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1995 INSC 844
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1995 INSC 844
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Smart Summary

Factual and Procedural Background

The three civil appeals arise out of divergent views taken by different Benches of the Central Administrative Tribunal on the effect of a compassionate transfer. Employees who were transferred from one unit to another on compassionate grounds were placed at the bottom of the seniority list in the transferee unit. They claimed that their earlier service in the transferor unit should nonetheless count toward the minimum “regular service” required for promotion.

The Madras Bench of the Tribunal (C.N. Ponnappan v. Union of India) accepted this claim, whereas the Bangalore Bench (S. Abdul Khayum v. Union of India) rejected it. Because the two Benches were coordinate, the conflict was later considered by a Full Bench of the Tribunal, which endorsed the Madras Bench’s view. The present appeals challenge the Madras and Full Bench decisions. Two appeals concern promotion from Lower Division Clerk (LDC) to Upper Division Clerk (UDC); one concerns promotion from Stenographer Grade III to Grade II.

Legal Issues Presented

  1. Whether, under the promotion rules as they stood prior to 30 June 1986, an employee transferred on compassionate grounds—thereby losing seniority and being placed at the bottom of the new unit’s list—may count his or her past “regular service” in the previous unit toward the service-experience requirement for promotion in the transferee unit.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
C.N. Ponnappan v. Union of India (1987) 5 ATC 766 (Mad) Past service in the transferor unit counts as “regular service” for promotion; only seniority is lost. The Supreme Court approved and adopted this reasoning.
S. Abdul Khayum v. Union of India (1987) 1 SLJ (CAT) 131 (Bang) Past service cannot be counted after a compassionate transfer. The Supreme Court expressly disagreed with this view.
Full Bench Decision, T.A. No. 65 of 1987 (1987) 4 ATC 805 (Mad) (FB) Affirmed the Ponnappan principle that past service remains valid for promotion eligibility. The Supreme Court concurred with the Full Bench’s conclusion.

Court's Reasoning and Analysis

Examining the relevant promotion rules, the Court noted that eligibility for promotion from LDC to UDC required “eight years’ regular service in the grade,” and promotion from Stenographer Grade III to Grade II required “five years of regular service.” The Court emphasised that service rendered in the transferor unit is indisputably “regular service” for other employment purposes, such as leave and retirement benefits. A compassionate transfer that affects seniority does not erase that service.

Consequently, the earlier service must be included when computing the experience threshold for promotion. The Court rejected the contrary view of the Bangalore Bench and found the Full Bench’s interpretation to be correct. It also recorded that, subsequent to the Tribunal’s decision in Ponnappan, the rules were amended on 30 June 1986 to confine the required service to the specific “unit/office/establishment” where promotion is sought, but held that the pre-amendment rules governed the disputes at hand.

Holding and Implications

The appeals are dismissed; the Tribunal’s decisions are affirmed.

Immediate Effect: The respondents’ previous service in their former units counts toward the requisite years of regular service for promotion, notwithstanding their loss of seniority on transfer. Costs were not awarded. The judgment clarifies the interpretation of pre-1986 promotion rules but acknowledges that the subsequent amendment now governs future cases, thereby limiting the broader impact of this ruling.

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    Union Of India And Others v. C.N Ponnappan .

