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PETITIONER: T.R. KAPUR & ORS.

       Vs.

RESPONDENT: STATE OF HARYANA & ORS.

DATE OF JUDGMENT17/12/1986

BENCH: SEN, A.P. (J) BENCH: SEN, A.P. (J) NATRAJAN, S. (J)

CITATION:  1987 AIR  415            1987 SCR  (1) 584  1986 SCC  Supl.  584     JT 1986  1092  1986 SCALE  (2)1051  CITATOR INFO :  F          1987 SC 424  (11)  RF         1987 SC1676  (17)  R          1988 SC1645  (6)  RF         1989 SC 307  (5)  D          1990 SC1072  (5)

ACT:     Punjab  Service  of  Engineers, Class  I,  Public  Works Department    (Irrigation   Branch)   Rules,   1964:    Rule 6(b)--Haryana  State  amendment  with  retrospective  effect declared ultra vires.     Punjab     Reorganisation    Act,     1966:     s.82(6), proviso--Service conditions of persons serving in  composite State of punjab--Alteration of--Approval of Central  Govern- ment mandatory. Civil Services.     Benefits acquired under existing service rules cannot be taken away by amendment of rules with retrospective effect.     Constitution  of  India,  Article  309,  proviso-Service Rules-Amendment  of with retrospective effect--Must  satisfy tests of Articles 14 and 16(1).

HEADNOTE:     The proviso to sub-s.(6) of s.82 of the Punjab Reorgani- sation  Act,  1966 mandates that the conditions  of  service applicable  to any person referred to in sub-s.(1)  or  sub- s.(2)  shall not be varied to his disadvantage  except  with the  previous approval of the Central Government. Rule  6(b) of  the Punjab Service of Engineers, Class I,  Public  Works Department  (Irrigation Branch) Rules, 1964, as it stood  at the  relevant time, provided that in case of appointment  by promotion from Class II Service no person shall be appointed unless  he  has  completed in that Class of  Service  for  a period  of ten years from the commencement of these  ,Rules, six years service and after that period eight years service. The  Governor of Haryana by a notification dated 22nd  June, 1984  amended  the above Rules by inserting  the  words  ’in addition  to  the qualifications prescribed in  clause  (a)’ after  the words "eight years service" in cl(b) of r.6  with retrospective  effect  from July 10, 1964 thereby  making  a degree in Engineering essential for promotion to the post of

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Executive Engineer in Class I service. Rule  3(c)  of  the Punjab Service of  Engineers,  Class  II P.W.D. 585 (Irrigation Branch) Rules, 1941 had enjoined that no  person shall be appointed to the service unless he possessed one of the  University degrees or other qualifications  prescribed. The proviso to r.5 however, laid down that that rule may  be relaxed  by Government on the recommendations of  the  Chief Engineers in order to admit the promotion of a member of the Overseers  Engineering Service of outstanding merit who  may not possess the qualifications specified in rule 3.     The  petitioners, who are Engineering  Diploma  holders, were  appointed to Class 11I Overseers  Engineering  Service (Irrigation Branch) in the erstwhile State of Punjab in  the year  1953, 1949 and 1952 respectively. In due  course  they were promoted as Sub-Divisional Officers in Class II service and  were  eligible for promotion to the post  of  Executive Engineer  in Class I service under the unamended  rule  6(b) having  more than eight years’ service in Class II  service. In  A.S. Parmar v. State of Haryana, [1984] 2 SCR  476  this Court  interpreting the unamended rule 6(b) had held that  a degree in Engineering was not an essential qualification for promotion  of  Class II Officers to the cadre  of  Executive Engineer in Class I service. But just before they were about to  be  promoted the State of Haryana  issued  the  impugned notification rendering them inelligible.     Aggrieved by the said notification they filed these writ petitions under Art.32 of the Constitution. It was contended for them that the impugned notification purporting to  amend r.6(b) of Class I Rules with retrospective effect was  ultra vires the State Government being contrary to the proviso  to s.82(6)  of  the Punjab Reorganisation Act, 1966,  that  the unamended  r.6(b) had conferred a vested right of  promotion on  them  which  could not be taken  away  by  retrospective amendment under the proviso to Art. 309 of the Constitution, that  a retrospective amendment taking away eligibility  for promotion from a back date ranging over 20 years and thereby rendering invalid the promotions already made was  constitu- tionally  impermissible, and that the action of the  Govern- ment  in making such retrospective amendment to nullify  the decision  in Parmar’s case was wholly arbitrary,  irrational and  mala fide and thus violative of Arts. 14 and  16(1)  of the Constitution.     For the respondents it was contended that the proviso to s. 82(6) was not attracted to the facts of the case since on the appointed day, that is, November 1, 1966 the petitioners were not members of Class II Service. They were then  Super- visors belonging to Class 111 Service, and, therefore,  were not  governed by the unamended r.6(b). It was  further  con- tended that under r.3(c) of the Punjab Service of Engineers, Class II 586 P.W.D. (Irrigation Branch) Rules, 1941 a degree in Engineer- ing  was  essential  till the 1970  Rules  brought  about  a change.  Inasmuch as none of the petitioners had the  requi- site qualifications, they could not become members of  Class II  Service. It wag strenuously contended that the  decision in A.S. Parmar v. State of Haryana was incorrect. Allowing the writ petitions, the Court,     HELD: 1.1 The impugned notification dated June 22,  1984 issued  by  the State Government of  Haryana  purporting  to amend  r.6(b) of the Punjab Service of Engineers,  Class  I, Public Works Department (Irrigation Branch) Rules 1964, with retrospective  effect from July 10, 1964 is  declared  ultra

