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2016 Supreme(Online)(P&H) 233

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Harpreet Singh Brar, J
Vijay Singh – Appellant
Versus
Punjab State Power Corporation Ltd. – Respondent
CWP-16688-2016|CWP-2118-2018|CWP-13586-2018



Advocates:
For the Appellants/Petitioners: Amit Jhanji, Mayank Mathur, Eliza Gupta, Shivam Kapila, Kapil Kakkar
For the Respondents: Vikas Sonak, D.S. Patwalia, Gaurav Rana, Akash Yadav, Jagdeep S. Rana, Jatinder Singh Khokhar, R.S. Pandher, Abhilaksh Grover

A provision labeled as a clarification cannot be applied retrospectively if it substantively alters existing service conditions or withdraws vested rights. Such modifications are deemed substantive amendments and must operate prospectively to ensure fairness and prevent the arbitrary deprivation of benefits already crystallized under the prior interpretation.

Headnote:(A) Constitution of India - Article 226 - Electricity (Supply) Act, 1948 - Section 79(c) - Service Law - Seniority - Retrospective modification of seniority - Petitioners promoted based on then-prevalent interpretation of regulations requiring minimum service for promotion - Subsequent introduction of 'clarificatory note' effectively amending criteria for service computation from date of appointment to date of acquiring qualification - Held, amendment substantive in nature and not clarificatory - Cannot be applied retrospectively as it adversely affects vested rights - Administrative instructions cannot override established service rules and past practices without due process. (Paras 7, 8, 29, 30, 32)

(B) Service Law - Clarificatory vs. Substantive Amendment - Principle culled out is that an explanation or clarification may not expand or alter the scope of an original provision - If a later provision substantively modifies criteria in a manner that creates an unanticipated burden or withdraws an anticipated benefit, it cannot be deemed clarificatory or applied retrospectively. (Paras 27, 28, 29)

Facts of the case:
The petitioners sought the quashing of orders and circulars that retrospectively recast their seniority in a promotional cadre. Initially, the petitioners were appointed as technical subordinates and were promoted as assistant engineers after completing three years of service, computed from the date of joining. The respondent entity later issued a clarificatory note stating that the three-year service requirement should be counted only from the date of acquiring a higher academic qualification, leading to a downward revision of the petitioners' seniority lists.

Findings of Court:
The court observed that the original regulation was neither vague nor ambiguous, and the administrative action under the guise of 'clarification' was actually a substantive amendment. The court found that retrospective application of such an amendment effectively withdrew vested service benefits previously enjoyed by the employees, which is impermissible.

Issues: Whether the office order introducing a 'clarificatory note' constitutes a substantive amendment and whether it can be applied retrospectively to alter established seniority.

Ratio Decidendi: The court held that where a rule has been consistently applied over time, a subsequent change that alters the qualifying criteria substantively to the detriment of employees cannot be labeled as a clarification. Since the amendment resulted in the withdrawal of vested seniority rights, it must be restricted to prospective operation only.

Result: Writ petitions allowed; impugned orders quashed insofar as they operate retrospectively.

Table of Content
1. summary of factual background regarding seniority dispute in pspcl. (Para 1 , 2 , 3 , 4 , 5 , 6)
2. parties' contentions on retrospective seniority adjustment and regulatory authority. (Para 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15)
3. inapplicability of k.k. dixit precedent and affirmation of continuous service-based seniority. (Para 16 , 17 , 18 , 19 , 20 , 22 , 23 , 24 , 25)
4. clarificatory notes operating as substantive amendments require prospective application. (Para 26 , 27 , 28 , 29 , 30 , 31 , 32)
5. quashing of retrospective seniority orders and direction for prospective application. (Para 33 , 34 , 35 , 36)

*******

HARPREET SINGH BRAR, J.

1. This common order shall dispose of the aforementioned three writ petitions, as they arise from similar factual matrix. However, for the sake of brevity, the facts are taken from CWP-16688-2016.

2. Present civil writ petition has been filed under Article 226 of the Constitution of India for issuance of a writ in the nature of certiorari seeking quashing of office order dated 05.07.2016 (Annexure P-1) and the circular dated 03.03.2016 (Annexure P-8), vide which seniority of the petitioners in the cadre of Assistant Engineers was recast retrospectively and further to issue a writ in the nature of mandamus directing the official respondents to assign correct seniority to the petitioners, as it stood prior to the impugned circular dated 03.03.2016 (Annexure P-8).

FACTUAL BACKGROUND

3. Briefly stated, the petitioners are employees of Punjab State Power Corporation Limited (for short ‘PSPCL’). They were initially appointed to the post of Junior Engineer (Electrical) in May, 2010. At the time of their appointment, they did not possess the qualification of Associate Member of Institution of Engineers (for short ‘AMIE’). The petitioners subsequently acquired AMIE qualification between March, 2013 and March, 2014.

4. As per the then prevalent interpretation of the Punjab State Electricity Board Services of Engineers (Electrical) Regulation, 1965 (for short ‘Regulations, 1965’), particularly Regulation 10.7, they became eligible for promotion to the post of Assistant Engineer (for short ‘AE’) upon completing three years of service and holding AMIE degree. The three-year service requirement was, at that time, computed from the date of their joining as Junior Engineers. Regulation 10.7 is reproduced as under:

“(7) 14% of the Cadre Post of A.E.s shall be reserved for the departmental employee (Technical Subordinate and Drawing Staff) possessing AMIE/Degree in Electrical/Electronics and /Mechanical/Instrumentation Communication Control/Computer Science Engineering and who have completed three years of service in that capacity.” (Emphasis supplied)

5. Consequently, all the petitioners were promoted to the post of Assistant Engineer (Electrical) vide order dated 30.06.2014 (Annexure P-3) and were assigned seniority numbers. They successfully completed their probation and have been working in the promoted capacity since then. However, genesis of the present dispute lies in a subsequent office order dated 09.02.2016 (Annexure P-7), which inserted a “clarificatory note” in Regulation 10.7 of Regulations, 1965. This note stipulated that the mandatory three-year service for promotion must be counted only from the date of declaration of AMIE result and not from the date of their joining the service. The clarificatory note is reproduced as under: -

“The Three years service will be considered to be completed as a qualified technical Subordinate i.e. three years will be counted after the date of declaration of result of the acquired requisite qualification while maintaining the seniorities in 14% AMIE/Degree holder quota of Technical Subordinates.”

6. Relying on this amendment and judgment of the Hon'ble Supreme Court in K.K. Dixit Vs. Rajasthan Housing Board , (2015) 1 SCC 474, the respondent-Corporation issued a memo dated 03.03.2016 (Annexure P-8), for preparation of tentative seniority

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