. State of Punjab, [1999] 5 SCC 171; J. N. D
Goel v. Union of India [1997) 2 SCC 440; V. Rangaiah v. J. Sreenivasa Rao,
[1983) 3 SCC 284; P. Ganeshwar Rao v. State of A.P., [1988] Supp. SCC
740; B.L. Gupta v. MCD, [1988) 9 SCC 233; P. Mahendran v. State of
Karnataka, [1990] l SCC 411, A.A. Calton v. Director of Education, (1983]
3 SCC 33 and N r Devin Katti v. KPSC, [1990) 3 SCC 157, held inapplicable.
E
7. It is held that the Government has taken a conscious decision not to
fill up the posts under the old 1941 Rules. The impugned order of the High
Court is set aside. The problem seems to have been compounded by the inaction/
casual approach of the Government detrimental to the public interest. The
State Government shall now fill up the vacant posts in accordance with the
2004 Rules within a period of three months from the date of this judgment.
F
..... All the eligible candidates who satisfy the criteria laid down under the 2004
Rules shall be considered. [Para 38] (23-F-G)

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2336 of2007.

From the Final Judgment and Order dated 18. l 0.2005 of the High Court G
of Punjab & Haryana at Chandigarh in C. W.P. Nos. 9715, 19716, 9724, 11890,
12638, 12696, 13375, 13281, 13288 and 13599 of2005.
_../
WITH

C.A. Nos. 2337 & 2338 of2007. H
12 SUPREME COURT REPORTS [2007] 6 S.C.R.
f
A Sarup Singh, L. Nageswara Rao, Dr. Rajeev Dhawan, N.C. Jain, P.S.
Patwalia and Rajeev Dutta, R.K. Pandey, Kuldip Singh, Sanjay Katya!, T.P.
Mishra, Mahalakshmi Pavani, G. Balaji (for Mis. Mahalakshmi Balaji & Co.),
Arnita Gupta, Deepak Sibal, Ejaz Maqbool, Vikash Singh, Taruna Singh, Abhijeet
Sinha, Maninder Singh, Pratibha M.Singh, Vivek Chib, Sumeet Bhatia, Gaurav
Sharma, Shikha Ray, B.V. Deepak, lrshad Ahmad, Ashok K. Mahajan and
B Arun K. Sinha for the appearing parties.

The Judgment of the Court was delivered by

H.K. SEMA, J. I. Leave granted.

c 2. All the aforesaid appeals are directed against the judgment and order
dated 18.10.2005 passed by the High Court of Punjab and Haryana in several
writ petitions. The High Court by irs impugned order disposed of all tile writ
petitions by a common order.

3. Although the hearing of these appeals has engaged our attention for
D a considerable length of time and spread over for many days' arguments, the
dispute to be resolved is ensconced in a narrow compass.

4. We have heard the parties at length.

5. The core questions that arise for determination are these:- .
E
(1) Whether any indefeasible right has been accrued to the diploma-
holder (outstanding categories) for promotion to the post ofSDO
by virtue of being given current duty charge by an order dated
21.6.2001 and whether any cause of action arose by withdrawing
the same by an order dated 22.6.2005.
F
(2) Whether old 1941 Rules or new 2004 Rules which became effective
~

from 9. 7.2004 will be applied for filling up the vacancies which
arose during 2000-01 under old 1941 Rules for promotion to the
post of SDO (Irrigation Department) in the State of Punjab.

G Whether any indefeasible right has been accrued to the diploma-holder
(outstanding categories) for promotion to the post ofSDO by virtue of being
given current duty charge by an order dated 21.6.2001 and whether ar.y
cause of action arose by withdrawing the same by an order dated 22.6.2005.
t--
6. The respondents were diploma-holder Junior Engineers. By an order
H dated 21.6.2001, 20 Junior Engineers Diploma-holders (outstanding category)
STATE OF PUNJAB v. ARUN KUMAR AGGARWAL (H.K. SEMA.J.] 13

were given current duty charge to look after the charge of SDOs. The current A
duty charge were given under proviso to Rule 5 of 1941 Rules, who otherwise
did not possess the qualifications specified under Rule 3 of the said Rules.
The power was exercised by the Government conferred under Rule 19 of 1941
Rules.