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vires the State Government being contrary to s.82(6) of  the Punjab Reorganisation Act, 1966. [602EF, S97CD]     1.2 The proviso to s.82(6) of the Punjab  Reorganisation Act is in the nature of a fetter on the power of the  Gover- nor under the proviso to Art. 309 of the Constitution not to alter  the  conditions of service applicable to  members  of civil  services affected by the reorganisation of the  State to  their disadvantage without the previous approval of  the Central Government. [593E, 597B]     In  the Instant case, the State Government  never  moved the  Central  Government seeking its prior approval  to  the proposed  amendment  of r.6(b) of the said  Class  I  Rules. There was no Chief Secretaries Conference as was held  prior to  the reorganisation of the States under the States  Reor- ganisation Act, 1956. Nor was there any communication issued by the Central Government conveying its previous approval of the  changes in the service conditions which the  States  of Punjab  and  Haryana might make in terms of the  proviso  to s.82(6)  of the Punjab Reorganisation Act, 1966. The  amend- ment, therefore, must be struck down. [596E,G, 597C]     Mohammad  Bhakar  v.Y. Krishan Reddy,  [1970]  SLR  768; Mohammdd Shujat Ali & Ors. v. Union of India & Ors.,  [1975] 1 SCR 449 and A.S. Parmar v. State of Haryana, [1984] 2  SCR 476, referred to.     2. I The decision in Parmar’s case is not open to  ques- tion.  What was of the essence for purposes of promotion  of Sub-Divisional Officers who were members of Class II Service to the post of Executive Engineer under r.6(b) of the  Class I  Rules was not a degree in Engineering, but  eight  years’ experience in Class II Service. [597G, 598CD] 587     2.2  The  petitioners  like other members  of  Class  II Service who are diploma-holders and satisfy the  eligibility test of eight years’ service in that Class were,  therefore, eligible  for being considered for promotion to the post  of Executive  Engineer  in  Class I service  without  having  a degree in Engineering. [594B] A.S. Parmar v. State of Haryana, [1984] 2 SCR 476,  referred to.     3. The requirement of a degree in Engineering which  was an  essential  educational  qualification  for  purposes  of direct recruitment of Assistant Executive Engineers in Class I  Service  under r.6(a) of the Class I Rules could  not  be projected for promotion of Sub,Divisional Officers belonging to  Class II Service to the posts of Executive Engineers  in Class  I.  Service under r.6(b) as they  form  two  distinct sources  from which appointments to the posts  of  Executive Engineers could be made. [598B]     4. The proviso to r.5 of the 1941 Rules conferred  power on  the State Government to relax the requirement of  r.3(c) on  the  recommendation of the Chief Engineer  in  order  to admit the promotion of a member of the Overseen  Engineering Service (Irrigation Branch), Punjab if he was an officer  of outstanding merit although he did not possess the qualifica- tion  prescribed  in r.3(c), i.e. a degree  in  Engineering. Presumably,  the petitioners were officers  off  outstanding merit as they were promoted as Offg. Sub,Divisional Officers in Class II Service in January 1964, July 1966 and  November 1969. [597H--598A, 596A]     5.  It cannot be said that on the appointed day i.e.  on November,  1, 1966 the petitioners were Overseers  belonging to the Class III Service and were therefore not governed  by unamended  r.6(b). Two of them had already been promoted  as (Mfg.  SUb,Divisional Officers prior to the  appointed  day, i.e.  in  January 1964 and July 1966  and  were,  therefore,

