REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS. 7220-7221 OF 2011 BELI RAM …Appellant Versus RAJINDER KUMAR & ANR. …Respondents JUDGMENT SANJAY KISHAN KAUL, J. 1. The sole question of law for consideration in the present appeals is whether in case of a valid driving licence, if the licence has expired, the insured is absolved of its liability. 2. The facts are in a very narrow compass. The first respondent herein, met with an accident on 20.5.1999 while driving a truck owned Signature Not Verified by the appellant herein, under whom he was gainfully employed. The Digitally signed by Anita Malhotra Date: 2020.09.23 consequence for the first respondent was 20 per cent permanent 18:45:29 IST Reason: disability. The first respondent herein filed a petition under the Workmen’s Compensation Act, 1923 (hereinafter referred to as ‘the Compensation Act’) before the Commissioner, Sadar, Bilaspur on 17.2.1999 seeking compensation of an amount of Rs.5,00,000/-, impleading the appellant and second respondent herein – the insurance company which had insured the vehicle. These proceedings resulted in an award by the Commissioner on 8.12.2004 granting Rs. 94,464/- for the injuries suffered and Rs.67,313/- towards medical expenses of the first respondent. The amounts awarded were to carry interest @ 9 per cent per annum from the date of filing of the application till the date of payment. The compensation amount was mulled on to the second respondent as insurer, while the interest was directed to be paid by the appellant herein. 3. The parties to the proceedings all filed appeals aggrieved by different aspects of the award. An intrinsic part of the consideration by the High Court was the issue raised about the validity of the driving licence of the first respondent at the time of the accident. The driving licence was endorsed by the Superintendent of R&LA Office, Udaipur but the licence expired on 6.9.1996 and there was no endorsement for renewal thereafter. Thus, the first respondent was driving the vehicle as the driver of the appellant herein for almost three years without the licence being renewed. 4. The aforesaid aspect of the non-validity of the driving licence weighed with the High Court while passing the impugned judgment dated 3.3.2009, absolving the insurance company of any liability and fastening the same upon the appellant herein on account of there being a material breach of the insurance policy. 5. The High Court, after the aforesaid finding took note of Section 4 of the Compensation Act, more specifically the following aspect: “4. Amount of compensation – (1) Subject to the provisions of this Act, the amount of compensation shall be as follows, namely:- (a) Where death results from the An amount equal to fifty per cent injury of the monthly wages of the deceased workman multiplied by the relevant factor; or An amount of eighty thousand, whichever is more; (b) Where permanent total An amount equal to sixty per cent disability results from the injury of the monthly wages of the injured workman multiplied by the relevant factor, or An amount of ninety thousand rupees, whichever is more. Explanation I.-- For the purposes of clause (a) and clause (b)," relevant factor", in relation to a workman means the factor specified in the second column of Schedule IV against the entry in the first column of that Schedule specifying the number of years which are the same as the completed years of the age of the workman on his last birthday immediately preceding the date on which the compensation fell due.” 6. On consideration of the aforesaid provision, the High Court opined that there was no provision under the Compensation Act for payment of medical expenditure incurred by the claimant for treatment. The accident having taken place in the year 1999, the monthly wages stated to be Rs.4,500/-, it was found that the maximum amount of wages permissible under the Compensation Act for determining the compensation could be Rs.2,000/-. Compensation was liable to be paid within thirty (30) days of the accident and the owner could have recovered the amount from the insurer if ultimately it was established that the insurer was liable to have indemnified the insured. The appellant was found to be in breach of the statutory duty of a benevolent legislation, i.e., the Compensation Act and, thus, the appellant was burdened to pay interest as also maximum penalty of 50 per cent. The amount of compensation was thus quantified as under: “1. Amount of compensation = Rs. 83,968/- 2. Penalty @ 50% on the amount of compensation = Rs. 41,984/- 3. Interest w.e.f. 20.6.1999 to 3.3.2009 (9 years & 257 days) on the amount of compensation = Rs. 73,335/-” 7. The result was that the appeals of the insurer and the claimant were allowed. The endeavour to seek review of the judgment on the basis of pronouncement of this Court in National Insurance Co. Ltd. v. Swaran Singh and Ors.1 failed and the application was dismissed on 8.7.2009. 8. The only question which has been debated before us, is as set out at the inception of the judgment. The appellant sought to rely upon the 1 (2004) 3 SCC 297 recent judgment of this Court, Nirmala Kothari v. United India Insurance Company Limited.2 The question of law examined in this judgment was as to what is the extent of care/diligence expected of the employer/insured while employing a driver. The legal position regarding the liability of the insurance company when the driver of the offending vehicle possessed an invalid/fake driver’s licence was adverted to for answering this question, by referring to earlier judicial pronouncements and the same was culled out in para 12 as under: “12. While hiring a driver the employer is expected to verify if the driver has a driving licence. If the driver produces a licence which on the face of it looks genuine, the employer is not expected to further investigate into the authenticity of the licence unless there is cause to believe otherwise. If the employer finds the driver to be competent to drive the vehicle and has satisfied himself that the driver has a driving licence there would be no breach of Section 149(2)(a)(ii) and the insurance company would be liable under the policy. It would be unreasonable to place such a high onus on the insured to make enquiries with RTOs all over the country to ascertain the veracity of the driving licence. However, if the insurance company is able to prove that the owner/insured was aware or had notice that the licence was fake or invalid and still permitted the person to drive, the insurance company would no longer continue to be liable.” 9. We have heard learned counsel for the parties and on a query being 2 (2020) 4 SCC 49 (authored by one of us, Krishna Murari, J.) raised, whether there is a view taken on the question as to what would be the consequence of a valid driving licence having expired both the learned counsel for the appellant and learned counsel for respondent No.2 insurance company stated that there was no direct view on this point. We even posed a question qua any judicial view of the High Courts in this behalf, but the answer to the same was also in the negative. We reserved the orders because we wanted to satisfy ourselves over this aspect. 10. We have not been able to trace out any judgments of this Court but there are judicial pronouncements of the High Courts dealing with the issue. 11. We consider it appropriate to first commence with the view of this Court in the Swaran Singh.3 case, which examined the meaning of the expression “duly licensed”, as used in Section 149(2)(a)(ii) of the Motor Vehicles Act, 1988 (hereinafter referred to as the ‘MV Act’). The factual matrix dealt with the claim of a third party and the different eventualities considered were: (a) licence not held; (b) fake licence held; (c) licence held but validity whereof has expired; (d) licence not held for type of 3 (supra) vehicle being driven; and (e) learner’s licence held. We may note here that the facts of the present case relate to eventuality (c) above. A liberal view was taken considering the intent of the legislation in question and that it was a case of a third party claim. In an endeavour of the insurance company to absolve itself of liability the following observations were made: “41. However, clause (a) opens with the words "that there has been a breach of a specified condition of the policy", implying that the insurer's defence of the action would depend upon the terms of the policy. The said sub-clause contains three conditions of disjunctive character, namely, the insurer can get away from the liability when (a) a named person drives the vehicle; (b) it was being driven by a person who did not have a duly granted licence; and (c) driver is a person disqualified for holding or obtaining a driving licence. 42. We may also take note of the fact that whereas in Section 3 the words used are 'effective licence', it has been differently worded in Section 149(2) i.e. 'duly licensed'. If a person does not hold an effective licence as on the date of the accident, he may be liable for prosecution in terms of Section 141 of the Act but Section 149 pertains to insurance as regard third party risks. 43. A provision of a statute which is penal in nature vis-a-vis a provision which is beneficent to a third party must be interpreted differently. It is also well known that the provisions contained in different expressions are ordinarily construed differently. 44. The words “effective licence” used in Section 3, therefore, in our opinion cannot be imported for sub-section (2) of Section 149 of the Motor Vehicles Act. We must also notice that the words 'duly licensed' used in sub-section (2) of Section 149 are used in past tense. 