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PETITIONER: GENERAL OFFICER COMMANDING-IN-CHIEF & ANR.

       Vs.

RESPONDENT: SUBHASH CHANDRA YADAV & ANR.

DATE OF JUDGMENT25/02/1988

BENCH: DUTT, M.M. (J) BENCH: DUTT, M.M. (J) MISRA RANGNATH

CITATION:  1988 AIR  876            1988 SCR  (3)  62  1988 SCC  (2) 351        JT 1988 (1)   458  1988 SCALE  (1)414

ACT:      Cantonments Act,  1924: Section  280(2)(c)-Rule  making power-Cantonment Funds  Servants Rules  1937,  Rule  5C-Held void being in excess of rule making power.      Cantonment Funds  Servants Rules 1937: Rule 5C-Services of employees  of Cantonment Boards-Transfer of-From one post in one Board to another post in another Board-Whether valid- Rule SC  held void-Excess of rule making power under section 280(2)(c) of Cantonments Act, 1924.

HEADNOTE: %      The  first   respondent  was  appointed  a  Sub-Charge, Cantonment General Hospital, Lucknow by the Cantonment Board by an  appointment letter dated 23.4.1969, and was confirmed in that  post on 1.12.1969. The conditions of service of the employees of  the Cantonment  Board, a statutory board, were governed by  the provisions of the Cantonment Funds Servants Rules, 1937. At the time of appointment, the services of the respondent were  not transferable  as per  the provisions of the Rules  as then  prevailing. His  appointment letter also did not include any condition for transfer from one Board to another.      By a  notification dated  16.12.1972,  the  Rules  were amended and  a new rule, being rule 5-C was added to provide for the  transfer of  the services  of the  employees of the Cantonment Boards from one post in one Board to another post in another Board within the same State.      The G.O.C.-in-Chief, Central Command by his order dated October 27,  1986 transferred  the first respondent from the Cantonment General  Hospital,  Lucknow,  to  the  Cantonment General Hospital, Varanasi, and the incumbent at Varanasi in turn being  transferred to  the Cantonment General Hospital, Bareilly.      Being aggrieved  by the  order of transfer passed under rule 5-C  of the  Rules, the  first respondent  filed a writ petition in  the High  Court challenging the validity of the order of  transfer on  the ground  that rule  5-C was  ultra vires the  provisions of  the Cantonments  Act and  as such, void. 63

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    The High  Court struck  down rule  5-C as  being  ultra vires the  provisions of  the Cantonments Act, 1924 and held that the  services of  the employees of the Cantonment Board are neither  centralised nor  is there  a common State level service and  that rule  5-C having provided for the transfer of the  employees of  one Board to another Board by the GOC- in-Chief, Central Command is beyond the rule making power of the Central  Government as  contained in  clause (c) of sub- section (2)  of section  280 of  the Cantonments  Act as  it stood before  it was  amended. It  accordingly  quashed  the order of  transfer dated October 27, 1988 passed by the GOC- in-Chief, Central Command.      In the  appeal to this Court it was contended on behalf of the  appellants: (1)  that after  the amendment of clause (c) of sub-section (2) of Section 280 of the Cantonments Act conferring on  the Central  Government the power to lay down the conditions  of service  of the  employees of the Boards, which include the power to make rules for transfer, rule 5-C is valid being in conformity with the provisions of the rule making power  under section  7.80(2)(c) of  the Act, and (2) that the  respondent would not be in the least prejudiced by the transfer  inasmuch as  full safeguard  has been provided for in rule 5-C.      On behalf  of the respondent it was contended that: (1) service under  the Cantonment  Board is  not  a  centralised service or  a service  at  the  State  level,  and  (2)  the transfer of an employee from one Cantonment Board to another would  mean  the  termination  of  the  appointment  of  the employees  in   the  Cantonment   Board  from  which  he  is transferred and a fresh appointment in the Board where he is so transferred.      Dismissing the Appeal, ^      HELD: 1.  The High Court was justified in striking down rule 5-C  of the Rules and in quashing the order of transfer of the respondent. [172G]      2. Rules  framed under the provisions of a statute form part of  the statute. Rules have statutory force. But before a rule  can have  the effect  of a  statutory provision  two conditions must be fulfilled, namely, (1) it must conform to the provisions  of the statute under which it is framed; and (2) it  must also  come within  the scope and purview of the rule making  power of  the authority  framing the  rule.  If either of  these two conditions is not fulfilled the rule so framed would be void. [69F-G]      3. When Rule 5-C was inserted in the Rules, it was void as being 64 contrary to  and in  excess of  the rule making power of the Central Government  as contained in the unamended clause (c) of sub-section  (2) of  Section 280  of the Act. It does not become valid  merely because of the amendment of clause (c), conferring power  on the  Central Government  to frame rules relating to conditions of service.[69C]      4. The  position remains  the  same  even  though  sub- section (2)  of Section  281 of  the  Act  has  specifically provided that  after the rules are framed and published they shall have  effect as if enacted in the Act. In spite of the provision of sub-section (2) of Section 281, any rule framed under the  Cantonments Act  has to fulfil the aforementioned two conditions regarding their validity. [69G-H]      Jestamani v. Scindia Steam Navigation Company, [1961] 2 SCR 811, distinguished.      5. The  Cantonment Board  are statutory  and autonomous bodies controlled  entirely by  the  Cantonments  Act.  Each

