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PETITIONER: ISHWAR CHAND

       Vs.

RESPONDENT: STATE OF MADHYA PRADESH & ANR.

DATE OF JUDGMENT10/05/1995

BENCH: KULDIP SINGH (J) BENCH: KULDIP SINGH (J) VENKATACHALA N. (J)

CITATION:  1995 SCC  Supl.  (3) 175 JT 1995 (4)   508  1995 SCALE  (3)396

ACT:

HEADNOTE:

JUDGMENT:           THE 10TH DAY OF MAY,1995 Present:           Hon’ble Mr.Justice Kuldip Singh           Hon’ble Mr.Justice N.Venkatachala Mr. Pramod Swarup, Adv. for the appellant Mr.S.K. Agnihotri, and Mr.S.S. Khanduja, Advs. for the Respondents.                J U D G M E N T The following Judgment of the Court was delivered:            IN THE SUPREME COURT OF INDIA             CIVIL APPELLATE JURISDICTION           CIVIL APPEAL NO. 4637 OF 1985. Ishwar Chand                              ..Appellant Versus State of Madhya Pradesh & Anr.            ..Respondents                 J U D G M E N T Kuldip Singh, J.      The Madhya  Pradesh Municipalities  Act, 1961 (the Act) came into  force on  February 1,  1962.  Ishwar  Chand,  the appellant before  us, was employed in the Municipal Council, Burhanpur as  an accountant  from a date prior to the coming into  force  of  the  Act.  The  Municipal  Council  by  the resolution dated  March 30,  1962 created a post of accounts officer. As  required under Section 94 of the Act the copies of the  resolution were  sent to  the Collector  and to  the State Government for grant of sanction. The State Government granted the  necessary sanction by the order dated April 23, 1964. Thereafter,  sometime in  the year  1964 the appellant was appointed to the newly created post of accounts officer. The said  appointment was  approved by  the State Government and finally  the appellant was confirmed against the post of accounts officer in the Municipal Council, Burhanpur.      The pay-scale  of the post of accounts officers working in various  Municipal Councils  was revised with effect from April 1,  1964 in  accordance with  the  recommendations  of

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Tarachand Pay  Commission. The  appellant  was  paid  salary under  the   revised  pay-scale   till  February  28,  1965. Thereafter till  September 30,  1966 he  was reverted to the unrevised pay-scale on the ground that the Municipal Council was not  in a position to meet the burden of the revision of the pay-scale.  However, from October 1, 1966 till April 30, 1970 the  appellant drew  his salary  in accordance with the revised pay-scale but was not permitted to draw increments.      The Municipal  Council redesignated  the  appellant  as accountant with  effect from  May 1, 1970 and started paying him the  salary of  the said  post which was lesser than the salary of  the post  of accounts  officer to  which  he  was initially appointed.  The appellant challenged the action of the respondents by way of a civil suit seeking a declaration that he  was entitled  to hold  the post of accounts officer and was  entitled to draw the salary, allowances etc. of the said post.  Various other  reliefs were  also sought  in the civil suit.  The trial  court decreed  the suit.  The  Lower Appellate Court,  however, set aside the judgment and decree of the trial court and dismissed the suit. The High Court in second appeal  upheld the  judgment of  the Lower  Appellate Court. This  appeal by  way of  special leave is against the judgment of  the Lower Appellate Court as upheld by the High Court.      The stand  of the  State Government  and the  Municipal Council  before   the  trial   court  was   that  the  State Government, in exercise of the power under Section 95 of the Act, framed  Rules  called  "the  Madhya  Pradesh  Municipal Services (Scale  of Pay  and Allowances)  Rules,  1967  (the Rules) whereunder  the  post  of  accounts  officer  in  the Municipal Council  Burhanpur  was  equated  to  that  of  an accountant and  as such  the Municipal Council was justified in redesignating  the  appellant  as  accountant  and  as  a consequence paying him the salary of the said post.      To appreciate  the rival contentions of the parties, it would be  useful to  examine the  relevant provisions of the Act and  the Rules.  Sections 94(1).  94(4), 94)5) and 95 of the Act are as under:-      "APPOINTMENT OF  STAFF (1) Every Council      having an annual income of five lakhs of      rupees or  more shall,  subject to rules      framed  under   Section  95,  appoint  a      Revenue Officer  and an Accounts Officer      and may  appoint such other officers and      servants as  may be necessary and proper      for  the   efficient  discharge  of  its      duties.           (4)  The   appointment  of  Revenue      Officer,  Accounts   Officer,   Sanitary      Inspector, Overseer,  Revenue  Inspector      and  Accountant   shall  be  subject  to      confirmation by the State Government and      no such  post or  the post  of any other      officer or  servant as  may be specified      by the  State Government  in this behalf      shall be  created or  abolished  and  no      alteration  in  the  emoluments  thereof      shall  be   made  without  the  previous      approval of  the  State  Government  and      every appointment  to and dismissal from      such post,  shall be  subject to  a like      approval.           (5) No  order of  suspension for  a      period  exceeding  one  month  shall  be      passed against  any officer mentioned in