45. Thus, a person whose licence is ordinarily renewed in terms of the Motor Vehicles Act and the rules framed thereunder despite the fact that during the interregnum period, namely, when the accident took place and the date of expiry of the licence, he did not have a valid licence, he could during the prescribed period apply for renewal thereof and could obtain the same automatically without undergoing any further test or without having been declared unqualified therefor. Proviso appended to Section 14 in unequivocal term states that the licence remains valid for a period of thirty days from the day of its expiry.” …. …. …. …. …. …. “48. Furthermore, the insurance company with a view to avoid its liabilities is not only required to show that the conditions laid down under Section 149(2)(a) or (b) are satisfied but is further required to establish that there has been a breach on the part of the insured. By reason of the provisions contained in the 1988 Act, a more extensive remedy has been conferred upon those who have obtained judgment against the user of a vehicle and after a certificate of insurance is delivered in terms of Section 147(3) a third party has obtained a judgment against any person insured by the policy in respect of a liability required to be covered by Section 145, the same must be satisfied by the insurer, notwithstanding that the insurer may be entitled to avoid or to cancel the policy or may in fact have done so. The same obligation applies in respect of a judgment against a person not insured by the policy in respect of such a liability, but who would have been covered if the policy had covered the liability of all persons, except that in respect of liability for death or bodily injury.” 12. We may next advert to the judgment in the Nirmala Kothari4 case. The judgment was sought to be canvassed in support of the proposition by learned counsel for the appellant and we reproduce the relevant paragraphs in addition to the one reproduced above, as under: “10. While the insurer can certainly take the defence that the licence of the driver of the car at the time of accident was invalid/fake however the onus of proving that the insured did not take adequate care and caution to verify the genuineness of the licence or was guilty of willful breach of the conditions of the insurance policy or the contract of insurance lies on the insurer. 11. The view taken by the National Commission that the law as settled in the PEPSU case is not applicable in the present matter as it related to third-party claim is erroneous. It has been categorically held in the case of National Insurance Co. Ltd. vs. Swaran Singh & Ors. (SCC p.341, para 110) that, “110. (iii)…Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards the insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by a duly licenced 4 (supra) driver or one who was not disqualified to drive at the relevant time.” 13. The submission, thus, was that the appellant as insured had taken adequate care by verifying the licence of the driver/first respondent at the time of employment and the liability could have been mulled on the appellant only if he was aware or had notice that the licence was fake or invalid and still permitted the person to drive. This was stated not to be the factual position in the present case as the issuance of the licence has not been doubted, but rather that it was not subsequently renewed which was pleaded to be the responsibility of the first respondent. 14. We did point out at that stage itself by raising a query as to how this judgment would help in the case of the appellant since it was not a case of a fake or invalid licence. If the appellant was required to take adequate care and caution to verify the driving licence at the threshold, thereafter, the burden shifted on the insurance company to prove that such due care was not taken, could it be said that having, at the first blush verified the driving licence, the appellant was absolved of the responsibility of verifying whether the driving licence was kept renewed? 15. We are of the view that once the basic care of verifying the driving licence has to be taken by the employer, though a detailed enquiry may not be necessary, the owner of the vehicle would know the validity of the driving licence as is set out in the licence itself. It cannot be said that thereafter he can wash his hands off the responsibility of not checking up whether the driver has renewed the licence. It is not a case where a licence has not been renewed for a short period of time, say a month, as was considered in the case of Swaran Singh5 where the benefit was given to a third party by burdening the insurance company. The licence in the instant case, has not been renewed for a period of three years and that too in respect of commercial vehicle like a truck. The appellant showed gross negligence in verifying the same. 16. We are conscious of the fact that in the present case the beneficiary is the driver himself who was negligent but then we are not dealing with a claim under the MV Act but under the Compensation Act, which provides for immediate succor, not really based on a fault theory with a limited compensation as specified being paid. We are, thus, in the present proceedings not required to decide the share of the burden 5 (supra) between the appellant as the owner and the first respondent as the driver as may happen in a proceeding under the MV Act. 17. We now turn to the views of some of the High Courts, which have come to our notice on our own research! 18. The Delhi High Court in Tata AIG General Insurance Co. Ltd. v. Akansha & Ors.6 found that the driving licence having expired led to the natural finding that there was no valid driving licence on the date of the accident. The initial onus was discharged by the insurance company in view of the licence not being valid on the date of the accident. The onus, thereafter, shifted to the owner/insured to prove that he had taken sufficient steps to ensure that there was no breach of the terms and conditions of the insurance policy. Since no evidence had been led in this behalf, a presumption was drawn that there was willful and conscious breach of the terms and conditions of the insurance policy. 19. The Allahabad High Court in The Oriental Insurance Co. Ltd. v. 6 2015 SCC OnLine 6758 : (2015) 2 TAC 52 Manoj Kumar & Ors.7 again dealt with the case of an expired driving licence. The endeavour to rely on the principle set forth in a fake licence case was held not applicable in the case of an expired licence since the owner was supposed to be aware that the driving licence of the driver had expired and, thus, it was held that it was the duty of the owner to have ensured that the driver gets the licence renewed within time. In the absence of a valid driving licence, the vehicle was being driven in breach of the condition of the policy, requiring the vehicle to be driven by a person who is duly licensed, and thus, there was breach of Section 149(2) (a)(ii) of the MV Act, the consequence being that the insurance company could not he held liable. 20. The last judgment is of the Himachal Pradesh High Court in National Insurance Co. Ltd. v. Hem Raj & Ors. 8 This was, once again, a case of an originally valid licence, which had expired, there was no question of a fake licence. It was opined that the conclusions to be drawn from the observations of the judgment in the Swaran Singh9 case of this Court, were that the insurance company can defend an action on the 7 (2015) 111 ALR 275 (authored by Krishna Murari, J., as he then was) 8 : 2012 ACJ 1891 (authored by Deepak Gupta, J., as he then was) 9 (supra) ground that the driver was not duly licensed on the date of the accident, i.e., an expired licence having not been renewed within thirty (30) days of the expiry of the licence as provided in Sections 14 & 15 of the MV Act. In this context it was observed that the Swaran Singh.10 case did not deal with the consequences if the licence is not renewed within the period of thirty (30) days. If the driving licence is not renewed within thirty (30) days, it was held, the driver neither had an effective driving licence nor can he said to be duly licenced. The conclusion, thus, was that the driver, who permits his licence to expire and does not get it renewed till after the accident, cannot claim that it should be deemed that the licence is renewed retrospectively. 21. The learned Judge debated the question of the consequences of the MV Act being a beneficial piece of legislation. Thus, if two interpretations were possible, it was opined that the one which is in favour of the claimants should be given, but violence should not be done to the clear and plain language of the statute. Thus, while protecting the rights of the claimants by asking the insurance company to deposit the amount, the recovery of the same from the insured would follow as the 10 (supra) sympathy can only be for the victim of the accident. The right which has to be protected, is of the victim and not the owner of the vehicle. It was, thus, observed in para 18 as under: “18. When an employer employees a driver, it is his duty to check that the driver is duly licensed to drive the vehicle. Section- 5 of the Motor Vehicles Act provides that no owner or person incharge of a motor vehicle shall cause or permit any person to drive the vehicle if he does not fulfil the requirements of Sections 3 and 4 of the Motor Vehicles Act. The owner must show that he has verified the licence. He must also take reasonable care to see that his employee gets his licence renewed within time. In my opinion, it is no defence for the owner to plead that he forgot that the driving licence of his employee had to be renewed. A person when he hands his motor vehicle to a driver owes some responsibility to society at large. Lives of innocent people are put to risk in case the vehicle is handed over to a person not duly licensed. Therefore, there must be some evidence to show that the owner had either checked the driving licence or had given instructions to his driver to get his driving licence renewed on expiry thereof. In the present case, no such evidence has been led. In view of the above discussion, I am clearly of the view that there was a breach of the terms of the policy and the Insurance Company could not have been held liable to satisfy the claim.” 