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governed  by the unamended r.6(b). The third petitioner  was also  promoted to that post subsequently in  November  1969. Upon  such  promotion to the post  of  Offg.  Sub-Divisional Officers  they had not only the legitimate expectation  that they would in due course be considered for confirmation  but also had the right on such confirmation to be considered for promotion.  It  is also not quite accurate to say  that  the petitioners  were  not shown as belonging to  the  Class  11 Service.  A bare look at the notification dated October  27, 1985 would show that the petitioners figure at Sr. Nos. 246, 254 and 369. [596B-D] 6.  The power to frame rules to regulate the  conditions  of service 588  under  the proviso to Art. 309 of the Constitution  carries with it the power to amend or alter the rules with a  retro- spective  effect. This rule is, however, subject to a  well- recognised  principle that the benefits acquired  under  the existing  rules  cannot be taken away by an  amendment  with retrospective  effect. Therefore, unless it is  specifically provided  in the rules, the employees who were already  pro- moted before the amendment of the rules, cannot be  reverted and  their  promotions cannot be recalled. In  other  words, such  rules  laying down qualifications for  promotion  made with retrospective effect must necessarily satisfy the tests of  Arts. 14 and 16(1) of the Constitution. They do not,  in the instant case. [599B-F]     B.S.  Vadhera v. Union of India, [1968] 3 SCR  575,  Raj Kumar v. Union of India, [1975] 3 SCR 963; K. Nagaraj & Ors. v. State of A.P. & Anr., [1985] 1 SCC 523; State of J & K v. Triloki  Nath  Khosla  & Ors., [1974] 1 SCR  771;  State  of Mysore  v.M.N. Krishna Murtv & Ors., [1973] 2 SCR 575;  B.S. Yadav  &  Ors., v. State of liaryana & Ors.,  [1981]  1  SCR 1024;  State of Gujarat & Anr. v. Ramanlal Keshavlal Soni  & Ors.,  [1983] 2 SCR 287 and Ex-Captain K.C. Arora & Anr.  v. State of Haryana & Ors., [1984] 3 SCR 623, referred to.

JUDGMENT: ORIGINAL JURISDICTION: Writ Petitions Nos. 630-32 of 1984 Under Article a2 of the Constitution of India.     M.K. Ramamurthy, Shanti Bhushan, U.R. Lalit, M.R.  Shar- ma, S.K. Mehta, B.R. Agarwala, N.D. Garg, E.M.S. Anam,  P.D. Sharma,  C.V.  Subba Rao, I.S. Goel, Dr. K.S.  Tiwari,  P.H. Parekh, Sohail Dutt, Uma Datta and V.P. Goel for the appear- ing parties. The Judgment of the Court was delivered by     SEN,  J. These petitions upder Art. 32 of the  Constitu- tion  assail the constitutional validity of  a  notification issued  by  the State Government of Haryana  in  the  Public Works  Department  (Irrigation Branch) dated June  22,  1984 purporting  to amend r.6(b) of the Punjab Service  of  Engi- neers, Class I, PUblic Works Department (Irrigation  Branch) Rules, 1964 (for short ’the Class I Rules’) with  retrospec- tive effect from July 10, 1964 as violative of Arts. 14  and 16(1)  of  the Constitution and also ultra vires  the  State Government by reason of the proviso to s.82(6) of the Punjab Reorganisation  Act,  1966. The purport and  effect  of  the impugned  notification  is to nullify the decision  of  this Court in A.S. Parmar v. State of Haryana, [1984] 2 SCR  476, holding 589 that  a  degree in Engineering was not  essential  for  such promotion.  By the impugned notification, a degree in  Engi-

