No Vested Right to Promotion Under Superseded Rules, Supreme Court Tells Odisha Transport Officers
A Division Bench of Justices Dipankar Datta and Augustine George Masih sets aside High Court directions to convene a DPC under executive instructions displaced by the 2021 Rules.
The Supreme Court has allowed appeals filed by the State of Odisha against a Division Bench of the Orissa High Court that had directed the Transport Commissioner to convene a Departmental Promotion Committee (DPC) for promoting two Senior Assistants, Sreepati Ranjan Dash and Aditya Bhanjan Sahoo to the post of Assistant Regional Transport Officer (ARTO). Deciding Civil Appeal Nos. 13121 and 13122 of 2025 on 18 May 2026, the Court held that once the Odisha Transport Service (Method of Recruitment and Conditions of Service) Rules, 2021 came into force, the earlier executive instructions under which the respondents claimed promotion stood superseded, and no enforceable right to be considered under those instructions survived. The Court also found that the High Court had failed to engage with a binding precedent State of H.P. v. Raj Kumar, (2023) 3 SCC 773 that was squarely on point.
How the Dispute Reached the Supreme Court
The origins of the dispute lie in a 1981 executive instruction issued by the Commerce & Transport Department, Government of Odisha, which created four posts of ARTO and designated the Transport Commissioner as the competent appointing authority. Promotion to the post required a Grade I Assistant (Senior Assistant) with five years of service. The instruction was explicitly framed as a pro-tem arrangement, pending finalisation of cadre rules.
Dash and Sahoo were both appointed as Junior Assistants on 16 March 2013 and promoted to Senior Assistant on 10 June 2016. In April 2017, the Central Government advised abolition of all border check gates, which required adjustment of ARTO posts. By a resolution dated 17 October 2017, the Government of Odisha brought the ARTO cadre within the Odisha Transport Service, restructured the post from Group C to Group B, upgraded its pay from Level 9 to Level 10 of the Pay Matrix, and made the Government, not the Transport Commissioner, the appointing authority.
A further resolution dated 24 January 2019 redesignated Senior Assistants as Assistant Section Officers (ASOs) at Level 9 of the Pay Matrix. Dash and Sahoo were accordingly redesignated as ASOs on 16 February 2019. Neither challenged that redesignation.
In June 2021, Sahoo submitted a representation seeking promotion to ARTO. The Transport Commissioner recommended convening a DPC to fill 16 vacant ARTO posts, noting that Dash, Sahoo, and one other officer had completed five years as Senior Assistant and were eligible. The Government rejected the proposal on 26 July 2021, and again on 11 October 2021 and 10 December 2021, holding that the ARTO post was a selection and ex-cadre post, not part of the promotional hierarchy, and that the executive instructions were no longer applicable.
Dash and Sahoo separately filed writ petitions. A Single Judge of the High Court allowed both petitions in February 2023, quashing the rejection orders and directing the Transport Commissioner to convene a DPC within four weeks. The State appealed. On 7 November 2023, a Division Bench of the High Court dismissed the intra-court appeals and upheld the Single Judge. The State then approached the Supreme Court. On 22 April 2024, the Supreme Court issued notice and stayed the impugned orders. On 2 August 2024, the Court directed that any appointments made in the interregnum would be subject to the outcome of the appeals.
Meanwhile, on 5 January 2022, the Odisha Transport Service (Method of Recruitment and Conditions of Service) Rules, 2021 had come into force, providing for recruitment to the ARTO post through competitive examination conducted by the Odisha Public Service Commission. An advertisement for Group B posts in the Orissa Transport Service Cadre, including ARTO, was issued on 30 December 2022.
The High Court's Error on Precedent
The Supreme Court's analysis opened with what it called “a glaring fallacy discernible from the order impugned before us.” The State had cited Raj Kumar before the Division Bench. The Division Bench dismissed it in a single line, holding that the ratio of Raj Kumar was not applicable on the factual matrix discussed by the Single Judge. The Division Bench also declined to re-examine findings of fact, treating the appeal as one where interference was warranted only on perversity.
