All India Insurance SC/ST and OBC Employees Action Committee vs The Chairman, General Insurance Corporation of India and Others

C.S. Karnan, J.—The brief facts of the case are as follows:-

The petitioner, viz., All India Insurance SC/ST and OBC Employees Action Committee represented by its President G. Ganesan has filed this writ

petition against the respondents to call for the records on the file of the third respondent herein/The Chairman-cum-Managing Director, New India

Insurance Company Limited, Mumbai, in Ref. No. R.O. Personnel dated 10.09.1999 for the posts of promotional vacancies for Supervisory,

Clerical Subordinate Staff (Other than A/O Cadre)-1999 and Ref. No. H.R.M./PROMOTION/SMP/99 dated 04.05.1999 for the posts of

promotional vacancies for supervisory, clerical and subordinate staff promotion to the cadre of ASSISTANT ADMINISTRATIVE OFFICERS

under para 30, 30A and 31 of the promotion policy (Departmental and Competitive) and to quash the same and direct the respondents to

implement the reservation policy in accordance to the Department of personnel O.M. No. 27/2/71 Estt (SCT) dated 27.11.1972 and O.M. No.

36021/7/75 Estt 9 SCT) dated 25.02.1976 and as per Judgment of the Hon''ble Apex Court in Indrasahaney Vs. Union of India and pass orders.

The petitioner stated that the petitioner''s organization is registered under the Societies Act in the year 1989. It has been affiliated to prominent and

leading to All India Federation of SC/ST, BC and Minorities Employees Welfare Association, Delhi Schedule Caste Welfare Association and

India National Trade Union Congress. The General Insurance Corporation of India is a Public Sector Undertaking of Government of India and

since it is an instrumental of State under Article 12 of Constitution of India and the Corporation ought to have followed all the guidelines and

instructions issued by the Government of India from time to time in the matter of reservation for the Scheduled Castes, Scheduled Tribes and other

Backward Classes.

The petitioner further stated that in spite of repeated directions and the instructions from the Government of India to the respondents to follow

the reservation policy in accordance with law, the respondents time and again are deliberately ignoring such directions and instructions, thereby

causing hardship and inconvenience to the Scheduled Caste/Scheduled Tribes Employees and one such instance was in the year 1991. This

petitioner also had filed a writ petition No. 13614 of 1991 for direction from the Hon''ble Court to implement the reservation policy in recruitment

of Assistants in the respondents companies. Only after this Court passed an order of injunction, restraining the respondents from proceeding with

the improper recruitment, the respondents companies came forward to follow the reservation policy. Whenever the vacancies arises in the

respondents Corporation and its subsidiary companies, the respondents used to declare the vacancies and in the declaration they used to specify

the number of posts reserved for the Scheduled Castes/Tribes against the total declared promotional vacancies. The General Insurance

Corporation of India has its subsidiaries, viz., 1) The New India Assurance Company Limited, 2) The United India Insurance Company Limited,

3) The Oriental Insurance Company Limited and 4) National Insurance Company Limited. At present the New India Assurance Company had

published the notification for the posts of Senior Assistants to Assistant Administrative Officers and Assistants to Senior Assistants, the vacancies

had been identified based on the number of posts sanctioned by the Corporation and its subsidiaries.

Thereby, it is evident from the column that the vacancies have been made generally and no reservation has been allotted.

The petitioner further stated that the criteria for promotion from Senior Assistant to Administrative Officers and Assistants to Senior Assistants is

based on the promotion policy that would be declared by the Corporation and its subsidiaries from time to time. As per promotion policy, the

basic qualification is for the post of Senior Assistants to Administrative Officers under Clause 30 is as follows:-

a) All Superintendents;

b) Senior Assistants and Stenographers who are at the ceiling of the scale;

c) Senior Assistants who have put in 7 years service in the cadre, or Stenographers who have put in 12 years service in the cadre;

d) Senior Assistants and Stenographers who have passed FFII or FCII or AVA or ACWA or Graduates in Engineering (Civil, Mechanical or

Electrical);

e) Senior Assistants and Stenographers who have put in at least three years in the cadre and are qualified as AFII or ACII;

f) Senior Assistants and Stenographers who have put in at least five years service in the cadre and have passed the Licentiate Examination of the

F.I.I.

and Clause 30-1 Selection shall be based on seniority, qualifications, work Record and Interviews and for the post of Assistant to Senior Assistant

the basic qualification is as follows:-

a) Put in at least three years service in the cadre and are qualified as A.F.I.I. or A.C.I.I. or have passed two subjects of the Institute of Actuaries,

or

b) Put in at least five years service in the cadre and have passed Licentiate Examination of the F.I.I. or

c) put in at least seven years in the cadre, or

d) reached the ceiling of the Assistant''s scale, shall be considered for promotion to the cadre of Senior Assistant.

