BHARUCHA, J.

Special leave granted

2. Heard

3. This appeal requires a true and correct interpretation to be placed upon Regulation 3 of the Gujarat Housing Board Services Classifications of and Recruitment Regulations, 1981. The appeal arises thus : The first appellant is an association of the Engineers of the Gujarat Housing Board (the second respondent). The second and third appellants are employees of the Housing Board. They filed a writ petition in the Gujarat High Court challenging the direction given to the Housing Board by the State of Gujarat (the first respondent) to appoint to the post of Assistant Housing Commissioner (Technical) an officer on deputation from the Building and Communication Department of the State Government. The writ petition was dismissed. The High Court relied upon the fact that the decision to appoint to the said post an officer of the rank of Superintending Engineer from the Building and Communication Department of the State Government had been taken by the State Government for reasons stated in its affidavit in reply and the said decision could not be said to be unjust or arbitrary or based on irrelevant or extraneous considerations

4. The Gujarat Housing Board Services Classifications of and Recruitment Regulations, 1981 are made under the provisions of Section 74(c) of the Gujarat Housing Board Act, 1961 (now called "the said Act") with the previous sanction of the State Government. Regulation 3 in Part V thereof prescribes the qualifications, age, experience and procedure relating to recruitment to the post of Assistant Housing Commissioner (Technical), now called Superintendent Engineer. The relevant portion thereof reads thus

"The post may be filled in either

(1)(a) by promotion of employees working as Executive Engineerin Boards Higher Services on the basis of seniority cum merits

OR

(b) by calling Executive Engineer on deputation from States

Building and Communication Department

OR

(c) by direct selection from amongst the candidates called

for interview;

(2) To be eligible for promotion, Executive Engineers (i) should have rendered at least 4 years continuous service as Executive Engineer;

On promotion, the officer will be on trial for one year on expiry of which he may be finally promoted or his trial may be extended or he may be reverted to the post from which he was promoted as the case may be looking to his performance during the trial period. On the expiry of the extended trial period, his case will be again reviewed and dealt in same manner

(3) If a suitable candidate is not available for appointment by promotion from the Executive Engineers of the Board, a panel of names of Executive Engineers having at least 4 years standing experience from the State B&C Department may be called for, with a proviso that no departmental inquiry should be pending against them. One of the names will be selected by the Board and the selected candidate will be appointed by the Board

(4) To be eligible for appointment by direct selection a candidate

(i) should be not more than 45 years of age;

(ii) should possess a Bachelors Degree in Engineering of a recognised University or an equivalent qualification recognised by Board, and

(iii) should have at least 10 years practical experience of planning and building construction work in State or Central Government or a local authority or a Corporation owned or controlled by such Government or in renowned private firms of Engineers and Contractors in a responsible postOfficers in Boards High Service who are eligible for direct selection as above, can also apply along with others

5. The contention on behalf of the appellants is that no appointment on deputation can be made to the said post of an officer serving in the State Governments Building and Communication Department until and unless it has been found that no suitable eligible candidate is available for appointment to the said post by promotion from among the eligible Executive Engineers of the Housing Board. On the other hand, it is contended on behalf of the State Government that Regulation 3 provides three alternative modes of appointment to the said post in clause (1) and clause (3) provides yet another, fourth mode of appointment. The appointment in question was directed to be made under the provisions of sub-clause (b) of clause (1) and not under clause (3), so that the State Government and the Housing Board were not in any manner constrained in making the appointment and it was not required that the appointment should be so made only if no suitable eligible candidate was available for appointment by promotion from among the Executive Engineers of the Housing Board

6. Clause (1) of Regulation 3 provides that the post of Assistant Housing Commissioner (Technical) may be filled in by promotion of employees working as Executive Engineers in the Housing Board on the basis of seniority-cum-merit; or by calling Executive Engineers on deputation from the Building and Communication Department of the State Government; or by direct selection from among candidates called for interview. Clause (2) sets out who among the Executive Engineers of the Housing Board are eligible for such promotion. Clause (3) states that if a suitable eligible candidate is not available for appointment by promotion from among the Executive Engineers of the Housing Board, a panel of names of Executive Engineers having four years standing experience in the State Governments Building and Communication Department may be called for and one name out of the panel may be selected and appointed on deputation by the Housing Board. Clause (4) sets out the eligibility requirements of candidates for appointment by direct selection

7. It is, therefore clear that clause (2) of Regulation 3 has application to sub-clause (a) of clause (1); that is to say, clause (2) sets out the eligibility criteria of employees working as Executive Engineers in the Housing Board for appointment to the said post on the basis of seniority-cum-merit under sub-clause (a) of clause (1). Clause (3) sets out how and when an Executive Engineer from the State Governments Building and Communication Department can be appointment on deputation to the said post under the provisions of sub-clause (b) of clause (1). Clause (4) sets out the eligibility requirements for candidates to be appointed by direct selection under the provisions of sub-clause (c) of clause (1)

8. We have no doubt, therefore, that clause (3) does not set out an additional, fourth mode of filling in the said post but is only a provision which sets out how and when an Executive Engineer from the State Governments Building and Communication Department can be appointed to the said post on deputation. It provides that an appointment can be made of an Executive Engineer from the State Governments Building and Communication Department to the said post on deputation only if a suitable eligible candidate is not available for appointment by promotion from among the Executive Engineers of the Housing Board

9. Regulation 3 can be read in no other manner. To construe it otherwise would mean that it provides no guidelines as to when the said post is to be filled up from among the Executive Engineers of the Housing Board, when by deputation from among the Executive Engineers of the Building and Communication Department of the State Government and when by direct selection. The interpretation that the court must place upon Regulation 3 must be such as avoids arbitrariness and the conferment of uncanalised power. Regulation 3 must, therefore, be read as providing that the said post must be filled by promotion of eligible Executive Engineers of the Housing Board on the basis of seniority-cum-merit. It is only if no suitable candidate is available for promotion to the said post from among the eligible Executive Engineers of the Housing Board that the appointment may be made on deputation from among the Executive Engineers of the State Governments Building and Communication Department. Failing this, the appointment can be made by direct selection from among candidates called for interview

10. It is an admitted position that the suitability of eligible Executive Engineers of the Housing Board for appointment to the said post by promotion was not considered before resort was directed to be had to the provisions of sub-clause (b) of clause (1) for filling the said post by deputation of an officer of the State Governments Building and Communication Department. In our view, therefore, the State Government was patently in error in directing the Housing Board to fill the said post by deputing an officer in the State Governments Building and Communication Department

11. Reference was made on behalf of the State Government to the provisions of Section 82 of the said Act and it was submitted that the State Government was thereby empowered to give to the Housing Board such directions as were in its opinion necessary or expedient for carrying out the purposes of the said Act and the Housing Board was obliged to comply with such directions. The short answer to the submissions is that it is not open to the State Government to give directions to the Housing Board under Section 82 which are contrary to the provisions of Regulations made under the provisions of the said Act with its previous sanction

12. The appeal is allowed. The judgment and order under appeal are set aside. The direction given to the Gujarat Housing Board by the Government of Gujarat to fill the post of Assistant Housing Commissioner (Technical) (now called Superintendent Engineer) by appointment on deputation a person in its service in the Building and Communication Department is set aside. For the purposes of filling up the said post, the Gujarat Housing Board shall proceed in the manner indicated above

13. There shall be no order as to costs.