S. A. SHAH, J. ( 1 ) THE petitioners who are at present holding the post of Permanent Inspector of Ways (hereinafter referred to as `the Inspector) in the Civil Engineering Department of Western Railways in the scale of Rs. 250-380 (A)/425-700 (R) have by this petition challenged the final seniority list of the cadre of Inspectors wherein their names are shown at serial nos. 185 and 186 respectively on various grounds and are claiming higher seniority on the basis of their earlier selection held in 1968. ( 2 ) THE relevant facts inter 6 are that the petitioners were initially appointed as Assistant Permanent Way Inspectors (hereinafter referred to as the Assistant Inspectors) in years 1960 and 1961 respectively. The next avenue for promotion is the post of Inspector. The post of Inspector is a selection post as shown in Appendix to the Indian Railway Establishment Manual and at the relevant time seniority was ma maintained on the Divisional basis. There were eight different divisions constituted in the Western Railways for administrative purposes and the seniority was regulated division-wise. Since the post of Inspector was a selection post the Selection Board of the Western Railways announced a selection test in June 1968 for the purpose of preparing a panel of selected candidates for promotions to the post of Inspectors in the scale of Rs. 250-380 (A ). the petitioners were Assistant Inspectors in the scale of Rs. 205 and they appeared at the above selection test. Thereafter by a memorandum dated 10-10-1968 result was announced and the petitioners were declared successful and therefore. their names were placed on the panel of Inspectors at serial nos. 6 and 7 respectively. The memorandum further mentioned that the selection had the approval of the competent authority. A copy of the said memorandum dated 10-10-1968 is produced at Annexure A to this petition and it clearly contains the aforesaid averments. The panel was made effective from 8-10-1968. In paragraph 6 of the petition the petitioners have averred that pursuant to the said empanelment they were promoted to officiate against non-fortuitous vacancies for various periods and are continuously officiating as Inspwectors from 12-1-1970 and 30-8-1970 respectively. There is no dispute raised by the respondents in respect of these averments of the petitioners. In paragraph 6 of the petition the petitioners have averred that pursuant to the said empanelment they were promoted to officiate against non-fortuitous vacancies for various periods and are continuously officiating as Inspwectors from 12-1-1970 and 30-8-1970 respectively. There is no dispute raised by the respondents in respect of these averments of the petitioners. ( 3 ) IT appears that the Rajkot Divisional office of the Western Railway declared that in termes of instructions contained in paragraph 2 (3) of the litter dated 25-7-1967 of the General Manager (E) C. C. G. the unoperated portion of the panel for promotion of the posts of Inspectors in the scale of Rs. 250-380 (A) declared under Rajkot Divisional Office Memorandum dated 10-10-1968 as in 19-6-1969 is treated as cancelled and the employees whose promotion orders have been issued on or after 19-6-1969 if any will be treated as fortuitous. With the said declaration there was a copy to the letter to the General Manager dated 25-7-1969 wherein it was stated that the promotions reversions and transfers to staff in the category to Inspectors in the scale at Rs. 250- 380 including the selections was being done at the Divisional Level. How ever as a result to the decision taken by the General Manager the above category to the staff will thereafter be controlled at the Headquarters Level and the selection to the eligible Assistant Inspectors in the scale to Rs. 205-280 (A) to the post to Inspectors in the scale to Rs. 250-380 (A) their transfers and promotions on whole railway basis etc. will be arranged at the Headquarters level and with a view to implementing the above decision instructions contained in the said letter were issued for information and guidance. I will refer to the said instructions at an appropriate stage. ( 4 ) AFTER the said declaration dated 111/14-8-1969 to the Rajkot Divisional Office which is produced at Annexure I to the affidavit-in-reply filed by Shri A. D. Pant Senior Personal Officer (Engineering) Western Railway Bombay on behalf to the respondent-Western Railway a combined seniority list of Assistant Inspectors was published. Since the employees to all the divisions to Western Railway were integrated it was decided to publish seniority lists to both the cadres. Since the employees to all the divisions to Western Railway were integrated it was decided to publish seniority lists to both the cadres. ( 5 ) IT is alleged in paragraph 8 to the petition that by a letter dated 9 a combined seniority list to Assistant Inspectors for all the Divisions was notified and the petitioners names were not shown therein since the petitioners were promoted. The said letter dated 9-10-1970 is produced at