7. The CDC/look after charge was given subject to the following B
conditions:-

(A) This CDC/Look After charge shall be on the basis of approval
to be granted as per instructions issued by the Personnel
Department, Punjab, vide letter No. 4/2/2001- 3PP.l/3318 dated
15th March, 2001. C
(B) This charge is temporary in the existing pay scale of official and
can be withdrawn without any prior notice and the officer cannot
claim seniority etc. on the basis thereof.
(C) The official on the basis of this CDC/ Look after charge cannot D
raise any claim for promotion under the provisions of Rule 3(1Xc)
of the P.E.S. Class 2 Rules, 1941.
(D) This CDC/Look after charge shall be subject to the decision in
different cases to be given by different Courts.

8. The CDC was subsequently withdrawn by an order dated 22.6.2005 E
which was impugned by the diploma holders (outstanding category) by filing
various writ petitions. Many grounds were recited supporting the decision to
withdraw the CDC. One shocking ground which we are tempted to quote is
as under:-

"Whereas regular enquiry No.28/2002 was registered by the Vigilance F
Bureau Punjab for tempering/stage-managing outstanding reports by
the Junior Engineers for getting Current Duty Charge of the post of
S.D.O. by Junior Engineer and the same is still under investigation."

9. At this stage, we may point out one of the arguments of Mr. Nageswara G
Rao, learned senior counsel, appearing for diploma-holders (non outstanding
category) that the diploma-holders represented by him are senior to those
who obtained outstanding certificates. They are also more meritorious but
outstanding certificate was not granted to them. In the back drop of the
reasons recited, which we have noticed above, the contention of Mr. Rao
appears to hold some water. H
14 SUPREME COURT REPORTS (2007) 6 S.C.R.
,.,
, A I0. The other ground recited in the order dated 22.6.2005 supporting
withdrawal of CDC which in our view would be relevant to resolve the present
controversy is in the following tenns:-

"Whereas, Govt. has notified Punjab Irrigation Department (Group-A)
Service Rules, 2004 on 30.4.2004 and it has been decided to fill up
B the vacant posts of SD.Os on regular basis from amongst Junior
Engineers by holding D. P. C. under the Provisions of new Rules, 2004
ibid.

Now, therefore, in view of position explained above when new
Departmental Service Rules, 2004 have been notified and Govt. has
c issued fresh guidelines on 19.04.2005 for granting Current Duty Charge
and it has also been decided to fill-up the Vacant posts of S.D.Os. on
regular basis by holding D.P.C. the continuity of holding Current Duty
Charge of the post of S.D.O. by the above mentioned 20 Junior
Engineers is not in public interest, the Government of Punjab is
pleased to withdraw the Current Duty Charge of the post of S.D.Os.
D
from these above mentioned 20 Junior Engineers with immediate effect
and these 20 junior engineers shall continue to work as Junior
>
Engineers against their original posts."

(emphasis supplied)
E 11. It will be pertinent to mention that the respondents/writ petitioners
also challenged the vires of 2004 Rules but given up. The High Court was
of the view that since vacancies arose under 1941 Rules, it should be filled
up on the basis of 1941 Rules. The High Court quashed the order dated
22.6.2005 and directed the Government to fill up posts under the Government
F instructions issued on 1.10.1999, 29.12.2000 and 25.9.2003. The High Court
further held that the vacancies fallen prior to 31.3.2001 shall be filled up by
following the creiteria indicated by instructions dated I.I 0.1999 and 29.12.2000
for detennination of outstanding merit in tenns of 1941 Rules.