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Cantonment Board  is an  independent body functioning within its  limited  jurisdiction.  The  Board  is  the  appointing authority  of   its  employees.   The  services   under  the Cantonment Board  is not  a centralised  service nor is it a service at the State level. [70C]      6. One  autonomous body cannot transfer its employee to another autonomous  body even  within the same State, unless the services  of the employees of these two bodies are under a centralised or State-level service. [70E-F]      In the  instant case, the GOC-in-Chief, Central Command is not  the appointing  authority of  the respondent  or the employees of  the Cantonment  Board, and  so transfer of the respondent by the GOC-in-Chief is not permissible. [70E]      Om Prakash  Rana v.  Swarup Singh  Tomar, [1986]  3 SCC 118, referred to.      7. Even  in spite  of substituted  clause (c)  of  sub- section (2)  of Section  280 the Central Government will not be entitled  to frame rules for transfer of an employee from one Cantonment  Board to  another within  the State  for the reasons: (t)  the Cantonment  Boards are  autonomous bodies; (2) the  service under  the Cantonment  Board is  neither  a centralised service  nor is  it a service at the State-level and  (3)   any  such  transfer  of  an  employee  will  mean termination of service of the 65 employee  in   the  Cantonment   Board  from   where  he  is transferred and  a fresh appointment by the Cantonment Board which he joins on such transfer. [72B-C]      8. The  Central Government, however, has power to frame rules about transfer of servants of the Board in exercise of its powers under clause (c) of subsection (2) of Section 280 of the  Act within  the region  in respect  of which  it has jurisdiction. For  example, the  respondent in  the  instant case,  could   be  transferred  from  one  hospital  of  the Cantonment Board,  Lucknow, to  another hospital  under  the same Board. [72E-F]      9. The  Central  Government  had  better  consider  the question  of   making  the   Cantonment  Board   Service   a centralised service  so 85 to enable one Cantonment Board to transfer its employees to another Cantonment Board. [72D],,

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeal No. 754 of 1988.      From the  Judgment and  order dated  31.8.1987  of  the Allahabad High Court in W.P. No. 7899 of 1986      Raja Ram  Aggarwal, V.K.  Pandita, E.C.  Aggarwala  and Atul Sharma for the Appellants.      S.C. Misra and P.K. Chakraborty for the Respondents.      Manoj Swarup and Ms. Lalita Kohli for the Interveners.      The Judgment of the Court was delivered by      DUTT, J.  As elaborate  submissions have  been made  by both the  parties at  the preliminary hearing of the special leave petition, we proceed to dispose of the points involved in the case on merits after granting special leave.      The appeal  is directed  against the  judgment  of  the Allahabad  High   Court  striking   down  rule  5-C  of  the Cantonment Funds  Servants Rules, 1937, hereinafter referred to as  ’the Rules’,  as ultra  vires the  provisions of  the Cantonment A  rt, 1924  and also quashing the impugned order of transfer  dated October  27, 1986  passed by  the GOC-in- Chief, Central Command. 66