Annexure B to the petition and therein in the last paragraph it is stated:". . . . The namas to those APWIs who have already been promoted to the scale to Rs. 250-380 (A) after due selection by the Divisions have not been included in this list". Therefore another combined seniority list to Assistant Inspectors was notified by the Divisional Office vide its letter dated 9-8-1971 land the said list also did not contain the names to the petitioners in view to the fact that the petitioners were by then already promoted to the posts to Inspectors. This fact has not been denied in the affidavit-in-reply filed by respondent-railway but only arguments have been made showing the reasons". ( 6 ) IN paragraph 9 to the petition the petitioners have further alleged that on 8-10-1974 respondent no. 2 circulated a provisional combined seniority list to Inspectors wherein the names to the petitioners were shown at serial nos. 185 and 186 respectively and many other persons who were far juniors to the petitioners by virtue to the fact that because the petitioners were selected in the selection held in 1968 and those persons were selected in the selections held in 1969 as well as 1973 were shown senior to the petitioners in direct violation to rules 306 and 314 to the Indian Railway Establishment Manual which provide for the principle for fixation to seniority. The petitioners have therefore raised objection against the provisional seniority list. but no change was made in the that final seniority list and therefore they have filed this petition to quash and set aside the said final seniority list dated 13-1-1977 as mentioned in. paragraph 19 to the petition. wherein the names to the petitioners have been shown respectively at serial nos. 185 and 186. ( 7 ) MR. but no change was made in the that final seniority list and therefore they have filed this petition to quash and set aside the said final seniority list dated 13-1-1977 as mentioned in. paragraph 19 to the petition. wherein the names to the petitioners have been shown respectively at serial nos. 185 and 186. ( 7 ) MR. P. M. Thakker learned Advocate fir the petitioners has challenged the final seniority list dated 13-1-1977 in the following grounds: (1) The final seniority list has been prepared in contravention of rule 306 read with rules 309 and 314 of the Indian Railway Establishment Manual which are statutory rules. (2) The petitioners were selected fir the panel in 1968 and were actually promoted from time to time and are holding higher post since 1970 till this date and by no stretch of imagination said promotion can be said to be fortuitous. In any view to the matter the petitioners cannot be denied the benefit of their continuous officiation. (3) By not including the names to the petitioners in the cadre to Inspectors for a number to years and treating them as Inspectors the respondent-railway is now stopped from treating the petitioners as Assistant Inspectors. (4) The petitioners were not heard before their panels were cancelled by the concerned authority the cancellation is therefore arbitrary and violates the principles to natural justice. ( 8 ) ALONGWITH the aforesaid affidavit-in-reply filed by Shri A. D. Pant declaration dated 11/14-8-1969 to the Rajkot Divisional Office has been produced. The extract to the letter dt. 25-7-1969 to the General Manager quoted in the said declaration shows that the powers to promotions reversions and transfers to the Inspectors which were controlled at the Divisional level will thereafter be controlled at the Headquarters level and selection to eligible Assistant Inspectors for the posts to Inspectors will be arranged at the Headquarters level on the whole Railway basis. The declaration does not mention that the previous selection or promotion or panels are cancelled. However with a view to implement the aforesaid declaration instructions are issued for information and guidance. The declaration does not mention that the previous selection or promotion or panels are cancelled. However with a view to implement the aforesaid declaration instructions are issued for information and guidance. Instructions (2) and (3) being relevant for our purposes read as under:" (2) Where the selections have already been arranged at the Divisional level and not Approved by the competent authority before 19-6-1969 the date on which General Manager has approved of the revised procedure the selections will be treated as cancelled". It is now not disputed that the selection to the petitioners was made prior to 19-6-1969 and the same was also approved by the competent authority. Therefore this instruction no. 2 will have no application to the facts to the instant case and their selection cannot be said to have been cancelled. " (3) In the cases to selections where the panels formed by the Divisional Officers pave been approved before 19-6-1969 and a part to a panel has been operated such panels will be honoured to the extent operated and the unoperated portion as on 19 will be treated as cancelled". It is not disputed