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Narpat Singh Rathod v. Rajasthan Financial Corporation And Others
Structured Summary of the Court's Opinion
Factual and Procedural Background
The petitioner, Narpat Singh Rathod, filed a writ petition under Article 226 seeking multiple reliefs: (1) declaration that Regulation 20 of the Rajasthan Financial Corporation (Staff) Regulations, 1958 was ultra vires Article 14; (2) quashing of seniority lists dated 20.05.1982 and 24.06.1982 insofar as they affected his seniority relative to respondent no. 3, K.K. Sharma; (3) direction to the Departmental Promotion Committee (DPC) to reconsider his candidature for promotion as Manager against 1981 vacancies; and (4) ignoring the departmental enquiry against him.
Chronology and key facts (as stated in the opinion):
- The petitioner was selected as Deputy Manager (Accounts), placed on probation from 19.04.1977 and confirmed on 04.04.1980 with effect from 01.06.1979; the same confirmation order also confirmed respondent no. 3 with the petitioner originally listed at sl. no. 2 and respondent no. 3 at sl. no. 3.
- A circular dated 05.12.1981 dealt with seniority matters; subsequently the petitioner’s seniority was changed by letter dated 20.05.1982 placing him below respondent no. 3 (petitioner at sl. no. 7, respondent no. 3 at sl. no. 6).
- The petitioner received a charge-sheet dated 10.12.1981 containing three charges; he submitted explanations denying guilt. Disciplinary proceedings were pending while seniority and promotion matters were being considered.
- The DPC considered promotion vacancies for multiple years. The petitioner was not recommended for promotion in the DPC meetings concerning vacancies for 1981 and several subsequent years (up to 1986–87); he was recommended only for vacancies of 1987–88 and was eventually promoted against that later vacancy.
- After conclusion of disciplinary proceedings the petitioner was given a "censure entry" dated 29.07.1985.
- The writ petition was filed on 08.11.1982; by that time the petitioner had not been promoted, hence the relief seeking promotion w.e.f. 1981 was pursued.
Legal Issues Presented
- Whether Regulation 20 of the Rajasthan Financial Corporation (Staff) Regulations, 1958 is ultra vires Article 14 of the Constitution by being in excess of delegation.
- Whether the seniority lists dated 20.05.1982 and 24.06.1982 should be quashed insofar as they affect the petitioner’s seniority relative to respondent no. 3, and whether the petitioner was entitled to rank senior to respondent no. 3.
- Whether the petitioner should be directed to have his candidature for promotion to Manager reconsidered by the DPC against the vacancies of 1981 on the basis of his service record.
- Whether the departmental enquiry against the petitioner should be ignored or quashed.
- Whether the procedure adopted by authorities in not considering the petitioner’s name for promotion (particularly non-adoption of sealed-cover procedure while a disciplinary enquiry was pending) was legal and justified, and, if not, what remedy or procedure should have been followed.
Arguments of the Parties
Petitioner's Arguments
- The petitioner contended that Regulation 20 was ultra vires Article 14 (as sought in relief).
- He asserted he was entitled to promotion as Manager against the vacancies of 1981 and that his later promotion (against 1987–88 vacancies) was unjustified with respect to his earlier entitlement; he orally requested a direction to promote him w.e.f. 1981.
- The petitioner argued that his seniority was wrongly altered so as to make him junior to respondent no. 3 and that this change was made without affording him an opportunity of hearing, rendering the order invalid.
Respondents' Arguments
- The respondents' reply explained non-selection of the petitioner for earlier promotions: a departmental enquiry was initiated in December 1981 and remained pending; it was not obligatory to complete the enquiry before the DPC meeting and the DPC could decide not to select a person while enquiry was pending. The respondents denied that the petitioner was superceded merely because of the pending enquiry (quoting the reply).