22. We have reproduced the aforesaid observations as it is our view that it sets forth lucidly the correct legal position and we are in complete agreement with the views taken in all the three judgments of three different High Courts with the culmination being the elucidation of the correct legal principle in the judgment in the Hem Raj11 case. 23. When we turn to the facts of the present case there is almost an identical situation where the appellant has permitted to let the first respondent driver drive the truck with an expired licence for almost three (3) years. It is clearly a case of lack of reasonable care to see that the employee gets his licence renewed, further, if the original licence is verified, certainly the employer would know when the licence expires. And here it was a commercial vehicle being a truck. The appellant has to, thus, bear responsibility and consequent liability of permitting the driver to drive with an expired licence over a period of three (3) years. The only thing we note is that fortunately there has been no accident with a third party claimant but the person who has caused the sufferance and sufferer are one and the same person, i.e., the first respondent driver. We are, however, dealing with the determination under the Compensation Act and those provisions are for the benefit of the workmen like the first respondent, even though he may be at fault, by determining a small amount payable to provide succor at the relevant stage when the larger 11 (supra) issues could be debated in other proceedings. The only exception is in the provisos to Section 3 of the Compensation Act, which is not the factual situation in the present case. The relevant provision reads as under: “3. Employer' s liability for compensation.- (1) If personal injury is caused to a workman by accident arising out of and in the course of his employment, his employer shall be liable to pay compensation in accordance with the provisions of this Chapter: Provided that the employer shall not be so liable-- (a) in respect of any injury which does not result in the total or partial disablement of the workman for a period exceeding [four] days; (b) in respect of any [injury, not resulting in death, caused by] an accident which is directly attributable to-- (i) the workman having been at the time thereof under the influence of drink or drugs, or (ii) the wilful disobedience of the workman to an order expressly given, or to a rule expressly framed, for the purpose of securing the safety of workmen, or (iii) the wilful removal or disregard by the workman of any safety guard or other device which he knew to have been provided for the purpose of securing the safety of workmen.” We are not aware whether any other proceedings have been initiated or not, at least, none that have been brought to our notice. The aforesaid findings of the initial lack of care by the first respondent in not renewing the driving licence would be present, but the lack of care of the appellant as the employer would also arise. We have penned down the aforesaid views as such a situation is quite likely to arise in proceedings under the MV Act where a third party is claiming the amount. Proceedings here being under the Compensation Act, the consequences are not flowing to the first respondent as the initial negligent person. 24. In view of the aforesaid, the appeals are dismissed by settling the aforesaid question of law and leaving the parties to bear their own costs. ...……………………………J. [Sanjay Kishan Kaul] ...……………………………J. [Aniruddha Bose) ...……………………………J. [Krishna Murari) New Delhi. September 23, 2020.


$~ * IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on:-24.02.2020 Date of Decision:- 18.03.2020 + O.M.P. (COMM) 399/2019 & IA No.13333/2019 (stay) UNION OF INDIA ..... Petitioner Through: Ms. Pinky Anand, ASG with Mr.Bhagwan Swarup Shukla, Mr. Rajesh Ranjan, Mr. Joel, Mr. Hemant Arya, Ms. Kirti Dua, Mr. Sumit Teterwal, Ms.Rinky, Mr.Sharvan Kumar & Mr.Gokul Sharma, Advs. versus BHARAT BIOTECH INTERNATIONAL LTD. .... Respondent Through: Mr.Sandeep Sethi, Sr. Adv. with Mr.Vipin Nair, Mr.P.B. Suresh, Mr.Karthik Jayashankar, Mr.Sughosh Subramanyam Neergundh, Advs. + O.M.P. (COMM) 407/2019 & IA Nos.13543/2019 (stay) UNION OF INDIA ..... Petitioner Through: Ms. Pinky Anand, ASG with Mr.Bhagwan Swarup Shukla, Mr. Rajesh Ranjan, Mr. Joel, Mr. Hemant Arya, Ms. Kirti Dua, Mr. Sumit Teterwal, Ms.Rinky, Mr.Sharvan Kumar & Mr.Gokul Sharma, Advs. versus SERUM INSTITUTE OF INDIA LIMITED ..... Respondent Through: Mr. Abhinav Vasisht, Sr. Adv. with Mr. Vikram Dhokalia, Adv. + O.M.P. (COMM) 408/2019 & IA Nos.13546/2019 (stay) UNION OF INDIA ..... Petitioner Through: Ms. Pinky Anand, ASG with Mr.Bhagwan Swarup Shukla, Mr. Rajesh Signature Not Verified OMP(COMM) 399/2019 & connected Page 1 of 16 DigitallySigned By:MANJU BHATT Signing Date:18.03.2020 16:52:44 Ranjan, Mr. Joel, Mr. Hemant Arya, Ms. Kirti Dua, Mr. Sumit Teterwal, Ms.Rinky, Mr.Sharvan Kumar & Mr.Gokul Sharma, Advs. versus PANACEA BIOTECH LIMITED ..... Respondent Through: Mr. Sudhir Nandrajog, Sr. Adv. with Mr. Kawal Nain, Ms.Kavita & Mr.Rohit Dadwal, Advs. CORAM: HON'BLE MS. JUSTICE REKHA PALLI JUDGMENT REKHA PALLI, J I.A. 13334/2019 (delay of 50 days in re-filing) in O.M.P. (COMM) 399/2019 I.A. No.13544/2019 (delay of 55 days in re-filing) in O.M.P. (COMM) 407/2019 I.A. No.13547/2019 (delay of 50 days in re-filing) in O.M.P. (COMM) 408/2019 1. The present decision disposes of similar applications filed by the Union of India seeking condonation of delay in re-filing the three petitions preferred under Section 34 of the Arbitration and Conciliation Act ('the Act'), in each of which a challenge has been laid to three different arbitral awards all dated 14.03.2019. 2. Although all the three applications are based on identical facts, the delay in question is slightly different. The delay of which condonation is sought is 50 days each in O.M.P. (COMM) 399/2019 and O.M.P. (COMM) 408/2019, while it is 55 days in O.M.P. (COMM) 407/2019. 3. In each of these petitions, condonation of delay in re-filing is sought primarily on the ground that a duly signed petition along with the affidavit, the statement of truth and Vakalatnama was filed on 31.05.2019 Signature Not Verified DigitallySigned By:MANJU BHATT Signing Date:18.03.2020 16:52:44 before the statutory period of limitation of 90 days as prescribed under Section 34(3) of the Act had expired. On the other hand, the respondents have vehemently opposed these applications primarily on the ground that these petitions, when originally filed within the statutory period of limitation, were merely a 'bunch of papers' and could not be treated as being valid in the eyes of law. It is contended that a complete and valid petition was filed only on 18.09.2019 by which date the limitation period of 3 months and 30 days as prescribed under Section 34 (3) of the Act had already expired. 4. In view of the preliminary objections raised by the respondents, the learned senior counsel for the parties have been heard at length on the aspect of condonation of delay in re-filing of the petition. 5. Before referring to the grounds on which condonation is sought, the factual matrix surrounding the delay caused in these matters may be noted. For the sake of convenience, only the facts of OMP(COMM.) 399/2019 are being referred to. 6. The impugned award was passed by the learned Arbitral Tribunal on 14.03.2019 and the petition under Section 34 of the Act assailing the same came to be filed by the petitioner on 31.05.2019. The petition as filed comprised of 83 pages and admittedly neither included a copy of the impugned Award nor was accompanied by any application seeking exemption from filing the same. The Registry raised 25 objections on this filing, which are reflected in the log information dated 04.06.2019. On 01.07.2019, when the courts re-opened after summer vacations, the petition was returned under objections, which was subsequently re-filed on 11.07.2019 without any corrections. When the petition was again returned under objections, it was re-filed on 31.07.2019 with some drastic alterations and was, at this point, running into 430 pages. Signature Not Verified DigitallySigned By:MANJU BHATT Signing Date:18.03.2020 16:52:44 7. Upon further defects being pointed out, the petition was re-filed on 12.09.2019 whereupon the Registry raised further objections and the petition was finally re-filed for the fifth time on 18.09.2019, by which date the petition had increased to 441 pages, along with an application for condonation of delay in re-filing the petition, which as noted hereinabove is the subject matter of the present controversy. 8. This application which barely runs into four paragraphs gives the reasons for delay in paragraph 3, the contents whereof read as under:- "3. It is respectfully submitted on account of several defects point out by registry in voluminous appeal filed it took long time to came the defect and some extra days wore in getting file approved for Union of India. One of the defects pointed out by registry was to give email address the respondents which against took same extra days to objection removed." 