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PETITIONER: OM PRAKASH MAURYA

       Vs.

RESPONDENT: U.P. COOPERATIVE SUGAR FACTORIES FEDERATION,LUCKNOW & ORS.

DATE OF JUDGMENT09/05/1986

BENCH: SINGH, K.N. (J) BENCH: SINGH, K.N. (J) REDDY, O. CHINNAPPA (J)

CITATION:  1986 AIR 1844            1986 SCR  (3)  78  1986 SCC  Supl.   95     JT 1986   370  1986 SCALE  (1)1211  CITATOR INFO :  F          1988 SC 286  (4)  D          1991 SC1402  (5)  E&D        1992 SC2093  (16)

ACT:      U.P. Cooperative  Societies Act, 1975, Sections 121 and 122, scope  of the scheme under-if two sets of service Rules are  prevalent,   which  would   prevail-Whether  the   U.P. Cooperative Sugar  Factories Federation  Service Rules, 1976 override the  U.P. Cooperative  Societies’ Employees Service Regulations 1975.      Deemed  Confirmation-Whether   an  employee   who   has completed the statutory maximum period of probation could be deemed to  have been  confirmed-U.P.  Cooperative  Societies Employees Service  Regulations 1975,  Regulations 17 and 18- Whether reversion to substantive post in such a case, valid.

HEADNOTE:      In the  State of  Uttar Pradesh  there are  two sets of service rules  (i) The  U.P. Cooperative Societies Employees Service Regulations  1975 framed  by  the  U.P.  Cooperative Institutional Authority  constituted by the State Government through a  Notification dated  March 4, 1978 as an authority for the  recruitment, training  and disciplinary  control of the employees of the Apex Level Societies Central or Primary Societies and;  (2) the  U.P.  Cooperative  Sugar  Factories Federation Employees’  Service Rules 1976 framed by the cane commissioner by  virtue of  the power  vested under  section 122(1) of  the U.P. Cooperative Societies Act which provided that they  shall apply  to all  the employees  of  the  U.P. Cooperative  Sugar   Factories  Federation  Ltd.  While  the proviso  to   Regulation  17  restricts  the  power  of  the appointing authority  in extending  the period  of probation beyond the  period of  one year  and in  case of an employee appointed against a regular vacancy beyond two years, Rule 5 of the Federation Service Rules 1976 does not place any such restriction on  the appointing  authority’s power  to extend the period of probation and in the absence of a confirmation order, the  employee shall  continue to  be a  probation for indefinite period. Again while the Regulations framed by the Institutional Service Board require approval of the State