- Respondent no. 3's counsel relied on Regulation 20 (all promotions by the Managing Director except where the Board has powers) and argued that no employee has a vested right to promotion; further reliance was placed on Regulation 19 (seniority according to date of confirmation) and its proviso (iii) which addresses inter-se seniority of persons appointed from the same examination/interview list.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Union of India v. K.V. Jankiraman | The sealed-cover procedure: where a preliminary enquiry, criminal investigation or disciplinary proceedings are pending against an employee, the Departmental Promotion Committee (DPC) should record its findings in a sealed cover kept closed until conclusion of those proceedings; the vacancy is filled on an officiating basis until final outcome; if exonerated later the sealed cover is opened and the officer given retrospective promotion, seniority and notional pay fixation. | The court relied on this principle to analyze the petitioner's non‑selection for promotions while disciplinary proceedings were pending. The court observed the petitioner was not recommended by the DPC in earlier years apparently because of the pending disciplinary proceedings and noted that the sealed-cover procedure should have been adopted. The court directed the authorities to consider the effect of non-consideration and why sealed-cover procedure was not followed. |
Court's Reasoning and Analysis
The court proceeded by first setting out the factual background — confirmation dates, change in seniority, service of the charge-sheet in December 1981, the pendency of disciplinary proceedings, and the chronology of DPC meetings and their recommendations which resulted in the petitioner being recommended only for vacancies of 1987–88.
The court identified the central legal question as whether the authorities' procedure for non-consideration of the petitioner for promotion to Manager (particularly during the period when disciplinary proceedings were pending) was legal and justified, and if not, what procedure should have been followed.
The court applied established Supreme Court authority (Union of India v. K.V. Jankiraman) holding that when disciplinary proceedings or an investigation are pending, the DPC should follow the sealed-cover procedure: it should record its conclusion regarding the officer in a sealed cover, fill the vacancy on an officiating basis, and open the sealed cover only after the enquiry concludes; if the officer is exonerated, retrospective effects including promotion, seniority and notional pay fixation follow.
Applying that principle, the court found that the petitioner’s non-recommendation in earlier years was, on the material before it, attributable to the pendency of disciplinary proceedings initiated by the service of the charge-sheet in 1981. The court noted that the disciplinary proceedings terminated with a censure entry rather than exoneration.
The court emphasized the legal distinction between (a) no absolute right to promotion and (b) the established right of every eligible person to be considered for promotion. The court concluded that the petitioner had suffered prejudice because of the authorities’ apparent view that a pending enquiry rendered him ineligible for consideration — a view inconsistent with the sealed-cover procedure.
On the separate issue of seniority, the court analyzed Regulation 19 (and its proviso (iii)) and observed that the petitioner was entitled to a hearing before his seniority was changed. The court regarded the failure to afford such an opportunity as a breach of natural justice, particularly because the change of seniority affected a vital right of the petitioner. However, the court also noted that the practical relevance of inter-se seniority between the petitioner and respondent no. 3 was diminished by the fact that both had now been promoted to Manager; nevertheless it left the matter open for departmental resolution after hearing the parties.
The court refused to quash the disciplinary proceedings (which had concluded in a censure) and also refused to issue an order directing promotion at the suit of the petitioner because he had ultimately been promoted (albeit against a later vacancy). Instead, the court framed specific questions for the administrative authorities to decide and directed them to do so according to law and in light of the court's observations.
Holding and Implications
DISPOSED OF.
Final decision (as ordered by the court):
- The writ petition was disposed of with directions to respondent nos. 1 and 2 to decide, according to law and in light of the court's observations, the following points:
- The effect of non-consideration of the petitioner’s name for promotion to Manager against the vacancies from 1981 until the year of his eventual promotion.
- Why the sealed-cover procedure was not followed if the departmental enquiry was the reason for non-consideration.
- The authorities were also directed to decide the inter-se seniority between the petitioner and respondent no. 3 after hearing both parties according to law.
