ORDER

Leave granted. We have heard learned counsel on both sides.

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

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

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

(a) if his work and conduct is found satisfactory-

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

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

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

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

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

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

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

4. It appears that series of orders came to be passed by the Administrative Tribunal and one arising therefrom was decided by this Court. In the first round of litigation in which one Sud was the applicant, the Tribunal had held that the seniority would be conferred on those who passed within two years from the date of joining the service and those who passed subsequently would rank juniors to them. In the case of Mohan Lal & Ors., in the second set of litigation, it was held that those who passed the test within two years, would get seniority from the date of joining the post and those who passed within the extended period of four years, would rank inter-se seniority from the date of the passing of the test. In case of those who did not pass the examinations within the extended period of four years, it would be open to the State Government to have their services terminated or to take such action as would be open to them. The first litigation had reached this Court. This Court in Ishwari Kumar & Ors. v. State of H.P.1 had held that such of the candidates who passed the examinations within two years and were confirmed after passing the departmental tests, would get seniority from the respective dates of their joining the post and the date of passing the departmental test relates back to the date of the appointment. But those who passed the ex