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79 Government under  sub-section 2  of section  122 of the Act, the Rules  do not  provide for  an approval.  Section 2(a-4) which defines  "Apex Level  Societies"  specifies  the  U.P. Cooperative Sugar Factories Federation Ltd. as an Apex Level Society.      The appellant  joined service  in Kisan  Sahkari  Chini Mills Ltd.  Bisalpur District  Pilibhit, a Sugar Factory run and managed  by the U.P. Cooperative Mills Federation. While working as  an Office  Superintendent, he  was selected  for promotion to  the post of commercial officer and by an order dated 29.8.80  appointed on  probation for  a period  of one year which  was extended by another order dated 2.10.81 till 4.9.82. No  further order  either extending  the  period  of probationary period or confirming him on the post was issued and while  so continuing  he was reverted, by an order dated 2.9.83, to  the post of office Superintendent. The appellant challenged the  validity of  the reversion  order before the High Court  of U.P.  (Lucknow Bench) on the sole ground that on the  expiry of the probationary period he stood confirmed and he  could not be reverted treating him on probation. The High Court  held that  on the  expiry  of  the  probationary period, the appellant could not be deemed to be confirmed as there  was   no  rule   prohibiting  the  extension  of  the probationary period. Hence the appeal by special leave.      Allowing the appeal, the Court ^      HELD: 1.1 Since the appellant’s services were regulated by  the   U.P.  Cooperative   Societies  Employees   Service Regulations, 1975  under which  his services  could  not  be extended beyond  the maximum  period of  two years, he stood confirmed  by   implication  on   the  expiry   of   maximum probationary period and thereafter, he could not be reverted to a  lower post  treating him  on probation.  The order  of reversion is illegal. [87D-E]      1.2 Reading  Regulations 17 and 18 together it is clear that an  employee appointed against a regular vacancy cannot be placed  on probation for a period more than two years and if during  the period  of probation the appointing authority is of  the opinion  that the  employee has  not made  use of opportunity afforded  to  him  he  may  discharge  him  from service or  revert him to his substantive post but he has no power to extend the period of probation beyond the period of two years.  Regulation  18  stipulates  confirmation  of  an employee by  an express  order  on  the  completion  of  the probationary period.  The regulations  do not  expressly lay down as to what would be the status of an employee on the 80 expiry of  maximum period  of probation  where no  order  of confirmation is  issued  and  the  employee  is  allowed  to continue in  service. Since  Regulation 17  does not  permit continuation of  an employee  on probation for a period more than two  years the necessary result would follow that after the expiry  of two  years probationary  period, the employee stands confirmed  by implication.  This is  implicit in  the scheme of Regulation 17 and 18. [82D-H]      State of Punjab v. Dharam Singh [1968] 3 SCR 1 applied.      1.3 It  is  well  settled  that  where  appointment  on promotion is made on probation for a specific period and the employee is  allowed to continue in the post after expiry of the  probationary  period  without  any  specific  order  of confirmation he  would be  deemd to  continue  on  probation provided the  Rules do  not provide  contrary to it. In that sense, if  Rule 5 of the U.P. Cooperative Federation Service Rules, 1976 were to apply, the appellant, no doubt could not

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acquire the  status of  a confirmed  employee in the post of commercial officer.  But the  scheme of sections 121 and 122 of the  U.P. Cooperative Societies Act, 1965 postulates that primacy has  to  be  given  to  Regulations  framed  by  the Authority under  section 122 of the Act and if there are two sets of  rules  regulating  the  conditions  of  service  of employees of  Cooperative Societies  the Regulations  framed under section 122 and approved by the State Government shall prevail.  In   this  view,   the  provisions   of  the  U.P. Cooperative Sugar  Factories Federation Service Rules do not override Service Regulations 1975 which is further evidenced by  Government’s  Notification  dated  6.8.1977.  Since  the Institutional  Service   was  conferred   power   to   frame regulations regulating  the conditions  of  service  of  the employees of Apex Level Societies, the regulations framed by the Board  alone will  apply to  the employees  of the  U.P. Cooperative Sugar  Factories Federation Ltd. so long as such a power  has not  been withdrawn.  Further, constituting the commissioner  and   Secretary  of   the   Cane   Development Department  as   the   competent   authority   for   framing regulations for  the recruitment,  training and disciplinary control of  the employees  of  the  U.P.  Cooperative  Sugar Factories Federation  Ltd.  is  of  no  consequence  to  the applicability of 1975 Regulations. [84D-E; 86D-E; 85F; 86G]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeal No. 491 of 1985      From the  Judgment and  Order dated  26th July, 1984 of the Allahabad High Court in W.P. No. 4899 of 1983. 81      Pankaj Kalra for the Appellant.      Rameshwar Dial and Sarv Mitter for the Respondents.      The Judgment of the Court was delivered by      SINGH, J:  This appeal is directed against the order of the High  Court of  Allahabad (Lucknow Bench) dismissing the appellant’s  writ  petition  made  under  Art.  226  of  the Constitution challenging  the Order  dt. 2.9.1983  reverting the appellant from the post of Commercial Officer to that of Superintendent.      The appellant  joined service  in Kisan  Sahkari  Chini Mills Ltd.,  Bisalpur District Pilibhit, a sugar factory run and  managed   by  the   Uttar  Pradesh  Co-operative  Mills Federation.  While  the  appellant  was  working  as  Office Surperintendent, he  was selected  for promotion to the post of Commercial  Officer and  by Order  dt.  August  29,  1980 appointed on  probation  for  one  year  against  a  regular vacancy with a condition that his probationary period may be extended further and during the period of probation he could be reverted to the post of Office Superintendent without any notice. On  2.7.1981  the  appellant  was  transferred  from Bisalpur to Majohla Sugar Factory where he continued to work as  Commercial  Officer.  By  an  Order  dt.  2.10.1981  the appellant’s probationary  period was  extended for  one year till 4.9.1982,  the period so extended expired on 4.9.82 but no further order either extending the probationary period or confirming him  on the  post was  issued, and  the appellant continued  to  work  as  Commercial  Officer.  The  Managing Director of the U.P. Co-operative Sugar Mill Federation Ltd. a "Co-operative  society"  registered  under  the  U.P.  Co- operative Societies  Act, 1965,  which runs  and  manages  a number of  sugar factories  in the  State of  Uttar  Pradesh issued order  on 2.9.83  reverting the appellant to the post