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    The respondent, Dr. Subhas Chandra Yadav, was appointed a Sub-Charge,  Cantonment General  Hospital, Lucknow, by the Cantonment Board  by the appointment letter dated 23.4.1969. He was  confirmed in  that post  on 1.12.1969  by  an  order issued by the Cantonment Board. The conditions of service of the employees  of the Cantonment Board, which is a statutory body, are  governed by  the provisions  of the Rules. At the time of the appointment of the respondent, his services were not transferable  as per  the provisions  of the  Rules then prevailing. His  appointment letter also did not include any condition for transfer from one Board to another.      By a  notification dated  16.12.1972,  the  Rules  were amended and  a new  rule, being  rule 5-C  was added  to the Rules. Rule S-C reads as follows:           "R.5-C. (1)  The service  of a  servant  shall  be           transferable from one post in one Board to another           post in another Board.                Provided that:                (a)  The transferor and transferee Boards are                     situated within the same State; and                (b)  The posts in both the Boards are similar                     and carry the same scales of pay.                (2) Subject to such general directions as the           Central Government  may issue  from time  to time,           the officer  Commanding-in-Chief, the  Command, or           such other  authority as  may be authorised by the           Central Government  in this  behalf, shall  be the           competent authority  to transfer  a servant  under           this rule.                (3) A  servant on transfer under sub-rule (I)           from one  Board to another may, for the purpose of           determination of  seniority  and  eligibility  for           promotion opt:                (i)  to   be  governed   by  the   conditions                applicable in  this behalf to the servants of                the Board  from which he has been transferred                (hereinafter referred  to as  the  transferor                Board); or 67                (ii)  to   be  governed   by  the  conditions                applicable in  this behalf to the servants of                the Board  to which  he has  been transferred                (hereinafter referred  to as  the  transferee                Board):                Provided that  where a  servant does  not opt           under this  rule within  thirty days from the date           of assumption  of charge  in the transferee Board,           he shall, for purposes of promotion and seniority,           be governed  by the conditions application in this           behalf to the servants of the transferor Board .                (4) Save  as provided  in sub-rule  (3),  the           terms and  conditions  of  service  of  a  servant           transferred under  this rule shall be deemed to be           these applicable to the servants of the transferee           Board.                (5) Where  the servant opts under clause (ii)           of subrule  (3), the  service put  in by him under           the transferor  Board before his transfer shall be           deemed to be service under the transferee Board."      For the  first time, rule 5-C provided for the transfer of the  services of  the employees  of the Cantonment Boards from one  post in one Board to another post in another Board within the same State. The GOC-in-Chief, Central Command, by his order  dated October 27, 1986 transferred the respondent from  the  Cantonment  General  Hospital,  Lucknow,  to  the

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Cantonment General  Hospital, Varanasi,  in place of one Dr. Bansal, who  was also  transferred by  the same order to the Cantonment General Hospital, Bareilly.      Being aggrieved  by the  said order  of transfer passed under rule  5-C of  the Rules,  the respondent  filed a writ petition  in   the  Allahabad  High  Court  challenging  the validity of the order of transfer on the ground that rule 5- C was  ultra vires the provisions of the Cantonment Act and, as such, void.      As has  been stated  already, the High Court has struck down rule  5-C holding, inter alia, that the services of the employees of  the Cantonment  Board are  neither centralised nor is  there a  common State-level  service  and  that  the impugned rule  5-C, having  provided for the transfer of the employees of one Board to another Board by the GOC-in-Chief, Central Command, is beyond the rule making power 68 of the Central Government as contained in clause (c) of sub- section (2) of section 280 of the Cantonment Act as it stood before it was amended. Hence this appeal.      Section 280  of the Cantonment Act confers power on the Central Government  to make  rules. The  relevant portion of section 280 of the Cantonment Act is as follows:           "S.  280.   POWER  To   MAKE  RULES:  The  Central           Government may  after previous  publication,  make           rules to  carry out  the purposes  and objects  of           this Act.                (2) In  particular, and  without prejudice to           the generality  of the foregoing power, such rules           may provide  for  all  or  any  of  the  following           matters, namely:                (a).........................................                (b)..........................................                (bb)........................................                (c)  the   tenure  of  office,  salaries  and                allowances,   provident    funds,   pensions,                gratuities,  leave   of  absence   and  other                conditions of service of servants of Boards;"      Clause (c)  of  sub-section  (2)  of  section  280  was substituted by the amendment of the Cantonment Act by Act XV of 1983.  Before such  amendment in  1983, clause (c) was as follows:           "(c).  the   appointment,   control   supervision,           suspension, removal,  dismissal and  punishment of           servants of Boards;"      It is  apparent that  before the  amendment, clause (c) did not  confer on  the Central  Government power  to  frame rules regarding  conditions  of  service  which  necessarily include transfer  of the  employees of the Boards. Rule 5-C, which was  inserted in  the Rules  by a  notification  dated November  23,   1972  providing  for  the  transfer  of  the employees of  the Cantonment  Boards, is  on the  face of it contrary to the rule making power of the Central Government, as it stood before the amendment of the Act in 1983. 69      It is,  however, contended  by Mr.  Raja Ram  Aggarwal, learned Counsel  appearing on behalf of the appellants, that after the  amendment of  clause (c)  of sub-section  (2)  of section 280 of the Cantonment Act, conferring on the Central Government the  power to  lay down the conditions of service of the  employees of  the Boards, which include the power to make rules  for transfer,  rule 5-C is valid, being quite in conformity with  the provisions  of the  rule  making  power under section 280(2)(c) of the Cantonment Act. We are unable to accept the contention.

