JUDGMENT By the Court.—Heard Shri Umesh Narain Sharma, Senior Advocate assisted by Shri Suneet Kumar for the petitioner. Shri P.S. Baghel appears for the U.P. Financial Corporation. Shri Shashi Nandan, Senior Advocate assisted by Shri Y.D. Misra was heard for private respondents. 2. A short question, that arises for consideration in this case, is whether Board of Directors of the U.P. Financial Corporation in their meeting dated 25.3.2006, could have annulled the decision of the ‘Departmental Promotion Committee’ meeting dated 12.5.2004 regarding promotions of Deputy Senior Managers to the post of Senior Managers in the Corporation on the ground that the promotions were required to be made only from the combined seniority list of the Deputy Senior Managers in the Corporation. 3. Brief facts, giving rise to this writ petition, are that the petitioners were serving as Deputy Senior Managers (Law) in U.P. Financial Corporation, a body corporate under the State Financial Corporation Act, 1951 (in short the Act), or State within the meaning of Article 12 of the Constitution of India. The Board of Directors of the Corporation are empowered to define the terms and conditions of the appointments, promotions and service of the staffs under Section 48 of the Act. In exercise of these powers, the Corporation has framed Uttar Pradesh Financial Corporation (Staff) Regulations, 1961 (in short the Regulations). Regulation-7 provides for classification of permanent employee; Regulation 21 for seniority and Regulation 22 for promotion. Regulations 21 and 22 relevant for the purpose of this writ petition are quoted : “Regulation No. 21 : Seniority. (1) A gradewise gradation list of all the regular employees of the Corporation as a whole shall be maintained for determining the inter se seniority of an employee within the grade. (2) Seniority of persons appointed to a grade shall be determined in the class of posts to which they are appointed with reference to the date of the order of appointment in a substantive vacancy. (3) In the case of direct recruitment to the same grade recruited in a batch, their inter se seniority shall be in accordance with their position in the merit list approved by the Appointing Authority. (3) In the case of direct recruitment to the same grade recruited in a batch, their inter se seniority shall be in accordance with their position in the merit list approved by the Appointing Authority. (4) The inter se seniority of persons promoted from a lower grade shall be maintained in the higher grade as well except in case of a superseded employee who, if promoted in future, shall be placed below the employee promoted prior to his promotion. (5) Inter se seniority of the employee appointed in the same scale/grade by promotion and by direct recruitment shall be in accordance with the roster of appointment, the first post to be filled by promotion. Regulation No. 22 : Promotion. Promotion to all the classes of post shall be made by the Corporation notwithstanding employee’s seniority in a grade and no employee shall have a right for promotion to any particular post of higher grade. The promotions shall be made as per the procedure laid down in Appendix-II. Notwithstanding anything contained in these regulations to the contrary, the Managing Director may make temporary promotion of an employee to the post of any class on ad hoc for a period not exceeding six months or pending selection of a regular candidate by the Competent Authority, whichever is earlier but the seniority of the employee so promoted shall not be affected in his substantive grade.” 4. The petitioners No. 1 to 4 were appointed as Manager (Law) in the Corporation on 18.3.1980; 21.10.1983; 20.10.1983 and 20.3.1984 respectively. The Appendix-II of the Regulations provides for the hierarchy of the posts for promotion from Manager to Deputy Senior Manager and then Senior Manager, who are thereafter promoted as Chief Manager and Regional Manager, Chief Technical Manager/Chief Law Manager/Senior Regional Manager and the Secretary and thereafter as Deputy General Manager. The last step in the ladder is the post of General Manager. The post of Deputy Senior Manager is to be filled up 100% by departmental promotion. The petitioners were promoted as Deputy Manager (Law) on 29.6.1983, 18.12.1987, 18.12.1987 and 8.8.1991 respectively. 5. The post of Senior Manager (Law) is to be filled up by 100% promotion by Departmental Promotion Committee from amongst the Deputy Senior Manager (Finance/Technical/Law) on completing two years of confirmed service on the post. A Departmental Promotion Committee in its meeting dated 12.5.2004 promoted petitioners as Senior Managers. 