- The court recorded that there was no question of quashing the departmental proceedings (they had concluded with a censure), and also observed there was no need to direct fresh promotion because the petitioner had already been promoted (albeit against a later vacancy).
- Each party was directed to bear its own costs.
Implications:
- Direct effect on the parties: the departmental authorities (respondents 1 and 2) must reassess the consequences of their earlier non-consideration of the petitioner, determine why sealed-cover procedure was not applied, decide entitlement to any benefits lost because of administrative lapse, and decide inter-se seniority — all after providing hearing and deciding according to law.
- The court did not set aside the disciplinary proceedings and did not itself grant retrospective promotion; instead it left determination of specific remedial consequences to the administrative decision-makers in accordance with the law as explained in the judgment.
- No broader precedent was created by this judgment beyond application of existing Supreme Court authority on sealed-cover procedure and established principles of natural justice as recited in the opinion.
This summary is based exclusively on the content of the provided opinion and does not add or infer facts beyond that text.
K.C Agarwal, C.J:— Through this writ petition under Art. 226 of the Constitution, the petitioner Narpat Singh Rathod has sought the reliefs, which are briefly stated as under:—
(1) Regulation 20 of the Raj. Financial Corporation (Staff) Regulations, 1958 is ultra vires of Art. 14 of the Constitution of India being in excess of the delegation.
(2) For quashing of the seniority list dated 20.05.1982 and 24.06.1982 in so far as they related to the petitioner and respondent no. 3 declaring that the petitioner was entitled to rank senior to respondent no. 3.
(3) For directing the Departmental Promotion Committee to reconsider the candidature of the petitioner for promotion as Manager as against the vacancies of the year 1981 on the basis of his service record; and
(4) For ignoring the departmental enquiry against the petitioner.”
2. The petitioner was selected for appointment on the post of Deputy Manager (Accounts) and was kept on probation for one year w.e.f 19.4.1977 He was confirmed on 4.4.1980 w.e.f 1.6.79 Sri K.K Sharma, respondent no. 3 was also confirmed vide the same order w.e.f 1.6.79 In the confirmation order, petitioner was at sl. no. 2 whereas respondent no. 3 at sl. no. 3.
3. Vide circular dated 5.12.1981 (Annexure 4 to the writ petition), the Rajasthan Financial Corporation issued directions regarding seniority of Dy. Managers, relevant portion for the purpose of this case is quoted below:—
“…. While deciding the seniority, following principles have been followed:—
(1) That as in the seniority of persons from s. no. 1 to 74 has already been determined finally as per office order No. PAS (90)/301/80-81, dated 8.05.1980, objections are invited only from persons mentioned from s. no. 8 to 22.”
4. Subsequently, the seniority of the petitioner was, however, changed and the same was communicated to him through letter dated 20th May 1982. Respondent no. 3 was kept at sl. no. 6 whereas the petitioner at sl. no. 7. The petitioner made a representation against the said seniority list alleging that the change in the same was illegal, unauthorised and without affording any opportunity of hearing to him.
5. Thereupon, the petitioner was served with a charge sheet dated 10th Dec. 1981 containing three charges. He submitted an explanation to the same asserting that the charges were far from truth and that he was not guilty of the same. While the matters of disciplinary proceedings and seniority were pending before the authorities, he learnt that as against the vacancies of 1981, he had not been promoted to the post of Manager by the Departmental Promotion Committee (for short DPC).
6. On the Court's direction, learned counsel for the respondent no. 1 produced the service record of the petitioner. On perusal, I find from the report of the DPC that it considered 15 eligible persons in the year 1981 including the petitioner. After considering the Annual Confidential Reports, personal files, entire service record and other papers, the DPC did not select the petitioner. The DPC again met on 10th Nov. 1986 for filling up the vacancies of the years 1983-1984 and 1984-1985. This report of the DPC indicates that the petitioner was not found fit for promotion on the post of Manager and was not recommended. In the subsequent meeting of the DPC held on 17th Feb. 1987 for regular promotion to the post of Manager for the year 1986-1987, the petitioner was again ignored. It was in the meeting of the DPC held for promotion to the post of Manager as against the vacancies for the year 1987-1988 that the petitioner was found fit and was recommended.