that petitioner no. 1 was promoted on 18-10-1968 and remained there till 2-12-1968 and again he was promoted on 9-12-1968 and remained on promotional post till 23-1-1969. Again he was promoted on 28 and remained on the promotional post till 13-3-1969 and thereafter he remained on promotional post from 23-6-1969 to 6-8-1969. ( 9 ) SO far as petitioner no. 2 is concerned he was also officiating as Inspector from 3-5-1969 to 26-6-1969. Thereafter. both the petitioners were again promoted in year 1970. and are holding the promotional post till today. It cannot therefore be said that the panel was not operated so far as the petitioners are concerned prior to 19-6-1969. Both the petitioners were promoted prior to that date to the post to Inspectors. ( 10 ) INSTRUCTION no. (4) which is also pressed into service reads:" (4) The combined seniority of A. P. W. Is. scale Rs. 205-280 (A) will hereafter be maintained at the Headquarter level which will be formed on the basis to length to service in the grade to its. 205-280 (A) While forming the combined seniority list to all Divisions the following principles will be observed". scale Rs. 205-280 (A) will hereafter be maintained at the Headquarter level which will be formed on the basis to length to service in the grade to its. 205-280 (A) While forming the combined seniority list to all Divisions the following principles will be observed". The principles which are mentioned thereafter in regard to maintaining the seniority at the Headquarter level are prejudicial to the interest to the petitioners and being contrary to the provisions to statutory rules are subjected to challenge. ( 11 ) SHRI R. P. Bhatt learned Advocate for respondent no. 1 Western Railway does not dispute that rules 306 and 314 to the Indian Railway Establishment Manual are statutory rules. It is also not disputed that the petitioners were selected and promoted as Inspectors and their selection was approved by the competent authority i. e. the Divisional Superintendent. Mr. Bhatt however submits that the respondent-railway has power to integrate the services and seniority transfers and promotions; so far as both the cadres were concerned which were at the Divisional level were integrated and changed to Circle level i. e. entire Western Railway and the Headquarter had become the competent authority for promotions transfers selections etc. Mr. Thakker does not want to enter into this controversy. His submission is that assuming that the General Manager has power to integrate the services to the staff from Divisional Level to Circle Level even then the General Manager is bound by the statutory provisions to the rules so far as selection and seniority to the petitioners are concerned. ( 12 ) MR. R. P. Bhatt has contended that though the selection to the petitioners made before 19-6-1969 has not been treated as cancelled under the provisions to aforesaid instruction no. (3) if the same is not operated on or prior to 16-6-1969 part to that panel will be treated as cancelled. It is not disputed that the petitioners were promoted prior to that date and they were promoted only in accordance with their seniority on the panel. However Mr. Bhatt has contended that these promotions were fortuitous promotions and not promotions on regular basis and therefore it cannot be said that the panels were operated so far as the petitioners were concerned. ( 13 ) IN my opinion the argument to Mr. Bhatt is totally misconceived. First to all instruction no. However Mr. Bhatt has contended that these promotions were fortuitous promotions and not promotions on regular basis and therefore it cannot be said that the panels were operated so far as the petitioners were concerned. ( 13 ) IN my opinion the argument to Mr. Bhatt is totally misconceived. First to all instruction no. (3) does not make any difference between the pro motion on the basis to the panel for fortuitous vacancy or regular vacancy. Those words are nowhere found in any to the said instructions. This question may be viewed from another angle also. Suppose the petitioners are promoted on regular vacancy then the question to cancelling the panel will not arise because they are not in the panel at all. ( 14 ) MR. Bhatt has invited my attention to instruction no. (4) and the principles to seniority required to be observed. The principles to be observed are as under:"if an APWI scale Rs. 205-280 (A) who had been placed on the panel for the post to PWI scale Rs. 250-380 (A) by one Division and has officiated on the basis to his panel position on that division but happens to be junior to another APWI of another Division who has nit been placed in the panel because of a selection nit being held or because he was too junior in that Division to be called fir such a selection then the APWI who has been placed in the panel and had officated as PWI scale Rs. 250-380 (A) will not be required to appear fir the selection fir the post of PWI scale 250-380 (A) which will be arranged by this office. He will be given protection in the panel. This promotion