'Promotion Effected Long Ago Not To Be Disturbed': Supreme Court Sets Aside HC Order Quashing 13-Year-Old Promotion; Holds 'Laying Rules' Directory Not Mandatory

"The conclusion is that in the absence of consequence, the laying procedure given in Section 95(3) is clearly directory. Non-compliance thereof cannot defeat the exercise of power by the Registrar." Supreme Court of India, in a significant ruling dated July 30, 2026, set aside a Chhattisgarh High Court order that had quashed a 13-year-old promotion of an employee, S.P. Chandrakar, to the post of Additional Manager.

A bench of Justices Sanjay Karol and Augustine George Masih held that the requirement of 'laying' rules before the legislative assembly under Section 95(3) of the Chhattisgarh Cooperative Societies Act, 1960, is merely directory, and its non-compliance does not invalidate an otherwise lawful amendment.

The appellant, S.P. Chandrakar, was promoted to the post of Additional Manager in the District Central Cooperative Bank Ltd. on December 30, 2010. This promotion was challenged by Kishor Bagh (Respondent No. 5), an original writ petitioner, who contended that Chandrakar, originally appointed to a technical post (Assistant Engineer), could not be promoted to a non-technical/administrative post of Additional Manager, citing Rule 5(3)(a) of the Chhattisgarh District Cooperative Central Bank Employee Service (Employment, Terms and their Working Conditions) Rules, 1982. The Registrar, Cooperative Societies, Chhattisgarh, had, however, purportedly deleted Rule 5(3)(a) in 2005. The High Court's Single Judge and Division Bench both found the deletion of the rule invalid, leading to the quashing of Chandrakar's promotion 13 years after it was granted.

The primary questions before the court were whether the Registrar possessed the requisite power to amend or delete the service rules, and if so, whether the deletion of Rule 5(3)(a) was validly effected, particularly in light of the requirement under Section 95(3) of the Act, 1960, to lay such rules before the legislative assembly. The Court also examined the legal implications of an order being termed a 'circular' and the impact of judicial delay on settled promotions.

Registrar Possesses Power To Frame, Amend, Or Delete Rules

The Supreme Court accepted the Registrar's assertion that he possessed the power to frame rules governing service conditions under Section 55(1) of the Chhattisgarh Cooperative Societies Act, 1960. The bench clarified that the authority to frame rules inherently includes the power to amend, alter, or delete them, a principle supported by Section 21 of the General Clauses Act, 1897.

Delegation Of Power To Additional Registrar Permissible

The Court observed that the communication regarding the amendment, though issued by the Additional Registrar, explicitly stated that it was 'ordered by Registrar'. The bench found no bar on the delegation of such functions under the Act, noting that the State had not disputed that the amendment was carried out under the Registrar's orders. Therefore, the communication by the Additional Registrar was deemed a valid exercise of power.

Nomenclature Of Order Does Not Vitiate Lawful Exercise Of Power

Addressing the argument that the Registrar's order sidestepped the statute or was merely a 'circular', the Court reiterated the established legal principle that the nomenclature or wrong reference to the power under which an action is taken does not vitiate the action, provided the competent authority indeed possessed the power and exercised it lawfully. References were made to Kiran Devi v. Bihar State Sunni Wakf Board and Municipal Corpn. of Ahmedabad v. Ben Hiraben Manilal.

"It is well settled that the exercise of a power, if there is indeed a power, will be referable to a jurisdiction, when the validity of the exercise of that power is in issue, which confers validity upon it and not to a jurisdiction under which it would be nugatory, though the section was not referred, and a different or a wrong section of different provisions was mentioned."

Legislative Laying Requirement Under Section 95(3) Is Directory

A critical aspect of the High Court's reasoning was the non-compliance with Section 95(3) of the Act, 1960, which states that "all rules made under this Act shall be laid on the table of Legislative Assembly." The Supreme Court deliberated on whether the word 'shall' in this context made the laying procedure mandatory or directory. The bench highlighted that Section 95(3) does not prescribe any consequence for non-compliance with the laying procedure, a factor that is pivotal in determining the nature of such a provision.

The Court referred to a Constitution Bench judgment in State of U.P. v. Manbodhan Lal Srivastava, which held that the use of "shall" does not always imply mandatory compliance and that the true intent of the legislature, considering the statute's nature, design, and consequences, must be ascertained. Further reliance was placed on State of U.P. v. Babu Ram Upadhya and Bhikraj Jaipuria v. Union of India, which instruct courts to consider the impact of non-compliance and whether the object of legislation would be defeated.

"The question as to whether a statute is mandatory or directory depends upon the intent of the legislature and not upon the language in which the intent is clothed."

Citing Atlas Cycle Industries Ltd. v. State of Haryana and K.T. Plantation (P) Ltd. v. State of Karnataka, the Court noted that laying clauses can be of different types, indicating varying degrees of legislative control. Ultimately, the Supreme Court concluded that in the absence of any specified consequences for non-compliance, and to avoid "serious general inconvenience and prejudice," the laying procedure under Section 95(3) is directory. Therefore, non-compliance with this procedure does not invalidate the exercise of power by the Registrar. The Court also observed that an identically worded provision in the Madhya Pradesh Co-operative Societies Act, 1960 (from which the Chhattisgarh Act was adopted) had also been interpreted as directory.

Long-Settled Promotions Should Not Be Disturbed Due To Judicial Pendency

The Supreme Court also underscored the principle that a person whose promotion has been in effect for a considerable period should not have it disturbed, particularly when the delay in adjudication is due to judicial pendency. Although the challenge to Chandrakar's promotion was initiated promptly, the judicial process took thirteen years for a final decision by the Single Judge.

"It is a position of law that a person should be entitled to sit back, considering that his promotion, effected a long time ago, would not be disturbed after passage of considerable time."

The Court, finding the reasoning of the lower courts erroneous, set aside their judgments.

The Supreme Court allowed the appeal, reinstating S.P. Chandrakar's promotion and protecting his seniority. The Court ordered that Chandrakar be entitled to all benefits of promotion that may have fallen due and further directed 50% back wages, payable within two months, failing which an interest of 6% per annum would be applicable. This judgment clarifies the directory nature of "laying" provisions in statutes where no consequences for non-compliance are specified and reinforces the principle against unsettling long-standing promotions due to prolonged judicial proceedings.

Date of Decision: July 30, 2026