7. In the background of the aforesaid facts, the petitioner felt aggrieved and filed the present writ petition on 8.11.1982 As is clear from the aforesaid facts that the petitioner was not selected to the post of Manager as on 8.11.1982 when the writ petition was filed, and, therefore, he sought the relief no. 3, aforesaid.
8. Learned counsel for the petitioner vehemently urged that the selection of the petitioner against the vacancies of 1987-1988 was unjustified. As a matter of fact, he was entitled to his promotion as Manager against the vacancies of 1981. For this purpose, he made an oral request for giving a direction to the authorities concerned for promoting him w.e.f 1981.
9. On the contrary, learned counsel for the respondents relying on the reply filed on behalf of respondent no. 1, justified the non-selection of the petitioner in the earlier years, i.e 1981-1982 to 1985-1986. He drew my attention to the following averments made in the Reply filed by respondent no. 1:—
“… The departmental enquiry was initiated against the petitioner in Dec. 1981. Due to reasons beyond the control of the Corporation the pending enquiry against the petitioner has not been completed as yet and the same is likely to be completed in the near future. It is not obligatory on the replying respondent to have completed the enquiry before the Departmental Promotion Committee meeting. It is wrong for the petitioner to state that he has been superceded merely because of the pending departmental enquiry.”
10. Aforesaid was the reason given by respondents for the non-selection of the petitioner as Manager against the vacancies for the year, 1981.
11. So far as non-selection of the petitioner as against the vacancies of 1982 onwards is concerned, neither the petitioner made any allegation in the writ petition nor any reason has been assigned in the reply filed by the respondents. However, from the perusal of the personal files of the petitioner, it appears that the pendency of the departmental enquiry was the main reason. He was ultimately awarded ‘censure entry’ for the charges levelled against him. The following comments were made by the concerned authority:—
Having regard to all the relevant facts, I hold the delinquent officer guilty and impose upon him the punishment of censure. He also be asked to be careful in future.” These remarks were given on 29.7.1985
Now the question that arises for determination is whether the procedure adopted by the authorities for non-consideration of the name of the petitioner for promotion to the post of Manager was legal and justified and if not, then what could be the procedure for the same.
12. This controversy has been settled by the Hon'ble Supreme Court in a number of cases, one of those being Union of India v. K.V Jankiraman (1). In this case and a number of others of which reference is not needed to be given, it has been held that while considering the case of an employee for promotion, selection grade, crossing of efficiency bar or higher scale of pay, the DPC should adopt sealed cover procedure if any preliminary enquiry criminal investigation is pending against him. In other words, if the officer is under suspension, or disciplinary proceedings are pending against him, or a decision has been taken by the competent disciplinary authority to initiate disciplinary proceedings against him, the findings of the DPC in respect of that officer should be kept in a sealed cover to be opened only after conclusion of the departmental enquiry. While the findings are kept in the sealed cover, the vacancy which might have gone to the officer concerned, is filled only on officiating basis. If on the conclusion of the departmental proceedings the officer is completely exonerated and where he is under suspension, it is also held that the suspension was wholly unjustified, the sealed cover is opened and the recommendations of the DPC are acted upon. If the officer could have been promoted earlier, he is promoted to the post which is filled on an officiating basis, the officiating arrangement being terminated. On his promotion, the officer gets the benefit of seniority and fixation of pay on a notional basis with reference to the date on which he would have been promoted in the normal course.