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of  Office  Superintendent.  The  appellant  challenged  the validity of the reversion order before the High Court on the sole ground that on the expiry of the probationary period he stood confirmed,  and he  could not be reverted treating him on probation.  The High Court held that on the expiry of the probationary period  the appellant could not be deemed to be confirmed as  there was no rule prohibiting the extension of probationary period.      The  U.P.   Co-operative  Institutional  Service  Board constituted by the State of Uttar Pradesh in accordance with sub-sec. (2)  of sec. 122 of the U.P. Co-operative Societies Act, 1965 has framed the U.P. 82 Co-operative Societies  Employees Service  Regulations  1975 which regulate  the condition of service of employees of all the co-operative  societies placed  under the purview of the Institutional Service  Board by  the Government Notification No. 366-C/XIIC-3-36-71  dt. March 4, 1972. These regulations contain provisions for recruitment, probation, confirmation, seniority and  disciplinary control.  Regulation 17 provides for probation,  it lays down that all persons on appointment against regular vacancies shall be placed on probation for a period of one year. Proviso to the Regulation lays down that the appointing  authority may,  in individual  cases, extend the period  of probation  in writing  for further period not exceeding one  year, as  it may deem fit. Clause (ii) of the Regulation provides  that if,  at any time, during or at the end of  the period  of probation  or the  extended period of probation, it  appears to  the appointing authority that the employee placed on probation, has not made sufficient use of the opportunity  offered to  him or  has otherwise failed to give satisfaction,  he may  be discharged  from service,  or reverted to  the post  held by  him substantively,  if  any, immediately before  such appointment. Regulation 18 provides for  confirmation   of  an   employee  on  the  satisfactory completion of  the probationary period. Regulation 17 and 18 read together,  provide that  appointment against  a regular vacancy is to be made on probation for a period of one year, this probationary period can be extended for a period of one year more.  The proviso to Regulation 17 restricts the power of the appointing authority in extending period of probation beyond the period of one year. An employee appointed against a regular vacancy cannot be placed on probation for a period more than  two years  and if  during the period of probation the appointing authority is of the opinion that the employee has not  made use  of opportunity  afforded to  him  he  may discharage him from service or revert him to his substantive post but  he has  no power to extend the period of probation beyond the  period of  two years.  Regulation 18  stipulates confirmation of  an employee  by an  express  order  on  the completion of  the probationary  period. The  regulations do not expressly  lay down as to what would be the status of an employee on  the expiry of maximum period of probation where no order  of confirmation  is issued  and  the  employee  is allowed to continue in service. Since Regulation 17 does not permit continuation of an employee on probation for a period more than  two years  the necessary result would follow that after the  expiry of  two  years  probationary  period,  the employee stands  confirmed by  implication. This is implicit in the scheme of Regulation 17 and 18. In State of Punjab v. Dharam Singh  [1968] 3  SCR 1,  a Constitution Bench of this Court held, 83           "Where, as  in the present case, the service rules           fix a  certain period  of time  beyond  which  the