5. The post of Senior Manager (Law) is to be filled up by 100% promotion by Departmental Promotion Committee from amongst the Deputy Senior Manager (Finance/Technical/Law) on completing two years of confirmed service on the post. A Departmental Promotion Committee in its meeting dated 12.5.2004 promoted petitioners as Senior Managers. A combined seniority list of the Senior Managers was circulated on 17.6.2005 inviting objections for the purposes of considering the promotions to the next promotional post of Chief Manager. It appears that some objections were received, on which the Board of Directors in its meeting dated 25.3.2006 reconsidered the matter of the representations of some of the officers and resolved as follows : “ITEM-VI RECONSIDERATION OF THE MATTER REGARDING THE REPRESENTATION MADE BY SOME OFFICERS OF THE CORPORATION AGAINST THE PROMOTIONS MADE BY THE DEPARTMENTAL PROMOTION COMMITTEE, MEETING HELD ON 12.5.2004 ON THE BASIS OF COMBINED SENIORITY LIST. The Board considered the note of General Manager dated 9.3.2006 on the above item. It was brought to the notice of the Board that the combined seniority list on the basis of which promotions were done on 12.5.2004 was made only on the previous date. This list has not been circulated; neither objections are invited and disposed off, which is against the principle of natural justice. This has jeopardized the interest of many senior officers of the Corporation. After detailed deliberations, the Board decided to annul the decision of the Departmental Promotion Committee meeting dated 12.5.2004 regarding promotion of Deputy Senior Managers to the post of Senior Managers on the ground that the combined seniority list of Deputy Senior Managers was not circulated to invite objections thereon in violation to the prescribed procedure.” 6. The decision of the Board was communicated by the impugned order dated April 3, 2006 annulling the decision of the Departmental Promotion Committee’s meeting dated 12.5.2004 promoting petitioners and 4 others out of which two namely Shri Suneet Kumar Gupta and Shri Diwakar Pandey were Deputy Senior Managers (Finance), at that time. 7. Shri U.N. Sharma, learned counsel for the petitioners contends that the seniority list was finalised and that the promotions by the Departmental Promotion Committee in its meeting dated 12.5.2004 were made in accordance with the Regulations and there were no objections taken by any person. 7. Shri U.N. Sharma, learned counsel for the petitioners contends that the seniority list was finalised and that the promotions by the Departmental Promotion Committee in its meeting dated 12.5.2004 were made in accordance with the Regulations and there were no objections taken by any person. He submits that the reversion orders were passed against the petitioners without giving them any opportunity of hearing, violating the principles of natural justice and are liable to be set aside. 8. Shri P.S. Baghel, on the other hand, has defended the order on the ground that the combined list of Deputy Senior Managers was prepared before considering the promotion of the petitioners to the post of Senior Manager. This list was not circulated amongst the staff. It is stated in paragraphs 16 and 17 of the counter affidavit of Shri R.K. Srivastava, Senior Manager (Law) U.P. Finance Corporation, that a separate seniority list for different grades of the Deputy Senior Manager (Technical), Deputy Senior Manager (Finance) and Deputy Senior Manager (Law) for promotion amongst the senior most officers of different branches in a particular grade was not considered by the Departmental Promotion Committee. A combined seniority list was considered. There were only four posts of Senior Manager (Law); 18 posts of Senior Manager (Finance) and 26 posts of Senior Manager (Technical). There was no vacant posts of Senior Manager (Law) as four Senior Manager (Law) were already working. Regulation 22 and Appendix-II makes it abundantly clear that there are separate classes of posts, such as Finance/Technical/Law, and all these classes are separate wings. The essential qualifications for all these three classes are different. The specialisation in their different disciplines is necessary, for example; for a Senior Manager (Finance), graduation in Economics or Commerce or MBA is the essential qualification; for Senior Manager (Law) the essential qualification is LLB and essential qualification for the post of Manager (Technical) is B.Tech or graduate in Engineering. 9. With regard to the judgment of this Court in Shree Prakash v. U.P. Financial Corporation, Civil Misc. Writ Petition No. 4626 of 2001, decided on 23.5.2001 and the withdrawal of SLP No. 10773 of 2001, UP Financial Corporation v. Shree Prakash by application dated 31.5.2004, it is contended that the judgment in question was confined only to Shree Prakash. It was a judgment in personem and was binding only on the parties to the judgment. Writ Petition No. 4626 of 2001, decided on 23.5.2001 and the withdrawal of SLP No. 10773 of 2001, UP Financial Corporation v. Shree Prakash by application dated 31.5.2004, it is contended that the judgment in question was confined only to Shree Prakash. It was a judgment in personem and was binding only on the parties to the judgment. The SLP was withdrawn as Shree Prakash was given promotion to the post of Senior Manager (Law) in normal course, and not on the basis of combined seniority and thus the petitioners could not be given similar benefit. 