12. The High Court, in our view, completely ignored the settled law
G enunciated by this Court on the subject.
13. To avoid multiplicity, this Court in the case of Ramakant Shripad
Sinai Advalpalkar v. Union ofIndia, [ 1991] Supp.2 SCC 733, held in paragraph
-
5 as under:-

H "The arrangements contemplated by this order plainly do not amount
STATE OF PUNJAB v. ARUN KUMAR AGGARWAL [H.K. SEMA,J.] 15

to a promotion of the appellant to the post of Treasurer. The distinction A
between a situation where a government servant is promoted to a
higher post and one where he is merely asked to discharge the duties
of the higher post is too clear to require any reiteration. Asking an
officer who substantively holds a lower post merely to discharge the
duties of a higher post cannot be treated as a promotion. In such a
case he does not get the salary of the higher post; but gets only what B
in service parlance is called a "charge allowance". Such situations are
contemplated where exigencies of pubic service necessitate such
arrangements and even consideration of seniority do not enter into it.
The person continues to hold his substantive lower post and only
discharges the duties of the higher post essentially as a stop-gap C
arrangement"

14. In the case of State of Haryana v. S.M Sharma, [I 993] Supp.3 SCC
252, while considering the identical question this Court held in paragraphs 11
and 12 as under:-
D
"11. Sharma was given the current duty charge of the post of Executive
Engineer under the orders of the Chief Administrator and the said
charge was also withdrawn by the same authority. We have already
reproduced above Rule 4(2) of the General Rules and Rule 13 of the
Service Rules. We are of the view that the Chief Administrator, in the
facts and circumstances of this case, was within his powers to issue E
the two orders dated June 13, 1991 and January 6, 1992.

12. We are constrained to say that the High Court extended its
extraordinary jurisdiction under Article 226 of the Constitution of
India to a frivolity. No one has a right to ask for or stick to a current
duty charge. The impugned order did not cause any financial loss or F
prejudice of any kind to Sharma. He had no cause of action whatsoever
to invoke the writ jurisdiction of the High Court. It was a patent
misuse of the process of the court."

15. We, accordingly, hold no such right much less indefeasible right has
been accrued to the diploma-holder junior engineers (outstanding category) G
by virtue of giving CDC to the post of S.D.0. for regularization in the post.
It was purely a stopgap arrangement, neither based on seniority nor efficiency
and no cause of action arises by withdrawing the same by the order dated
22.62005.
H
16 SUPREME COURT REPORTS [2007] 6 S.C.R.

A 16. Though by now, it has become an academic question, because, in
view of our interim order no one is holding the current duty charge and also
in view of the fact that the new Rules namely 2004 Rules have now become
operative and there is no provision under new Rules for outstanding category.
Be that as it may, we are not persuaded to accept the view taken by the High
Court and the order of the High Court quashing the order dated 22.6.2005 is
B set aside.

Whether old 1941 Rules or new 2004 Rules which became effective from
9. 7.2004 will be applied for filling up the vacancies which arose during
2000-01 under old 1941 Rules for promotion to the posts of SDO (Irrigation ~
Department) in the State of Pun1ab.
c
17. 1941 Rules were repealed by 2004 Rules. The reason why 1941 Rules
were repealed by the new Rules appear to be that there was no channel of
promotion for diploma-holders under old Rules. The only provision on which
diploma-holders could be accommodated was proviso to Rule 5, which deals
with the relaxation of the Rules. Proviso to Rule 5 reads:-
D
"Provided that this rule may be relaxed by Government on the
recommendations of Chief Engineer in order to admit the promotion
of a member of the Oversees Engineering Service or Irrigation Branch,
Punjab or Irrigation Branch (Provincial Draftsman and Tracers) Service
of 'outstanding merit' who may not possess the qualifications
E specified in Rule 3."