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         probationary period  cannot be  extended,  and  an           employee  appointed  or  promoted  to  a  post  on           probation is  allowed to  continue  in  that  post           after  completion   of  the   maximum  period   of           probation   without    an   express    order    of           confirmation, he  cannot be  deemed to continue in           that post  as a  probationer by  implication.  The           reason is that such an implication is negatived by           the  service  rule  forbidding  extension  of  the           probationary  period  beyond  the  maximum  period           fixed by  it. In scuh a case, it is permissible to           draw the  inference that  the employee  allowed to           continue in  the post on completion of the maximum           period of probation has been confirmed in the post           by implication."      In the  instant case the order of appointment promoting the appellant  on the  post  of  Commercial  Officer  merely indicated that his probationary period could be extended and he could  be reverted  to the  post of Office Superintendent without   any   notice.   Stipulation   for   extension   of probationary  period   in  the  appointment  order  must  be considered in  accordance with  the  proviso  to  Regulation 17(1) which  means that  the probationary  period  could  be extended for  a period of one year more. Undisputably on the expiry of the appellant’s initial probationary period of one year, the appointing authority extended the same for another period of  one year which also expired on 4.9.82. During the period  of   probation  appellant’s  services  were  neither terminated nor  was he  reverted  to  his  substantive  post instead he was allowed to continue on the post of Commercial Officer. On the expiry of the maximum probationary period of two years,  the appellant could not be deemed to continue on probation,  instead  he  stood  confirmed  in  the  post  by implication.  The   appellant  acquired   the  status  of  a confirmed employee on the post of Commercial Officer and the appointing authority  could not  legally revert  him to  the lower post of Superintendent.      Learned Counsel  appearing for  the  U.P.  Co-operative Sugar Factories  Federation urged that the U.P. Co-operative Societies Employees Service Regulations 1975 do not apply to the appellant as he was an employee of the U.P. Co-operative Sugar Factories  Federation, as  the condition of service of the appellant  and other  employees of the U.P. Co-operative Sugar Factories  Federation are  regulated by  the U.P.  Co- operative Sugar Factories Federation Service Rules 1976 84 framed by  Cane Commissioner in exercise of his powers under sub-sec. (1)  of sec.  121 of  the Act published in the U.P. Gazette dt.  September 4,  1976. Rule  3  of  the  U.P.  Co- operative Sugar  Factories  Federation  Service  Rules  1976 (herein after  referred to  as the Federation Service Rules) provides that  these Rules  shall apply to all the employees of the Federation. Rule 5 provides that every employee shall be appointed  on probation for such period as the appointing authority may  specify and  the period  of probation  may be extended by  the appointing authority from time to time, the rule does  not prescribe  any limit  on the extension of the probationary period.  Rule 6 provides that upon satisfactory completion of  probationary  period  an  employee  shall  be eligible  for  confirmation.  Placing  reliance  on  rule  5 learned counsel  for the  respondents urged that since there was no  order of  confirmation the  appellant’s probationary period stood  extended, therefore,  he could  be reverted at any time  to his substantive post. It is true that rule 5 of the Federation  Service Rules does not place any restriction