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neering is made an essential qualification for promotion  of Assistant  Engineers  in the Irrigation Branch, a  Class  II service  under r.6(b) of the Class I Rules and  thereby  the petitioners  have been rendered ineligible for promotion  to the post of Executive Engineer in Class I service.     The  circumstances  which  led to the  issuance  of  the impugned notification are these. A controversy had arisen on the construction of r.6 of the Class I Rules as to whether a degree in Engineering was necessary when the post of  Execu- tive Engineer, which is a post in Class I service, was to be filled by promotion by members of Class II service and  this was  settled by the decision of this Court in A.S.  Parmar’s case,  supra. The Court on a consideration of  the  relevant rules  came  to  the conclusion that a member  of  Class  II service, namely, Assistant Engineer or Sub-Divisional  Offi- cer  did not require to have a University degree for  promo- tion  to the post of Executive Engineer in Class I  service. On February 24, 1984, the Additional Solicitor General  gave an  undertaking  on behalf of the State Government  that  it would  consider the cases of all eligible persons  including the  petitioners  for  regular appointment to  the  Class  I service in accordance with the rules and complete the  proc- ess within four months from that day. The Court,  according- ly, in Civil Appeal No. 149 of 1981 (Ashok Gulati & Ors.  v. State of Haryana) and the connected matters as also in these petitions under Art. 32 of the Constitution passed an  order to the effect:               "Mr. K.G. Bhagat, learned Additional Solicitor               General  says that the State  Government  will               consider the cases of all the eligible persons               including   the   appellants/petitioners   and               respondents for regular appointments to  Class               I  Service  in  accordance with  the  law  and               complete the process of appointments within  4               months from today. The Government is permitted               to  do so. But all appointments made  pursuant               to  this  order will be subject to  the  final               result of these cases.                        In the meanwhile the appellants  will               continue in the posts held by them.                        These  matters will  stand  adjourned               for a period of 6 months from today."               590 Just  two days before the expiry of the period within  which promotion of eligible persons including the petitioners  was to be completed, the State Government purported to effect an amendment  of r.6(b) retrospectively w.e.f. July  10,  1964. The impugned notification was in these terms:                   "HARYANA GOVERNMENT          PUBLIC WORKS DEPARTMENT (IRRIGATION)                      NOTIFICATION                  The 22nd June, 1984.               No.  G.S.R. 47/Cons./Art.  309/Amend.  (1)-84-               Inexercise  of  the powers  conferred  by  the               proviso to Article 309 of the Constitution  of               India  and  all other powers enabling  him  in               this  behalf, the Governor of Haryana,  hereby               makes the following rules further to amend the               Punjab  Service of Engineers, Class I,  P.W.D.               (Irrigation Branch) Rules, 1964, namely:-                     1.  (1)  These rules may be  called  the               Punjab  Service of Engineers, Class I,  P.W.D.               (Irrigation  Branch), Haryana, (Second  Amend-               ment) Rules, 1984.                      (2)  ’These  rules shall be  deemed  to

