The Article 309 rule that overrides every executive instruction on transfers.

When the Rules Changed, the Transfers Stopped

For years, Central Excise Inspectors across India had a safety valve. If you were posted in Bhubaneswar but your spouse worked in Chennai — or if a parent's illness demanded you be closer to home — you could apply for an Inter-Commissionerate Transfer (ICT). The 2002 Recruitment Rules explicitly allowed it. Then, in 2016, the rules changed. The new rules said nothing about ICTs. And in 2018, the Central Board of Indirect Taxes and Customs (CBIC) issued a circular: ICTs are no longer permitted. For thousands of inspectors, the door slammed shut.

SK Nausad Rahaman and others challenged that circular. They lost at the Kerala High Court. They appealed to the Supreme Court. And on March 10, 2022, a two-judge Bench of Justice Dr. Dhananjaya Y. Chandrachud and Justice Vikram Nath dismissed their appeals. The ban on ICTs was upheld. But the Court did something else. It told the government to go back and think again — about spouses, about disabled employees, about compassionate grounds. The judgment, reported as SK Nausad Rahaman & Ors. v. Union of India & Ors., 2022 LiveLaw (SC) 266, is a masterclass in how recruitment rules work, and what happens when executive instructions try to fill a gap the rules deliberately left open.

The old rule that let inspectors move

Under the Central Excise and Land Customs Department Inspector (Group C Posts) Recruitment Rules, 2002 (RR 2002), Rule 4(ii) contained a crucial provision. It allowed an inspector to be absorbed from one Commissionerate's cadre into another. This was the legal basis for ICTs. An inspector in the Bhind Commissionerate could, with the consent of both cadres, move to the Chennai Commissionerate. It was a transfer, yes, but it was also a change of cadre — a lateral absorption.

Then came the Central Excise and Customs Commissionerates Inspector Group B Posts Recruitment Rules, 2016 (RR 2016). Rule 5 of the new rules stated: "Each Cadre Controlling Authority (CCA) shall have its own separate cadre, unless otherwise directed by the CBEC." The absorption provision from RR 2002 — Rule 4(ii) — was gone. Not carried forward. Not replaced. Simply absent.

For a while, the old practice continued. DoPT Office Memoranda (OMs) on spousal posting and compassionate grounds were still being applied. But on September 20, 2018, CBIC issued a circular that changed everything. It declared that, under RR 2016, ICTs were no longer permissible. Each Commissionerate was its own cadre. You could not move from one to another unless the rules themselves provided for it. And they didn't.

The fight that went from Tribunal to Supreme Court

The inspectors approached the Central Administrative Tribunal (CAT) in Kerala and other benches. The CAT agreed with them. It held that the 2018 circular was invalid. The Tribunal reasoned that the absence of an absorption provision in RR 2016 was a gap, not a prohibition. The DoPT OMs on transfers could fill that gap.

The Union of India appealed to the Division Bench of the Kerala High Court. The High Court reversed the Tribunal. It held that RR 2016 created separate cadres for each Commissionerate. The silence on absorption was deliberate. The circular was valid. The inspectors appealed to the Supreme Court in Civil Appeal No. 1243 of 2022.

What the inspectors argued — and why it failed

The learned Counsel for the appellants made a straightforward argument. They said that the 2018 circular was an executive instruction that could not override the DoPT OMs on transfers. The OMs, they argued, were binding policy guidelines. The circular was ultra vires. They also pointed to the hardship caused: spouses separated, disabled employees unable to access care, families uprooted.

The Union of India countered with a simpler point. The RR 2016 were framed under the proviso to Article 309 of the Constitution. They had the force of law. The DoPT OMs were executive instructions under Article 73 (for the Union) and Article 162 (for the States). When a recruitment rule occupies a field, an executive instruction cannot contradict it. Rule 5 of RR 2016 said each CCA has its own separate cadre. That meant no absorption from outside. The circular merely clarified what the rules already required.

The rule that killed the transfer

The Supreme Court agreed with the Union. The Bench observed that the non-inclusion of Rule 4(ii) of RR 2002 in RR 2016 was not an oversight. It was a deliberate exclusion. The Court cited Union of India v. Somasundaram Viswanath, (1989) 1 SCC 175, for the proposition that rules framed under Article 309 prevail over executive instructions in case of conflict. It also relied on State of Orissa v. Prasana Kumar Sahoo, (2007) 15 SCC 129, which held that policy decisions under Articles 73 and 162 are subservient to recruitment rules under Article 309.