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on  the   appointing  authority’s   power  to   extend   the probationary period,  it may  extend the probationary period for an  unlimited period  and in the absence of Confirmation Order the  employee shall  continue to  be on  probation for indefinite period. It is well settled that where appointment on promotion  is made on probation for a specific period and the employee is allowed to continue in the post after expiry of the  probationary period  without any  specific order  of confirmation he  would be  deemed to  continue on  probation provided the  Rules do not provide contrary to it. If Rule 5 applies to  the appellant he could not acquire the status of a confirmed  employee in  the post of Commercial Officer and he could legally be reverted to his substantive post.      There are  two set  of rules  (i) The U.P. Co-operative Societies Employees Service Regulations, 1975, (ii) the U.P. Co-operative Sugar  Factories Federation  Employees  Service Rules, 1976. The question is which of the rules apply to the employees of  the Co-operative  Sugar Factories  Federation. While considering this question it is necessary to advert to the relevant  provisions of  the Act  and the  Rules  framed thereunder and  the Notifications  issued from time to time. Section 121  of the  Act confers power on the Registrar, (an officer appointed as such by the State Government under sec. 3) to  frame regulations  to  regulate  the  emoluments  and conditions of service of employees in a Co-operative Society or class  of Co-operative  Societies. Section  3(2)  confers power on  the State Government to appoint officers to assist the Registrar and to confer on them all or any of the powers of the Registrar. An officer on whom powers of Re 85 gistrar are conferred by the State Government, has authority to frame  rules regulating  conditions of service under sec. 121(1) of the Act. Section 122(1) confers power on the State Goverment to  constitute an  authority for  the recruitment, training and  disciplinary control  of the  employees of the Co-operative societies  or class  of co-operative  societies and  it   may  further   require  such  authority  to  frame regulations regarding  recuritment,  emoluments,  terms  and conditions of service including disciplinary control of such employees. Regulations  so framed  require approval  of  the State  Government  under  sub-sec.  (2).  Once  approval  is granted, the  regulations  take  effect  from  the  date  of publication. The  State Government in exercise of its powers under sec. 122(1) issued a Notification No. 366-C/XIIC-3-36- 71 dt.  March 4,  1972 constituting  the  U.P.  Co-operative Institutional  Service   Board  as   an  authority  for  the recruitment,  training   and  disciplinary  control  of  the employees of  the Apex  Level Societies  Central or  Primary Societies,  and   it  further   conferred   power   on   the Institutional Service  Board to  frame regulations regarding recruitment, emoluments,  terms and conditions of service of the employees  of the  co-operative societies  of  the  Apex Level Societies  Central or  Primary Societies. In pursuance thereof the  Institutional Service Board framed the U.P. Co- operative  Societies   Employees  Service  Regulations  1975 regulating the  conditions of  service of  the  employee  of these Co-operative  Societies which  were placed  under  the purview  of   the  Institutional  Board  by  the  Government Notification No. 366-C/XII-C-3-36-71 dt. March 4, 1972. This Notification states  that the  Board shall have authority to frame  regulations   for  the   recruitment,  training   and disciplinary control  of the  employees of  the  Apex  Level Societies, Central,  or Primary  Societies.  Section  2(a-4) which defines  "Apex Level  Societies", expressly  specifies the U.P.  Co-operative Sugar Factories Federation Ltd. as an

