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Petitioner 1 joined the Posts and Telegraphs Audit Office of the Government of India at Delhi on July 31, 1956 as a Lower Division Clerk. In 1961 he qualified in the departmental examination for promotion as an Upper Division Clerk. On May 4, 1962 he joined the Savings Bank Control Organisation and Savings Bank Internal Check Organisation (SBCO-ICO), as an Upper Division Clerk. Petitioner 2 joined the P and T Audit Office at Madras on June 3, 1950 as a Lower Division Clerk. On passing the departmental examination he was promoted as an Upper Division Clerk on September 10, 1958. He joined SBCO-ICO on April 1, 1963 in the same capacity. He is due to retire on October 31, 1980.

Until the year 1961, the Savings Bank work of the post office was under the supervision and control of the Indian Audit and Accounts Department of which the Comptroller and Auditor General of India is the Head. The branches of the Indian Audit and Accounts Department doing the Savings Bank work and the work of auditing P & T accounts were called P & T Audit Offices.

The Government of India having decided that the Savings Bank work should be taken over by the P & T Department, the audit offices were relieved of that responsibility by stages during the years 1961 to 1964 and a new Organisation called the Savings Bank Control Organisation and Savings Bank Internal Check Organisation (SBCO-ICO) was created on May 4, 1962. With the setting up of that organisation, volunteers were given the option of joining it. Amongst those who were thus invited to opt for service in the new Organisation were Upper Division Clerks in the Audit Offices, Lower Division Clerks who had qualified for promotion to the Upper Division Clerks' cadre in the audit offices, employees under the Post Master General and lastly those from amongst the time-scale clerks in the P & T Accounts Organisation. Employees belonging to the aforesaid departments who opted for service in the new Organisation were transferred thereto in the interest of public service.

"Under the new scheme the audit office UDCs will get the posts of Head Clerks to the extent of 20% of their strength instead of 10% as at present. The remaining posts of Head Clerks will go to the non-audit UDCs."

This is the other of the two impugned letters. The petitioners contend that the classification of the Upper Division Clerks for the purpose of promotion to the Selection Grade/Head Clerks Cadre, on the basis of the sources from which they are drawn and the limiting of the promotional posts available to them to 10% in the case of Selection Grade Posts and 20% in the case of the posts of the Head Clerks has resulted in stagnation of the UDCs., who joined the new organisation from the Audit Offices. The petitioners' grievance is that UDCs. who joined that organisation from the P & T offices and who were junior to them in terms of the length of service in the U.D.C. cadre have been already promoted to the Selection Grade/Head Clerks cadre. This classification of the U.D.Cs. of the SBCO-ICO into two groups for the purpose of promotion on the basis of the sources from which they are drawn is challenged by the petitioners as discriminatory, arbitrary and unreasonable. According to them, since the promotional post is a non-selection post, the only criterion for promotion from amongst the U.D.Cs. in the SBCO-ICO can be the length of service in the cadre of U.D.Cs., subject to fitness.

In the result, we allow the writ petition partly and quash the directions issued by respondent 2 by his letters of May 16, 1975 and May 29,1965 to the effect that U.D.Cs. drawn from the Audit Offices will be eligible for promotion to the Selection Grade on the basis of 10 per cent of the posts held by them or to the Head Clerks' Cadre on the basis of 20 per cent of the posts held by them in SBCO-ICO. They and the other U.D.Cs. will accordingly be entitled equally to promotional opportunities. We direct that the petitioners, and others similarly situated as them, shall be promoted to the Selection Grade/ Head Clerks Cadre with effect from the dates on which they were due for promotion, by applying the test of seniority-cum-fitness. Since we have upheld the provision in Column 10 of item 3 of the Schedule to the Recruitment Rules, 1969, the petitioners will have become eligible for promotion after completing 10 years' service in SBCO-ICO. Since the demotion of the respondents or any of them is likely to lead to undue hardship to them and to some administrative confusion, the Government may create supernumerary posts to which the petitioners and others similarly situated as them, may be promoted. We are informed that consequent upon the judgments of the High Courts of Kerala and Karnataka, the Government has adopted a similar course in the Kerala and Karnataka Circles.