Bishan Sarup Gupta Vs. the Union of India and ors. - Court Judgment

H.R. Khanna, C.J.

(1) Bishan Sarup Gupta by means of this petition under Article 226 of the Constitution of India has prayed for the issuance of a writ to quash the revised seniority list of Income-tax Officers, Class I, issued by the Ministry of Finance by letter dated July, 15, 1968. Prayer has also been made to quash the principles which were adopted in revising the seniority list. The principles are given in letter dated July 15, 1968 accompanying the revised list. Another letter sought to be quashed by the petitioner is dated July 5, 1969 addressed by the Ministry of Finance. Prayer has further been made by the petitioner for refixing his seniority in Income-tax Service, Class I, so as to show him above the direct recruits appointed as a result of the competitive examination held in 1959. A number of other consequential and ancillary reliefs have also been asked for by the petitioner.

(2) The first six respondents are (1) the Union of India,

(2)the Ministry of Finance (Department of Revenue),

(3)the Centra] Board of Direct Taxes, (4) the Ministry of Home Affairs, (5) the Ministry of Law and (6) the Union Public Service Commission, Om Parkash and others, respondents 7 to 141, who belong to Income-tax Service Class I, were impoleaded as parties in pursuance of order dated April 8, 1970 of the Court.

(3) INCOME-TAX was introduced in India by Act Xxxii of 1860 and used to be administered through normal provincial machinery for revenue collection except at some places where there were distinct departments under a Collector of Income-tax. When Income-tax Act, 1922 came into force, a separate administration for the purpose of performing duties under the Act was created at the Centre. The first recruitment to posts in the administration was made from revenue personnel which was associated with the assessment and collection of Income-tax in each province. In 1944 a scheme for the reorganisation of the Income-tax service was considered by the Government. Letter dated September 29, 1944 was addressed in that connection by the Finance Department to the Commissioners of Income-tax. On May 26, 1945 the Government of India issued the Income-tax Officers (Class I, Grade II) Service Recruitment Rules. Rules 3, 4, 6, 20(a) and 21 of the aforesaid Rules read as under :-

'3.The service shall be recruited by the following methods :-

(I)By competitive examination held in India in accordance with Part Ii of these Rules.

(II)By promotion on the basis of selection from Grade Iii (Class Ii Service) in accordance with part Iii of these Rules.

(4) Subject to the provisions of rule 3, Government shall determine the method or methods to be employed for the purpose of filling any particular vacancies, or such vacancies as may require to be filled during any particular period, and the number of candidates to be recruited by each method.

(5) A competitive examination for admission to the service shall be held in India at such times and places as Government may prescribe by notice issued through the Commission. Every such notice will, when possible, announce the number of vacancies to be filled on the result of the examination,

20(A)Appointments shall be made on probation for a period of two years provided that this period may be extended if the officer on probation has not qualified for confirmation by passing the prescribed departmental examinations. Repeated failure to pass the departmental examination within a period of three years shall involve loss of appointment.

Xx xx x x x

21.-Recruitment by promotion shall be made by selection from among Grade Iii Income tax Officers (Class Ii Service) after consultation with the Commission. No Officer shall have any claim to such promotion as of right.'

(6) The initial constitution of the Service was completed in 1950. By that time, the Income-tax Investigation Commission had recommended that with a view to securing talented men, even for non-gazetted cadres, and for ensuring their efficiency and contentment, the proportion of the recruitment from the lower ranks might be I '3rd of the total vacancies in each year. Accordingly, the Government of India decided in October, 1951 that for a period of five years in the first instance 2 '3rd of the vacancies in Class I, Grade Ii would be filled by direct recruitment through competitive examination and the remaining 1,3rd by promotion on the basis of selection from Class Ii subject to availability of suitable candidates. The decision was conveyed in a letter dated October 18, 1951 from Ministry of Finance to all Commissioners of Incometax. The letter read as under :-

'THEGovernment of India have had under consideration the question of increasing the proportion of vacancies reserved for promotion from Class Ii Income-tax Officers in Class I, Grade II. They have now decided in consultation with the Union Public Service Commission and in modification of para 2(d) of the Finance Department (Central Revenues) letter No. 195-A-admn-T'39 dated the 29th September 1944 that, for a period of five years in the first instance, 661% of the vacancies in Class I, Grade Ii, will be filled by direct recruitment via Combined Competitive Examination and the remaining 331/3 by promotion on the basis of selection from Grade Iii (Class Ii Service). Any surplus vacancies which cannot be filled by promotion for want of suitable candidates will be added to the quota of vacancies to be filled by direct recruitment.'