Selection shall be made on the basis of seniority, qualifications, Work Record and Interview, and therefore, the above said selection is purely

only on the basis of seniority cum fitness and that the Office Memorandum in Ref. No. Department of Personnel O.M. No. 27/2/71 - Estt (SCT)

dated 27.11.1972 and O.M. No. 36021/7/75 - Estt 9 SCT) dated 25.02.1976 is applicable to these posts. The petitioner further stated that the

Hon''ble Supreme Court of India had referred in its Judgment in AIR 1993 Supreme Court 477 in Sawhney etc., Vs. Union of India and others,

dated 16.11.1992 holding that reservation in promotion is impermissible and that Article 16(4) of the Constitution of India cannot be held to be

permitting reservation in the matter of promotions. However, taking into consideration of the circumstances, the Hon''ble Supreme Court was

pleased to direct that the said decision will operate only prospectively and also that whatever reservations are already provided in the matter of

promotions be at Central Services and State Services or for that matter of services under any Corporation Authority or Body falling under the

definition of State in Article 12, such reservations shall continue in operation for the period of five years, and that the same was extended in

pursuance to the 77th Constitutional Amendment under Article 16(4A). The Ministry of Public Grievances and Pension Department has also

issued a Office Memorandum dated 13th August 1997 clarifying the earlier Department O.M. No. 36012/37/93 ESTT (SCP) dated 19.08.1993

clarifying the Supreme Court heard Indrasahaney''s case permitted the reservation for Scheduled Castes/Tribes in promotion to continue for the

period of five years from 16.11.1992. The above said O.M. is annexed with typed-set of papers and it should be treated as part and parcel of this

writ petition, but the respondent-Corporation has not followed the said O.M., and that there is inadequate representation in all cadres.

The petitioner further submitted that the impugned notification of selection process is only on the basis of seniority cum fitness, the respondent-

Corporation ought to have followed the Rule of reservation as per the O.M., which is already in existence in all the Central and State Services

prior to the judgment of the Hon''ble Apex Court in Indrasahaney Vs. Union of India and that the petitioner''s association is entitled to get

reservation.

The petitioner further submitted that one of the individuals in respondent-Corporation working as Administrative Officer has filed a writ petition

in W.P. No. 1629 of 1998, before the Hon''ble High Court, Mumbai seeking a direction to implement a reservation since the promotion made on

seniority cum fitness basis and the High Court gave directions to the Corporation, New India Assurance Company that

The respondent No. 1 to consider the claim of the petitioner for promotion to the post of Assistant Manager as per the promotion policy i.e.,

seniority cum merits by taking into consideration the upto date reservation policy laid own by the Government of India. C.A. No. 996 of 1998 is

disposed of accordingly and in pursuant to the above said order the respondent Corporation considered his claim and gave him promotion from

Administrative Officer to Assistant Manager.

The petitioner Association have made representations to the first respondent/The Chairman, General Insurance Corporation of India, on

31.08.1999, with a request to implement the reservation policy as per Government Guidelines, but the Corporation has not taken any suitable

action. As such, the act of respondent is illegal and unconstitutional. The petitioner further stated that in the event of respondent hastily filling up the

announced vacancies by promotion, i.e., Senior Assistants to Assistant Administrative Officers Cadre and Assistants to Senior Assistants Cadre,

without implementing the reservation for SC/ST employees, the SC/ST employees, who are eligible for promotion will be deprived of their long

waited promotional opportunities. Hence, the petitioner prays for direction to implement the reservation policy in accordance to the Departmental

Proceedings and Hon''ble Apex Court judgment.

The respondent has filed a draft counter statement. The respondent stated that at the outset, the respondent No. 1 herein only wants to place on

record subsequent events which had taken place during pendency of the above case. These subsequent events relate to the change in legal status

of General Insurance Corporation Business (Nationalization) Act, 1972. In view of the amendments, details of which are enumerated herein below,

nothing survives against the General Insurance Corporation of India in the above matter. The respondent further stated that the General Insurance

Corporation of India was established u/s 9 of the General Insurance Business (Nationalization) Act, 1972 for the purpose of superintending,

controlling and carrying on the business of General Insurance. The respondent further stated that the Section 9 of the General Insurance Business

(Nationalization) Act, 1972, the role of General Insurance Corporation of India of Superintending, controlling and carrying on the business of

General Insurance is done away with and replaced by the role of a re-insurer. Hence, the General Insurance Company of India is no longer the

controlling body of National Insurance Company Limited, the New India Assurance Company Limited, the Oriental Insurance Company Limited

and the United India Insurance Company Limited.

The respondent further stated that by adding Section 10A, the share capital of the above said four General Insurance Companies, which was

held by the General Insurance Company of India is now divested from it and is now transferred to the Central Government. The proviso to Section

18 has transferred the functions of General Insurance Company of India to the Central Government Amendment to Section 19 now stipulates that

instead of General Insurance Company of India, now the Central Government shall give directions to 4 of its earlier subsidiaries, viz., National,

New India, Oriental and United India Insurance Company. Amendment to Section 22 vests the powers in the Central Government to transfer

employees of General Insurance Company and four of its earlier subsidiary companies. The newly added proviso to Section 24(A) stipulates that

the General Insurance Company of India shall cease to carry on general insurance business and amendment to Section 39 makes it clear that the

General Insurance Company of India shall carry on only insurance business. In fact, even u/s 101(A)(8)(ii) of the Insurance Act, 1938, the Central

Government has specified the General Insurance Company of India as the Indian re-insurer, to that effect, a gazette notification issued by the

Central Government on 08.11.2000. In the changed circumstances, the General Insurance Company of India, i.e., the first respondent herein is

neither a necessary nor proper party. Hence, the first respondent has prayed to dismiss the said writ petition.