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Apex Level  Society. Since  the Institutional  Service Board was conferred  power to  frame  regulations  regulating  the conditions  of  service  of  the  employees  of  Apex  Level Societies, the  regulations framed by the Board apply to the employees  of   the  U.P.   Co-operative   Sugar   Factories Federation Ltd.  The respondents  have failed  to place  any Notification before  the Court to show that the power of the Institutional Service Board to frame regulations, regulating the conditions  of service  of the  employees of  Apex Level Societies  including   that  of   U.P.  Co-operative   Sugar Factories Federation Ltd. was ever with-drawn.      The  U.P.   Co-operative  Sugar   Factories  Federation Service Rules 1976 have been framed by the Cane Commissioner under sub-sec. (1) 86 of sec.  122 of the Act. These Rules provide that they shall apply to  all the  employees of  the U.P. Co-operative Sugar Factories Federation Ltd., but the question is whether rules so framed  by  the  Cane  Commissioner  would  override  the Service   Regulations    1975.   As   noted   earlier,   the Institutional Service  Board was  constituted  an  authority under sec.  122(1)  of  the  Act  and  authorised  to  frame regulations  regulating   the  conditions   of  service   of employees of  the Co-operative  Societies including those of Apex Level  Societies. Sub-section  (2) of sec. 122 provides that on  approval of the Regulations by the State Government any rule  or regulations framed by the Registrar in exercise of its powers under sec. 121(1) would stand superseded. Sub- section (1) of sec. 121 confers power on the Registrar which may include  any other  sub-ordinate officer or authority to frame rules regulating the condition of service of employees of  Co-operative   Societies,  such  rules  do  not  require approval of  the State Government. While a regulation framed by an  authority constituted  under sub-sec. (1) of sec. 122 requires approval  of  the  State  Government  and  on  such approval the  regulation so framed supersedes any rules made under sec.  121.  The  scheme  of  sec.  121  and  sec.  122 postulates that  primacy has  to  be  given  to  regulations framed by  the authority under sec. 122 of the Act. If there are two  sets of  rules regulating the conditions of service of employees of Cooperative societies the regulations framed under sec.  122 and  approved by  the State Government shall prevail. In  this  view  the  provisions  of  the  U.P.  Co- operative Sugar  Factories Federation  Service Rules 1976 do not override  Service Regulations  of 1975.  It appears that this position  was realised  by the State Government and for that reason  it issued  Notification No. U.O. 402(II)/C-I-76 dt.  August   6,  1977  constituting  the  Commissioner  and Secretary Sugar  Industry and Cane Development Department as authority  under   sub-sec.  (1)   of  sec.   122  for   the recruitment, training  and disciplinary control of employees of the U.P. Co-operative Factories Federation Ltd.      The learned counsel for the respondent urged that since the  Government   had  constituted   the  Commissioner   and Secretary of  the Development  Department as  the  competent authority  for  framing  regulations  for  the  recruitment, training and  disciplinary control  of the  employees of the U.P.  Co-operative  Sugar  Factories  Federation  Ltd.  1975 Regulations framed by the Institutional Service Board do not apply. We  find no  merit in  this submission.  Firstly, the Notification  dt.  August  6,  1977  merely  designates  the Commissioner  and   Secretary  Sugar   Industry   and   Cane Development Department as the authority for the recruitment, training and disciplinary control of the employees of the 87

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U.P. Co-operative  Sugar Factories  Federation, it  does not confer  power   on  the  authority  to  frame  any  rule  or regulations regulating  the conditions  of  service  of  the employees of Sugar Factories Federation Ltd. But even if any such  power   can  be   inferred,  admittedly  no  rules  or regulations regulating  the conditions  of  service  of  the employees of  the Co-operative  Sugar  Factories  Federation have as yet been framed. Learned counsel for the respondents conceded that  draft service  regulations have been prepared but those  have not  been  approved  by  the  Government  as required by  sub-sec. (2) of the Act. In absence of approval of the  State Government as required by sub-sec. (2) of sec. 122, regulations,  if any,  framed by  the Commissioner  and Secretary Sugar  Industry and Cane Development Department do not acquire  any legal  force. In this view 1975 Regulations framed by  the Institutional Service Board continue to apply to the  employees of  the U.P.  Co-operative Sugar Factories Federation Ltd.      In view  of the above discussion it is manifestly clear that the appellant’s services were regulated by the U.P. Co- operative Societies  Employees  Service  Regulations,  1975. Since  under   those  Regulations  appellant’s  probationary period could  not be  extended beyond  the maximum period of two years,  he stood  confirmed on  the  expiry  of  maximum probationary period  and thereafter he could not be reverted to a  lower post  treating him  on probation.  The Order  of reversion is  illegal. We  accordingly allow the Appeal, set aside the  order of  the High  Court and  quash the order of reversion dt.  2.9.1983 and  direct that the appellant shall be  treated   in  service  and  paid  his  wages  and  other allowances. The  appellant is entitled to his costs which is quantified as Rs. 1,000. S.R.                                         Appeal allowed. 88