(7) It may be mentioned that according to letter dated September 29, 1944, referred to in the above letter, a quota of 80% was contemplated for direct recruits and of 20% for promotees from Class Ii, Grade III.

(8) The principles of seniority of Income-tax Officers of Class I service were considered by the Government in consultation with the Federal Public Service Commission from 1948 onwards. Rule l(f)(iii) was framed in 1950 in that context. The material part of that rule was as under :-

'THEpromotees, who have been certified by the Commission in any calendar year shall be senior to all direct recruits who complete their probation during that year or after, and are confirmed with effect from a date in that year or after.'

(9) The Rules of 1950 were revised in 1952 as per letter of Ministry of Finance dated September 5, 1952. Rule l(f)(m) of the revised Rules was as follows :-

'OFFICERSpromoted in accordance with the recommendations of the Departmental Promotion Committee before the next meeting of the Departmental Promotion Committee shall be senior to all direct recruits appointed on the results of the Examinations held by the Union Public Service Commission during the calendar year, in which the Departmental Promotion Committee met, and three previous years.'

(10) Rule 1 (f) (iii) reproduced above thus gave a promotee from Class Ii a weightage of two years of his past service. Its effect was that a promotee became senior to a direct recruit who had completed probation of two years in the year in which the Departmental Promotion Committee met to recommend the officers of Class Ii for promotion to Class I.

(11) In 1952 Income-tax Service Along with Customs and Central Excise Service was constituted into a separate service called Indian Revenue Service. This service became an established service with effect from April 1, 1956. As

(12) The Rule of Seniority or, what is otherwise known as the 'weightage rule' incorporated in rule l(f)(iii) of the Seniority Rules of 1952, was challenged in a writ petition filed in the Circuit Bench of the Punjab High Court by S.G. Jaisinghani, a direct recruit to Class I Income-tax Service. The validity of the rule was assailed on the ground that it secured discriminatory and preferential treatment to promoted officers vis-a-vis the direct recruits by giving to the former a weightage of three years' seniority over the direct recruits. The petitioner also contended that the quota of 2/3rd and l/3rd as prescribed by the Government of India in letter dated October 18, 1951 was not properly implemented inasmuch as there had been recruitment of promotees in excess of the prescribed quota. The Punjab High Court dismissed the writ petition. Jaisinghani preferred an appeal to the Supreme Court. Another direct recruit M.C. Joshi also filed a writ petition under Article 32 of the Constitution in Supreme Court. By judgment dated February 22, 1967, which is reported in : [1967]65ITR34(SC) ,their Lordships upheld the validity of rule 1 (f) (iii) as framed in 1952. Dealing with the contention that the Quota Rule as revised in 1951 had not been properly implemented, the Court did not accept the argument advanced an behalf of the Government that the Quota Rule was merely an administrative direction and that its breach was not justiciable. It was observed that the quota had been fixed in exercise of the statutory power under rule 4 of the Income-tax Officers (Class I, Grade II) Service Recruitment Rules, 1945. The Court further held that having fixed the quota under rule 4 between the two sources of recruitment, no discretion was left with the Government to alter that quota or to deviate from the quota. As regards the manner in which the Quota Rule had been implemented, the Court directed the Ministry of Finance to furnish the number of vacancies which had arisen from year to year from 1945 onwards, the nature of the vacancies and other details relevant to the matter. An affidavit was thereupon filed by Shri R.C. Dutt, Secretary, Ministry of Finance, slating that it was not possible to work out, in spite of best endeavors, reliably the number of vacancies arising in any particular year by reason of the fact that many files were not available. A statement, showing recruitment, through the two methods, to Class I Service in various years, was, however, filed. Their Lordships observed that from the affidavit of Shri R.C. Dutt it was not clear whether the Quota Rule was strictly followed in the years in question. The Court, in the above case, issued the following writ of mandamus to the Government of India :-

'WEare accordingly of the opinion that promotees from Class Ii, Grade lit to Class I, Grade Ii Service in excess of the prescribed quotas for each of the years 1951 to 1956 and onwards have been illegally promoted and the appellant is entitled to a writ in the nature of mandamus commanding respondents I to 3 to adjust the seniority of the appellant and other officers similarly placed like him and to prepare a fresh seniority list in accordance with law after adjusting the recruitment for the period 1951 to 1956 and onwards in accordance with the Quota Rule prescribed in the letter of the Government of India No. F. 24 (2)Adm. IT/51, dated October 18, 1951. We, however, wish to make it clear that this order will not affect such Class Ii officers who have been appointed permanently as Assistant Commissioners of Income-tax. But this order will apply to alil other officers including those who have been appointed Assistant Commissioners of Income-tax provisionally pursuant to the orders of the High Court.'

