State of Odisha & Orsv.Sreepati Ranjan Dash & Anr

Legal Analysis: State of Odisha & Ors. v. Sreepati Ranjan Dash & Anr

Citation: 2026 INSC 505
Court: Supreme Court of India
Bench: A Division Bench comprising Justice Dipankar Datta (as the sole named author, but as an appeal under Article 136, it is a Division Bench)
Date of Decision: May 18, 2026
Nature of Case: Civil Appeal Nos. 13121-13122 of 2025 arising out of Special Leave Petition

Synopsis

The Supreme Court allowed appeals filed by the State of Odisha against the judgment of the Orissa High Court which had directed the State to convene a Departmental Promotion Committee (DPC) for promoting the respondents to the post of Assistant Regional Transport Officer (ARTO) under executive instructions of 1981. The High Court had held that the respondents had a right to be considered for promotion under the old executive instructions despite the subsequent enactment of the Odisha Transport Service Rules, 2021, which replaced the earlier regime and provided for direct recruitment through OPSC. The Supreme Court reversed, holding that: (i) the 2021 Rules, framed under Article 309 of the Constitution, supersede all earlier executive instructions; (ii) there is no vested right to promotion; an employee has only a right to be considered for promotion under the rules in force on the date of consideration; (iii) the decision in Y.V. Rangaiah (1983), which held that vacancies arising under old rules must be filled under old rules, has been overruled by a three-Judge Bench in State of H.P. v. Raj Kumar (2022); and (iv) the Government’s policy decision not to fill vacancies by promotion but to introduce direct recruitment is not arbitrary and cannot be interfered with.

1. Basic Information of the Judgment

• Case Title: State of Odisha & Ors. v. Sreepati Ranjan Dash (along with State of Odisha v. Aditya Bhanjan Sahoo)

• Citation: 2026 INSC 505

• Civil Appeal Nos.: 13121-13122 of 2025

• Bench: Division Bench (Justice Dipankar Datta) – the judgment is authored by a single judge but as an appeal under Article 136, it is a Division Bench

• Date of Decision: May 18, 2026

• Court: Supreme Court of India (Civil Appellate Jurisdiction)

• Impugned Order: Common judgment dated 07.11.2025 of the Division Bench of the Orissa High Court dismissing intra-court appeals (Writ Appeals) and upholding the Single Judge’s order directing convening of DPC.

2. Legal Framework

Major Laws and Provisions Involved

• Constitution of India, 1950 – Article 162 (executive power of State), Article 309 (proviso – power to make recruitment rules), Article 14 (non‑arbitrariness).

• Odisha Transport Service (Method of Recruitment and Conditions of Service) Rules, 2021 – Framed under proviso to Article 309; superseded all previous rules, instructions, and orders; provided for direct recruitment through OPSC to Group B posts including ARTO.

• Executive Instructions dated 17.11.1981 – Pro‑tem arrangement for recruitment to ARTO posts pending finalisation of cadre rules; Transport Commissioner was the competent authority.

• Resolution dated 17.10.2017 – Restructured the post of ARTO from Group C to Group B; upgraded pay from Level 9 to Level 10.

Key Precedents

• State of H.P. v. Raj Kumar (2022) 12 SCC 617 (three‑Judge Bench) – Overruled Y.V. Rangaiah v. J. Sreenivasa Rao (1983) 3 SCC 284; held that there is no rule of universal application that vacancies must be filled under the old rules; the right to be considered for promotion arises under the rules in force on the date of consideration; the Government can take a conscious policy decision not to fill up vacancies under old rules.

• Y.V. Rangaiah v. J. Sreenivasa Rao – Overruled; had held that vacancies arising prior to amendment of rules must be governed by old rules.

• Union of India v. Somasundaram Viswanath (1988) (cited) – Rules framed under Article 309 supersede executive instructions.

• Haryana SEB v. Gulshan Lal (2009) 12 SCC 251 – Employee has no vested right to promotion, only a right to be considered.

• Sant Ram Sharma v. State of Rajasthan (1967) 1 SCR 111 – For selection posts, seniority does not confer automatic right to promotion; merit is primary.