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             have come into force with effect from the 10th               July, 1964.               2.  In the Punjab Service of Engineers,  Class               I, P.W.D. (Irrigation Branch) Rules, 1964,  in               rule 6, in clause (b), after the words  "eight               years service", the words, "in addition to the               qualifications prescribed in clause (a)" shall               be inserted."     Presumably,  the State Government adopted this  unfortu- nate course of action taking cue of the observations made by this  Court in the concluding part of the judgment  in  A.S. Parmar’s case saying that if the Government wish to  appoint only  persons  having  a degree in Engineering  to  Class  I service,  it was free to do so by  promulgating  appropriate rules  and  that the power to frame such a rule  was  beyond question. But the Court never laid down that such a rule may be framed under Art. 309 of the Constitution with retrospec- tive  effect  so as to render ineligible Class  II  officers like  the petitioners who were Diploma-holders  for  further promotion as Executive Engineers in Class I service. In view of the clear formulation of law interpreting 591 r.6(b)  of the Class I Rules holding that a degree in  Engi- neering was not an essential qualification for promotion  of Class  II  Officers to the cadre of Executive  Engineers  in Class I service, there was no occasion for the State Govern- ment  to issue the impugned notification unless it was  with the object of nullifying the decision of this Court in  A.S. Parmar’s case.     In order to appreciate the points involved, it is neces- sary to state a few facts. The three petitioners T.R. Kapur, Mohinder Singh and V.D. Grover who are Diploma-holders  hold the  posts of Sub Divisional Officers, Public Works  Depart- ment  (Irrigation  Branch),  Haryana, a  Class  II  service, governed  by  the  Haryana Service of  Engineers,  Class  II P.W.D.  (Irrigation Branch) Rules, 1970. They  joined  Class III service as Overseers in the Irrigation Branch on Septem- ber, 18, 1953, October 6, 1949 and November 8, 1952  respec- tively  in the erstwhile State of Punjab. At the  time  when they  were appointed to the Overseers  Engineering  Service, Punjab, r.3(c) of the Punjab Service of Engineers, Class  II P.W.D.  (Irrigation  Branch) Rules, 1941  enjoined  that  no person shall be appointed to the service unless he possessed one  of the University degrees or other qualifications  pre- scribed  in Appendix ’A’ to the Rules. Note beneath  cl.(c), however,  provided that the requirements of cl.(c) could  be waived  in the case of members of the Overseers  Engineering Service  (Irrigation  Branch) Punjab to be promoted  in  the service  under  the proviso to r.5 of the  Rules.  The  term ’service’  was  defined  in r. 1(2)(g) to  mean  the  Punjab Service of Engineers, Class II (Irrigation Branch),  Proviso to r.5 of Part II--Appointments Rules, reads as follows:               "Provided  that  this rule may be  relaxed  by               Government on the recommendations of the Chief               Engineers in order to admit the promotion of a               member  of  an  Overseer  Engineering  Service               (Irrigation  Branch),  Punjab  of  outstanding               merit  who may not possess the  qualifications               specified in In  due course, the petitioners were promoted as Offg.  Sub- Divisional  Officers  in the Class II  service  in  November 1969, July 1966 and January  1964 respectively.  Subsequent- ly, by notification dated October 27, 1985, the  petitioners were appointed as Sub-Divisional Officers on a regular basis w.e.f. December 25, 1970. Under the unamended r.6(b) of  the

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Class  I Rules, the petitioners were eligible for  promotion as  Executive Engineers in Class I service despite the  fact that they did not possess a degree in Engineering. Rule 6 of Class I 592 Rules insofar as relevant may be reproduced:               "6.  Qualifications:  No person shall  be  ap-               pointed to the service unless he--               (a) possesses one of the University Degrees or               other qualifications prescribed in Appendix  B               of these rules;                         Provided  that Government may  waive               this qualification in the case of a particular               officer belonging to the Class II Service.               (b)  In case of appointment by promotion  from               Class II Service, has completed in that  Class               of Service for a period of ten years from  the               commencement of these rules, six years service               and after that period eight years service."     Shri Shanti Bhushan, learned counsel for the petitioners has  put  forward a three-fold contention.  First  of  these submissions is that the impugned notification which purport- ed  to amend r.6(b) of the Class I Rules with  retrospective effect  from  July 10, 1964 making a degree  in  Engineering essential for promotion to the post of Executive Engineer in Class I service constitutes a variation in the conditions of service applicable to officers belonging to Class II service who  are  diplomaholders like the petitioners prior  to  the appointed day i.e. November 1, 1966 to their disadvantage as it  renders  them ineligible for promotion to  the  post  of Executive  Engineer in Class I service and was  ultra  vires the  State Government having been made without the  previous approval of the Central Government as enjoined by the provi- so to s.82(6),of the Punjab Reorganisation Act, 1966. It  is urged that any rule which affects the promotion of a  person relates to his conditions of service, although mere  chances of  promotion  may not be. The contention, in  our  opinion, must prevail. The second is that it was not permissible  for the  State Government to amend r.6(b) of the Class  I  Rules with  retrospective effect under the proviso to Art. 309  of the Constitution so as to render ineligible for promotion to the  post  of  Executive Engineer in Class  I  service,  the members of Class II service who are diploma-holders although they  satisfy the condition of eligibility of  eight  years’ experience  in  that class of service. It is said  that  the unamended  r.6(b) conferred a vested right on  persons  like the petitioners which could not be taken away by  retrospec- tive amendment of r.6(b). The third and the last  submission is  that the action of the State Government in  issuing  the impugned notification making retrospective 593 amendment  of r.6(b) of the Class I Rules was  wholly  arbi- trary, irrational and mala fide and thus violative of  Arts. 14  and 16(1) of the Constitution. It is submitted that  the impugned  notification  was  calculated  to  circumvent  the direction  given by this Court in its order  dated  February 24,  1984  on  the basis of the undertaking  given   by  the learned Additional Solicitor General that the State  Govern- ment  would  consider  the cases of  all  eligible  officers belonging  to Class II service for promotion to the Class  I service.     Sub-s.(6) of s.82 of the Punjab Reorganisation Act, 1966 provides:               "82(6).  Nothing  in  this  section  shall  be               deemed to affect on or after the appointed day

