Supreme Court says employees have no vested right to promotion under superseded executive instructions after 2021 service rules came into force
The Supreme Court has allowed appeals filed by the Odisha government in a dispute concerning promotion to the post of Assistant Regional Transport Officer (ARTO).
A Bench of Justice Dipankar Datta and Justice Augustine George Masih set aside orders of the Orissa High Court. The High Court had directed the State to convene a Departmental Promotion Committee (DPC) to consider two Assistant Section Officers for promotion as ARTOs.
The Supreme Court held that the employees had no vested right to promotion under executive instructions that stood superseded by statutory service rules framed in 2021.
The judgment came on May 18, 2026, in State of Odisha & Ors. v. Sreepati Ranjan Dash and the connected matter State of Odisha & Ors. v. Aditya Bhanjan Sahoo, Civil Appeal Nos. 13121 and 13122 of 2025.
Dispute Over ARTO Promotions
The case arose from executive instructions issued by the Odisha Commerce & Transport Department on November 17, 1981.
Those instructions allowed Grade-I Assistants, also known as Senior Assistants, to seek promotion to the post of ARTO after completing five years of service. The State had issued the instructions as a temporary arrangement until it framed recruitment rules.
Sreepati Ranjan Dash and Aditya Bhanjan Sahoo joined service as Junior Assistants in March 2013. They became Senior Assistants in June 2016.
In October 2017, the Odisha government restructured the Odisha Transport Service cadre. It upgraded the ARTO post from Group C to Group B and brought it within the Odisha Transport Service cadre.
After this restructuring, the Government of Odisha had to make appointments to the post.
In January 2019, the State restructured the Odisha Ministerial Services cadre. It redesignated the post of Senior Assistant as Assistant Section Officer (ASO). Dash and Sahoo received this redesignation in February 2019.
Employees Sought Promotion Under 1981 Instructions
In June 2021, Sahoo submitted a representation seeking promotion as ARTO under the 1981 executive instructions.
The Additional Commissioner Transport then requested the State to convene a DPC for filling 16 vacant ARTO posts. The request stated that Dash, Sahoo and another employee had completed five years of service and met the eligibility requirement.
The Odisha government rejected the proposal in July 2021. It rejected similar requests again in October and December 2021.
The State took the view that the ARTO post no longer formed part of the promotional hierarchy. It also said the 1981 executive instructions no longer applied after cadre restructuring.
Dash and Sahoo challenged these decisions before the Orissa High Court.
A Single Judge directed the State to convene a DPC and consider their promotion claims. The Division Bench dismissed the State’s intra-court appeals on November 7, 2023.
State Relied On 2021 Service Rules
Before the Supreme Court, the Odisha government argued that the 1981 executive instructions could not survive after cadre restructuring and the framing of statutory rules.
The State relied on the Odisha Transport Service (Method of Recruitment and Conditions of Service) Rules, 2021. The government framed these rules under Article 309 of the Constitution.
According to the State, the 2021 Rules superseded the executive instructions.
The State also submitted that the ARTO post no longer belonged to the promotional channel of the respondents’ cadre. It argued that the 2021 Rules required appointments through a competitive examination conducted by the Odisha Public Service Commission (OPSC).
The government relied on the Supreme Court’s three-judge Bench decision in State of Himachal Pradesh v. Raj Kumar. It argued that employees do not acquire a vested right to promotion merely because vacancies existed before new rules came into force.
Respondents Defended Their Promotion Claim
Counsel for Dash argued that the respondents had become eligible under the 1981 executive instructions before the 2021 Rules came into force.
They submitted that the executive instructions continued to operate until January 5, 2022, when the 2021 Rules took effect.
The respondents also argued that executive instructions issued under Article 162 of the Constitution carry binding force when no statutory recruitment rules exist.
They further contended that the redesignation from Senior Assistant to Assistant Section Officer did not affect their eligibility.
According to them, ASO remained at Level 09 in the pay matrix, while ARTO stood at Level 10. They argued that this made ARTO a natural promotional post.
They also relied on Shankarsan Dash v. Union of India. They submitted that the government must provide bona fide reasons when it decides not to fill vacancies.
High Court Failed To Apply Binding Precedent: Supreme Court
Justice Dipankar Datta, writing for the Bench, found that the High Court did not properly consider State of Himachal Pradesh v. Raj Kumar.
The Court noted that the State had specifically relied on that judgment before the High Court.
The Supreme Court said that Raj Kumar had overruled the earlier principle in Y.V. Rangaiah v. J. Sreenivasa Rao. That earlier principle required authorities to fill vacancies under the rules that existed when the vacancies arose.
The Court also said that an employee has only a limited right to be considered for promotion. The employee does not have a vested right to promotion itself.
Executive Instructions Stood Superseded
The Supreme Court found that paragraph 4 of the 1981 executive instructions clearly described the arrangement as temporary.
The Court said the State had issued those instructions only until it finalised cadre rules.
Once the State framed the 2021 Rules under Article 309, those statutory rules fulfilled the purpose of the 1981 instructions and superseded them.
The Court rejected the High Court’s view that the request to convene a DPC qualified as an “act done” under the saving clause of the 2021 Rules.
The Bench noted that the State had not made any appointment before the 2021 Rules came into force. It also noted that no DPC had met before the new rules took effect.
The Court relied on Union of India v. Somasundaram Viswanath to reaffirm that statutory rules framed under Article 309 prevail over executive instructions.
ARTO Is A Selection Post, Not A Promotional Post
The Supreme Court also held that the ARTO post is a selection post and not a promotional post.
The Bench said eligible employees cannot claim automatic promotion unless service rules give them such a right.
Relying on Sant Ram Sharma v. State of Rajasthan, the Court observed that authorities fill selection posts mainly on merit, not only on seniority.
The Court held that the Odisha government could change the method of appointment. It also held that the State could fill ARTO posts through competitive examination conducted by the OPSC under the 2021 Rules.
Appeals Allowed
The Supreme Court allowed the Odisha government’s appeals.
It set aside the judgments of the Single Judge and the Division Bench of the Orissa High Court.
The Court also vacated interim orders passed in the matter.
The parties will bear their own costs.