The Supreme Court found this approach legally untenable for two reasons. First, the Single Judge had not referred to any decision of this Court, including the settled line of authority on the point of law. Second, when a precedent is cited before a Division Bench for the first time, Raj Kumar had been delivered on 20 May 2022, before the Single Judge reserved judgment on 10 November 2022, but was not cited before the Single Judge, the Division Bench was obliged to examine its applicability rather than summarily reject it. The Court said that mere reference to a precedent in passing, without engaging with it in the analysis, is not sufficient compliance with the duty to assign reasons.
The Court was direct: “a bare perusal of the law laid down in Raj Kumar would have set the entire controversy at rest.”
What Raj Kumar Settled and Why It Applied Here
In Raj Kumar, a three-judge bench of the Supreme Court had overruled the four-decade-old proposition in Y.V. Rangaiah v. J. Sreenivasa Rao, (1983) 3 SCC 284, which had held that vacancies arising prior to amended rules must be filled under the old rules. The Court in Raj Kumar surveyed fifteen decisions that had distinguished Rangaiah and concluded that the wide principle it enunciated had been substantially watered down. It declared that a candidate has a right to be considered only in the light of the rules in force on the date consideration actually takes place, not the rules in force when the vacancies arose.
Raj Kumar also held that the Government is entitled to take a conscious policy decision not to fill vacancies arising prior to an amendment, and that no employee acquires a vested right to be considered under repealed rules on account of such a policy decision. The only requirement is that the policy decision be fair, reasonable, and consistent with Article 14 of the Constitution.
Applying this to the facts, the Supreme Court found that all the requirements set out in paragraph 82 of Raj Kumar were squarely covered. The Government had chosen not to fill ARTO posts by promotion, in view of cadre restructuring and the 2021 Rules. The proposition that vacancies must be filled under the rules existing when they arose had been expressly overruled. The Government's decision to fill vacancies under the 2021 Rules could not be faulted.
The Supersession Question and the Savings Clause
The Division Bench of the High Court had also addressed the preamble to the 2021 Rules, which stated that the Rules were made “in supersession of all rules framed, instructions or orders issued in this respect except as respect things done or omitted to be done before such supersession.” The Division Bench held that the action for convening the DPC would be saved by this clause.
The Supreme Court disagreed. It accepted that the 2021 Rules superseded the executive instructions. However, it held that the savings clause could only protect an act already done or completed under the executive instructions. In the present case, not only had appointments not been made, but the DPC had not even been constituted. There was no completed act for the savings clause to protect. The Transport Commissioner's letter requesting that a DPC be convened could not, the Court said, be construed as an act done under the executive instructions. The High Court had, in the Court's words, “missed the woods for the trees.”
The Court added that even apart from the supersession question, rules framed under the proviso to Article 309 of the Constitution prevail over executive instructions issued under Article 162, as settled in Union of India v. Somasundaram Viswanath, (1989) 1 SCC 175. Once the 2021 Rules were in force, the executive instructions could not survive in any event.
The ARTO Post Was a Selection Post, Not a Promotional Post
The Court also addressed the nature of the ARTO post. It held that the post was a selection post, not a promotional post. The distinction matters: where service rules confer an automatic right to promotion, an employee may have a right to be promoted; absent such a provision, the employee has at best a right to be considered, strictly in accordance with the rules in force. Relying on Sant Ram Sharma v. State of Rajasthan, AIR 1967 SC 1910, the Court reiterated that ranking in a gradation list does not confer any right to be promoted to a selection post.
The Government had chosen to fill ARTO posts through direct recruitment by competitive examination conducted by the OPSC. The manner of selection for a selection post is a matter of policy that vests entirely with the Government. Unless the changed policy is proved to be arbitrary, Dash and Sahoo could have no claim to the post. No such arbitrariness was demonstrated.
The Court also noted the general principle, drawn from Haryana SEB v. Gulshan Lal, (2009) 12 SCC 231, that an employee has no vested right to be promoted and no legitimate expectation of promotion. The limited right is to have candidature considered. Even that limited right, the Court held, must be exercised in accordance with the rules in force at the time of consideration — which, by the time the Government acted, were the 2021 Rules.
Outcome
The Supreme Court allowed both Civil Appeal Nos. 13121 and 13122 of 2025. The impugned judgment of the Division Bench of the Orissa High Court dated 7 November 2023, and the orders of the Single Judge dated 24 February 2023 and 28 February 2023, were set aside. All interim orders were vacated. The parties were directed to bear their own costs.