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             the  operation of the provisions of Chapter  I               of Part XIV of the Constitution in relation to               the determination of the conditions of service               of  persons  serving in  connection  with  the               affairs of the Union or any State:                         Provided  that  the  conditions   of               service  applicable  immediately  before   the               appointed  day to the case of any  person  re-               ferred  to in sub:section (1)  or  sub-section               (2)  shall not be varied to  his  disadvantage               except  with  the  previous  approval  of  the               Central Government."     It  is quite clear that the proviso to s. 82(6)  of  the Punjab Reorganisation Act, 1966 is in the nature of a fetter on  the power of the Governor under the proviso to Art.  309 of  the  Constitution  to alter the  conditions  of  service applicable  to  all persons serving in connection  with  the affairs  of the State. It interdicts that the conditions  of service  applicable to persons referred to in sub-s. (1)  or sub-s.  (2) thereof i.e. members of civil services  affected by the reorganisation of the State. The conditions of  serv- ice of any persons who immediately before the appointed  day were serving in connection with the affairs of the  existing State  of  Punjab and are as from that  date  allocated  for service  in  connection with the affairs  of  the  successor State  i.e. allocated Government servants can not be  varied to their disadvantage.     There is a long fine of decisions starting from Mohammad Bhakar  v.Y. Krishan Reddy, [1970] SLR 768 down to  Mohammed Shujat Ali & Ors. v. Union of India & Ors., [1975] 1 SCR 449 while  construing the analogous provision contained  in  the proviso to s. 115(7) of the States Reorganisation Act,  1956 laying down that any rule made 594 under  the  proviso to Art. 309 of  the  Constitution  which seeks to vary or alter the conditions of service without the previous  approval of the Central Government would  be  void and inoperative being in violation of the proviso to  sub-s. (7)  of s. 115 of the Act., It is a trite  proposition  that any  rule which affects the right of a person to be  consid- ered for promotion is a condition of service, although  mere chances of promotion may not be. As laid down by this  Court in A.S. Parmar’s case, the petitioners like other members of Class  II  service who are diploma holders and  satisfy  the eligibility test of eight years’ service in that class, were eligible  for being considered for promotion to the post  of Executive  Engineer  in  Class I service  without  having  a degree in Engineering. Admittedly, the impugned notification which  seeks to amend r.6(b) with retrospective effect  from July 10, 1964 clearly operates to their disadvantage as  its purports to make them ineligible for promotion being  diplo- ma-holders.     In  Mohammad Bhakar’s case, the Court  speaking  through Mitter,  J. said: "A rule which affects the promotion  of  a person  relates to his conditions of service". It  was  held that  a rule which made the passing of certain  departmental examinations a pre-requisite for promotion having been  made without the previous approval of the Central Government  was void  by reason of sub-s. (7) of s. 115. In Mohammad  Shujat Ali’s  case,  a Constitution Bench of  this  Court  speaking through Bhagwati, J. observed:                     "A rule which confers a right of  actual               promotion  or  a right to  be  considered  for               promotion is a rule prescribing a condition of               service."