as PWI scale Rs. 250-380 (A) will however be treated as fortuitous till such time his seniors are called fir the selection to the said category. His name will however be interpolated in the panel to be framed by the office in the basis to his seniority position as APWI in all railway basis". These principles of seniority framed by the General Manager of respondent- railway may be laudable but they are in direct conflict with statutory rules 306 and 314 to the Indian Railway Establishment Manual. These principles of seniority framed by the General Manager of respondent- railway may be laudable but they are in direct conflict with statutory rules 306 and 314 to the Indian Railway Establishment Manual. Rule 306 reads:"306 Candidates selected fir appointment at an earlier selection shall be senior to those selected later irrespective of the dates of posting"it is nit disputed that the petitioners were selected at an earlier selection then the persons who are selected during 1969-1973. Therefore there is substantial change in respect of the seniority made by the General Manager. Instruction no. (2) of the said instructions in terms dies nit state that the selection made before 119-6-1969 is cancelled. Instruction no. (3) cancels the unoperated panel without cancelling the selection. Therefore it creates contradiction. Principle of seniority under rule 306 is based upon selection and earlier selected candidates are treated as senior of the latter selected candidates even though they had officiated earlier. This is made clear by rule 314 of the said Manual. It reads:"314 Seniority in a selection post: The seniority of two or mire officiating Railway servant selected at different selections fir a particular selection post should be fixed with reference to the date of selection that is of say Railway servants borne on an earlier panel shall be senior to those selected later even though the latter may be continuously officiating in the selection posts as a local arrangement from a date prior to the date of promotion of the firmer or the latter may be substantively senior to the former". This rule 314 reiterates that a person selected earlier will remain senior to the person not only promoted in an officiating basis but even if the latter is substantively senior to the former. This principle has been adopted in several statutory rules viz. date to passing examination or date to selection is considered as criteria for fixation to seniority. This criteria which has been prescribed by the statutory rule has been given a total go bye by the General Manager. ( 15 ) MR. Bhatt explain this position by stating that the General Manager has the power to cancel the selection made by the lower authority and he having cancelled the same the petitioners cannot claim any right to seniority on the basis to their cancelled selection. I am unable accept this contention to Mr. Bhatt. ( 15 ) MR. Bhatt explain this position by stating that the General Manager has the power to cancel the selection made by the lower authority and he having cancelled the same the petitioners cannot claim any right to seniority on the basis to their cancelled selection. I am unable accept this contention to Mr. Bhatt. First to all selections are not cancelled by the General Manager in clear terms. On the contrary Instruction no. (9) to the said Instractions states that the selections which are approved prior to 19-6-1969 are not subject to cancellation. Now if the petitioners were promoted substanlively on a higher cadre then the question to cancellation to the unoperated portion to the panel does not arise. However Instruction no. (3) clearly provides that if the panel is operated on 19-6-1969 such panel will be retained and the unoperated panel will be cancelled. Therefore it necessarily means that those persons whose names are in the panel and who have not been promoted at all only their names will be treated as cancelled from the panel. Mr. Thakker argues that if the selections are not cancelled and the rest to the panel which is not operated is cancelled it would only mean that the petitioners will not be entitled to seniority on the basis to panel position. This would amount to violation to rules 306 and 314 to the Indian Railway Establishment Manual. He therefore submitted that the Instructions (3) and (4) are ultra vires the powers to General Manager being contrary to the statutory rules. In my opinion provisions to rules 306 and 314 are mandatory and the General Manager has no power to change the principle of seniority which is contrary to the provisions to the said Rules. Generally where services are integrated rule to continuous officiation is considered to be relevant for the cadre. But the persons who are selected and or promoted cannot be denied their statutory rights and therefore their seniority should be fixed either in the promotional cadre or they should be treated as senior to the persons who are not selected. If the combined effect to the instructions issued by the General Manager is that even if the