9. Though the petitioner subsequently filed an additional affidavit on 05.11.2019 in an effort to explain the reasons for delay, but the same merely recounted the particulars of the re-filings. 10. In support of the application, Ms. Pinky Anand, learned ASG appearing on behalf of the petitioner submits that the petition was filed within the prescribed statutory period of 90 days as the award dated 14.03.2019 had been assailed by way of the present petition on 31.05.2019, therefore the delay was only occasioned in re-filing the petition which ought to be condoned in view of the reasons stated in the application and the additional affidavit. She submits that the initially filed copy of the petition was complete and was not only duly signed in accordance with law but was also supported by an affidavit, a statement of truth and a duly executed vakalatnama; therefore, merely because the Registry kept raising defects thereon from time to time, which the petitioner diligently removed, the same neither renders the filing non est, Signature Not Verified DigitallySigned By:MANJU BHATT Signing Date:18.03.2020 16:52:44 nor indicates any negligence on the petitioner's part in filing the petition nor render the petition as being barred by limitation. 11. She further submits that the failure to file a copy of the impugned award along with the petition was also not fatal. In support of this contention, she places reliance on Chapter IV of the Delhi High Court (Original Side) Rules, 1967 issued by this Court in pursuance to the Indian Arbitration Act, 1940 to contend that it was never the intention of the legislature to insist on a copy of the arbitral award at the very first instance. She submits that even the Delhi High Court (Original Side) Rules, 2018 do not mandate the same but, instead, adopt the existing practice directions with respect to arbitration, as contained in the Arbitration and Conciliation Act, 1996 which also do not necessitate appending the copy of the arbitral award to the Section 34 petition. Rather, the practice directions enjoin the arbitral tribunal to transmit the arbitral record, including the award, to the Court once notice is issued in a Section 34 petition. She, therefore contends that on a combined reading of the practice directions issued on 30.08.2010 and 16.01.2015 also do not require the impugned award to be filed along with a Section 34 petition, therefore the non-filing of the impugned award in the present case, alongwith the original petition filed on 31.05.2019, is inconsequential. 12. She finally submits that the parameters for condonation of delay in re-filing the petition are very different from those applicable for condonation of delay in filing the petition. She submits that once the filing of a petition is within time, the Court ought to apply a liberal yardstick while considering the prayer for condoning the delay in re-filing the same. Any said delay ought to be condoned by the Court, provided that the applicant shows sufficient cause for the same, which duty has Signature Not Verified DigitallySigned By:MANJU BHATT Signing Date:18.03.2020 16:52:44 duly discharged by the petitioner in the present case. In support of this contention, she places reliance on Northern Railway vs. Pioneer Publicity Corporation Private Limited (2017) 11 SCC 234, M/s. Himachal Futuristic vs. I.T.I. Limited 2017 SCC OnLine Del 8522 and Indian Statistical Institute vs. M/s Associated Builders and Others (1978) 1 SCC 483. 13. On the other hand, Mr. Sandeep Sethi, learned senior counsel for the respondent while opposing the application, submits that the Section 34 petition as originally filed on 31.05.2019 could, at the most, be considered as a 'bunch of papers' as it suffered from critical deficiencies which cannot be disregarded by this Court; a copy of the arbitral award which the petition sought to impugn was absent; the petition failed to bear the requisite signatures on each page therein, as mandatorily required; the affidavit accompanying the petition refers to documents at serial nos. 3 (a) to (w) which were never annexed; the petition was filed without any court fees, to name a few. To make matters worse, the vakalatnama annexed to the initially filed petition on 31.05.2019 was undated and could not, therefore, be treated as a valid vakalatnama. He submits that even the statement of truth accompanying the petition bore incomplete information. This is revealing of the petitioner's intent from the very beginning, as paragraphs 3 and 6 of the aforesaid statement of truth were intentionally left blank by the petitioner with the possible hope of changing the basic structure of the originally filed petition. Lastly, the petition, as filed on 31.05.2019, comprised of 83 pages which were subsequently increased to 441 pages which, he contends virtually amounted to altering the entire petition which is not permissible in law. 14. Mr. Sethi thus contends that the initial filing by the petitioner on 31.05.2019 was merely a dummy filing, which bore references to Signature Not Verified DigitallySigned By:MANJU BHATT Signing Date:18.03.2020 16:52:44 documents which are completely alien to the present disputes. Similarly, the second filing on 11.07.2019 was also a dummy filing as at that instance, the petitioner had merely proceeded to re-file the entire petition without curing a single defect raised by the Registry on 04.06.2019, all of which were blatant attempts to defeat the rights accruing to the respondent in the interregnum. He further submits that the third re-filing on 31.07.2019, notwithstanding the increase in the number of pages of the petition to 430, was defective as it neither adhered to the statutorily prescribed period of limitation of 3 months and 30 days nor addressed the objections raised by the Registry. The fourth and fifth re-filings were effected on 12.09.2019 and 18.09.2019 respectively, this time with 441 pages, and led to the petition being listed for hearing before this Court on 24.09.2019. By placing reliance on the decisions of this Court in Delhi Development Authority v. Durga Construction Co. 2013(139)DRJ 133(DB), Oriental Insurance Co. Ltd. Vs. Air India Ltd. 2019 SCC OnLine Del 11634 and Oil and Natural Gas Corporation Ltd. v. Joint Venture 2019 SCC OnLine Del 10456, he contends that the initially filed petition, being a mere skeletal filing, could not be treated as a valid filing in the eyes of law. It is his case that the first instance of valid filing in the present case, could only be considered as having been effected on 12.09.2019. He thus, contends that the delay of which condonation is sought is masked as a delay in re-filing, but in reality ought to be treated as a delay in filing the petition beyond the period of 3 months and 30 days as prescribed under the express provisions of Section 34(3) of the Act and cannot be condoned. 15. Mr.Abhinav Vashisth and Mr. Sudhir Nandrajog, learned senior counsel who appear for the respondents in the connected petitions oppose the applications as well and, besides adopting the arguments of Mr.Sethi, Signature Not Verified DigitallySigned By:MANJU BHATT Signing Date:18.03.2020 16:52:44 submit that the reasons given in these applications as also the additional affidavit filed by the petitioner are extremely vague and cannot be treated as a sufficient ground to condone the delay. They further submit that the petitioner's alteration of the final page of the originally filed petition and act of filling in blanks in the statement of truth as also the vakalatnama, as originally filed, reveal their attempt to falsify the record which cannot be permitted, for which they relied on the decision of this Court in Sravanthi Infratech Private Limited vs. Greens Power Equipment (China) Co. Ltd., 2016 SCC Online Del. 5645. 16. I have heard the learned ASG and learned senior counsel for the respondents and with their assistance, perused the record. The primary contention raised by the learned ASG, by relying on the decisions in Pioneer Publicity Corporation Private Limited (supra), M/s. Himachal Futuristic (supra) and M/s Associated Builders (supra), is that the parameters to be applied for condoning delay in re-filing are different from those applicable to delay in filing. There cannot be any quarrel with this proposition of law. However, in view of the respondent's plea that the original filing on 31.05.2019 was non est and the petition has to be treated as being validly filed only on 31.07.2019, i.e., the date on which the impugned award was placed on record and therefore, what the petitioner is actually seeking is not a condonation of delay in re-filing but condonation of delay in filing. To determine this issue, the foremost question which needs to be considered by this Court is whether the original filing was non est and a mere bunch of papers, or whether the same was filed in compliance with all legal requirements. If the Court finds that the initial petition was hopelessly inadequate or insufficient or contained defects which are fundamental to the very filing of the petition, then the filing has to be treated as non est, and the date of filing has to be Signature Not Verified DigitallySigned By:MANJU BHATT Signing Date:18.03.2020 16:52:44 treated as the date on which the petitioner re-filed the petition after annexing all the necessary documents and removing objections raised by the Registry. On the other hand, if the initial filing is found to be valid, then the petition would have to be treated as having been filed within time and the question then would be whether the delay in re-filing, after curing of defects, ought to be condoned. 