• Shankarshan Dash v. Union of India (1991) 3 SCC 47 – Policy decision not to fill vacancies must be bona fide and reasoned (distinguished).

3. Relevant Facts

• The respondents (Dash and Sahoo) were appointed as Junior Assistants in 2013, promoted to Senior Assistant in 2016, and redesignated as Assistant Section Officer (ASO) in 2019 under a restructuring resolution (Level 9 pay).

• Executive Instructions of 1981 governed promotion to the post of ARTO (Gazetted, later Group B) from Grade I Assistant (Senior Assistant) with 5 years’ service. Transport Commissioner was the appointing authority pending cadre rules.

• In 2017, the post of ARTO was restructured to Group B, Level 10. In 2021, the State framed the Odisha Transport Service Rules, 2021 under Article 309, which provided for direct recruitment to ARTO through OPSC, superseding all previous instructions.

• The respondents sought promotion to ARTO under the 1981 Instructions. Their representations were rejected by the Government on 11.10.2021 and 10.12.2021 on the ground that the post was not in their promotional hierarchy and that new rules would govern.

• The High Court (Single Judge) allowed the writ petitions, directing convening of DPC for the respondents and three others, holding that the Executive Instructions were still in force when the vacancies arose and that the 2021 Rules did not affect pending DPC proceedings. The Division Bench dismissed the State’s intra‑court appeals.

• The State appealed to the Supreme Court, which stayed the High Court’s order on 22.04.2024.

4. Issues Before the Supreme Court

• Issue No. 1: Whether the respondents had a vested right to be considered for promotion to the post of ARTO under the Executive Instructions of 1981, or whether their right to consideration was governed by the Odisha Transport Service Rules, 2021, which came into force before any DPC was convened or promotion was effected.

• Issue No. 2: Whether the High Court erred in directing the convening of a DPC under the superseded Executive Instructions, ignoring the law laid down in State of H.P. v. Raj Kumar that there is no rule of universal application that vacancies must be filled under old rules.

• Issue No. 3: Whether the Division Bench of the High Court was justified in summarily rejecting the applicability of Raj Kumar without proper reasoning.

• Issue No. 4: Whether the post of ARTO being a selection post (not a promotional post) and the Government’s decision to switch to direct recruitment was arbitrary or contrary to law.

5. Ratio Decidendi

A. The right to be considered for promotion arises on the date of consideration, not when vacancies arise.
The Court, relying on Raj Kumar, held that the proposition in Y.V. Rangaiah – that vacancies occurring prior to amended rules must be governed by old rules – is overruled. An employee has no vested right to promotion; he has only a right to be considered for promotion under the rules in force on the date the competent authority decides to undertake such consideration. In this case, the Government had not convened any DPC or taken any step to fill the posts by promotion before the 2021 Rules came into force. Therefore, the 2021 Rules applied. (Paras 13, 15, 16)

B. The 2021 Rules supersede all executive instructions; the saving clause does not save incomplete acts.
The 2021 Rules were framed under Article 309 and specifically stated that they supersede “all rules framed, instructions or orders issued in this respect except as respect things done or omitted to be done before such supersession”. The Court held that the Transport Commissioner’s recommendation to convene a DPC was not an “act done” under the Executive Instructions; it was merely a proposal. No DPC had been convened, no selection had taken place, and no appointment had been made. Therefore, there was nothing for the saving clause to protect. The High Court erroneously held that the request for DPC was a completed act. (Paras 23-24)

C. The High Court failed to engage with a binding precedent (Raj Kumar) and summarily rejected it.
The Division Bench of the High Court, while noting that Raj Kumar was cited, held that it was “not applicable on the factual matrix” without any explanation. The Supreme Court held that this was insufficient. A precedent, especially one overruling a long‑standing principle, must be considered and distinguished with reasons. The High Court’s approach was erroneous. *(Paras 9-12, 14)*

D. The post of ARTO was a selection post, not a promotional post; the Government has the power to change the method of recruitment.
The Court noted that the post of ARTO was not a promotional post but a selection post. Promotion to selection posts is based on merit, not seniority alone, and the Government has the discretion to decide the manner of recruitment. The decision to fill the posts through direct recruitment by OPSC was a policy decision. Unless shown to be arbitrary, the Court cannot interfere. No arbitrariness was proved. *(Paras 26-28)*