(13) In pursuance of the above writ of mandamus the Government of India undertook the task of adjusting the recruitment and rectifying the promotions made in excess of the prescribed quota. A number of representations were made by Income-tax Officers, Class I, Grade Ii, individually as well as by the Associations of direct recruits and promotees. Meanwhile, Jaisinghani and M.C. Joshi initiated contempt proceedings for the delay in implementing the directions of the Supreme Court During the course of those proceedings their Lordships directed that the seniority list should be finalised before the Court reopened after the summer vacation in 1968. In accordance with those directions, the Government of India issued letter dated July 15, 1968. Enclosed with that letter was the revised seniority list of officers in

Gradeii of Class 1. Para 2 of that letter reads as under :-

'2.In compliance with the mandamus of the Supreme Court, a list showing seniority of officers of this department as Income-tax Officers, Class I has been drawn up. Copies of the list are sent herewith. In revising the list, the following principles have been ad.opted :-

(I)Class Ii Officers promoted to Class I, Grade Ii prior to 1951 have been left undisturbed as the mandamus covers the period 1951 to 1956 and onwards.

(II)There were no promotions to Class I, Grade Ii, made in 1951. The officers promoted to Class I, Grade Ii in 1952 have either been confirmed as Assistant Commissioners or they have left service. seniority as Income-tax Officers, Class I thereforee, has not been disturbed.

(III)The list begins with the promotees of 1-1-1952. The names of the 1-1-1952 promotees and the direct recruits of 1948 examination have been included only for technical compliance and to show the context. The revision of seniority has actually taken place only in respect of promotees of 1-1-1953 and subsequent batches.

(IV)In view of the difficulty in working out the vacancies arising in each year the total number of direct recruits and promotees in each year have been taken into account for the purpose of implementing the Quota Rule.

(V)Class Ii officers promoted to Class I, Grade Ii have been allowed weightage vide Rule 1 (f) (iii) of the seniority rules. Any excess promotions over the quota in a particular year have been carried forward to the subsequent year and taken against the promotions of that particular year and given weightage accordingly. The excess in that year has similarly been carried forward to the following year and so on.

(VI)The quota for direct recruitment and promotion has been 661 2/3 % :33 1/3% respectively since 1951. The calculations have accordingly been made on this basis.

(VII)As a result of the adjustment, 154 junior most officiating Income-tax Officers, Class I (Promotees) have been found to be in excess ofthe quota. (This excess has arisen because in 1959-60, 214 Class Ilposts were upgraded to Class land these were exclusively filled up by promotions from Class II). The names of these officers appear at the bottom of this list. These promotees have not been given any weightage. They will be adjusted against the vacancies falling in the promotion quota in future years. These officers will, however continue to work as Class I Officers.'

(14) In the meantime, G.R. Bahmani, a promoted officer, also fined a contempt petition in the Supreme Court alleging that the Government had discriminated against the promotees and pushed them down in the seniority list. When the contempt petitions came up for hearing in September, 1968 the Supreme Court directed that the direct recruits as well as the promotees should set out in writing the principles which, according to them, had been violated by the Government in implementing the mandamus. This was done by the promotees and direct recruits. The contempt petitions there after came up for hearing on November 6, 1968. All the petitions were dismissed. Their Lordships, while dismissing the petitions, observed:-

'THEpresent petitions challenge these lists but indirectly, by stating that the mandamus, which was issued by this Court, was not properly implemented and that there was a deliberate avoidance of the orders of this Court. In other words, the process of contempt is used to seek avoidance of the orders of Government, making it out to be a dereliction on the part of the Government by citing some instance of the breach. . . -Having looked into the grounds on which the petitions for contempt are based, we are clearly of the opinion that the Government has attempted to do what it honestly thought was the implementation of the orders of the Court. It may be that in some ways the Government has committed some mistake as it was bound to when it attempted to adjust the seniority among hundreds of Government servants over a period of years. Even if these errors are there, there should be some other method of getting these errors rectified. In our opinion, the proceedings for contempt are wholly inappropriate for correcting errors which might have occurred in some eventuality. We have found no deliberate avoidance of the orders of this Court. If there is any error it should be corrected either by departmental action or by some appropriate proceedings.'