(emphasis supplied)

Now under 2004 Rules the diploma-holders are entitled to 25% out of 40%
promotional quota. The criteria of outstanding merits are also done away with
F by the new 2004 Rules and now the criteria applicable for promotion is
seniority- cum- merit. Mr. Rao learned senior counsel contended that in view
of the aforesaid background the Government has brought out the new 2004
Rules, which have become effective from 9.7.2004. He further contended that
1941 Rules were not amended but were repealed by 2004 Rules and therefore
G the executive instructions issued under 1941 Rules do not survive. He has
invited our pointed attention to Rule I 0 of 2004 Rules, which deals with
Repeal and saving. Rule I0 is reproduced in extenso:-
...
10. Repeal and saving. The Punjab Service of Engineers Class-II,
(Irrigation Branch) Rules, 1941 and the Punjab Services of Engineers
H Class-I, P.W.D. (Irrigation Branch Rules, 1964, are hereby repealed:
STATEOFPUNJABv. ARUN KUMAR AGGARWAL (H.K. SEMA,J.] 17
Provided that any order issued or any action taken under the A
rules, so repealed, shall be deemed to have been issued or taken
under the corresponding provisions of these rules."

He, accordingly, contended that 1941 Rules are not in existence and the
instructions issued under 1941 Rules are extinct along with the Rules. He
further contended that 2004 Rules created new posts and those posts need B
to be filled up in accordance with 2004 Rules. He further argued that the
conscious decision has been taken by the Government to fill up the vacancies
under the new Rules and, therefore, the High Court was wrong in directing
to fill up the vacancies under 1941 Rt1les, which were not in existence.

18. Per contra Dr. Dhawan contended that the vacancies arose during C
2000-0 I under 1941 Rules and, therefore, these should be filled up under the
1941 Rules. He further contended that the vacancies so arisen under 1941
Rules be filled up according to the instructions issued on 1.10.1999, 29.12.2000
and 25.9.2003. He further contended that there was no conscious decision
arrived at by the Government. According to him, such conscious decision, D
if any, must be based on deliberations. According to him, there was no such
deliberation. He further contended that the conscious decision of the
Government, if any, cannot unsettle the Rules.

WHETHER THERE WAS ANY CONSCIOUS DECISION BY THE
GOVERNMENT TO FILL UP THE VACANCIES UNDER THE NEW RULES? E
19. We have already noticed that in 1941 Rules there was no provision
for promotion quota for diploma holders. Instead, under proviso to Rule 5
relaxation of the Rules provided to the extent of outstanding merit for diploma
holders. The outstanding merit category has been done away with by new
2004 Rules. In 2004 Rules, the diploma holders are entitled to 25% out of 40% F
promotional quota.

20. While it is true that there appears to be no definite decision arrived
at based on deliberations, the intendment of the authorities can be gathered
from various background and circumstances.
G
21. As already noted in the withdrawal order of 22.6.2005 one of the
reasons recited for withdrawal of CDC was, at the risk of repetition runs as
under:

"Whereas, Govt. has notified Punjab Irrigation Department (Group-A)
Service Rules, 2004 on 30.4.2004 and it has been decided to fill up the H
18 SUPREME COURT REPORTS (2007] 6 S.C.R.

A vacant posts ofS.D.Os on regular basis from amongst Junior Engineers
by holding D.P.C. under the Provisions of new Rules, 2004 ibid.

22. Civil Writ Petition No. 11644of1999 was filed by Satbir Singh (AMIE
Holder) praying for a mandamus to allot 31 % of the promotional quota to their
category. The counter affidavit was filed by one Mr. Samir Kumar !AS on
B 31.5.2000 before the High Court in Civil Misc. No. I0810 of 2000 m
C.W.P.No.11644of1999. It is stated in paragraphs 1 to 3 as under:

I. That the Government is considering to amend the PSE Class II
Rules 1941 and Committee of3 ChiefEngineers namely Shri P.K.
Singla, Chief Engineer, Canals IW, Punjab, Shri Sarup Singh,
C Chief Engineer National Highways, Patiala and Shri Jatinder Singh,
Chief Engineer/Public Health, Patiala has been constituted for
making recommendations with regard to fixing the quota for
different categories and its due incorporation in the PSE Class 1
rules by amending the same.
D 2. The regular promotion on the posts of SDO's will be considered
after finalization/amendment of the Departmental Service Rules as
explained in para 3 of the Preliminary objection.
3. The regular promotions of SDOs cannot be considered at this
stage because the Government is considering the amendment/
E finalization of departmental service rules as explained in preliminary
objections."