petitioners are treated as selected in year 1968 their seniority will be kept in suspense till each and every senior in other Divisions is called for selection and if they are selected. If the combined effect to the instructions issued by the General Manager is that even if the petitioners are treated as selected in year 1968 their seniority will be kept in suspense till each and every senior in other Divisions is called for selection and if they are selected. their seniority will be fixed on the basis to the date to their. promotion or selection in the lower cadre to Assistant Inspectors. The petitioners will also not get chance to further promotion till their seniority is decided. Im fact till 1974 their seniority remained under suspension. ( 16 ) MR. Bhatt relies upon the decision of the Supreme Court in Sham Sunder v. Union to India AIR 1969 Supreme Court 212. In that case the facts were that the General Manager Northern Railway called 52 enquiry-cum- reservation clerks to appear in the tests for selection to the posts to reservation supervisors in the grade to Rs. 250-380. The petitioner in that case who ranked 113 in order to seniority was allowed to appear in the tests. As a result of the oral and written tests a panel to 38 persons was drawn up and was published in the Railway Gazette. The said petitioner was one to the selected candidates and his name was shown at No. 33 in the panel. A note at the foot to the panel intimated to the staff concerned that the mere fact that their names are on the panel will not confer upon them any right for permanent absorption as a reservation supervisor (emphasis supplied ). On the assumption that 38 persons must be on the panel the General Manager called 157 persons i. e. 4 times the number to candidates to be included in the panel the basis to immediate vacancies and anticipated vacancies due to retirement and upgradation to posts. The Railway Board received several complaints and representations regarding the constitution to the panel and by an order dated 16-9-1965 the Railway Board decided that the panel to 38 persons was irregularly drawn tip and that there should be a panel to 24 persons only for promotion to the higher grade on the calculation to anticipated vacancies in accordance with the Rules. On that conclusion the Railway Board restricted the panel to 24 persons and decided that only 96 persons should be allowed to appear in the examination. On that conclusion the Railway Board restricted the panel to 24 persons and decided that only 96 persons should be allowed to appear in the examination. The panel should therefore be operated only in respect to 94 persons and the names to the remaining 14 persons should he deleted forthwith. The petitioner in that case who was in the panel at serial No. 33 and whose name was deleted challenged the action to the Railway Board. The Counsel for the petitioner in that case contended that the Railway Board or the General Manager had no power to amend the panel published in August 1965 The said contention was rejected by the Supreme Court on the ground that such a contention was raised at the hearing to the petition only. The Solicitor General pointed out to the Court the letter dated 4-8-1953 to the Railway Board wherein on the subject of cancellation or amendment to approved panels the Railway Board directed that the panels once approved should not be cancelled or amended without reference to the authority next above the one that approved the panel. It was nit disputed that the Railway Board had power to issue the said general direction under rule 157 to the Railway Establishment Code. In that case the General Manager was the authority approving the panel and the Railway Board was the authority next above him. Therefor it was found by the Supreme Court that the cancellation was in accordance with the Rules. ( 17 ) RELYING upon the aforesaid decision of the Supreme Court Mr. Bhatt has argued that in the instant case the panel was approved by the Divisional Superintendent and the said panel has been cancelled by the General Manager who is the authority higher then the Divisional Superintendent and therefor. he had the power to cancel the same. Mr. Thakker for the petitioners dies not dispute the power to the General Manager to cancel the panel. But his contention is that though the General Manager has power he cannot exercise the same arbitrarily and unless he finds as it was found by the Railway Board in the case before the Supreme Court that there was material irregularity in selection or that the proper procedure was nit fallowed as contemplated by the Rules. I think there is considerable force in the argument of Mr. Thakker. I think there is considerable force in the argument of Mr. Thakker. ( 18 ) THE aforesaid decision of the Supreme Court is in respect of laying down the powers of the higher authority of cancel the panel if it is found to be irregular or illegal. Since Mr. Thakker is not challenging the powers of the General Manager the said decision will nit help Mr. Bhatt. As stated