(15) Bishan Sarup Gupta petitioner was appointed to a Gazetted post on July 21, 1945 as Assistant Director (Gazetted) in the office of the Director General of Aircraft, Lucknow, Ministry of Industry and Supply. He was appointed Income-tax Officer with effect from October 1, 1954 and was confirmed on March 27, 1958. The petitioner was promoted as Income-tax Officer, ' Class I with effect from December 1, 1962 Along with other officers on the basis of his selection made by a duly constituted Departmental Promotion Committee. The Committee consisted of a member of the Union Public Service Commission, the Chairman and a member of the Central Board of Revenue. A list of officers of the Indian Revenue Service (Income-tax Branch) as in August, 1965 was issued and in it the name of the petitioner was shown at Seriall No. 571. In the impugned list issued on July 15, 1968 the petitioner's name is shown at Seriall No. 1147. There is also a remark in respect of Seriall Nos. 1144 to 1297 -'These promotees have been found to be in excess of the quota as a result of the adjustment They will be absorbed in the vacancies falling in the promotion quota in future years. Their seniority will be fixed as and when they are absorbed in the promotion quota'. It may be mentioned that the petitioner and others at Nos. 1144 to 1297 are the 154 officers referred to in clause (vii) of Para 2 of letter dated July 15, 1968 reproduced above. By letter dated July 5, 1969, issued on behalf of the Government of India, the seniority of 15 promotees including that of the petitioner was readjusted in accordance with the impugned principles. It was mentioned that they had been adjusted against recruitment made in 1968. The petitioner was placed at No. 963 below probationers who joined in 1964 as a result of qualifying in the combined competitive examinations held in 1963.

(16) The case of the petitioner is that he could not be put at Seriall No. 963 and his rightful place was above the direct recruits of 1959 competitive examinations who joined the department in 1960. The petitioner, it is stated, could not be deprived of the weightage under rule l(f) (iii) of the Rules of Seniority as revised in 1952. The quota of 2/3rd for direct recruits and l/3rd for promotees, according to the petitioner, was prescribed by letter dated October 18, 1951 for a period of five years, and as the Quota Rule was not continued or revived after 1956, the petitioner's name in the seniority list could not be brought down. Principles (iv) and (vii) referred to in letter of July 15, 1968, which were adopted inter alia, while revising the seniority list, were stated to be based upon the assumption that the total number of vacancies in any year was equal to the total number of direct recruitments and promotions made in that year and they were applicable even to 214 Class If posts which were upgraded to Class 1. The above assumption according to the petitioner, was unwarranted. A fresh seniority list, it is urged on behalf of the petitioner, should be prepared after excluding 104 direct recruits who are alleged to have been illegally retained in service in contravention of rule 20(a) of the Recruitment Rules of 1945 inasmuch as they did not pass the departmental examination within a period of three years. Prayer has also been made on behalf of the petitioner that in accordance with the seniority claimed by him, he and officers similarly situated should be considered and selected to the grade of Assistant Commissioners by the Departmental Promotion Committee.

(17) The petition has been resisted by respondents 1 to 3 and the affidavit of Shri M.G. Thomas, Under Secretary to the Government of India, Ministry of Finance, has been filed in opposition to the petition. So far as respondents 7 to 141 are concerned. Hardy and Deshpande JJ. ordered on March 12, 1970 that service might be effected on them by means of publication in the Indian Express. Out of those respondents, appearance through counsel has been put in on behalf of respondents 14, 15, 16, 20, 28, 31 and 43. Affidavit of M.S. Moray, respondent No. has been filed on behalf of those respondents to oppose the petition.