10. It is stated by Shri Baghel that under the Regulations provide for a combined seniority list to be prepared, circulated and finalised before promotions could be made. The post of Senior Manager of different wings could be filled only from the combined seniority list under the U.P. Financial Corporation (Staff) Regulations 1993, by a process of selection on the basis of merit-cum-seniority of the eligible candidates by selection committee. The promotion of selection for the post of Chief Manager is different than the process of promotion for the post of Deputy Senior Manager. 11. In the supplementary counter affidavit filed on 23.4.2007, Shri B.K. Chaturvedi, Deputy Senior Manager (Law) has stated, on behalf of the Corporation that the resolution dated 25.3.2006 of the Board of Directors cancelling the promotions to the post of Senior Manager was taken after considering the entire matter including the representations of the aggrieved employees. The Board concluded that these promotions will jeopardize the interest of many senior officers of the Corporation. It was also observed that a combined seniority list was not circulated and that the Board’s note dated 9.3.2006 is already on record. 12. In the supplementary counter affidavit-II Shri Rajeev Sharma, Deputy Senior Manager (Law) of the Corporation has stated in paragraph-7 that at the time of petitioners’ earlier promotion from the post of Manager (Law) to the post of Deputy Senior Manager (Law), the petitioners superseded as many as 91 Managers. At that point of time they claimed promotions on the basis of cadre-wise seniority in their respective cadre. In the present case they have taken a different stand and are claiming promotion on the basis of combined seniority list and thus the staff which remained in their original cadre creating a new class of Senior Manager. At that point of time they claimed promotions on the basis of cadre-wise seniority in their respective cadre. In the present case they have taken a different stand and are claiming promotion on the basis of combined seniority list and thus the staff which remained in their original cadre creating a new class of Senior Manager. The petitioner No. 1 was promoted as Deputy Senior Manager (Law) on 29.6.1983, superseding 32 Managers senior to him in different wings. On the date of joining on 18.3.1980 there were 57 Managers in different wings (Technical/Finance) senior to him. The petitioner Nos. 2 and 3 were promoted as Deputy Senior Manager (Law) on 18.12.1987, ignoring the rights of the promotion of other wings. They superseded 47 Managers (Technical/Finance). If a combined list is considered as a whole, they were promoted against the available vacancies of Law wing at that time and thus 47 Managers (Technical and Finance) were left out. Similarly petitioner No. 4 joined the Corporation on 20.3.1984 on the post of Manager (Law). At that time 91 Managers of different wings were senior to him. He was promoted as Deputy Senior Manager (Law) on 8.8.1991 depriving the rights of 19 Manager (Technical, Finance & Legal). If a combined list was considered for promotion and that again all the petitioners were promoted on the post of Senior Manager by the Departmental Promotion Committee on 12.5.2004 without taking into account the vacant posts of different wings on the basis of combined list, the Deputy Senior Managers, senior to the petitioners were left out of the promotion. There was no reason or justification given by the Departmental Promotion Committee in its meeting dated 12.5.2004 to leave out the Deputy Senior Managers for promotion to the post. 13. It is then contended in paragraph-18 of the supplementary counter affidavit-II that Shri S.K. Singh-petitioner No. 1 was promoted to the post of Senior Manager (Law) on 13.12.2007, as per promotion policy. The petitioners were given benefit by the Departmental Promotion Committee, in view of the observations made in the judgment of Shri Shree Prakash (supra) on the basis of combined seniority list. The petitioners were given benefit by the Departmental Promotion Committee, in view of the observations made in the judgment of Shri Shree Prakash (supra) on the basis of combined seniority list. If the principle of combined seniority of a cadre/class and a grade is adopted on the post of Manager (Law) the other officers in the cadre of technical and finance will suffer, causing injustice and violation of principles of natural justice as all these officers belong to same organization, accelerated promotions on the basis of vacancies fallen to a particular wing (law wing) at relevant period and also again on the strength of combined seniority will be a gross violation of natural justice and settled law. 14. In Shree Prakash (supra) a Division Bench of this Court held that a law officer is promoted to the law cadre and not to the other cadres. The petitioner (Shree Prakash), Deputy Senior Manager (Law) was entitled to be promoted only to the