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    or specified  under sub-section  (1) and      no  resignation  tendered  by  any  such      officer  shall   be   accepted   without      previous   approval    of   the    State      Government.           95.  STATE   GOVERNMENT   TO   MAKE      RULES.-- The  State Government  may make      rules  in   respect  of   qualification,      recruitment appointment, leave, scale of      pay, all  allowances  by  whatever  name      called,   loans,    pension,   gratuity,      compassionate  fund,   provident   fund,      annuity, dismissal,  removal conduct and      other departmental punishment and appeal      and  service  conditions  for  Municipal      employees other  than a  member  of  the      State Municipal Service."      Rules 7,  8 and  10 of  the Rules are as      under:      "Rule 7. EQUATION OF POSTS.- The present      posts in  each Municipal Council will be      equated  with  the  posts  mentioned  in      Schedule III  as per  Schedule  IV.  The      State Government  will have the power to      add, delete or make any amendment in the      equation of  the post  made and shown in      Schedule   IV   after   consulting   the      municipal council concerned, posts other      than those  of whose  equation has  been      made as per Schedule IV will continue to      be designated  as at present until their      designation  is  altered  by  the  State      Government.      8.   ABSORPTION.-   Except   for   posts      mentioned in  sub-section (4) of section      94 of  the Madhya Pradesh Municipalities      Act, 1961 and such other posts as may be      specified under  this  section  and  the      posts of Chief Municipal Officer, Health      Officer  and   Engineer   mentioned   in      Section 87(1) and 88(1) of the said Act,      the employees  working on  any post,  of      which equation has been made as per Rule      7, will be absorbed against such equated      posts as follows:......      10.  ABSORPTION   OF  EMPLOYEES  HOLDING      UNEQUATED POST.-  Employees  working  on      posts on  which equation  has  not  been      made as  per Rule  7  will  be  absorbed      against their present posts."      Schedule III  to the  Rules provides the pay scales and qualifications in respect of various posts named therein and to be  created in different classes of Municipal Committees, In Class  A committees the pay scale of the post of accounts officer as  shown in  Schedule III  was  Rs.190-10-250-EB-12 1/2-300. Schedule  IV  to  the  Rules  gives  the  statement showing equation  of present posts with the posts in the new set up.  Under the  heading Class  A Municipal  Councils  at Serial No.4 it was mentioned as under: ------------------------------------------------------------ S.No.  Designation of posts  Name of the  Designation of        in the new set up     Municipal    present posts of        and pay scale         Council      which equation                                           has been made. ------------------------------------------------------------

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4.     Accountant        Rs.130-5-160-6-190-   Burhanpur    Accountant        plus Special pay        Rs.15/- p.m. ------------------------------------------------------------      It is not disputed that the Municipal Council Burhanpur has an  annual income of Rs.5 lakhs or more and as such is a Class A  Municipality. Under section 94 of the Act Municipal Council  Burhanpur  has  to  appoint  an  accounts  officer, subject to  the rules framed under Section 95. It is further not disputed  that the  appellant was  appointed as accounts officer under  Section 94  with the  approval of  the  State Government and  he was confirmed in the said post. The Rules came into  force with  effect from September 29, 1967, years after the  appointment of  the  appellant  to  the  post  of accounts  officer.   The  appellant   having  been   validly appointed to  the post  of accounts officer under the Act he could only  be removed  or reduced  in rank  by follwing the procedure provided  under law. The respondents have reverted the appellant  on the  ground  that  the  post  of  accounts officer held  by him  was equated  to the post of accountant under the  Rules. The  stand of  the respondent is factually unsustainable and  legally untenable.  Under Rule  7 of  the Rules "present  posts" in  each municipal council were to be equated with  the posts  mentioned in  Schedule III  as  per Schedule IV.  Under Schedule  III Class A Municipal Councils were to have accounts officers as one of the posts. Schedule IV nowhere  mentions that  the  existing  post  of  accounts officer in  Burhanpur Municipal  Council was  to be  equated with that  of accountant.  The said  schedule only  mentions that the  existing  post  of  accountant  in  the  Burhanpur Municipal Council  was to  be equated with accountant. It is thus obvious  that rule  7 read  with Schedule  IV could not have been  made applicable  to the  post of accounts officer which was  held by  the appellant  since prior to the coming into force of the rules. Rule 10 of the rules clearly states that the employees which were not equated under rule 7 would be absorbed  against their present posts. Since there was no equation provided  under Schedule IV read with rule 7 of the rules regarding  the post  of accounts  officer in Burhanpur Municipal Council  the appellant was entitled to be absorbed in the  post of  accounts officer after coming into force of the Rules.  Therefore on  the bare reading of the provisions of the  Act and  the  Rules,  the  respondents  were  wholly unjustified in  equating the higher post of accounts officer held by the appellant with the lower post of accountant.      Learned  counsel   for  the  appellant  has  vehemently contended before  us that  under Section 94 of the Act it is mandatory to  have a  post of  accounts officer  in Class  A Municipal Committees.  He further  states that Section 95 of the Act  only provides  the procedure  for  appointment  and conditions of  service in  respect of  the post  of accounts officer. According to him the post of accounts officer which has been  provided under the Act cannot be taken away by the Rules framed  under Section  95 of the Act. The view we have taken  on  the  interpretation  of  the  Rules,  it  is  not necessary for  us to go into these contentions raised by the learned counsel for the appellant.      We allow  the appeal,  set aside  the judgment  of  the Lower Appellate  Court and the impugned judgment of the High Court. We restore the judgment of the trial court and decree the suit with costs. We quantify the costs as Rs.20,000/- to be paid by the State Government.

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