(18) We have heard Mr. Yogeshwar Prasad on behalf of the petitioner, Mr. Mehta on behalf of respondents 1 to 6 and Mr. Hardev Singh on behalf of respondents 14, 15, 16, 20, 28, 36 and 43 at some length. The first con- tention which has been advanced on behalf of the peti- tioner, is that as he was promoted as Income-tax Officer, Class I in 1962 on the basis of a selection made by a duly constituted Departmental Promotion Committee, he, in accordance with the weightage given under rule c(l)(f)(iii), should rank higher than the direct recruitof 1959 competitive examination who joined the department in 1960. In this connection we find that their Lordships of the Supreme Court, while considering the validity of the above rule in the context of the guarantee under Articles 14 and 16 of the Constitution of India held in Jaisinghani's case that the rule could not be considered unreasonable when read with the Quota Rule which provided for a special reservation of a small percentage of posts by a special committee, which determines the fitness of the candidates for promotion after they have put in at least three years of service as Incometax Officers. It was observed:

'IT is really a case of recruitment to the Service from two different sources and then adjustment of seniority between the recruits coming from the two sources.

(19) So far as Article 16(1) is concerned, it cannot be said that the rule of seniority proceeds on an unreasonable basis. The reason for the classification is the objective of filling the higher echelons of the Income Tax Service by experienced officers possessing not only a high degree of ability but also first-rate experience. Having regard to the particular circumstances of this case, we are of opinion that the seniority rule is not unreasonable when read with the quota rule which provides for a special reservation of a small percentage of posts for the promottees who are selected by a special Committee, which determines the fitness of the candidates for promotion after they have put in at least three years of service as Income-tax Officers.'

(20) The Court further observed:

'THEnet effect of rule l(f)(iii) thereforee is that three years of outstanding work in Class Ii is equated to two years of probation in Class I Service and on consideration of this aspect of the matter the promotee is given seniority over a direct recruit completing the period of probation in the same year.'

(21) The Court took the view that 'the rule of promotion is inextricably linked with the rule ofweightage and seniority in Grade II.' It is further clear that in the absence of the Quota Rule the Court would have found difficult to hold that the seniority rule embodied in rule l(f)(iii) was not unreasonable and did not offend Article 16 of the Constitution. The observations of their Lordships in this respect were as under:-

'WEare of opinion that having fixed the quota in exercise of their power under rule 4 between the two sources of recruitment, there is no discretion left with the Government of India to alter that quota according to the exigencies of the situation or to deviate from the quota, in any particular year, at its own will and pleasure. As we have already indicated, the quota rule is linked up with the seniority rule and unless the quote rule is strictly observed in practice, it will be difficult to hold that the seniority rule i.e.. rule l(f)(iii) and (iv), is not unreasonable and does not offend Article 16 of the Constitutions.'

(22) It would follow from the above that rule I (f)(iii) of the Seniority Rules cannot operate in isolation. It has to be taken with the Quota Rule and the two must be read together. Indeed, the Quota Rule confers validity on the Weightage Rule embodied in rule l(f)(iii) and it is manifest that without the Quota Rule it would have been difficult to sustain the validity of the Weightage Rule. As the authorities had been making promotions from Class Ii Grade Iii to Class I Grade Ii service in excess of the prescribed quota for each of the years 1951 to 1956 and onwards, the Supreme Court held that those promotions were illegal. Respondents I to 3 were, accordingly, directed to adjust the seniority of direct recruits and to prepare fresh seniority list in accordance with the Quota Rule. To accept the contention advanced on behalf of the petitioner that he should rank higher than the direct recruits of 1959 Competitive Examination who joined the department in 1960 in conformity with the Weightage Rule, would have the effect of setting at naught the Quota Rule and thus run counter to the decision of the Supreme Court in Jaisinghani's case.

(23) Argument has then been advanced on behalf of the petitioner that the quota of 2/3rd for the direct recruits and l/3rd for piomotees in Class I Grade Ii was fixed by letter dated October 18, 1951 for a period of five years. The fact that the quota was fixed for five years, is also clear from the observations of their Lordships of the Supreme Court on page 716 of the Supreme Court Reports in Jaisinghani's case. It is urged that after 1956 respondents I to 3 weie not justified in relying upon that Quota Rule. In this respect we find that the directive of the Supreme Court was that the seniority list should be revised after adjusting the recruitment for the period 1951 to 1956 and onwards in accordance with the Quota Rule prescribed in the letter dated October 18, 1951. In view of that directive, the Government, in our opinion, was justified in applying the Quota Rule to not only recruitments made during the years 1951 to 1956 but in subsequent years also. The words '1951 to 1956 and onwards' contained in the writ of mandamus issued by the Supreme Court constitute a complete answer to the argument on behalf of the petitioner that the writ of mandamus was confined only to the years 1951 to 1956 and not to future years. According to the Affidavit of Shri Thomas, the Government had the power under Rules 3 and 4 of the Recruitment Rules, 1945, when filling any particular vacancy during a particular period, to determine the number of candidates recruited by each of the two methods. It is stated that the Government acted within the ambit of its powers conferred by rules 3 and 4 in applying the 1951 quota even after the year 1956. It is, in our view, not necessary to express any opinion on this aspect of the matter in view of the clear direction of the Supreme Court for adjusting the recruitment for the period-1951 to 1956 and onwards.