23. From the record it appears that the Government also constituted
DPC for category of outstanding merit candidates on various dates namely
March, 2001, 30th April, 2001, 8th November, 2001, 21st November 2001, 9th
F January 2002 and 29th May, 2002. On all these days although the date was
fixed but no DPC was conducted. This would also indicate that the Government
was keeping in its mind the impending new Rules of 2004.

24. Mr. Rao, therefore, contended that the conscious decision was taken
by the Government not to fill up the posts under the 1941 Rules. In view of
G the conscious decision taken by the Government, the Government, therefore,
did not conduct any DPC for promotion to the post of SDO. To substantiate
his contention he has invited our attention to the decision of this Court in
Dr. K. Ramulu v. Dr. S.Suryaprakash Rao, [1997] 3 SCC 59. The three Judge
Bench of this Court after referring to various decisions of this Court upheld
H the conscious decision of the Government not to fill up the post in view of
STATE OF PUNJAB v. ARUN KUMAR AGGARWAL [H.K. SEMA, J.] 19
the impending new rules. This Court finally held in paragraph 15 at sec p.67 A
'1
as under:-

"15. Thus, we hold that the first respondent has not acquired any
... vested right for being considered for promotion in accordance with
the repealed Rules in view of the policy decision taken by the
Government which we find is justifiable on the material available from B
the record placed before us. We hold that the Tribunal was not nght
and correct in directing the Government to prepare and operate the
panel for promotion to the post of Assistant Directors of Animal
Husbandry Department in accordance with the repealed Rules and to
operate the same."
c
25. Dr. Dhawan contended that outstanding merit is a valid criteria. In
this connection, he has referred to Subash Chander Sharma v. State of
Punjab, [ 1999] 5 SCC 171 at para 7:

"..... Both the aforesaid decisions were not directly concerned with the
rules with which we are concerned in these appeals. Rule 5, as it is D
worded, leaves no doubt that the rule-making authority intended by
enacting the second proviso that a Temporary Engineer/Overseer
referred to therein should also satisfy other conditions before he can
be promoted to Class II service ....... The last proviso could not have
been intended to enable the Government to relax the other conditions E
mentioned in the. second proviso in the case of the class of persons
referred to in the last proviso. Outstanding merit of a member of the
Overseers Engineering Service or Draftsmen and Tracers Service
obviously could not have been ascertained unless he had completed
at least two years' continuous service. Similarly a person having
outstanding merit could have been easily declared by the Commission F
on the report of the Chief Engineer to be fit for service and, therefore,
.., there was hardly any point in making a special provision for relaxation
of such conditions. It is also not possible to believe that the said
proviso was enacted for dispensing with the requirement of age. It
would not have been difficult for a person having outstanding merit G
to have passed a departmental test and, therefore, it is not possible
to believe that the last proviso was enacted with a view to dispense
with the requirement of that condition ........ "

--< 26. He has also referred to JN. Goel v. Union ofIndia [1997] 2 SCC 440
at para 14: H
20 SUPREME COURT REPORTS [2007] 6 S.C.R.

A "We may now come to the proviso to Rule 21(3) which was inserted y
in 1972. As noticed earlier, the proviso permits relaxation in the matter
of educational qualifications for promotion of Assistant Engineers to
the cadre of Executive Engineers and an Assistant Engineer though
not a graduate could be promoted provided he had "outstanding
....
ability and record". The said criterion of "outstanding ability and
B record" prescribed by the proviso cannot be regarded as vague or
arbitrary. In service jurisprudence "outstanding merit" is a well-
recognised concept for promotion to a selection post on the basis of
merit. Such assessment of outstanding merit is made by the DPC on
the basis of the record of performance of the employee. It cannot,
c therefore, be said that the proviso to Rule 21(3) which enabled a
diploma-holder Assistant Engineer to be promoted as Executive
Engineer if he had "outstanding ability and record" suffers from the
vice of arbitrariness"

27. In our virw, the decisions of this Court, referred to by Dr. Dhawan
D are not at all applicable in the facts and circumstances of the case at hand.