E. The Government is not obliged to fill vacancies that arose under old rules if it decides to restructure the cadre.
Following Raj Kumar, the Court held that the Government can take a conscious policy decision not to fill up vacancies under the old rules, especially when cadre restructuring is intended for efficient functioning. The only requirement is that the policy must be fair and reasonable under Article 14. The State’s decision to introduce the 2021 Rules and switch to direct recruitment was a valid policy choice. (Para 17)

6. New Legal Principles Established / Reiterated

• First, the principle in Y.V. Rangaiah that vacancies must be filled under the old rules is overruled. State of H.P. v. Raj Kumar is the governing law: the right to be considered for promotion is governed by the rules in force on the date of consideration, not the date of vacancy.

• Second, a saving clause in superseding rules protects only completed acts (e.g., appointments already made), not incomplete steps (e.g., recommendations to convene a DPC). The High Court’s interpretation of “things done or omitted to be done” was erroneous.

• Third, a High Court, in an intra-court appeal, cannot summarily reject a binding Supreme Court precedent without engaging with its reasoning. The duty to assign reasons requires a proper discussion of why the precedent is inapplicable.

• Fourth, executive instructions under Article 162 are subordinate to rules framed under Article 309. Once rules are framed, they prevail over any inconsistent executive instruction.

7. Court’s Examination and Analysis of Concepts

The Court examined the chronology of events: the 1981 Executive Instructions were a pro‑tem arrangement “pending finalisation of the cadre rules”. The 2017 resolution restructured the ARTO post. The 2021 Rules finally framed the cadre rules. The Court noted that the respondents were not even in service when the 1981 Instructions were issued; they were appointed in 2013. By the time they became eligible for promotion (after 5 years as Senior Assistant, i.e., around 2021), the 2021 Rules had already been framed. The Court emphasised that the Government had not taken any final decision to fill ARTO posts by promotion prior to the 2021 Rules. The Transport Commissioner’s recommendation was only a proposal, which the Government rejected through reasoned orders.

The Court then analysed the overruling of Rangaiah by Raj Kumar. It quoted extensively from paragraph 82 of Raj Kumar, which held that: (a) there is no universal rule that vacancies must be filled under old rules; (b) the right to consideration arises on the date of consideration; (c) the Government can decide not to fill vacancies under old rules. The Court held that the High Court’s failure to apply Raj Kumar was a serious error.

The Court also clarified the nature of the ARTO post. It was a selection post. Even under the Executive Instructions, promotion was not automatic; it was based on merit and suitability as determined by a DPC. Under the 2021 Rules, the Government chose to fill it by direct recruitment through OPSC. This was a policy choice within the Government’s domain. The respondents could not claim a right to be promoted to a selection post merely because they were in the feeder cadre.

Finally, the Court rejected the argument that the saving clause in the 2021 Rules protected the proposed DPC. It held that no “act done” had been completed; only a proposal existed. The request to convene a DPC was not an act that created any right or obligation.

8. Critical Analysis

Strengths: The judgment correctly applies the binding precedent in Raj Kumar and clarifies that the overruling of Rangaiah applies to all pending litigations unless the rights had already crystallised. It restores the settled position of service law that the Government is not bound to fill vacancies under old rules when it enacts new rules before any promotion process is initiated. The critique of the High Court’s failure to engage with Raj Kumar reinforces judicial discipline and the duty to give reasoned orders.

Potential concerns: The judgment does not explicitly address the “legitimate expectation” argument. The respondents had been given representations that they would be considered; the Single Judge had earlier directed consideration. However, the Supreme Court held that no enforceable right had accrued. Also, the judgment does not discuss whether the Government’s decision was motivated by any extraneous considerations – but no such allegation was made.

Practical impact: This judgment will be cited in all service matters where employees claim promotion based on vacancies that arose before new recruitment rules were framed. It affirms that the Government can change the rules of the game before the game is played. However, where a DPC has already been convened and completed, or where a select list has been prepared, different considerations may apply. The judgment reinforces the supremacy of Article 309 rules over executive instructions.

