Promotions during a transitional period following cadre restructuring and merger can be regulated by interim administrative instructions where no unified Recruitment Rules exist, and employees have no vested right under pre-restructuring rules.

Headnote:(A) Constitution of India - Article 309 - Recruitment Rules - Promotion - Eligibility condition - Administrative instructions cannot override statutory Recruitment Rules - But where cadre undergoes restructuring and merger, and no unified Recruitment Rules exist for the merged cadre, interim administrative directions to regulate promotions are permissible - The rule-making authority's domain includes prescription of qualifying service, and judicial review is limited - Court will not interfere unless rules are manifestly arbitrary, discriminatory, or violative of constitutional provisions. (Paras 47-49, 54)

(B) Service Law - Promotion - Vested right - An employee does not acquire a vested right to be considered for promotion under repealed or superseded Rules, particularly when restructuring of cadre is undertaken - There is no universal rule that vacancies must necessarily be filled as per Rules existing when vacancies arose - The date of consideration is key. (Para 49)

(C) Service Law - Cadre Restructuring - Merger of Directorates - Executive instructions dated 17.07.2019 - After Cadre Restructuring 2013 and merger of 18 Directorates under DGPM, the erstwhile Recruitment Rules of 2004 became impracticable and unworkable - The respondents adopted an interim mechanism via Board letter dated 17.07.2019 to regulate promotions from Tax Assistant to Executive Assistant based on field formations' Recruitment Rules of 2015 - Such an arrangement, pending notification of fresh unified Recruitment Rules, was held not arbitrary. (Paras 46-48, 52)

Facts of the case:
The applicants were Tax Assistants appointed in 2015-2016 under DGPM. Their promotions were initially governed by Recruitment Rules of 14.07.2004, which prescribed three years' qualifying service for promotion to Senior Tax Assistant. Following Cadre Restructuring 2013 and merger of Directorates (order dated 12.02.2018), the cadre structure changed. The respondents, via letter dated 17.07.2019, applied the 2015 Recruitment Rules for field formations (prescribing ten years' service) to the merged cadre, which the applicants challenged. The applicants also challenged the fresh Recruitment Rules notified on 31.10.2022, arguing that no saving clause was incorporated. Their representations were rejected via order dated 19.10.2022.

Findings of Court:
The Tribunal held that the applicants' contentions could not be accepted in the peculiar factual and administrative circumstances. The cadre had undergone substantial restructuring and merger, and no unified Recruitment Rules existed for the merged cadre till 31.10.2022. The respondents' interim administrative arrangement (letter dated 17.07.2019) was permissible. The applicants, having entered service post-restructuring, had no vested right to be considered under the pre-restructuring rules. The challenge to the 31.10.2022 Rules on grounds of no saving clause was also rejected.

Issues: (1) Whether the respondents acted illegally in applying the field formations' Recruitment Rules of 2015 (prescribing ten years' service) instead of the DGPM Recruitment Rules of 2004 (prescribing three years' service) for promotions during the transitional period after cadre merger? (2) Whether the fresh Recruitment Rules notified on 31.10.2022 were arbitrary for not incorporating a saving clause?

Ratio Decidendi: The court held that after cadre restructuring and merger, where no unified Recruitment Rules exist for the merged cadre, an interim administrative arrangement to regulate promotions is not arbitrary. Employees do not acquire a vested right to be considered under pre-restructuring rules. The rule-making authority's prescription of qualifying service (ten years) is subject to limited judicial review, and non-incorporation of a saving clause does not per se render the rules unconstitutional. Result : Original Application dismissed. MA(s) disposed of. No order as to costs. (Paras 56-57)

Table of Content
1. the main legal principle discussed in these paragraphs is the dispute over the application of the correct recruitment rules (2004 vs. 2015) for promotions following a cadre restructuring and merger, and the failure to hold timely dpcs. (Para 1 , 2 , 3 , 4 , 5 , 6)
2. the applicants argue that the respondents' actions are arbitrary, illegal, and contrary to statutory recruitment rules, and that the application of the 2015 rules and the lack of a saving clause in the 2022 rules constitute a violation of articles 14, 16, and 21 of the constitution. (Para 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14)
3. the respondents argue that the 2004 rrs became unworkable due to the 2013 cadre restructuring and merger, necessitating interim administrative instructions for promotions; they further contend that no vested right exists under the old rules, as per supreme court precedent. (Para 15 , 16 , 18 , 19 , 20 , 21 , 22)
4. in rejoinder, applicants contend that statutory rrs must be followed until repealed, the respondents' actions are contrary to inder prakash gupta, and the respondents' own communications and subsequent promotions confirm the rrs of 2004 were operational. (Para 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43)
5. the court observed that the cadre restructuring and merger made the old rules unworkable, justifying interim administrative instructions, and the applicants lacked a vested right under the superseded framework. (Para 44 , 45 , 46 , 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54 , 55 , 56)
6. the tribunal concludes that the respondents acted within their authority and the application is dismissed for being devoid of merit. (Para 57)

ORDER

Hon’ble Ms. Harvinder Kaur Oberoi, Member (J):

1.The applicants were appointed as Tax Assistants under Directorate General of Performance Management (DGPM), under Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry of Finance during the years 2015–2016 on the basis of recommendations made by Staff Selection Commission. After their appointment, the respondents finalized and notified the seniority list of Tax Assistants working in DGPM, New Delhi in the year 2017. At the time of joining, the promotional avenues of the applicants to the higher post of Senior Tax Assistant/Executive Assistant and thereafter to Inspector, Central Excise and Customs were governed by the Recruitment Rules notified on 14.07.2004 by the then Directorate of Inspection (Customs & Central Excise), which was subsequently renamed as DGPM. Under the said Recruitment Rules, a Tax Assistant possessing three years of regular service in the grade and having qualified the prescribed departmental examination was eligible for promotion to the post of Senior Tax Assistant in the pay scale of Rs. 5000–8000 (revised to PB-2 Rs. 9300–34800 with Grade Pay Rs. 4200).

2. The applicants submit that suddenly, vide order dated 12.02.2018, all Group ‘B’ and Group ‘C’ cadres, including Executive, Ministerial and Non-Technical cadres of different Directorates under CBEC/CBIC, were merged into one common cadre. Consequent to the merger, the seniority lists maintained separately by various cadre controlling authorities were also merged into a common seniority list, which materially affected the applicants and similarly situated employees. Thereafter, the respondents were required to convene a Departmental Promotion Committee for promotion to the post of Senior Tax Assistant against the available vacancies in accordance with the Recruitment Rules then in force and the DOP&T Office Memorandum dated 20.04.1998 prescribing the schedule for holding DPCs.

3. The applicants completed the requisite three years of service between 2018 and 2019 and thereby became eligible for promotion to the post of Senior Tax Assistant under the Recruitment Rules of 2004. However, despite availability of vacancies, the respondents failed to convene timely DPCs and did not consider the applicant

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2026 Supreme(Online)(CAT) 6630

CENTRAL ADMINISTRATIVE TRIBUNAL955/2023O.A./408/2023

Promotions during a transitional period following cadre restructuring and merger can be regulated by interim administrative instructions where no unified Recruitment Rules exist, and employees have no vested right under pre-restructuring rules.

CENTRAL ADMINISTRATIVE TRIBUNAL
955/2023
O.A./408/2023