post of Senior Manager (Law) and not to other posts like Senior Manager (Technical) and Senior Manager (Finance). Their seniority is to be counted separately. A law officer is not entitled to get promotion in technical and finance wings. It was found that at that time when the judgment was delivered i.e. 23.5.2001, there was no vacancy in the cadre of Senior Manager (Law) and thus in the opinion of the Court, since promotions must be provided in view of Council of Scientific and Industrial Research v. K.G.S. Bhut, 1989 (4) SCC 635 and Dr. (Mrs.) O.Z. Hussain v. Union of India, 1990 (Supp) SCC 688, in order to allow petitioners to have promotional avenues, a direction was issued to consider the petitioners for promotion on the post of Senior Manager (Law). The Court had observed that Regulation 21 dealing with the seniority does not provide for any separate seniority list and the seniority is to be determined as a whole. 15. The proceedings of the Departmental Promotion Committee, held on 12.5.2004, would show that the Departmental Promotion Committee considered the Regulation-7 of the Staff Regulations which provides that all the officers are to be treated in one cadre, which is Class-A, and that the procedure relating to recruitment and promotion on different posts on different categories shall be laid down in Appendix-II. Regulation 21 does not provide for any separate seniority list. Regulation 21 does not provide for any separate seniority list. The Corporation decided to follow the judgment of the High Court and relied upon the combined seniority list. It found that all 11 posts of Senior Manager were lying vacant. Out of these 4 were reserved for scheduled caste and 7 were unreserved. It was found that from amongst the Deputy Senior Managers, who have completed two years confirmed service on the post, one year confirmed service in SC/ST by a process of selection and judging the fitness from the service records the 11 persons including the petitioners were found fit to be promoted. 16. The petitioners in their own discipline (law), had superseded many seniors on the promotions as Deputy Senior Manager (Law). The question, whether they should be considered for promotion to the next higher post of Senior Manager would depend upon the interpretation of Staff Regulations. If the judgment of Shree Prakash is to be taken into consideration the petitioners have to search for vacancies which may fall in their own category. The Rules however do not provide for such a situation. Regulation-21 providing for seniority provides in sub-regulation (i) that a grade-wise gradation of all regular employees of the Corporation as a whole shall be maintained for determining inter-se seniority of an employee within the grade. Sub-regulation (ii) provides that seniority of persons appointed to a grade shall be determined in the class of posts to which they are appointed with reference to the date of the order of appointment in substantive vacancy. The promotions under Regulation-22 to all the classes of posts shall be made by the Corporation, notwithstanding employees seniority in a grade, and no employee shall have a right for promotion to any particular post of higher grade. The procedure of promotion is provided in Appendix-II. Regulation-7 provides for classification of permanent employees. These are to be classified in broad categories of officers in Class-A; Assistant in Class-B and subordinate staff in Class-C. The procedure for their recruitment and promotion is laid down in Appendix ‘II’. The Appendix II provides for separate post in separate categories namely law, technical and finance. Regulation-7 provides for classification of permanent employees. These are to be classified in broad categories of officers in Class-A; Assistant in Class-B and subordinate staff in Class-C. The procedure for their recruitment and promotion is laid down in Appendix ‘II’. The Appendix II provides for separate post in separate categories namely law, technical and finance. A Deputy Senior Manager (Finance/Technical/Law) in item No. 6 appointed by 100% departmental promotion from amongst Managers (Finance/Technical/Law) having completed two years of confirmed service is treated in one grade as compared to item-7, 8 and 9 where the Managers of different disciplines are treated in different grades. The criteria of promotion to the post of Senior Manager (Finance/Technical/Law) is, ‘seniority subject to rejection of unfit,’ to be considered by a selection committee as may be constituted by the Managing Director. 