Court’s Decision
The Supreme Court allowed the Union of India’s appeal, setting aside the Patna High Court’s order that had reinstated a Railway trainee as Senior Section Engineer (SSE). The Court held that under the Master Circular of 1991 and the Railway Establishment Manual, completion of initial training and passing a written test is a mandatory prerequisite for absorption into service. Since the trainee failed the General and Subsidiary Rules (G&SR) training twice, his termination was lawful. However, the Court rejected the Railway’s demand for refund of stipend inadvertently paid during his second attempt, holding that recovery could not be justified absent misrepresentation or fraud .
Facts
The Railway Recruitment Board issued a notice in 2014 inviting applications for the post of SSE. The respondent was selected and given a provisional appointment in 2016, subject to successful completion of training and probation. His appointment letter clearly stated that retention depended on satisfactory performance in training.
He completed 46 out of the prescribed 52 weeks of training and was deputed to the Zonal Rail Training Institute for a three-week G&SR module. He failed the written test in December 2017. On request, he was permitted a second attempt in March 2018 without stipend, as per rules. He again failed, while most of his batch cleared.
In January 2019, his services were terminated, and he was asked to refund ₹1,53,354 paid as stipend during his second attempt, contrary to the stipulation. His challenge before the Central Administrative Tribunal (CAT) failed. However, the Patna High Court allowed his writ petition in 2023, holding that no departmental exam was prescribed for SSE recruitment and ordering reinstatement with benefits .
Issues
- Whether completion of training and passing a written test is mandatory for SSE appointment.
- Whether the High Court erred in holding that no departmental examination was prescribed.
- Whether recovery of stipend paid due to administrative inadvertence was justified .
Petitioner’s Arguments
The Union of India argued that the Master Circular and Revised Training Module made passing the written training test compulsory. It contended that “departmental examinations” are held for promotions, not direct recruits. Here, what was required was a “training examination,” which the respondent twice failed.
The provisional appointment itself made training performance decisive for retention, and termination was automatic on failure. The stipend recovery, though an error, was permissible since the rules barred payment during a second attempt .
Respondent’s Arguments
The respondent argued that 46 weeks’ training completion was sufficient and four similarly placed candidates had been confirmed without undergoing G&SR training. He contended that the Revised Training Module of 2010 did not mandate an exam for retention. Termination was discriminatory, arbitrary, and violative of Articles 14 and 16.
He also claimed that reliance on the Master Circular was misplaced, as it applied to posts without a specific training module. He urged that stipend recovery was unwarranted as the payment was not due to his misrepresentation .
Analysis of the Law
The Court held that the Master Circular of 1991 clearly required:
- Completion of training as a precondition for absorption.
- A written test at the end of training.
- Warning to candidates that retention depends on clearing the test.
The Employment Notice and appointment letter reinforced these requirements. Departmental exams were distinct from training tests; the High Court conflated the two.
On stipend recovery, the Court noted that although rules barred payment during the second attempt, the excess payment was due to administrative inadvertence, not fraud or misrepresentation. Hence, recovery could not be enforced .
Precedent Analysis
- Prafulla Kumar Swain v. Prakash Chandra Misra (1993 Supp (3) SCC 181) – Distinguished “recruitment” from “appointment”; recruitment is initial selection, appointment follows only upon fulfilling conditions. Applied to hold that the respondent’s provisional recruitment did not amount to appointment.
- Ashok Ram Parhad v. State of Maharashtra (2023) 18 SCC 768 – Followed Prafulla Kumar; reinforced the same principle.
These cases clarified that probationers cannot claim permanent status without satisfying mandatory training requirements .
Court’s Reasoning
The Court found that the respondent failed twice in the G&SR training test despite opportunities, while almost all others passed. It held: “In the absence of any test at the end of training, it would be impossible to ascertain whether a candidate has acquired sufficient training.”
The High Court erred in holding that no departmental exam was prescribed. The Court clarified that training exams were essential and distinct from promotional departmental exams.
On stipend, the Court held recovery unjustified as the respondent neither induced nor misrepresented; the payment was an administrative error .
Conclusion
The Supreme Court upheld the termination of the trainee SSE for failing to complete mandatory training and tests, setting aside the High Court’s order of reinstatement. However, it struck down the demand for refund of stipend. The appeal was disposed of accordingly .
Implications
The judgment clarifies the distinction between provisional recruitment and appointment in Railways. It affirms that completion of prescribed training and passing mandatory exams are conditions precedent for absorption. It also ensures fairness by preventing recovery of stipends paid due to administrative errors, absent fraud.
This decision balances institutional discipline with equitable treatment of probationers .
FAQs
Q1. Is passing the training exam mandatory for SSE appointment in Railways?
Yes. Under the Master Circular and Railway Manual, completion of training and clearing the written test is compulsory.
Q2. Did the Supreme Court allow recovery of stipend paid to the respondent?
No. It held recovery unjustified since payment was inadvertent and not obtained by fraud.
Q3. Why was the High Court’s decision reversed?
Because it wrongly held that no exam was prescribed, ignoring the binding Master Circular that mandated a written training test.