28. We are gravely concerned with the manner in which the certificates
of outstanding merit categories were obtained by diploma-holders (respondents
herein). It is disclosed in the impugned order of 22nd June, 2005 that the
certificates of outstanding merit categories were obtained by tempering/stage
E managing and manipulation by diploma- holders Junior Engineers for getting
CDC of the post of S.D.O. This has casted a serious doubt of the credibility
of their outstanding merit categories. It is also disclosed that enquiry No. 28/
2002 was also registered by Vigilance Bureau, Punjab. We found ourselves
extremely difficult to sift the grain from the chaff. This is one of the reasons
that persuaded the appropriate authority for taking conscious decision not to
F
fill up the post under 1941 Rules.

29. Dr. Dhawan also contended that the vacancies are to be filled up in /

accordance with the contemporary Rules. In this connection he has referred
to Y.V. Rangaiah v J. Sreenivasa Rao, (1983] 3 SCC 284 at para 9:
G "..... Under the old rules a panel had to be prepared every year in
September. Accordingly, a panel should have been prepared in the
year 1976 and transfer or promotion to the post of Sub-Registrar Grade
II shou Id have been made out of that panel. In that event the petitioners
in the two representation petitions who ranked higher than Respondents
H 3 to 15 would not have been deprived of their right of being considered
STATE OF PUNJAB v. ARUN KUMAR AGGARWAL [H.K. SEMA, J.] 21

l for promotion. The vacancies which occurred prior to the amended A
rules would be governed by the old rules and not by the amended
rules. It is admitted by counsel for both the parties that henceforth
,, promotion to the post of Sub-Registrar Grade II will be according to
the new rules on the zonal basis and not on the State-wise basis and,
therefore, there was no question of challenging the new rules. But the
question is of filling the vacancies that occurred prior to the amended B
rules. We have not the slightest doubt that the posts which fell
vacant prior to the amended rules would be governed by the old rules
and not by the new rules."

30. There is no quarrel over the proposition of law that nonnal Rule is
that the vacancy prior to new Rules wculd be governed by the old Rules and c
not by the new Rules. However, in the present case, we have already held
that the Government has taken conscious decision not to fill the vacancy
under the old Rules and that such decision has been validly taken keeping
in view the facts and circumstances of the case.

31. Dr. Dhawan has also referred to P.Ganeshwar Rao v. State ofA.P., D
[1988] Supp. SCC 740 at para 11:

·-' "In view of the foregoing we are of the view that the observations
made by the Tribunal to the following effect, namely:
In this case the Rules for recruitment have been changed on
April 28, 1980. Hence, prima facie it would not be legal to make
E
direct recruitment against temporary vacancies, even if the
vacancies were at an earlier date earmarked for direct recruits .....
In these circumstances,· there is, in my opinion, no scope for
direct recruitment against temporary vacancies after April 28,
1980 i.e. the date on which the Rules were amended as stated F
above.
. ' are unsustainable. We hold that the amendment made on April 28,
1980 does not apply to the vacancies which had arisen prior to the
date of the amendment."

32. He has also referred to B.L. Gupta v. MC.D., [1988] 9 SCC 223 at G
para 9:

"When the statutory rules had been framed in 1978, the vacancies had
to be filled only according to the said Rules. The Rules of 1995 have
been held to be prospective by the High Court and in our opinion this
H
22 SUPREME COURT REPORTS (2007] 6 S.C.R.