17. A combined reading of Regulation 7 (1) and (3) and Regulation 21 providing for seniority, and Regulation 22 providing for promotion would show that where as Manager (Technical) in item-7 of Appendix-II; Manager (Finance) in item-8 and Manager (Law) in item-9 are treated in different categories of the grade, the post of Deputy Senior Manager (Finance/Technical/Law) is treated in one grade, and similarly the post of Senior Manager (Finance/Technical/Law) is also treated in one grade. The promotions therefore to the post of Deputy Senior Manager and Senior Manager have to be made by drawing a combined seniority list and that they are not to be promoted in their own grade. The ‘Grade’ is defined in the Law Lexicon by P. Ramanatha Aiyar: Second Edition Reprint-2007 as, ‘rank positive in scale, a class, or position in a class according to the value. The classification of the employees in Regulation-7 is in category and not in grade. Regulation 21 (1) provides for a grade-wise, gradation list of all the regular employee of the Corporation and sub-regulation (2) provides that seniority of person appointed to a grade shall be determined in a class of post to which they are appointed. Regulation 22 provides that promotion to all classes of posts shall be made by the Corporation, notwithstanding employees seniority in a grade and no employee shall have a right of promotion to any particular post of higher grade. The Appendix-II provides that the employees in Category ‘A’ officers are to be appointed on different posts. Regulation 22 provides that promotion to all classes of posts shall be made by the Corporation, notwithstanding employees seniority in a grade and no employee shall have a right of promotion to any particular post of higher grade. The Appendix-II provides that the employees in Category ‘A’ officers are to be appointed on different posts. The qualifications of each post and the mode of appointment is provided in column-4 and 3 respectively. The Assistant Manager in his own discipline may be appointed as Manager in his own discipline in accordance with his qualification/experience. The promotions to the post of Deputy Senior Manager, Senior Manager and Chief Manager is provided in column-3 from amongst the Managers of all three disciplines by clubbing them having completed two years of service on the post. The regulations do not provide for number of posts in the category of Deputy Senior Manager and Senior Manager for different disciplines. 18. What follows from the aforesaid discussions of the provisions of the Staff Regulations, is that whereas the recruitment to the post of Assistant Manager and Manager has to be made according to the qualification and experience in each discipline, promotion to the post of Deputy Senior Manager, Senior Manager and Chief Manager, by 100% departmental promotion is to be made from the feeding cadres by providing a combined seniority list of all disciplines. There is no special qualification provided for the post of Deputy Senior Manager and Senior Manager. The qualification and experience however is to be provided for Chief Manager and Regional Manager. The Corporation as such did not commit any illegality in drawing a combined seniority list of Deputy Senior Managers, in all disciplines. 19. There is no such plea taken in the counter affidavit that there is any allocation for the post of Deputy Senior Manager or Senior Manager in each discipline and there is rota-quota rule applicable in the promotions. The petitioners therefore were rightly considered for promotion on the post of Senior Manager in combined seniority list of Senior Manager. 20. The objection of Shri U.N. Sharma, that the reversion orders after two years without affording any opportunity of hearing violated principles of natural justice. The petitioners however have not denied that the combined seniority list was neither circulated nor finalised. It was drawn a day prior to the promotions by the Departmental Promotion Committee on 12.5.2004. 20. The objection of Shri U.N. Sharma, that the reversion orders after two years without affording any opportunity of hearing violated principles of natural justice. The petitioners however have not denied that the combined seniority list was neither circulated nor finalised. It was drawn a day prior to the promotions by the Departmental Promotion Committee on 12.5.2004. The proceedings of the Selection Committee would show that the seniority list was drawn a day prior to the selections and was not circulated and finalised. 21. Where the principles of natural justice have been violated in respect of all the members on the seniority list, the rights of the persons, who are promoted on the basis of such illegally and arbitrarily drawn list, will have to give way to the rights of other employees. Further we find that allegations that there were no vacancy on the post of Senior Managers have not been specifically denied. 22. It has been brought to the notice of the Court that the petitioner No. 1 being the senior most has been given promotion in 2007. In the circumstances we find, that whereas the promotions to the posts had to be given by drawing a combined seniority list, since the combined seniority list was drawn only on the previous day of the promotion of the petitioners and was not circulated and finalised, and that there were no vacancies on the day, the promotion orders were not valid and violated the rights of other persons on the list, who may have had the chance of promotion. 23. The writ petition is dismissed. ————