13. In the instant case, the petitioner was ultimately given censure entry for his misconduct. Though the file indicates that he was considered for promotion to the post of Manager in the earlier years, it is more than apparent that he could not be recommended by the DPC due to the pendency of the disciplinary proceedings against him. The disciplinary proceedings in this case would be deemed to have been initiated when the charge sheet was served upon him in 1981. It terminated with the final awarding of the censure entry. Although the petitioner has been promoted to the post of Manager, not against the vacancy of 1981 but against that of a later year, the authorities will not have to consider the effect of non-consideration of his name as against the vacancies of those earlier years by not adopting the sealed cover procedure.
14. Learned counsel for the respondent no. 3 pointed out Regulation 20 of the Raj. Financial Corporation (Staff) Regulations, 1958 laying down that all promotions shall be made by the Managing Director except that the Board shall have such powers in the case of officers appointed by them. No employee shall have a right to be promoted to any particular post or grade. Emphasis of the learned counsel was that the petitioner has no right to be promoted and as such, he could not have raised his grievance through the present writ petition.
15. True it is that no one has a right to be promoted but it is also undisputed that every eligible person has a right to be considered for promotion. In the instant case, due to wrong thinking that as the enquiry was pending against the petitioner, he was not eligible to be considered, the petitioner has irreparably suffered-both monetarily as well as in respect of seniority, about which I am not expressing any considered opinion.
16. Arguments were made by the learned counsel for the petitioner that the petitioner was senior to respondent no. 3 as Deputy Manager and he was wrongly made junior by a subsequent order. As no opportunity of hearing was given to him before changing his seniority, the order was bad in law.
17. For meeting the above submission, learned counsel for the respondent no. 3 invited my attention to Regulation 19 and urged that seniority shall rank according to the date of confirmation in the grade. He urged that as the post of the petitioner was the same to that of respondent no. 3, they were members of different cadres and, therefore, the claim of the petitioner of being senior to respondent no. 3 was unfounded, unjustified and wrong.
“Proviso (iii) of the Regulation 19 is quoted below:—
(iii) That the seniority inter-se of the persons appointed to a particular class of post as a result of one and the same examination and/or interview except those who do not join the services when vacancies are offered to them, shall follow the order in which they have been placed in the list.”
18. From the affidavits exchanged in between the parties, it also appears that it is not a case of two persons having been appointed from two different Departments. Had that been so, at the initial stage, the petitioner could not have been shown senior to respondent no. 3. Before changing the seniority of the petitioner, it was incumbent on the part of the relevant authority to have given an opportunity of hearing to the petitioner. That requirement has not been complied with. After all, this order snatched a vital right of the petitioner and the principles of natural justice demanded an opportunity. Merely taking of charge on a different date, earlier than the petitioner, is not decisive of the controversy inasmuch as proviso (iii) of Regulation 19, aforesaid, lays down that the petitioner could be denied seniority only if he did not join the service when vacancies were off erred to him. That is not a fact in this case. However, what would be the relevancy of seniority amongst petitioner and the respondent no. 3, would be a mute question now in view of the fact that both of them have been promoted as Managers. But I leave this question for the Department to decide, if need be, after hearing both the parties according to law.
19. As the departmental enquiry against the petitioner has ended and he has been exonerated substantially, there is no question of quashing of those proceedings. Also there is no question of issuing any direction to the Department to promote the petitioner as he already stands promoted as Manager. In these circumstances, the only points to be decided by the Department are:—
(i) as to what is the effect of non-consideration of the name of the petitioner for promotion to the post of Manager as against the vacancies of the years 1981 onwards till the year of his promotion;
(ii) if the reason was departmental enquiry, why sealed-cover procedure was not followed?
20. Apart from above, the authorities will also decide as to what are the benefits, to which the petitioner was entitled but was deprived of due to lapse on the part of the authorities concerned.
21. The writ petition is accordingly disposed of with the direction to the respondent nos. 1 and 2 to decide the points indicated in the body of this judgment according to law and in the light of the observations made above. They are also directed to decide the inter-se seniority between the petitioner and the respondent no. 3 according to law. Parties shall bear their own costs.
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