9. Final Outcome

• The civil appeals were allowed.

• The impugned common judgment of the Orissa High Court (Division Bench) dated 07.11.2025 was set aside.

• The orders of the Single Judge dated 24.02.2023 and 28.02.2023 were also set aside.

• The writ petitions filed by the respondents (Dash and Sahoo) were dismissed.

• Interim orders (including the stay granted by the Supreme Court) stood vacated.

• No order as to costs.

10. Practical Application

First, an employee claiming promotion based on vacancies that arose under old rules, where no DPC was convened before the enactment of new rules, cannot rely on Y.V. Rangaiah. The employer can fill those vacancies under the new rules. This judgment should be cited to oppose such claims.

Second, a government seeking to change the method of recruitment (e.g., from promotion to direct recruitment) can rely on this judgment to argue that it has the policy discretion to do so, provided the decision is not arbitrary and is backed by rules framed under Article 309.

Third, a High Court, when faced with a binding precedent, cannot summarily dismiss it as inapplicable without reasoning. If a party cites a precedent, the court must engage with it. This judgment can be used to argue for a reasoned order.

11. Court Lines

Line 1 (Right to consideration under rules in force – Para 13, quoting Raj Kumar):
“There is no rule of universal application that vacancies must be necessarily filled on the basis of the law which existed on the date when they arose. … It is now a settled proposition of law that a candidate has a right to be considered in the light of the existing rules, which implies the rule in force as on the date consideration takes place.”

Line 2 (Overruling of Rangaiah – Para 85 of Raj Kumar, quoted in Para 13):
“The statement in Y.V. Rangaiah that, ‘the vacancies which occurred prior to the amended Rules would be governed by the old Rules and not by the amended Rules’, does not reflect the correct proposition of law … It is hereby overruled.”

Line 3 (Saving clause does not protect incomplete acts – Para 24):
“An act which was permissible and, in fact, done in pursuance of the Executive Instructions and found inconsistent with the 2021 Rules could certainly be saved, if so warranted. However, the Transport Commissioner’s letter, requesting that the DPC be convened cannot, by any stretch of imagination, be construed as an act done under the Executive Instructions.”

Line 4 (Selection post – no automatic right – Para 28):
“The post being a selection post and not one of promotion, the manner of selection is a matter of policy which completely vests with the Government. If the Government deemed it fit to change the method of selection, it was within its power, authority and competence and unless the changed policy is proved to be arbitrary, Dash and Sahoo cannot have a claim to the post.”

12. Legal Strategy Insight

For an employer (State/Government): If new recruitment rules are framed under Article 309 before any promotion process is completed, the employer can refuse to fill vacancies under the old rules. The employer should document that no DPC was convened, no select list was prepared, and no appointments were made under the old rules. In litigation, cite Raj Kumar and this judgment to argue that the right to consideration is governed by the rules in force on the date of consideration, not the date of vacancy.

For an employee seeking promotion: If you have an existing right that has crystallised – e.g., a DPC has been held, a select list prepared, or an appointment order issued – then the new rules may not affect you. Distinguish this case on facts: here, only a recommendation to convene a DPC was made, no DPC was held. If your case is at a more advanced stage (e.g., DPC already conducted), argue that it is a “thing done” under the old rules and saved by the saving clause.

For a lawyer challenging a promotion denial: Examine the timeline carefully. If the employer delayed convening the DPC deliberately to bring the process under new rules, argue that the employer acted in bad faith. However, this judgment suggests that mere delay, without proof of mala fides, is not enough – the Government has the power to restructure.

For a lawyer drafting a writ petition: If the old rules were executive instructions and new rules are under Article 309, the new rules will prevail. The only hope is if the old rules were statutory rules (framed under Article 309) and the new rules are also under Article 309 – then the principle of Rangaiah (even if overruled) might still be argued in cases where the DPC process was already initiated. But after Raj Kumar, that argument is weak. Focus instead on the arbitrariness of the policy change, if any.