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    When rule  5-C was inserted into the Rules, it was void as being  contrary to and in excess of the rule making power of the  Central Government  as contained  in  the  unamended clause  (c)  of  sub-section  (2)  of  section  280  of  the Cantonment Act.  It does  not become valid merely because of the amendment of clause (c), inter alia, conferring power on the Central Government to frame rules relating to conditions of service.      Our attention  has been  drawn to the provision of sub- section (2)  of section  281 of  the Cantonment  Act,  which provides  that  all  rules  made  under  the  Act  shall  be published in  the official Gazette and in such other manner, if any,  as the  Central Government  may direct and, on such publication, shall  have effect as if enacted in the Act. It is urged  on behalf  of the  appellants that in view of sub- section (2)  of section  281, rule  5-C became a part of the statute and, accordingly, the question of its being contrary to the  provisions of  the Cantonment  Act does  not at  all arise.      This contention  is unsound.  It is  well settled  that rules framed  under the provisions of a statute form part of the statute. In other words, rules have statutory force. But before a  rule can have the effect of a statutory provision, two conditions  must  be  fulfilled,  namely,  (1)  it  must conform to  the provisions  of the statute under which it is framed; and  (2) it  must also  come within  the  scope  and purview of  the rule  making power  of the authority framing the  rule.   If  either  of  these  two  conditions  is  not fulfilled, the  rule so  framed would  be void. The position remains the  same even though sub-section (2) of section 281 of the  Act has  specifically provided  that after the rules are framed  and published  they  shall  have  effect  as  if enacted in  the  Act.  In  other  words,  in  spite  of  the provision of sub-section (2) of section 281, any rule framed under the  Cantonment Act  has to  fulfil the two conditions mentioned above  for their validity. The observation of this Court in  Jestamani v.  Scindia  Steam  Navigation  Company, [1961] 2 SCR 811, 70 relied upon  by Mr. Aggarwal, that a contract of service may be transferred  by a  statutory provision,  does not  at all help the  appellants. There  can be no doubt that a contract of service  may be  transferred by statutory provisions, but before a rule framed under a statute is regarded a statutory provision or a part of the statute, it must fulfil the above two  conditions.   Rule  5-C   was  framed  by  the  Central Government in  excess of  its rule making power as contained in clause  (c) of  sub-section (2)  of section  280  of  the Cantonment Act  before its  amendment by the substitution of clause (c); it is, therefore, void.      It is  not disputed  that  the  Cantonment  Boards  are statutory and  autonomous bodies  controlled entirely by the Cantonment Act. Each Cantonment Board is an independent body functioning within  its limited  jurisdiction. The  Board is the appointing authority of its employees. The service under the Cantonment  Board is not a centralised service nor is it a service at the State-level.      There is much force in the contention of the respondent that  as  service  under  the  Cantonment  Board  is  not  a centralised service  or a  service at  the State-level,  the transfer of an employee from one Cantonment Board to another would mean the termination of appointment of the employee in the Cantonment  Board from  which he  is transferred  and  a fresh appointment  in the  Board where he is so transferred. The GOC-in-Chief,  Central Command,  is not  the  appointing