    Order

    1. These three appeals raise a common question for consideration. The question is whether an employee who is transferred from one unit to other on compassionate grounds, and, as a result, is placed at the bottom of the seniority list can have his service in the earlier unit from where he has been transferred counted as experience for the purpose of promotion in the unit where he is transferred. There was a difference of opinion amongst the Benches of the Central Administrative Tribunal (hereinafter referred to as ‘the Tribunal’) on this question. In C.N Ponnappan v. Union of India (1987) 5 ATC 766 (Mad), which has given rise to Civil Appeal No. 1221 of 1987, the Madras Bench of the Tribunal has taken the view that though on transfer on compassionate grounds the employee loses his seniority and is placed at the bottom of the seniority list at the transferred place but for the purpose of promotion his earlier service in the unit from where he was transferred is not wiped out and the said service has to be treated as experience for the purpose of his eligibility for such promotion and if he is found eligible then the matter of promotion has to be considered on the basis of seniority at the transferred place. The Bangalore Bench of the Tribunal in S. Abdul Khayum v. Union of India (1987) 1 SLJ (CAT) 131 (Bang) (Applications Nos. 1282, 1283 and 1284 of 2986) decided on 30-9-1986 has, however, not agreed with the said view of the Madras Bench of the Tribunal in Ponnappan case (1987) 5 ATC 766 (Mad) and has held that an employee who is transferred on compassionate grounds and is placed at the bottom of the seniority list at the place where he is transferred cannot have his earlier service at the place from where he was transferred counted as experience for the purpose of eligibility for promotion. Since the Bangalore Bench and the Madras Bench were coordinate Benches of the Tribunal, it was expected that the Bangalore Bench, when it felt inclined to take a view different from that taken by the Madras Bench, should have referred the question for consideration by a larger Bench. Anyway, the matter has been considered by a Full Bench of the Tribunal in Transferred Application No. 65 of 1987 (1987) 4 ATC 805 (Mad) (FB) wherein the Full Bench has agreed with the view of the Madras Bench in Ponnappan case (1987) 5 ATC 766 (Mad) and has held that a person who is transferred on compassionate grounds only loses his seniority but he does not lose the benefit of the past service in the previous unit for the purpose of his promotion.

    2. Civil Appeal No. 1221 of 1987 has been filed against the Madras Bench of the Tribunal in Ponnappan case (1987) 5 ATC 766 (Mad). Civil Appeal No. 529 of 1989 has been filed against the judgment of the Madras Bench of the Tribunal dated 15-3-1988 in Civil Appeal No. 118 of 1987 filed by N. Kumarason. Civil Appeal No. 2320 of 1995 has been filed against the judgment of the Madras Bench of the Tribunal dated 5-10-1987 (1987) 4 ATC 805 (Mad) (FB) in Transferred Application No. 65 of 1987 filed by K.A Balasubramaniam. Civil Appeals Nos. 1221 of 1987 and 2320 of 1995 relate to promotion from the post of Lower Division Clerk to Upper Division Clerk and Civil Appeal No. 529 of 1989 relates to promotion from the post of Stenographer Grade III to Stenographer Grade II.

    3. We have considered the appeals in the light of provisions contained in the relevant rules. For promotion of a Lower Division Clerk to the post of Upper Division Clerk, which is in issue in Civil Appeals Nos. 1221 of 1987 and 2320 of 1995, the relevant rules required “eight years' regular service in the grade”. Similarly, for promotion from the post of Stenographer Grade III to Stenographer Grade II, which is in issue in Civil Appeal No. 529 of 1989, “five years of regular service in the post of Stenographer Grade III” was required.

    4. The service rendered by an employee at the place from where he was transferred on compassionate grounds is regular service. It is no different from the service rendered at the place where he is transferred. Both the periods are taken into account for the purpose of leave and retiral benefits. The fact that as a result of transfer he is placed at the bottom of the seniority list at the place of transfer does not wipe out his service at the place from where he was transferred. The said service, being regular service in the grade, has to be taken into account as part of his experience for the purpose of eligibility for promotion and it cannot be ignored only on the ground that it was not rendered at the place where he has been transferred. In our opinion, the Tribunal has rightly held that the service held at the place from where the employee has been transferred has to be counted as experience for the purpose of eligibility for promotion at the place where he has been transferred.

    5. It has been pointed out that subsequent to the judgment of the Tribunal in Ponnappan case (1987) 5 ATC 766 (Mad), the relevant rules governing promotion from Lower Division Clerk to Upper Division Clerk have been amended by notification dated 30-6-1986 and now the requirement is “with eight years' regular service in the grade in the unit/office/establishment/laboratory/centre/unit, etc. in which they are considered for promotion”.

    6. Since we are in agreement with the view of the Tribunal on the interpretation of the rules as they stood at the relevant time, the appeals fail and are accordingly dismissed. No costs.

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    Union Of India And Others v. C.N Ponnappan .
    (Dec 5, 1995)