A was the correct conclusion. This being so, the question which arises
is whether the vacancies which had arisen earlier than 1995 can be
filed as per the 1995 Rules. Our attention has been drawn by Mr.Mehta
to a decision of this Court in the case of N.T. Devin Katti v. Karnataka
Public Service Commission. In that case after referring to the earlier
decisions in the cases of Y. V. Rangaiah v. J.Sreenivasa Rao, P.
B Ganeshwar Rao v. State of A.P., and A.A. Calton v. Director of
Education, it was held by this Court that the vacancies which had
occurred prior to the amendment of the Rules would be governed by
the old Rules and not by the amended Rules. Though the High Court
1
has referred to these judgments, but for the reasons which are not
easily decipherable its applicability was only restricted to 79 and not
c 171 vacancies, which admittedly existed...... "

33. He further submitted that rights of candidates that are eligible under
the unamended Rules cannot be taken away by subsequent amendment. In
this connection, he referred to P. Mahendran v. State of Karnataka, (1990]
I SCC 411 at para 5.
D
" .... Since the amer.ding Rules were not retrospective, it could not
adversely affect the right of those candidates who were qualified for
selection and appointment on the date they applied for the post,
moreover as the process of selection had already commenced when
the amending Rules came into force, the amended Rules could not
E affect the existing rights of those candidates who were being considered
for selection as they possessed the requisite qualifications prescribed
by the Rules before its amendment moreover construction of amending
Rules should be made in a reasonable manner to avoid unnecessary
hardship to those who have no control over the subject matter."

F 34. He further contended that the power of appointing authority for the
post amendment cases confined to those cases. Reference is made to AA
Calton v. Director of Education, (1983 J 3 SCC 33 at para 5:

" ... Although the Director in the present case exercised that power
subsequent to August 18, 1975 on which date the amendment came
G into force, it cannot be said that the selection made by him was illegal
since the amending law had no retrospective effect. It did not have
any effect on the proceedings which had commenced prior to August
18, 1975. Such proceedings had to be continued in accordance with
the law as it stood at the commencement of the said proceedings. We
do not, therefore, find any substance in the contention of the teamed
H counsel for the appellant that the law as amended by the U.P. Act 26
STA TE OF PUNJAB v. ARUN KUMAR AGGARWAL [H.K. SEMA. J.] 23

- of 1975 should have been followed in the present case."

35. All the decisions referred to above are relating to amendment of the
A

Rules. We have already held that 1941 Rules were repealed by 2004 Rules. The
facts of those cases are, therefore, not applicable to the facts of the present
case.

36. Dr. Dhawan further argued that the diploma-holders outstanding
B
merit candidates have vested rights under 1941 Rules and that rights under
new Rules are saved and not repealed by 2004 Rules. Reference is made to
N.TDevin Katti v. KPSC, [1990) 3 SCC 157 at para 11:

" ..... Lest there be any confusion, we would like to make it clear that C
a candidate on making application for a post pursuant to an
advertisement does not acquire any vested right of selection, but if
he is eligible and is otherwise qualified in accordance with the
relevant rules and the terms contained in the advertisement, he does
acquire a vested right of being considered for selection is accordance
with the rules as they existed on the date of advertisement. He cannot D
be deprived of that limited right on the amendment of rules during the
pendency of selection unless the amended rules are retrospective in
nature."

(emphasis supplied)
E
37. These decisions are of no assistance to the diploma-holders
outstanding category, in the view that we have taken.

38. We hold the Government has taken conscious decision not to fill up
the posts under the old 1941 Rules. The impugned order of the High Court
is set aside. We may at this stage point out that the problem seems to have F
been compounded by the inaction/casual approach of the Government
detrimental to public interest. The State Government shall now fill up the
vacant posts in accordance with the 2004 Rules within a period of three
months from today. All the eligible candidates who satisfy the criteria laid
down under 2004 Rules shall be considered. The entire process of
recommendation and appointment shall be completed within three months G
from today.

39. The impugned order of the High Court is set aside. The appeals are
disposed of in terms of the above directions. No costs.

v.s.s. Appeals disposed of. H