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authority  of   the  respondent  or  the  employees  of  the Cantonment Board,  and so  transfer of the respondent by the GOC-in-Chief  is   not  permissible.   In  any   event,  one autonomous body  cannot transfer  its  employee  to  another autonomous body  even within  the  same  State,  unless  the services of  the employees  of these  two bodies are under a centralised or a State-level service. In this connection, we may refer  to a decision of this Court in Om Prakash Rana v. Swarup Singh  Tomar, [1986]  3 SCC  118. Pathak,  J. (as His Lordship then  was)  speaking  for  the  Court  observed  as follows:           "As is  clear by now, the fundamental basis of the           contention that  the power  of transfer  under the           Education Act  and its  Regulations  continues  in           force even  after the  enactment of  the  Services           Commission Act  rests on  the assumption  that the           power of appointment does not include the power of           transfer.  In   our  opinion,  the  assumption  is           unsustainable. The  scheme under the Education Act           envisages  the   appointment  of  a  Principal  in           relation to a specific college. The appointment is           in relation to that college and to 71           no other Moreover, different colleges may be owned           by different bodies or organisations, so that each           Principal serves  a different employer. Therefore,           on filling the office of a Principal to a college,           a new  contract of  employment with  a  particular           employer comes  into existence. There is no State-           level service  to which  Principals are appointed.           Had that  been so,  it would have been possible to           say that  when a Principal is transferred from one           college  to   another  no   fresh  appointment  is           involved. But  when a  Principal is  appointed  in           respect of  a particular college and is thereafter           transferred as  a Principal  of another college it           can hardly be doubted that a new appointment comes           into existence.  Although the  process of transfer           may be governed by considerations and move through           a  machinery  different  from  the  considerations           governing the appointment of a person ab initio as           Principal, the  nature of  the transaction  is the           same, namely,  that of appointment, and that is so           whether  the   appointment   be   through   direct           recruitment, through  promotion from  the teaching           staff of  the same institution or by transfer from           another institution."      The observation  extracted above  clearly supports ’the contention  made  on  behalf  of  the  respondent  that  the employees of  one Cantonment  Board cannot be transferred to another Cantonment  Board inasmuch  as the service under the Cantonment Board  is not  a centralised service or a service at the State-level.      Mr. Aggarwal,  however,  submits  that  the  respondent would not  be in  the least prejudiced by the transfer in as much as  full safeguard  has been  provided for in rule 5-C. The question whether the interest of the transferee has been protected or  full safeguard  has been  provided for by rule 5-C  is  quite  irrelevant,  if  it  is  invalid  and  void. Moreover, the  provisions of  rule 5-C  are clumsy  and lack clarity  and   a  transfer   may   affect   the   transferee prejudicially. It is not necessary for us to discuss how the provisions of rule 5-C may be prejudicial to the interest of an employee  transferred to  another Cantonment Board within the State,  for, we  are of  the view that rule 5-C is ultra

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vires the  provision of the rule making power of the Central Government under the Cantonment Act.      The  question,   however,  is   whether   the   Central Government is  entitled to  frame rules  for transfer of the employees of  the Cantonment  Boards under  the  substituted clause (c) of sub-section (2) of 72 section 280  of the  Cantonment Act.  It is  true that under clause (c),  as it  now stands,  the Central  Government can frame rules  pertaining to  conditions  of  service  of  the Cantonment Board  employees. But,  in our  opinion, even  in spite of substituted clause (c), the Central Government will not be  entitled to  frame rules for transfer of an employee from one  Cantonment Board  to another  within the State for the reasons  stated  already,  namely,  (1)  the  Cantonment Boards are  autonomous bodies;  (2) the  service  under  the Cantonment Board  is neither a centralised service nor is it a service  at the  State level; and (3) any such transfer of an employee will mean termination of service of the employee in the  Cantonment Board  from where he is transferred and a fresh appointment  by the Cantonment Board which he joins on such transfer.      So long  as the  Cantonment Board service is not made a centralised service or at least a State-level service, there can be  no transfer  from one  Cantonment Board  to  another Cantonment  Board   within  the   same  State.  The  Central Government has  better consider  the question  of making the Cantonment Board  service a  centralised service  so  as  to enable one  Cantonment Board  to transfer  its employees  to another Cantonment Board.      As has  been  held  by  the  High  Court,  the  Central Government has  power to  frame rules  about the transfer of the servants  of the  Board in  exercise of its powers under clause (c)  of sub-section  (2) of  section 280  of the  Act within the  region in  respect of which it has jurisdiction. For example,  the respondent  could be  transferred from one hospital  of  the  Cantonment  Board,  Lucknow,  to  another hospital  under   the  same   Board.  But  that  apart,  the Cantonment Act  does not authorise the Central Government to frame rules  for  transfer  from  one  Cantonment  Board  to another.      The High  Court  was,  therefore,  quite  justified  in striking down  rule 5-C  of the  Rules and  in quashing  the impugned order of transfer of the respondent.      For the  reasons aforesaid,  the judgment  of the  High Court is  affirmed and this Appeal is dismissed. There will, however, be no order as to costs. N.V.K.                                     Appeal dismissed. 73