The learned counsel for the petitioner contended that the Central Government of India had given repeated directions and instructions to the

respondents 2 to 5 to follow reservation policy in accordance with law, but the respondents 2 to 5 deliberately ignored those directions. As such,

the respondents 2 to 5 have caused hardship and inconvenience to the SC/ST employees to providing promotions under reservation policy. The

learned counsel further contended that the very same petitioner association has filed a writ petition in W.P. No. 13614 of 1991 for direction from

this Court to implement the reservation in recruitment of Assistants in the respondents companies. In the said writ petition, this Court was pleased

to pass an order of injunction, restraining the respondents from proceeding with the improper recruitment, then the respondents companies came

forward to follow the reservation policy. The learned counsel further contended that whenever the vacancies arises in the respondents Corporation,

the respondents used to declare the vacancies and in the declaration, they used to specify the number of the posts reserved for the SC/ST against

the totality declared promotional vacancies. The learned counsel further contended that as per the Hon''ble Supreme Court judgment reported in

Indrasahaney Vs. Union of India, the petitioners are entitled to get promotion under reservation, but the respondent Corporation had not followed

the Hon''ble Apex Court judgment and not granted promotion to the petitioners.

The learned counsel further contended that an Administrative Officer, who is attached to the respondent Corporation had filed Writ Petition in

W.P. No. 1629 of 1998, before the Bombay High Court for direction to implement the reservation. The Bombay High Court gave a direction to

the respondent ""to consider the claim of the petitioner for promotion to the post of Assistant Manager, as per the promotional policy i.e., seniority-

cum-merits by taking into consideration the upto date reservation policy laid down by the Government of India. C.A. No. 996 of 1998 is disposed

of accordingly"" and subsequently, the respondent Corporation promoted the said officer.

After considering the affidavit of the petitioner and annexures and on hearing the arguments of the learned counsel for the petitioner and on

perusing the contents of the draft affidavit of the first respondent, this Court is of the view that it is competent for the State to classify the employees

for the purposes of promotion. In such a case, the Court can interfere only if the differences between the two groups of recruits are not sufficient to

give any preference to one against the other, or, in other words, there is no reasonable nexus between such differences and the nature of office or

offices to which recruitment is being made. In the absence of such nexus, any differentiation between members of the same cadre or class would be

violative of Article 14 and 16(1). The Article does not prevent the Government from laying conditions of efficiency or other qualifications for

securing the best services, for being eligible for promotion, including general academic qualifications, even when the post is technical. What Article

16(1) guarantees is equality of opportunity. Hence, if an employee''s case has been properly considered but rejected, he cannot complain that the

person, who has been promoted is junior or inferior in merit to him. Under Article 16 of the Constitution, right to be ""considered"" for promotion is

a fundamental right, provided the employee is within the zone of consideration. It is not the mere ''consideration'' for promotion that is important but

the ''consideration'' must be ''fair'' according to established principles governing service jurisprudence. This also depends on the relevant guidelines

applicable on the date of consideration and is subject to the claimant''s eligibility, but chances of promotion as such cannot be claimed as of right.

The description of the appointment to a selection post as ''promotion'' in the Government letter does not preclude the Government from making the

appointment on the basis of merit, regardless of seniority. The terms and conditions of service of an employee including his right to be considered

for promotion indisputably are governed by the rules framed under the proviso appended to Article 309 of the Constitution.

This Court further observes that,

(i) Promotion is not a matter of right, but it is based on various parameters, like, seniority, efficiency, best services including general academic

qualifications and it should be considered fairly by the Department without discrimination.

(ii) There is no specific provision or act made by the House of Assemblies or Parliament, as on date regarding reservation for promotion to the

SC/ST or OBC.

(iii) An employee has a fundamental right to be considered for promotion but only if he falls within the prescribed zone of consideration.

Reservation is entirely different from consideration. The consideration is also subject to the relevant guidelines laid down by the concerned

Department and also on the eligibility of the candidate.

(iv) The learned counsel pointed out that one of the officers had filed writ petition in W.P. No. 1629 of 1998 before Bombay High Court and that

the Bombay High Court had given direction to the respondent Department to consider the promotion as per the reservation policy laid down by

the Government of India, but it is seen that no specific direction or order or instruction to provide promotion under the reservation quota had been

mentioned in the said order. The policy is not based on any law enacted and it is obligatory in nature, subject to fair consideration among the

candidates who are eligible for promotion. Further, there is no existing proof to show reservation appointment for promotion exists for SC/ST

candidates and no documents have been produced to show that such reservation is still prevailing and in force at present. This Court strongly views

that there is no reservation for promotion for the cadre of SC/ST. Hence, this Court is not inclined to allow the writ petition.

In the result, the writ petition is dismissed with the above observations. There is no order as to costs.