of Directors, Represented Vs. Director, National Aluminium  Insc 336 (25 July 2001)
Babu & Shivaraj V. Patil Shivaraj V. Patil, J.
APPEAL NO. 5661 OF 1998
respondents herein filed writ petitions OJC No. 9368 of 1995 and OJC No. 9218
of 1996 challenging the introduction of E-O grade in the executive cadre as
promotional avenue for the channel of supervisors inter alia in S-3 cadre on
the ground that it deprived the employees of their legitimate promotional
avenue E-1 in executive cadre. The respondents also prayed for quashing the
circular No. 64 dated 29.6.1995 contending that it was issued without the
decision of the Board of Directors as to the introduction of new induction
point E-O grade in the executive cadre.
writ petitions were resisted by the appellants stating that the Recruitment and
Promotion Rules for Executives, 1984 (for short `the 1984 Rules) were
applicable only to executives and not for the employees in the non-executive
cadres; scheme for promotion of the non-executives to executive cadre was
separate and independent; the impugned circular No. 64 noted that over the
years, executive cadre was stablised with consequent reduction in the
requirement of E-1 level officers. Hence, it had become necessary to implement
the said circular to provide promotional avenues to the employees working at
supervisory level in the S-3 grade for selection against the executive posts at
E-O level subject to fulfillment of conditions prescribed. A settlement under
Section 18(3) of the Industrial Disputes Act, 1947 was arrived at before the
Conciliation Officer between the appellant company and nine different
non-executive employees unions representing substantial majority of them. In
the said binding settlement it is specifically stipulated that the employees in
the revised grades M-6/T-6/P-6/S-3 (corresponding to s-3 level) would continue
to be eligible for internal selection for posts at E-O level according to the
High Court disposed of the writ petition OJC No. 9368 of 1995 by a short order
without dealing with various contentions raised by the appellants directing
that the scheme contained in Annexure-5 can only remain in force if any part or
portion thereof which is at variance with the conditions contained in
Annexure-1 cannot have any legal effect prejudicing the rights of the
petitioner or similarly situated persons in the matter of promotion and other
incidental aspects. OJC No. 9218 of 1996 was disposed of following the order
made in OJC No. 9368 of 1995.
these two appeals by the appellant company.
behalf of the appellants it was urged that the 1984 Rules deal with executive
posts in the company and they were not applicable to the non-executives
including the employees in S-3 supervisory cadre; separate schemes were framed
for promotion of supervisory personnel from non-executive to executive cadre;
there were no promotional chances from S-3 cadre to E-1 executive level
consequent upon the reduction in the requirement of E-1 level, the scheme was
issued creating promotional avenues at E-O level to the supervisory personnel
in S-3 grade; and on account of the same no prejudice was caused to the
attention was drawn to the relevant provisions contained in the Rules, Schemes
and the impugned circular.
behalf of the respondents submissions were made supporting the impugned orders
passed by the High Court. It was contended that the legitimate expectations of
the respondents for promotion from S-3 cadre to E-1 executive level cadre was
denied by virtue of the schemes introduced which were inconsistent with the
order to appreciate the respective submissions it is useful to look at the
Rules, schemes and the impugned circular to the extent they are relevant for
the purpose. In Rule 18.104.22.168 of 1984 Rules it is clearly stated that these
rules shall apply to all executive posts up to and including the posts in the
scale of Rs.2250-2750 (E-7) in the company and will not apply to the cases of
promotion from non-executive posts to executive posts.
separate scheme called Promotion Scheme for non-executive to executive level
was approved by the CMD on 18.5.1985 to be effective from 25.11.1985, which
provides for a system of manning posts in E-1 level up to maximum of 50% of
available vacancies at that level from amongst and competent employees at S-3
said scheme, it is specifically stated that these norms may be withdrawn,
amended, modified or cancelled at any time at the discretion of the CMD without
notice. In the impugned circular No. 64 dated 29.6.1995 it is stated that on
introduction of E-O grade in the executive salary structure, it was decided
that the supervisory personnel at S-3 level would be considered for selection
to E-O grade with effect from 1.7.1991 vide circular No. CPD/RR/0012.5(B)/951(45)/91
dated 19.3.1991. The said decision was temporarily kept in abeyance vide IOM
No.CPD/RR/002.2/1965/91 dated 20.6.1991. It is further stated that over the
years, the executive cadre has stablised with consequent reduction in the
requirement at E-1 level. It has, therefore, become necessary to implement E-O
grade for the purpose of selection of eligible supervisory personnel against
the executive posts at E-O level subject to fulfillment of given conditions.
The said circular also states that the scheme may be amended, modified or
withdrawn at any time without notice at the discretion of CMD. It is made clear
that the policy to regulate further promotions from E-O grade to E-1 grade will
be issued separately. In para 4.1 of Annexure P-5, the Memorandum of Settlement
dated 14.12.1995 entered into between the appellant company and nine
non-executive employees union before the Conciliation Officer it is stated that
the revised wage structure of different categories of employees is given at
7 of this Annexure it is stated that the employees in the revised grades
M6/T6/P6/S3 will continue to be eligible for internal selection for executive
posts at E-O level according to the prescribed conditions.
to these Rules, schemes and the circular including the settlement dated
14.12.1995 the High Court was not correct in passing the impugned orders
granting relief to the respondents.
noticed above 1984 Rules do not apply to non-executives, the High Court
proceeded on the assumption that the said Rules were applicable to the
non-executives and the impugned circular No. 64 to the extent inconsistent with
the said Rules could not be sustained. The submission of the appellants that
the decision of the company to operate E-O level in the executive cadre was
taken in the general interest of career advancement of non-executive employees
consistent with the employers requirements at executive level due to shrinkage
of vacancies at executive level is acceptable, particularly, when nothing was
shown as to how creating one more level in the executive cadre to provide
promotional avenues to non-executive employees was prejudicial.
not the case of the respondents that the vacancies at E-1 executive level were
not reduced on account of stablisation of vacancies over number of years after
the starting of the company.
same impugned circular it is clearly stated that the policy to regulate
promotions from E-O grade to E-1 grade would be issued separately. Thus, the
employees working at S-3 level will be benefited rather than prejudiced by the
impugned circular. If such a scheme for creation or operation of E-O level was
not there and in the absence of vacancies in E-1 executive level the employees in
the non-executive cadre would have been stagnated. Further, in the settlement
(Annexure P-5) also it is clearly stated that the employees in the revised
grades including S-3 will continue to be eligible for internal selection for
executive posts at E-O level according to the prescribed conditions. To this
settlement as many as nine employees unions were parties. If the employees were
aggrieved or prejudiced as to creation of E-O level as one of the promotional
avenues they should not have been parties to such settlement. We are told
number of employees from non-executive cadre had already been promoted to E-O
level of executive cadre.
rate the respondents were unable to say as to how they were prejudiced by
creation of E-O level in the executive cadre to provide one more promotional
opportunity in the circumstances already stated above. The appellants also
brought to our notice that NALCO Recruitment and Promotion Rules for
Executives, 1997 (Annexure P-9 filed in this Court) have come into force superseding
the 1984 Rules. Rule 16.1 of the 1997 Rules says that all executive posts in
the Company shall be classified in different grades including E-O level. Thus,
having regard to all the aspects we find it difficult to sustain the impugned
orders passed by the High Court.
this view the appeals are allowed. The impugned orders are set aside.
Consequently the writ petitions stand dismissed.
shall be no order as to costs.
V. Patil] New Delhi;