MADAN B. LOKUR, J.

The rather limited question for our consideration is: Whether, in exercise of the power of relaxation conferred by statutory rules, the Central Government is entitled to divert vacancies, en bloc, belonging to the quota of direct recruits to the quota of promotees, in order to regularize their promotion” Given the facts and circumstances of the case, as well as the legal position, our answer to this question is in the affirmative.

2. The aggrieved parties before us are directly recruited Assistant Executive Engineers (Civil), Class I (for short AEEs) whose quota of vacancies for promotion to the grade of Executive Engineer was diverted in favour of Assistant Engineers (for short AEs). Broad facts of the case:

3. The statutory rules that we are concerned with are presently called the Central Engineering Service Group “A” Recruitment Rules, 1954 (for short the 1954 Rules). The power to relax the statutory rules is conferred upon the Central Government by Rule 25 of the 1954 Rules and this reads as follows:-“25. Power to relax: Where the Central Government is of opinion that it is necessary or expedient to do so, it may, by order, relax, in consultation with the Union Public Service Commission, any of the provisions of these Rules with respect to any class or category of persons.”

4. At this stage, it may be mentioned that the Ministry of Urban Affairs and Employment (Department of Urban Development), Central Engineering (Civil) Group “A” Service Rules, 1996 (for short the 1996 Rules) superseded the 1954 Rules. However, as far as we are concerned, this is of no serious consequence for answering the question that we have set out above. We shall, however, be dealing with the alleged impact of the 1996 Rules.

.5. Rule 3 of the 1954 Rules provides for recruitment to the Central Engineering Service, Class I, by a competitive examination, by promotion and by transfer. The posts that we are concerned with are of Executive

.Engineer (Civil), Class I, and they can be filled up by promotion of directly recruited Assistant Executive Engineers, Class I (AEEs) and by promotion of Assistant Engineers (AEs). AEs who can be considered for promotion as Executive Engineers, include both graduate engineers as well as diploma-holders.

6. The 1954 Rules provide a quota for filling up the posts of Executive Engineer, Class I. As the 1954 Rules originally stood, 75% of the vacancies were to be filled up by promotion of AEEs and the rest by promotion of AEs. However, this quota underwent changes on more than one occasion but we are not really concerned with the amendments made. Suffice it to say that even though direct recruitments were said to have been made to the post of AEEs on a yearly basis, there remained a substantial shortfall of AEEs available for promotion to the grade of Executive Engineer, Class I. The result of this was that to keep the work going, the Central Government promoted AEs as ad hoc Executive Engineers. The promotions made were quite disproportionate to the quota and the fall-out of this was that many of the AEs continued as ad hoc Executive Engineers and even retired as such without the benefit of regularization.

7. As one would expect, promotions of AEs in excess of their quota led to litigation, but our attention has particularly been drawn to a decision of the Supreme Court in J.N. Goel and others v. Union of India and others, (1997) 2 SCC 440. What happened in that case was that graduate AEs had challenged, before the Central Administrative Tribunal, the entitlement of diploma-holder AEs for ad hoc promotion as Executive Engineers, inter alia, on the ground that the educational qualification postulated by Rule 21(3) of the 1954 Rules did not permit it. During the pendency of the challenge, the Central Government retrospectively incorporated a proviso to Rule 21(3) of the 1954 Rules to the effect that a diploma-holder AE having an outstanding record and ability could be promoted as an Executive Engineer i

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