(24) The matter can also be looked at from another angle. The rule of weightage, as observed earlier, can only be sustained if taken in juxta-position with the Quota Rule. In case the quota Rule, which prescribed a ratio of 2/3rd for direct recruits and l/3rd for promo- tees, were to be eliminated, the earlier Rule in modification of which the Quota Rule of 2/3rd and l/3rd was introduced, fixed a ratio of 80 per cent for direct recruits and 20 per cent for the promotees. Resort to the earlier quota, which was fixed as per letter dated September 29, 1944 would obviously make things much worse from the point of view of the petitioner.

(25) It is next argued on behalf of the petitioner that he was not a party to the case of Jaisinghani and as such is not bound by the decision in that case. There is no force in this contention. In Jaisinghani's case their Lordships of the Supreme Court dealt with the Quota Rule and the Weightage Rule which are the subject matter of the present case and issued a directive in the nature of a writ of mandamus to the Goveinment. The directive is plainly binding upon the Government. Further, the law laid down in that case by their Lordships, is binding on all Courts within the territories of India in view of Article 141 of the Constitution.

(26) It has next been pointed out on behalf of the petitioner that 214 Class Ii posts were upgraded to Class I in 1959-60. They were exclusively filled up by promotees in accordance with the decision of the Government to make recruitment to these posts only by promotion. Reference in this connection has been made to the affidavit dated January 23, 1968 of Shri Thomas in the writ petition filed by Rabindranath Bose and others which was disposed of by the Supreme Court on October 9, 1969 as per judgment reported in : [1970]2SCR697 . It is urged by the learned counsel for the petitioner that the Government having decided to fill these posts by promotion could not subsequently after the decision in Jaisinghani's case apply the Quota Rule to these posts. The above contention, in our opinion, is not well-founded. Before the decision of the Supreme Court in Jaisinghani's case the Government obviously took the view that the Quota Rule was merely an administrative direction to determine recruitment from two different sources and a breach of that Quota Rule was not a justiciable issue. This was also the stand of the Solicitor-General on behalf of respondents I to 3 in the Supreme Court in Jaisinghani's case. Their Lordships did not accept this plea on behalf of respondents I to 3 and observed that they were unable to accept the argument of the Solicitor-General that the Quota Rule was not legally binding on the Government. It was further observed that the Government having fixed the quota in letter of October 18, 1951 under rule 4 of the Recruitment Rules, it was not open to the Government to say that it was not incumbent upon it to follow the quota for each year and it was open to alter the quota on account of the particular situation. Emphasis was also laid upon the fact that 'there is no discretion left with the Government to alter the quota according to the exigencies of the situation or to deviate from the quota in any particular year at its own will and pleasure.' To accept the contention advanced on behalf of the petitioner in respect of 214 posts would be tantamount to vesting a discretion in the Government to alter the quota according to the exigencies of the situation. Such a course, as held by the Supreme Court, is not permissible. The upgrading of 214 posts from Class Ii to Class I had the effect of creating more vacancies in Class I posts, but the upgrading did not imply that the Class Ii Officers who were actually holding those posts, before the posts were upgraded, were also promoted to Class 1. The upgrading was of the posts and not of the Officers who were holding the posts. It is no doubt that there was no reference to these 214 posts in the decision of the Supreme Court in Jaisinghani's case and the Court did not deal with these posts. The observations -of the Supreme Court, to which reference has been made earlier, were all the same of a general character and in view of those observations it would not be permissible to exclude the 214 posts from the operation of the Quota Rule.