17. To determine whether the originally filed petition should be treated as valid or non est, this Court may be guided by the principles laid down by a Division Bench of this Court in DDA vs. Durga Construction Co., 2013 (139) DRJ 133(DB) wherein it was held as under:- "17. The cases of delay in re-filing are different from cases of delay in filing inasmuch as, in such cases the party has already evinced its intention to take recourse to the remedies available in courts and has also taken steps in this regard. It cannot be, thus, assumed that the party has given up his rights to avail legal remedies. However, in certain cases where the petitions or applications filed by a party are so hopelessly inadequate and insufficient or contain defects which are fundamental to the institution of the proceedings, then in such cases the filing done by the party would be considered non est and of no consequence. In such cases, the party cannot be given the benefit of the initial filing and the date on which the defects are cured, would have to be considered as the date of the initial filing. A similar view in the context of Rules 1 & 2 of Chapter IV of the Delhi High Court (Original Side) Rules, 1967 was expressed in Ashok Kumar Parmar v. D.C. Sankhla: 1995 RLR 85, whereby a Single Judge of this Court held as under:- "Looking to the language of the Rules framed by Delhi High Court, it appears that the emphasis is on the nature of defects found in the plaint. If the defects are of such character as would render a plaint, a non-plaint in the eye of law, then the date of presentation would be the date of re-filing after removal of defects. If the defects are formal or ancillary in nature not effecting the validity of the plaint, the date of presentation would be the date of original presentation for the purpose of calculating the limitation for filing the suit." Signature Not Verified DigitallySigned By:MANJU BHATT Signing Date:18.03.2020 16:52:44 A Division Bench of this Court upheld the aforesaid view in D.C. Sankhla v. Ashok Kumar Parmar: 1995 (1) AD (Delhi) 753 and while dismissing the appeal preferred against decision of the Single Judge observed as under:- "5. ...... In fact, that is so elementary to admit of any doubt. Rules 1 and 2 of (O.S.) Rules,1967, extracted above, do not even remotely suggest that the re-filing of the plaint after removal of the defects as the effective date of the filing of the plaint for purposes of limitation. The date on which the plaint is presented, even with defects, would, therefore, have to be the date for the purpose of the limitation act." 18. In several cases, the defects may only be perfunctory and not affecting the substance of the application. For example, an application may be complete in all respects, however, certain documents may not be clear and may require to be retyped. It is possible that in such cases where the initial filing is within the specified period of 120 days (3 months and 30 days) as specified in section 34(3) of the Act, however, the re-filing may be beyond this period. We do not think that in such a situation the court lacks the jurisdiction to condone the delay in re-filing. As stated earlier, section 34(3) of the Act only prescribes limitation with regard to filing of an application to challenge an award. In the event that application is filed within the prescribed period, section 34(3) of the Act would have no further application. The question whether the Court should, in a given circumstance, exercise its discretion to condone the delay in re-filing would depend on the facts of each case and whether sufficient cause has been shown which prevent re-filing the petition/application within time." 18. The aforestated principles, when applied to the facts of the present case, would provide an answer to the first question arising for my consideration - should the petition, as filed on 31.05.2019, be regarded as a 'valid' filing or as non est? It remains undisputed inter alia that the impugned award was not placed on record till 31.07.2019, by which date the extended period of limitation had already expired and that the petition, as originally filed, had been substantially altered at the time of re-filing. In fact at the time of re-filing, not only were documents spanning over 350 pages added to the petition, but even the framework of Signature Not Verified DigitallySigned By:MANJU BHATT Signing Date:18.03.2020 16:52:44 the petition was changed, yet the last page of the re-filed petition continued to reflect the date of filing as 31.05.2019; which is patently untrue, in the light of the petitioner's admission that it had made changes in the body of the petition at the time of re-filing. This, in my considered opinion, is an entirely unacceptable practice. Even the fact that when the petition was initially filed no court fees was affixed, the vakalatnama was undated, the accompanying statement of truth was incomplete and lacked critical information, and the supporting affidavit made reference to documents which were not even annexed to the petition remains undisputed. However, the most glaring defect at the time of the initial filing as also the only re-filing done prior to 14.07.2019 was that even a copy of the award which the petitioner sought to assail, was not annexed with the petition. I am unable to comprehend as to how a petition seeking to assail an order, an award in this case, without even annexing a copy thereof can be claimed as a valid filing and that too without even moving an application seeking exemption from filing a copy of the impugned award. 19. It is obvious that the original petition, as filed on 31.05.2019, and only running into 83 pages was a careless and deliberate attempt on the petitioner's part to somehow stop the clock on limitation amounting to a clever manoeuvre to buy time. In fact even after the original petition was received back by the petitioner's counsel on 01.07.2019 with defects being pointed by the Registry, the petitioner did not take any steps to file a copy of the impugned award while re-filing the petition on 11.07.2019, i.e., within the extended period of limitation of 3 months and 30 days which expired on 14.07.2019. In fact, even as per the petitioner's admission, the impugned award was filed for the first time, belatedly, on 31.07.2019. I am of the view that the petitioner's failure to file the Signature Not Verified DigitallySigned By:MANJU BHATT Signing Date:18.03.2020 16:52:44 impugned award along with the petition at the time of filing on 31.05.2019 or at the time of its re-filing on 11.07.2019, both falling within the period of limitation, cannot be underplayed as a 'trivial' defect but is a defect of such gravity that it would render the original filing as a mere dummy filing. 20. Though the learned ASG has vehemently urged that neither under the Original Side Rules nor the practice directions require the arbitral award to be filed along with the Section 34 petition and that in fact the award along with the entire arbitral record were required to be summoned by this Court as a matter of practice, I am unable to accept this contention. A bare perusal of the practice directions issued on 30.08.2010, which are relevant herein and reproduced below, do not support this contention. Further, on perusing the 2018 Original Sides Rules I find that Chapter XXVIII Rule 1, being the applicable provision, also merely states that the existing practice directions in relation to the proceedings under the Act shall stand incorporated by inclusion in these Rules. The same, however, do not, in any manner, either deal with or dispense with the requirement of annexing a copy of the impugned award in a Section 34 petition. CHAPTER XXVIII ALTERNATIVE DISPUTE RESOLUTION, ARBITRATION AND MEDIATION 1. Extant rule (s), notification (s), scheme (s) and Practice Directions in relation to proceedings under the Arbitration and Conciliation Act, 1996, as amended from time to time, shall stand incorporated by inclusion in these Rules. PRACTICE DIRECTION Hon‟ble the Chief Justice has been pleased to issue the following practice direction:- Signature Not Verified DigitallySigned By:MANJU BHATT Signing Date:18.03.2020 16:52:44 As soon as notice is issued in the petitions filed under Section 34 of the Arbitration & Conciliation Act, 1996, the Registry shall send a letter of request to the Arbitrator to transmit the record of arbitral proceedings as well as award to this Court after the conclusion of arbitration. This practice direction will come into force immediately. (Rakesh Kapoor) Registrar General 21. In fact, a similar plea regarding the effect of non-filing of the award has already been considered by a Division Bench in Executive Engineer vs. Shree Ram Construction Co. (2010) 120 DRJ 615 (DB) as also a co-ordinate Bench of this Court in SKS Power Generation (Chhattisgarh) Ltd. vs. ISC Projects Private Limited 2019 SCC OnLine Del 8006 holding that non-filing of the impugned award would be fatal. In my considered view, filing a copy of the impugned award would be a sine qua non in every petition laying a challenge thereon. On a combined consideration of the significant deficiencies in the original petition filed on 31.05.2019, especially the non-filing of a copy of the award, with the principles enunciated in Durga Construction (supra), I am compelled to hold that, notwithstanding the fact that it bore the requisite signatures, albeit not on every page, and was accompanied by the statement of truth, affidavit and the vakalatnama, the initial filing was non est in the eyes of law and is inconsequential. Therefore, in the present case I have no hesitation in holding that a valid petition can, at the earliest, be treated as having been filed on 31.07.2019, when for the first time a copy of the impugned award came to be annexed to the petition, even though the other objections which were equally important were removed only on 18.09.2019. 