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In the C.P.W.D. Assistant Engineers are appointed by direct recruitment as well as by promotion from the cadre of Junior Engineers. The cadre of Assistant Engineers consists of graduates holding a degree in Engineering as well as holders of diploma in Engineering. Recruitment to the post of Executive Engineer was earlier governed by the Central Engineering Service Group `A' Recruitment Rules, 1954 (hereinafter referred to as `the 1954 Rules'). Under the 1954 Rules appointment to the post of Executive Engineer was being made by promotion of Assistant Executive Engineers and Assistant Engineers. The promotion of Assistant Engineers as Executive Engineers was governed by Rule 21(3) of the 1954 Rules which provided as follows :-
"Provided that Government in consultation with the Commission may promote an Assistant Engineer of outstanding ability and record, to Group A service in relaxation of the educational qualifications provided in clause (a)."

After the insertion of the said proviso promotions of diploma holder Assistant Engineers were being made on the post of Executive Engineer on ad hoc basis under the said proviso. Feeling aggrieved by such promotion the graduate Assistant Engineers filed an application (O.A. No. 704 of 1988) before the Tribunal wherein it was submitted that in view of the proviso inserted in sub-rule (3) of Rule 21 of the 1954 Rules only those diploma holder Assistant Engineers could be promoted to the post of Executive Engineers who had `outstanding ability and record' and that diploma holder Assistant Engineers who did not possess `outstanding ability and record' were not eligible for promotion as Executive Engineer either on regular or on ad hoc basis and that promotion of diploma holder Assistant Engineers could not be made simply on the basis of seniority-cum-fitness by taking them at par with graduate Assistant Engineers. Another application (O.A. No. 910 of 1989) was filed before the Tribunal by the diploma holder Assistant Engineers who submitted that the proviso to Rule 21(3) of the 1954 Rules, in so far as it prescribed the requirement of `outstanding ability and record' for the purpose of promotion of diploma holder Assistant Engineers to the post of Executive Engineer, was discriminatory and violative of Articles 14 and 16 of the Constitution. On behalf of the Union Government it was submitted that the proviso inserted in Rule 21(3) of the 1954 Rules is fair and just and cannot be termed as discriminatory and that the assessment of `outstanding ability and record' of the diploma holder Assistant Engineers is done by the Departmental Promotion Committee (for short `DPC') which is chaired by a member of the Union Public Service Commission and that he assessment of merit is based on the total record of service. Both these applications have been disposed of by the Tribunal by the impugned judgment dated April 30, 1990.

After referring to the proviso introduced in Rule 21(3) of the 1954 Rules, the Tribunal has observed that the eligibility conferred thereby in relaxation of the educational qualification is conditioned by the higher quality of performance and a longer work experience, assessed as `outstanding ability and record' and that this could be judged from the annual confidential reports (ACRs). According to the Tribunal, ACR is a vehicle for assessment of comparative and competitive merit of the officers equally placed for the purpose of promotion and that such an assessment cannot quantify the compensatory element for the diploma holders Assistant Engineers which is required to place them at the same pedestal as graduate Assistant Engineers who admittedly have higher mental equipment because the DPC that makes assessment for the purpose of promotion to the higher grade applies uniform norms for assessing the performance of the officers placed equally in the feeder grade. The Tribunal has also observed that according to Rule 21(3) the Department is required to screen the diploma holder Assistant Engineers based on their total record of service to identify those persons who have `outstanding ability and record' and the diploma holder Assistant Engineers so identified should thereafter be placed at par with the graduate Assistant Engineers and assessed for promotion to the grade of Executive Engineer in accordance with the procedure prescribed by the DPC and this has never been followed. Since both the assessments, namely, screening of diploma holder Assistant Engineers first for identifying those who have `outstanding ability and record' in accordance with Rule 21 (3) and thereafter assessing them along with the graduate Assistant Engineers by the DPC in accordance with the procedure followed by it for such selection, are made on the basis of job performance, the work content of which is the same, for the diploma holders as well as graduates, Rule 21(3) contains an element of arbitrariness and discrimination. The Tribunal has taken note of the fact that for the last three decades diploma holder Assistant Engineers have been promoted on ad hoc basis along with the graduate Assistant Engineers based on the appraisal of their confidential record and that in the last three DPCs held in 1965, 1968 and 1971, the select lists were prepared applying the selection norms uniformly to all the Assistant Engineers irrespective of their being diploma holders or degree holders by treating them (graduates and non-graduates) as one category and the selection was made without first determining the eligibility of diploma holder Assistant Engineers for the next promotion. According to the Tribunal, the procedure so far has not been in conformity with Rule 21(3). The Tribunal has, therefore, held that the proviso inserted in Rule 21(3) is arbitrary and discriminatory and it requires to be substituted by a rational and just criterion, e.g., holding of a qualifying test for diploma holder Assistant Engineers, annually or as may be necessary, to obviate the element of arbitrariness and make the rule reasonable and those who qualify in such a departmental test, they should be considered along with graduate Assistant Engineers for promotion to the next higher grade by the DPC by following the normal procedure. The Tribunal has directed the Government to further amend the 1954 Rules suitably and has also directed that until the Rules are so amended, no regular promotion of diploma holder Assistant Engineers shall be made and that ad hoc promotions already made shall be regularised in accordance with the amended Rules.

Before we come to the question regarding the validity of the proviso to Rule 21(3), we would deal with the submission of Shri G.K. Aggarwal, the learned counsel appearing for the appellants in Civil Appeal No. 5364 of 1990 filed by the diploma holder Assistant Engineers, assailing the validity of Rule 21(3). Shri Aggarwal has submitted that Rule 21(3) of the 1954 Rules, in so far as it restricts eligibility for promotion to the cadre of Executive Engineer to graduate Assistant Engineers only, is violative of Articles 14 and 16 of the Constitution. The submission is that promotion to the cadre of Assistant Engineers is made from amongst Junior Engineers who are degree holders as well as diploma holders on the basis of a limited departmental examination and that diploma holder Junior Engineers who become Assistant Engineers after such selection discharge the same duties and responsibilities as graduate Assistant Engineers and that there is no basis for denying diploma holder Assistant Engineers promotion to the higher grade of Executive Engineers. Shri Aggarwal has also urged that since 1956 diploma holder Assistant Engineers were being promoted as Executive Engineers and there is nothing to show that their performance as Executive Engineers was found wanting.