(27) The next argument on behalf of the petitioner relates to principle (iv) in letter dated July 15, 1968. According to that principle, in view of the difficulty in working out the vacancies arising in each year, the number of direct recruits and promotees in each year has been taken into account for the purpose of implementing the Quota Rule. It is urged that the vacancies in a year represent the difference between the total number of sanctioned posts during that year and the number of persons actually working. In the light of that criterion, it is submitted, it should not have been difficult for the various agencies- of the Government with all its resources to work out the vacancies. In this connection we find that the Supreme Court during the hearing of Jaisinghani's case ordered the Secretary of the Finance Ministry to furnish the number of vacancies which had arisen from year to year from 1945 onwards, the nature of vacancies and the chain of vacancies and other details. Shri R.C. Dutt, Secretary, Ministry of Finance, filed an affidavit in the Supreme Court stating that it had not been possible, in spite of best endeavors, to furnish reliably the number of vacancies arising in any particular year by reason of the fact that many files were not available after nearly two decades. A statement was, however, filed showing recruitment by two methods to Class I service in var

(28) The petitioner has annexed with the petition a chart as annexure 'K'. According to the petitioner the said chart gives the sanctioned strength and the working strength of Class I, Grades I and Ii officer? and the exact number of vacancies in each year. A look at that chart shows that in finding out the number of vacancies in each year the petitioner has deducted the working strength from the sanctioned strength of both Grade I and Grade Ii of Class I officers. This is obviously a wrong approach because the sanctioned strength of Class r. Grade I officers cannot be taken into account in determining the vacancies in Class I, Grade Ii any year.

(29) The next argument on behalf of the petitioner relates to alleged illegal retention in service of 104 direct recruits in contravention of rule 20(a) of the Recruitment Rules, 1945. The list of those officers is given in annexure 'I' to the petition. It is not disputed that 101 of those officers have not been imp leaded as parties. .As such, no finding can be given in respect of those 101 officers.

(30) Out of the persons imp leaded as respondents in this case, three of them, namely, Devi Dayal respondent No. 42, B.D. Roy respondent No. 47 and R.N. Patel respondent No. 54 are stated to have been illegally retained in service. As mentioned earlier, no personal service wag effected on these respondents and report was had to service by publication in the Indian Express. No appearance has been put in on behalf of these respondents. Rule 20(a), upon which reliance has been placed by the petitioner to show the illegal retention in service of the said three respondents, has been reproduced earlier. According to that rule. the appointments of direct recruits shall be made on probation for a period of two years provided that the period might be extended if the officer on probation does not qualify for confirmation by passing the departmental examinations. Repeated failure to pass the departmental examination within a period of three years shall involve loss of appointment. Perusal of the said rule, in our opinion, goes to show that although a period of two years has been prescribed for probation, power has also been given to the authorities concerned to extend the period of probation. There is nothing in the rule to restrict the power of extension of the period of probation vested in the authorities so as to make the total period of probation including the extended period to be not more than three years. According to annexure 'L' to the petition, the three respondents, 42, 47 and 54, passed the departmental examinations but not within the period of three years of their appointment. The concluding words of rule 20(a) that repeated failure to pass departmental examination within a period of three years shall involve loss of appointment, merely confer a power on the authorities concerned, to terminate the services of those officers who fail to pass the departmental examination within three years of their appointment. The rule creates also a corresponding liability for the defaulting officer that he shall be liable to be removed from service in case the authorities concerned choose, to exercise the power conferred by rule 20(a). It is, however, not the effect of rule 20(a) that even if the authorities concerned do not choose to exercise the power conferred by that rule, the service of the defaulting officer shall stand terminated. Mr. Yogeshwar Prasad on behalf of the petitioner has referred to the use of the word 'shall' in the above rule. it is urged that the use of the word 'shall', as held in the case of State of Uttar Pradesh and others v. Bahu Ram Upadhyu, : 1961CriLJ773 , is a.prmia facie indication of the mandatory nature of the provision. Reference has also been made to the case of Khub Chand and others v. Slate of Rajasthan and others, : [1967]1SCR120 , wherein it has been observed that though the expression 'shall' under certain circumstances maybe construed as 'may', the ordinary significance of the word is mandatory. The petitioner, in our view. cannot derive any assistance from the above two authorities because rule 20(a) does not create any obligation for the Government or makes it imperative for the Government to terminate the services of the Income-tax Officers who fail to pass the departmental examination within a period of three years. In the case of Frederic Guilder Juliuf v .The Lord Bishop of 0xford,5 AC 214 the House of Lords dealt with the 3rd section of the Church Discipline Act, according to that section, it shall be lawful for the Bishop of the diocese within which an offence is alleged to have been committed by a clerk in holy orders, to issue a commission to the said clerk for the purpose of making inquiry. It was held that the section gave the bishop complete discretion to issue or decline to issue such commission. The Lord Chancellor (Earl Cairns), while dealing with the words ''it shall be lawful'' observed '.-