22. For the aforesaid reasons the petition, being re-filed after 14.07.2019, i.e., the date on which the extended period of limitation of 3 Signature Not Verified DigitallySigned By:MANJU BHATT Signing Date:18.03.2020 16:52:44 months and 30 days stood expired, has to be treated as being barred by limitation. Now these applications in question, though styled as applications seeking condonation of delay in re-filing, have to necessarily be treated as applications seeking condonation of delay in filing the petition beyond the statutorily prescribed period. As is settled, this Court does not have the power to condone any delay caused beyond 30 days after the expiry of the limitation period of three months, which in the present case expired on 14.07.2019. In this regard, reference may be made to the decision in Union of India vs. Popular Construction Co. (2001) 8 SCC 470 wherein the Supreme Court held that the Court cannot entertain an application to set aside the award beyond the extended period under proviso to Section 34 (3) of the Act, thus clearly laying down that a challenge to an award filed after 3 months and 30 days of receipt of the arbitral award by the aggrieved party has to be rejected. 23. Thus, I have no hesitation in holding that these applications are seeking condonation of delay in filing, which is not permissible considering the delay in question was beyond the extended period of limitation and cannot, therefore, be condoned by this Court. 24. In the light of my aforesaid conclusion, while there is no doubt that the applications have to be treated as seeking condonation of delay in filing but even if the petitioner's plea were accepted that the delay ought to be treated as a 'delay in re-filing', it was still incumbent upon the petitioner to provide cogent and substantive reasons for the delay of 50/55 days occasioned in filing these petitions. Undoubtedly as a matter of general practice, the standards applicable while considering a prayer for condonation of delay in 're-filing' are less rigid than those applicable for condoning delay in filing, but I cannot lose sight of the fact that these applications pertain to petitions under Section 34 of the Act where the Signature Not Verified DigitallySigned By:MANJU BHATT Signing Date:18.03.2020 16:52:44 approach, even while dealing with a prayer for condonation of delay in re-filing, cannot be too liberal. 25. In this regard, reference may be made to the decision in Durga Construction (supra), wherein a Division Bench of this Court, while dealing with an application for condonation of delay in re-filing of a petition beyond the time prescribed under Section 34(3) of the Act, held that though the Court is empowered to condone delay beyond the extended period of limitation of 3 months and 30 days, it is requisite for the party seeking the condonation to show that despite his diligence, the rectification of defects and re-filing could not be carried out within the limitation period, for bonafide reasons beyond his control. At the time of considering applications of like nature, it is important for the Court to bear in mind the legislative intent for prescribing a statutory period of limitation under Section 34(3) of the Act viz. ensuring expeditious disposal of arbitration and preventing delay in implementation of an award by parties who would malafidely challenge the same. Ultimately, the Act sought to breathe life into a much needed alternate system of dispute resolution and lend greater credence to it, by removing any unwarranted obstacles to its smooth functioning. A liberal approach while dealing with an application for condonation of delay in challenging the award would only endanger and frustrate the purpose for which the Act was enacted. 26. Returning to the facts of the present petition, I find that regrettably, the petitioner has failed to provide any justifiable reason, much less a sufficient reason to seek condonation of delay. The petitioner's explanation in the application as also the additional affidavit is wholly perfunctory, vague and demonstrate the alarmingly lackadaisical approach of the petitioner in complying with general filing practice and Signature Not Verified DigitallySigned By:MANJU BHATT Signing Date:18.03.2020 16:52:44 the statutory requirements under Section 34 of the Act. In fact the petitioner has merely made a bald averment that the delay had been caused due to repeated objections being raised on the petition by the Registry, which took time to cure. On the contrary the logbook maintained by the Registry shows that most of the defects raised by the Registry at the very first instance of fling on 04.06.2019 were not rectified till as late as 18.09.2019, which indicates that the petitioner was at fault for not removing the objections in a timely manner and the reasons sought to be advanced by it are not at all bonafide. Thus, even if the delay in question were to be treated as a 'delay in re-filing', the petitioner's explanation for the delay being vague, unsubstantiated, insufficient and contrary to the record is liable to be rejected. 27. For the aforesaid reasons, when looked at from any angle, these applications cannot succeed and are accordingly dismissed. O.M.P. (COMM) 399/2019 & IA No.13333/2019 (stay) O.M.P. (COMM) 407/2019 & IA Nos.13543/2019 (stay) O.M.P. (COMM) 408/2019 & IA Nos.13546/2019 (stay) 28. Since the applications seeking condonation of delay in filing/re- filing the petitions have been dismissed, the petitions are also dismissed. (REKHA PALLI) March 18, 2020 JUDGE „SDP/gm‟ Signature Not Verified DigitallySigned By:MANJU BHATT Signing Date:18.03.2020 16:52:44


[REPORTABLE] IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS.1713-1714 OF 2022 (@ SLP (c) Nos.30487-30488 OF 2017) RAMA NEGI APPELLANT(S) VERSUS UNION OF INDIA & ORS. RESPONDENT(S) WITH CIVIL APPEAL NOS.1715-1716 OF 2022 (@ SLP (c) Nos.10513-10514 OF 2018) J U D G M E N T Hrishikesh Roy, J. 1. Signature Not Verified Digitally signed by Leave granted. The challenge in these two appeals Nidhi Ahuja Date: 2022.03.02 17:53:15 IST is to the judgment dated 22.9.2017 in the Special Reason: Appeal Nos.87 and 88 of 2014, filed by Appellant Rama Negi and Special Appeal Nos. 96 of 2014 and 97 of 2014, filed by the Cantonment Board, Ranikhet. The Division Bench of the Uttarakhand High Court under the impugned judgment dismissed the Appeals and upheld the judgment of the learned Single Judge whereby the appellant Rama Negi’s promotion to the post of Office Superintendent in the Cantonment Board was quashed and the Writ Petitions of the respondent no.3, Gopal Ram Arya were allowed. 2. Heard Mr. P.S. Patwalia, learned senior counsel appearing for the appellant. The Cantonment Board, Ranikhet is represented by Mr. Jayant Bhushan, learned senior counsel. Also heard the learned counsel appearing for the Respondent no.3. 3. As the contentions of the learned counsel are based on the inter se seniority of the two contesting parties, their service details in the Cantonment Board, Ranikhet are reproduced, in the following chart. S.No. Gopal Ram Arya (R-3/WP in Rama Negi (appellant)  HC) Date Description Date Description 1. 16.07.199 Appointed as 01.09.199 Appointed as 0 Typist/Junior 5 Steno Typist Clerk on ad-hoc equivalent to basis. Senior Clerk Promoted to Senior Clerk 09.07.199 2. 01.09.200 Promoted to 01.10.200 Promoted to the 5 Revenue 9 post of Superintendent Accountant (feeder cadre) (feeder cadre) (as SC category) 3. 28.11.201 Charge sheet 1 for dereliction of duty, negligence 4. 01.02.201 Officiating 2 charge as Office Superintendent. 25.3.2013 Retrospectively promoted to Office Superintendent w.e.f. 1.2.2012 5. 17.8.2016 Penalty of recovery of Rs. 10,000/- on DP by Board (R2) 4. As can be seen from above, the appellant initially joined service in the Cantonment Board, as a Steno Typist (equivalent to Senior Clerk), on 1.9.1995. The respondent no.3 after entering service initially as a Junior Clerk on 16.7.1990, was promoted to the Post of Steno Typist/Senior Clerk on 9.7.1997, around 22 months after the appellant directly joined service in the higher post. Thereafter, the respondent no.3 though junior, was promoted to the post of Revenue Superintendent on 1.9.2005 by giving him the benefit of reservation as a Scheduled Caste person. The appellant was subsequently promoted to the equivalent post of Accountant on 1.10.2009. Since promotion to the respondent no.3 was by conferring reservation benefit, appellant being subsequently promoted to the said cadre on 1.10.2009, she expected restoration of her seniority. 5. The promotion for the next post of Office Superintendent is governed by Rule 5-B (8) of the Cantonment Fund Servant Rules, 1937 (“the Rules” for short), and the same reads as under: “Rule 5-B(8) - Appointments to promotion posts shall be made [by the appointing authority] on the basis of seniority lists maintained for this purpose by the Board, subject to rejection of those considered unfit: Provided that promotion of selection posts shall be made on the basis of seniority-cum-merit.” 6. Under Annexure E of the Rules, the post of Office Superintendent together with other posts of Accountant, Toll Superintendent and Revenue Superintendent in the Cantonment Board of Ranikhet, is included in the category of “selection posts” and the relevant portion reads as under: “ANNEXURE ‘E’ 1. Post declared as Selection posts under Cantonment Boards in Central Command. Authority: GOC-in-C, Central Command, Lucknow Letter No., 82562/Classification/LC6 dated 12.1.77 and [dated 25.4.1980] **** **** **** **** **** **** **** **** 24.Ranikhet Office Supdt. Accountant, Toll Supdt. Rev. Supdt. Forest Ranger, Jamadar (PWD) Sanitary Jamadar, Head Mali and Toll Moharrir (Non- Matric).” The Rules above specify, the post of Office Superintendent as a “selection post” and under Rule 5B(8), promotion to the post is to be considered on the criterion of seniority cum merit. 