Non-statutory service rules and cadre merger upheld where higher-post selection used valid interview-and-appraisal criteria.

Recruitment and Promotion Rules not made under a statutory rule-making power do not acquire statutory force merely by being called rules; here they operated as non-statutory service guidelines read with the statutory regulations. On that basis, a settlement merging the hardware and software cadres and creating a common seniority list was valid because it did not conflict with any statutory instrument, and the promotions made under that arrangement were upheld. The 50:50 assessment of interview and annual confidential reports in higher managerial selection was also not arbitrary, since merit, suitability, personality and management capacity could lawfully be evaluated through that mix, particularly where the employee participated in the process without protest.

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Issues: (i) Whether the Recruitment and Promotion Rules were statutory in nature or merely administrative instructions; (ii) whether the merger of the hardware and software cadres and the consequential common seniority list were valid and whether the promotions of respondent nos. 2 to 4 were vitiated; (iii) whether the selection procedure allocating equal weight to interview and annual confidential reports was arbitrary.

Issue (i): Whether the Recruitment and Promotion Rules were statutory in nature or merely administrative instructions.

Analysis: The applicable service regime was traced to the Air Corporations Act, 1953 and the regulations framed thereunder. The Corporation could make regulations subject to the Act and the rules made by the Central Government, but no rule-making power was vested in the Corporation itself. The Recruitment and Promotion Rules were not framed under a statutory rule-making power and were not notified as statutory rules. They operated as internal service guidelines and had to be read with the service regulations, which alone had statutory character.

Conclusion: The Recruitment and Promotion Rules were held to be non-statutory administrative guidelines and not statutory rules.

Issue (ii): Whether the merger of the hardware and software cadres and the consequential common seniority list were valid and whether the promotions of respondent nos. 2 to 4 were vitiated.

Analysis: The merger of cadres arose from a settlement between the Management and the Officers' Association and was not shown to offend any statutory instrument. Once the Recruitment and Promotion Rules were held non-statutory, the settlement could validly operate in the field of service administration. Promotion to the relevant post was governed by suitability-cum-seniority and selection on merit, not by seniority alone. The record showed that respondent no. 2 was senior in service and was considered under the merged cadre arrangement, while respondent nos. 3 and 4 were assessed by the Selection Board on comparative merit and performance appraisals. The Court also noted that the appellant had participated in the process and could not successfully challenge it after failure.

Conclusion: The merger of cadres and the promotions of respondent nos. 2 to 4 were upheld and found to be valid.

Issue (iii): Whether the selection procedure allocating equal weight to interview and annual confidential reports was arbitrary.

Analysis: The post involved upper managerial selection, where assessment of personality, professional ability and management capacity through interview, together with appraisal records, was permissible. The 50:50 method had already been upheld in earlier analogous selections for similar higher posts and was not arbitrary merely because it involved a substantial interview component. Participation in the process without protest also weakened the challenge to the method of selection.

Conclusion: The selection procedure was held not to be arbitrary.

Final Conclusion: The challenge to the merger of cadres, the common seniority arrangement, and the promotions made thereunder failed, and the appellant was not entitled to any relief.

Ratio Decidendi: Internal service rules not made under a statutory rule-making power do not acquire statutory force merely by being described as rules, and a non-statutory service arrangement or settlement governing promotion may validly operate where it does not conflict with any statutory provision; in higher selections, comparative merit and suitability may be assessed through a permissible mix of appraisal and interview.

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