'The words 'it shall be lawful', are not equivocal. They are plain and unambiguous. They aie words merely making that legal and possible which there would otherwise be no right or authority to do. They confer a faculty or power, and they do not of them elves do more than confer a faculty or power. But there may be something in the nature of the thing empowered to be done, something in the object for which it is to be done, something in the conditions under which it is to be done, something in the title of the person or persons for whose benefit the power is to be exercised, which may couple the power with a duty, and make it the duty of the person in whom the power is reposed, to exercise that power when called upon to do so. Whether the power is one coupled with a duty such as I have described is a question which, according to our system of law, speaking generally, it falls to the Court of Queen's Bench to decide, on an application for a mandamus. And the words 'it shall be lawful' being according to their natural meaning permissive or enabling words only, it lies upon those as it seems to me who contend that an obligation exists to exercise this power, to show in the circum- stances of the case something which, according to the principles I have mentioned, creates this obligation.'

(31) The dictum laid down in the above case was relied upon by their Lordships of the Supreme Court in the case of Chief Controlling Revenue Authority v. Maharashtra Sugar Mills Ltd., : [1950]1SCR536 , and has a bearing on the present case. in the case of State of Punjab v. Satyapal Dang and others. : [1969]1SCR478 , the Court dealt with the provisions of Article 199(4) of the Constitution and held the same to be directory. Hidayatullah Cj, speaking for the Court, emphasised one of the distinctions which have to be kept in view to determine whether the provision is mandatory or directory. It was observed.

'INthose cases where strict compliance is indicated to be a condition precedent to the validity of the act itself the neglect to perform it as is fatal. But in cases where although a public duty is imposed and the manner of performance is also indicated in imperative language, the provision is usually regarded as merely directory when general injustice or inconvenience results to others and they have no control over those exercising the duty.'

(32) We have given the matter our consideration and are of the view that rule 20 (a) is an enabling provision and confers a power on the authorities to terminate the services of those Income-tax officers who fail to pass departmental examination within a period of three years. No obligation is, however, cast by the rule on the authorities concerned to actually terminate the services of such Income-tax Officers in case the authorities do not consider it appropriate to terminate their services.

(33) The last contention, raised on behalf if the petitioner, relates to a direction to respondents 1 to 6 to consider and select the petitioner and other officers similarly situated for selection to the grade of Assistant Commissioners by the Departmental Promotion Committee which was to be convened after the filing of the petition. Perusal of the petition makes it clear that: the above prayer of the petitioner was founded upon the acceptance of his claim regarding seniority. No case was set up in the petition that in case his seniority was at the position at which it had been determined by the respondents concerned and his claim for a higher position in the seniority list: was not accepted by the Court, even in such an event he should be considered and selected to the Grade of Assistant Commissioners. We have, as would appear from the above, not accepted the claim of the petitioner that he is entitled to a higher position in the seniority list than that determined by the authorities concerned. We find it difficult to accede to the contention of Mr. Yogeshwar Prasad that even though the petitioner did not set up that case in the petition, relief about consideration and selection to the Grade of Assistant Commissioners should be granted to him (Petitioner) in accordance with his present position in the seniority list.

(34) It is urged by the learned counsel that the case in that respect was set up in the rejoinder filed by the petitioner. Our attention in this context has been invited to the case of Sri-La-Sri Subramania Desika Gnanasambanda Pandarasannadhi v. State of Madras and another, (1965) 3 SCR. 170.

(35) What was held in that case was that although the plea of denial of natural justice had not been taken by the appellant in his writ petition, it had been taken in the rejoinder, and as the respondent had full notice of the said plea the High Court was in error in declining the writ on that ground. The rule for appointment as Assistant Commissioners of Income-tax according to the petitioner, reads as under :

'ASSISTANTCommissioners of Income-tax.

(A)Assistant Commissioners of Income-tax are appointed by the Central Government by selection from amongst Income-tax Officers (Class I, Grade 1) strictly on merit on the recommendation of a Departmental Promotion Committee composed of:-

1.A member of the Union Public Service Commission.

2.A member of the Central Board of Revenue.

3.Director of Inspection (Income-tax).

(B)No Income-tax Officer should ordinarily be considered for promotion as Assistant Commissioner unless he has completed at least 10 years, service as Income-tax Officer.'