7. The Cantonment Board in its meeting held on 11.1.2012 considered the candidature of the persons serving in the feeder cadre and it was resolved to recommend the appellant for promotion to the “selection post” of Office Superintendent, overlooking the respondent no.3. The appellant was held to be senior as per the rule. The decision was taken after due consideration of the relevant materials, including the fact that the respondent no.3 was drawing a lower pay scale than the appellant, in the feeder cadre. The Board also took into account that the Office Superintendent position required a service record without misconduct. Respondent no.3, it was noted, was a charge sheeted person, who had accepted the charges levelled against him. To determine the appellant to be senior to the respondent no.3 in the feeder cadre, the Board relied upon the criterion that “Persons in the feeder grades given the same grading, those in higher scales of pay will rank senior to those in the lower scale of pay”. It was noted that the pay scale of the appellant Rama Negi was Rs.9300-34800 with grade pay of Rs.4200 whereas, the pay scale of respondent no.3 Gopal Ram Arya was Rs.5200-20200 with grade pay of Rs.2800 and accordingly the inter se seniority of the appellant was found above the respondent no.3, in the feeder cadre. 8. Following the above Resolution on 11.1.2012 for appointment to the post of Office Superintendent, the Cantonment Board sought the advice of the Central Command, Lucknow furnishing the details of those under consideration. Since nothing happened thereafter for several months, the appellant filed the W.P (C) No.1465 of 2012 before the Uttarakhand High Court. Parallelly, the respondent no.3 filed the W.P (C) No.1645 of 2012 before the same High Court, challenging the Cantonment Board’s Resolution No.28 dated 11.1.2012 in favour of the appellant. At that stage, the Central Command, Lucknow with its letter dated 23.11.2012 informed that the issue of promotion to the post of Office Superintendent falls entirely within the purview of the Cantonment Board, under Rule 7(1) of the Rules. 9. Prompted by the above clarification, the Cantonment Board in its meeting held on 25.3.2013 passed the Resolution No.8 where, after having examined the rule position, it was recorded that the appellant “Smt. Rama Negi is the best, suitable and fit candidate for the post of Office Superintendent. Hence she is promoted from the post of Accountant to Office Superintendent w.e.f. the date of her taking charge as an Officiating Office Superintendent i.e. Feb 1st, 2012 as per rules mentioned in the agenda side.” The Board relied upon the legal advice tendered to it on the basis of the O.M. dated 12.12.1988 issued by the Ministry of Personnel, Public Grievances and Pensions, which stated “that among the persons in the feeder grades given the same grading, those in the higher scales of pay will rank senior to those in the lower scale of pay.” 10. Aggrieved by the above Resolution No.8 favouring the appellant, the respondent no.3 filed W.P (C) No.352 of 2013. In the meantime, the W.P (C) No.1465 of 2012 filed by the appellant for her promotion was dismissed as infructuous on 4.4.2013, by the High Court. 11. The two Writ Petitions filed by the respondent no.3 were analogously considered and the learned Single Judge in his judgment dated 25.2.2014 concluded that the respondent no.3/writ petitioner is senior and rejected the contention that the appellant is to be considered senior above the respondent no.3, by virtue of her higher pay scale in the post of Accountant in the feeder cadre. Insofar as the disciplinary proceeding pending against the respondent no.3, the learned Single Judge observed that the charge sheet was deliberately issued on 28.11.2011 to keep out the respondent no.3 from the zone of consideration. Such inference was drawn since no decision was taken on the charges by the authorities which according to the learned judge, demonstrate malice on their part. The chargesheet itself was brushed aside by saying that it was a minor irregularity not involving moral turpitude. Therefore, the respondent no.3 by virtue of his accelerated earlier promotion in the year 2005 in the feeder cadre and the 2009 promotion of the appellant, the appellant’s promotion was found to be unmerited. On this basis, the respondent no.3 was asked to officiate as the Office Superintendent, replacing the appellant who hitherto was discharging such responsibility. The Court also directed the Cantonment Board to expeditiously conclude the departmental proceeding against the respondent no.3 within 3 months and if the same is not concluded, the learned Judge declared that the chargesheet shall be deemed to have been revoked, and thereafter denovo exercise for promotion to the post of Office Superintendent should be undertaken. With this, both writ petitions filed by the respondent no.3 were allowed by the learned Judge, under his judgment dated 25.2.2014. 12. Aggrieved by the judgment favouring the respondent no.3 in his two writ petitions, the appellant Rama Negi and the Cantonment Board filed their respective Special Appeal Nos.87 & 88 of 2014 and Special Appeal Nos.96 & 97 of 2014. While the Special Appeals were pending consideration before the Division Bench, the disciplinary proceeding was concluded with the report of the inquiry officer against the delinquent, and it was found that the Board incurred a loss of Rs.3,50,000/- on account of dereliction of duty by the respondent no.3 and accordingly the penalty of recovery of Rs.10,000/- from the delinquent’s salary was ordered by the disciplinary authority, on 17.8.2016. 13. The Division Bench considered the basis for declaring the appellant to be senior to the respondent no.3 by virtue of her higher pay scale in the feeder cadre, and by adverting to the wrong O.M. dated 10.09.1985 (Incorrectly mentioned as 1995) conclusion was reached that the said O.M. does not provide for declaration of seniority, on the basis of higher pay scale. It was further held that the date of appointment in the feeder cadre should be the basis for considering inter se seniority for the purpose of promotion to the post of Office Superintendent. The disciplinary proceeding against the respondent no.3 was brushed aside in a summary manner by declaring that the same was initiated for the fault committed by the subordinate staff of the delinquent officer to deny him the benefit of promotion. With such finding the Special Appeals filed by the appellant and the Cantonment Board were dismissed, and the judgment rendered by the learned Single Judge favouring the respondent no.3 was affirmed by the Division Bench by their judgment dated 22.09.2017. 14. Taking exception to the above judgment, the present appeals are filed. We have heard the learned counsel for the parties and also read the relevant materials on record. 15. On the issue of inter se seniority, it is necessary to bear in mind that the respondent no.3 entered service earlier on 16.7.1990 but in the lower grade and was promoted to the post of Senior Clerk, only on 9.7.1997. In contrast, the appellant entered service on 1.9.1995 in the higher grade as a Steno-Typist (equivalent to Senior Clerk). Thus, she was senior to the respondent no.3 in the post, just below the feeder cadre. Overlooking the inter-se seniority position of the two, the respondent no.3 as a Scheduled Caste person was granted accelerated promotion on 1.9.2005, to the post of Revenue Superintendent. 16. Besides, the appellant by virtue of her higher pay scale in the post of Accountant in the feeder cadre, also deserves seniority above the respondent no.3 with his lower pay scale, on account of the provision made in the O.M. dated 12.12.1988. 17. The Rule 5-B (8) read with Annexure ‘E’ of the Rules makes it clear that the post of Office Superintendent is a “selection post” and the criterion for promotion is seniority-cum-merit. The parameters for determining promotion based on such criterion are well established by this Court. Justice S.C. Agrawal in B.V. Sivaiah v. K. Addanki Babu1, speaking for a three Judges Bench, held that, “10. On the other hand, as between the two principles of seniority and merit, the criterion of “seniority-cum-merit” lays greater emphasis on seniority. In State of Mysore v. Syed Mahmood [AIR 1968 SC 1113 : (1968) 3 SCR 363 : (1970) 1 LLJ 370] while considering Rule 4(3)(b) of the Mysore State Civil Services General Recruitment Rules, 1957 which required promotion to be made by selection on the basis of seniority-cum-merit, this Court has observed that the Rule required promotion to be made by selection on the basis of “seniority subject to the fitness of the candidate to discharge the duties of the post from among persons eligible for promotion”. It was pointed out that where the promotion is based on seniority-cum-merit, the officer cannot claim promotion as a matter of right by virtue of his seniority alone and if he is found unfit to discharge the duties of the higher post, he may be passed over and an officer junior to him may be promoted. 11. In State of Kerala v. N.M. Thomas [(1976) 2 SCC 310 : 1976 SCC (L&S) 227] A.N. Ray, C.J. has thus explained the criterion of “seniority-cum- merit”: (SCC p. 335, para 38) “With regard to promotion the normal principles are either merit-cum-seniority or seniority-cum- merit. Seniority-cum-merit means that given the minimum necessary merit requisite for efficiency 1 (1998) 6 SCC 720 of administration, the senior though the less meritorious shall have priority. 