The Court then turned to the concept of "cadre." It cited JS Yadav v. State of UP, (2011) 6 SCC 570, and Jarnail Singh v. Lacchmi Narain Gupta, 2022 SCC OnLine SC 96, to define a cadre as a separate sanctioned unit. Each Commissionerate under RR 2016 was a distinct cadre. An inspector appointed to the Bhind cadre could not be absorbed into the Chennai cadre without an enabling provision in the rules. The silence in RR 2016 was not a gap — it was a wall.

The Court distinguished Prabir Banerjee v. Union of India, (2007) 8 SCC 793, which had allowed inter-Collectorate transfers under the old rules. In that case, there was no express rule occupying the field. Here, Rule 5 of RR 2016 expressly created separate cadres. The two situations were different.

The doctrine that mattered: executive instructions cannot override Article 309 rules

This is the core of the judgment. The proviso to Article 309 allows the President (or Governor) to make rules regulating recruitment and conditions of service. Those rules have the force of law. Executive instructions — including DoPT OMs and CBIC circulars — are subordinate to them. If a recruitment rule says "each CCA shall have its own separate cadre," an executive instruction cannot say "you can still transfer between cadres." The rule occupies the field. The instruction must yield.

The Court was clear: the DoPT OMs on spousal posting and compassionate grounds were not binding in the face of RR 2016. They were guidelines, not law. The 2018 circular was merely a clarification of what the rules already required. It was not an independent policy change — it was a recognition that the old practice was no longer legally possible.

THE PLAY: If your client relies on an executive instruction that contradicts a recruitment rule framed under Article 309, the rule wins. Always. The only way to change the rule is to amend the rule itself — not to issue a circular.

Why this matters for every government employee

For advocates, this judgment is a reminder that the hierarchy of norms in service law is rigid. Article 309 rules sit at the top. Executive instructions fill gaps — they cannot override express provisions. If a rule says "no transfers between cadres," no OM can create a right to such a transfer.

For CFOs and founders who deal with government contracts or regulatory bodies, the lesson is similar. When a statutory rule or regulation occupies a field, a policy circular cannot change it. If you are negotiating a concession or a license, check the parent rule — not just the latest circular.

But the judgment is not a complete loss for employees. The Court did something unusual. It dismissed the appeals — but it directed the respondents to revisit the policy.

The obiter that could change policy

Justice Chandrachud, writing for the Bench, spent several paragraphs on what the government should do. These observations are not binding — they are obiter dicta — but they carry weight.

The Court noted that preservation of family life is an incident of Article 21. The right to dignity and privacy includes the right to live with one's family. A blanket ban on ICTs that systematically separates spouses without considering proportionality may violate this right. The Court cited Bank of India v. Jagjit Singh Mehta, (1992) 1 SCC 306, and Union of India v. SL Abbas, (1993) 4 SCC 357, to say that spousal posting policies are aspirational, not enforceable as rights. But it added that the State must give due consideration to protecting family life.

The Court also invoked the Rights of Persons with Disabilities Act, 2016. That Act creates a statutory mandate for reasonable accommodation. A transfer policy that fails to account for the needs of disabled employees may be challenged under that Act.

Most significantly, the Court applied the doctrine of indirect discrimination, drawing from Lt. Col. Nitisha v. Union of India, 2021 SCC OnLine SC 261. A facially neutral transfer policy that disproportionately burdens women employees — for example, by forcing them to choose between career and family — may violate Articles 14, 15, and 16. The Court did not decide that the 2018 circular was discriminatory. But it flagged the issue. That is a warning shot.

What the Court actually ordered

The operative order is precise. The appeals were dismissed. The Kerala High Court judgment was upheld. The 2018 circular stands. But the Court directed the respondents — the Union of India and CBIC — to revisit the policy. Specifically, they must consider accommodating the posting of spouses, the needs of disabled employees, and compassionate grounds. The direction is not a stay or a modification. It is a nudge. But it is a nudge from the Supreme Court, and the government will have to respond.

The bottom line

If you are a government employee hoping to transfer between cadres under a policy circular, check the recruitment rules first. If the rules create separate cadres and say nothing about absorption, the circular cannot help you. The only fix is a rule change. And if you are a lawyer arguing such a case, remember: the hierarchy is Article 309 rules > executive instructions. Always.