earlier I am nit concerned with the cancellation of the panel but with the rule of seniority. It is nit disputed that the petitioners were selected according to the rules. Once that position is conceded and if the selection is nit cancelled rule of seniority viz. rules 306 and 314 of the Indian Railway Establishment Manual must operate. Secondly even if the rule Instruction no. (3) of the General Manager is treated as cancelling the unoperated panel then the said cancellation will be illegal in the ground that the power to cancel according to Mr. Thakker. cannot he exercised unless there is illegality or irregularity and before exercising such power the General Manager was bound to hear the petitioners. The order is therefor clearly in violation of the principles of natural justice. ( 19 ) MR. Bhatt then submitted that the inclusion of the names of the petitioners in the selection panel does not create any vested interest in the petitioners and therefor. it is an administrative act and can be cancelled at any time by exercising the powers as aforesaid. In such a case principles of natural justice will not arise. Mr. Thakker has invited my attention to the decision of this Court in R. P. Jani v. Union of India 24 Gujarat Law Reporter 85 which is also a Railway case. Therein the name of the petitioner was deleted from the selection list. It was observed therein:". . . . . . It is true that merely because a persons name is placed in the selection panel he does not automatically get a vested right to promotion to the higher post. Therein the name of the petitioner was deleted from the selection list. It was observed therein:". . . . . . It is true that merely because a persons name is placed in the selection panel he does not automatically get a vested right to promotion to the higher post. Being empanelled for promotion confers upon the person concerned limited right to being considered for promotion which is another way to saying that person who is put on the panel framed for promotion to a higher post is at the given moment considered eligible for promotion (vide: N. M. Siddiqui v. Union to India 1978 S. L. R. 279 (S. C.) The fact remains that the petitioner having passed the written test and viva voce test was placed on the selection panel for being regularly appointed to Class III service and he was placed at serial no. 20. He therefore got the limited right to being considered for regular promotion to Class III service on the basis to this empanelment. In fact he was already promoted since years on ad hoc basis as Class III servant and after empanelment not only he continued as such but his juniors also were promoted later on as their names appeared below the petitioners name in the selection panel. Under these circumstances if the name to the petitioner was to be deleted from the selection in fairness to him a hearing ought to have been given to the petitioner or at least all opportunity to point out his version to the matter should have been afforded to the petitioner. . . . . . . Consequently the impugned order must be held to be ultra vires and entirely contrary to the elementary principles to natural justice and fair play". In the instant case it is no doubt true that by cancellation to the panel the petitioners have suffered legal injury. . . . . . . Consequently the impugned order must be held to be ultra vires and entirely contrary to the elementary principles to natural justice and fair play". In the instant case it is no doubt true that by cancellation to the panel the petitioners have suffered legal injury. In any case the order is prejudicial to the petitioners and before such panel is cancelled if they had been given an opportunity to being heard they could have pointed out that so far as they were concerned the panel was operated or they could have also pointed out that their selection having been upheld and not cancelled by virtue to rule 306 lead with rule 314 to the Indian Railway Establishment Manual their seniority cannot be changed by unilateral cancellation to the rest to the panel. The respondent-railway has patently committed breach to principles to natural justice and therefore the impugned order so far as the petitioners are concerned. is void and the seniority list based upon such order so far as the petitioners are concerned requires to be quashed and set aside. ( 20 ) THE petition is therefore allowed. The impugned seniority list so far as the names to the petitioners are concerned is quashed and set aside and the respondent-Railway is directed to redetermine their seniority in accordance with rule 306 read with rule 314 to the Indian Railway Establishment Manual on the basis to their selection and inclusion to their names in the panel in the cadre to Permanent Way Inspectors in year 1968 and to grant all consequential benefits arising on refixation of their seniority. The respondent-Railway is directed to determine the same within two months from the date to the receipt to the writ to this Court. Rule is made absolute with costs. Petition allowed .