17. ... While applying the principle of seniority- cum-merit for the purpose of promotion, what is required to be considered is the inter se seniority of the employees who are eligible for consideration. Such seniority is normally determined on the basis of length of service, but as between employees appointed on the same date and having the same length of service, it is generally determined on the basis of placement in the select list for appointment. ... 18. We thus arrive at the conclusion that the criterion of “seniority-cum-merit” in the matter of promotion postulates that given the minimum necessary merit requisite for efficiency of administration, the senior, even though less meritorious, shall have priority and a comparative assessment of merit is not required to be made. For assessing the minimum necessary merit, the competent authority can lay down the minimum standard that is required and also prescribe the mode of assessment of merit of the employee who is eligible for consideration for promotion. Such assessment can be made by assigning marks on the basis of appraisal of performance on the basis of service record and interview and prescribing the minimum marks which would entitle a person to be promoted on the basis of seniority-cum-merit. ” Justice Arijit Pasayat, speaking for a Division Bench in K. Samantaray v. National Insurance Co. Ltd.2, noted the following distinction, “7. The principles of seniority-cum-merit and merit-cum-seniority are conceptually different. For the former, greater emphasis is laid on seniority, though it is not the determinative 2 (2004) 9 SCC 286 factor, while in the latter, merit is the determinative factor.” 18. The appraisal of the facts before us reveals that the respondent no.3 faced a disciplinary proceeding following the chargesheet issued against him on 28.11.2011. But the High Court questioned the timing of the disciplinary action and observed that the same was issued to deny promotion to the respondent no.3. On this, the inquiry report finding (17.8.2016) is important, which indicates that the Cantonment Board suffered a pecuniary loss of Rs.3,50,000/- due to dereliction of duty by the delinquent. Significantly, the respondent no.3 accepted the charge and the disciplinary authority imposed the penalty of Rs.10,000/- recoverable from his salary. 19. It was a “selection post” and the appellant contrastingly had an unblemished service record all throughout her career. Moreover, she was found to be senior by the Board on 11.1.2012 and for this reason was recommended for promotion, in preference to the respondent no. 3. Adverting to the role of promotion committees, Justice P.B. Sawant, speaking for a three Judges bench in Union of India & Ors. vs. K.V. Jankiraman & Ors.3 has emphasized the necessity to consider the entire service record of the candidates in line for promotion, “29. …In fact, while considering an employee for promotion his whole record has to be taken into consideration and if a promotion committee takes the penalties imposed upon the employee into consideration and denies him the promotion, such denial is not illegal and unjustified. If, further, the promoting authority can take into consideration the penalty or penalties awarded to an employee in the past while considering his promotion and deny him promotion on that ground, it will be irrational to hold that it cannot take the penalty into consideration when it is imposed at a later date because of the pendency of the proceedings, although it is for conduct prior to the date the authority considers the promotion. …” 20. On the same aspect, Justice Kuldip Singh, also held for a Division Bench in Jagathigowda C.N. v. Chairman, Cauvery Gramina Bank & Ors.4,that the totality of the circumstances factor as a pivotal consideration with respect to seniority cum merit, 3 (1991) 4 SCC 109 4 (1996) 9 SCC 677 “8. ... It is settled proposition of law that even while making promotions on the basis of seniority-cum-merit the totality of the service record of the officer concerned has to be taken into consideration. The performance appraisal forms are maintained primarily for the purpose that the same are taken into consideration when the person concerned is considered for promotion to the higher rank. ...” (emphasis added) For a Division Bench in Haryana State Electronics Development Corporation Limited & Ors. Vs. Seema Sharma & Ors.5, Justice A.K. Ganguly also reiterated the distinguishable features for the criterion of seniority cum merit, and the requirement to consider the entirety of the candidate’s service record, “8. The principle of merit-cum-seniority puts greater emphasis on merit and ability and where promotion is governed by this principle seniority plays a less significant role. However, seniority is to be given weightage when merit and ability more or less are equal among the candidates who are to be promoted. 9. On the other hand, insofar as the principle of seniority-cum-merit is concerned it gives greater importance to seniority and promotion to a senior person cannot be denied unless the person concerned is found totally unfit on merit to discharge the duties of the higher post. The totality of the service of the employee has to be considered for promotion on the basis of seniority-cum-merit (see Jagathigowda, C.N. v. 5 (2009) 7 SCC 311 Cauvery Gramina Bank [(1996) 9 SCC 677: 1996 SCC (L&S) 1310: AIR 1996 SC 2733] ).” (emphasis added) 21. While rejecting the appellant’s seniority claim in the feeder cadre by virtue of her higher salary vis-à- vis the respondent no.3, the Division Bench, unfortunately, referred to the incorrect O.M. (dated 10.9.1985), overlooking the applicable O.M. (dated 12.12.1988) of the Ministry of Personnel. In this O.M., as noted earlier, it was clearly stated that the persons in the feeder cadre drawing higher scale will rank senior to those drawing lesser pay scale. Admittedly, the pay scale drawn by the appellant as an Accountant in the feeder cadre was higher than the respondent no.3 and therefore the benefit of O.M. (dated 12.12.1988) would surely accrue to the appellant, in the determination of her inter se seniority. However, the learned Division Bench by adverting to the incorrect O.M., wrongly rejected the contention that the higher pay scale can be the basis for claiming the seniority in the feeder cadre in the circumstances referred to in the O.M. dated 12.12.1988. 22. In the present case, the Cantonment Board in their deliberations made on 11.1.2012 not only considered the appellant to be senior to the respondent no.3 but also considered her to be more deserving for promotion as the best, suitable and fit candidate, for the responsible post. The respondent no.3 was penalized pursuant to the disciplinary proceeding for dereliction of duty and misconduct and he suffered the penalty of recovery of Rs.10,000/- from his salary. Seen in this context, the appellant was more deserving. That apart, the disciplinary action was not challenged by the respondent no.3. He cannot therefore set up a better claim for promotion, to a selection category post. 23. Insofar as the contention of the respondent no.3 that the issue of selection category post was not argued before the High Court, it is necessary to bear in mind that arguments based on the Rules were advanced by all the contesting parties before the High Court. Therefore, the status of the promotion post and the criterion for promotion specified in the Rules, must in our opinion, receive due consideration. 24. As far as the issue of higher pay scale being the basis for seniority in the feeder cadre, the same is clearly provided in the O.M. dated 12.12.1988. The issue received due consideration by the Cantonment Board and was answered in favour of the appellant. But this aspect was held against both the appellant and the Board, due to an inadvertent reference to the wrong Office Memorandum dated 10.09.1985 by the High Court. Having regard to the manner in which the issue was examined and decided by the Board, we deem it appropriate to endorse the Board’s declaration of seniority in favour of the appellant, based on the reasoning contained in the Board’s Resolution dated 25.3.2013. 25. This Court must also be mindful of the fact that the Cantonment Board applied the criterion of seniority-cum-merit and treated the post to be of the “selection category”. Moreover, the unblemished service record of the appellant vis-à-vis the pending disciplinary proceedings against the respondent no.3, (eventually resulting in penalty), were taken into account. All these circumstances in our opinion, weigh in favour of the appellant Rama Negi. Her Suitability for the selection post was attributable to two factors i.e. merit of the candidate and the inter-se seniority. Despite the difficulty in encapsulating the parameters for ‘merit’, a significant marker can be found in the unblemished record of the employee. A marred service record, though not an insurmountable bar, must carry some consequences, and it could be a comparative disadvantage in promotion for a selection post. The employer’s preference for a person with a clean service record can be well appreciated. 26. Moreover, the higher pay in the same grade as per the applicable O.M., is a reliable indicator for determining inter-se seniority. In this Court’s perception, the decision to prefer the appellant over the respondent no.3 for promotion is in tune with the applicable parameters. As such the contrary opinion by the High Court does not merit our approval. Accordingly, the Appeals stand allowed by setting aside the impugned judgment. The parties to bear their own cost. ……………………………………………………J. [K.M. JOSEPH] ……………………………………………………J. [HRISHIKESH ROY] NEW DELHI MARCH 2, 2022