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Under the Class I Rules as they existed immediately prior to the appointed day i.e. before November 1, 1966, a member  of the Overseers Engineering Service in the Irrigation  Branch, Punjab  having a diploma was eligible for being promoted  as Sub-Divisional  Officer in the Class II Service and then  in due course to the post of Executive Engineer in the Class  I service within the quota prescribed for them without  having a  degree in Engineering. It was not necessary to possess  a degree in Engineering as held by this Court in A.S. Parmar’s case for purposes of promotion under the unamended r.6(b) of the  Class I Rules, as in the case of promotion to the  post of  Executive Engineer in Class I service under r.6(b)  what was essential was eight years’ service in that class and not a  degree  in Engineering. The impugned  notification  which purports to amend r.6(b) with retrospective effect, however, renders members of the Class II service like the 595 petitioners who are diploma-holders ineligible for promotion by making a degree in Engineering an essential qualification for such promotion which amounts to alteration of the condi- tions  of service applicable to them to  their  disadvantage without the previous approval of the Central Government  and is  thus void by reason of the proviso to sub-s.(6) of  s.82 of the Punjab Reorganisation Act, 1966.     Faced  with  the  difficulty, learned  counsel  for  the respondents strenuously contends that the proviso to s.82(6) of  the  Act  is not attracted in the present  case.  It  is argued  that on the appointed day i.e. November 1, 1966  the petitioners were not members of Class II service. It is said that the petitioners on the appointed day being  Supervisors belonged  to  the Class III service and therefore  were  not governed by the unamended r.6(b). Reliance is placed on  the notification  issued by the State Government  dated  October 27,  1985 constituting the Class II service w.e.f.  December 25,  1970 and it is said that the petitioners are not  shown as belonging to Class II service. It was then contended that under  r.3(c) of the Punjab Service of Engineers,  Class  II P.W.D.  (Irrigation Branch) Rules, 1941, a degree  in  Engi- neering was essential till the Punjab Service of  Engineers, Class  II, P.W..D. (Irrigation Branch) Rules,  1970  brought about a change. Inasmuch as none of the petitioners had  the requisite  qualifications, they could not become members  of the  Class II service. We are unable to accept this line  of reasoning.     Undoubtedly,  at  the  time when  the  petitioners  were recruited  as Supervisors in the Irrigation Branch, a  Class III  service,  r.3(c) of the Punjab  Service  of  Engineers, Class  II, P.W.D. (Irrigation Branch) Rules, 1941 laid  down that  no person shall be appointed to the service unless  he possessed one of the university degrees or other  qualifica- tions prescribed in Appendix ’A’ to the Rules. Note  beneath r.3(c)  however  provided that the requirements of  cl.  (c) could  be  waived in the case of members  of  the  Overseers Engineering Service, Irrigation Branch, Punjab for promotion to  the service under the proviso to r.5 of the  Rules.  The term  ’service’  as defined in r. 1(2)(g) meant  the  Punjab Service of Engineers, Class II (Irrigation Branch).  Proviso to r.5 of the Rules, however, empowered the State Government to  relax the condition. It is clear from the terms  of  the proviso to r.5 quoted above that the State Government  could relax  the requirements of r.3(c) on the  recommendation  of the  Chief  Engineer in order to admit the  promotion  of  a member  of  the Overseers  Engineering  Service,  Irrigation Branch,  Punjab  if he was an officer of  outstanding  merit although he did not possess the qualifications specified  in

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r.3(c) i.e. a 596 degree  in  Engineering. Presumably,  the  petitioners  were officers  of  outstanding merit and they  were  promoted  as Offg. Sub-Divisional Officers in Class II service in January 1964,  July  1966 and November 1969. Eventually,  the  State Government by notification dated October 27, 1985  appointed them  on a regular basis in that post, w.e.f.  December  25, 1970. ’Further, it is wrong to suggest that on the appointed day i.e. on November 1, 1966 they were all Overseers belong- ing to the Class III service and were therefore not governed by the unamended r 6(b). Two of them V.D. Grover and  Mohin- der Singh had already been’ promoted as Offg. Sub-Divisional Officers prior to the appointed day i.e. in January 1964 and July  1966  and  were therefore governed  by  the  unamended r.6(b)  of the Class I Rules and the third  petitioner  T.R. Kapur was also promoted to that post. subsequently in Novem- ber  1969.  Upon such promotion to the post  of  Offg.  Sub- Divisional Officers they had not only the legitimate  expec- tation  that  they  would in due course  be  considered  for confirmation but also had the right on such confirmation  to be  considered for promotion. It is also not quite  accurate to  say that the petitioners were not shown as belonging  to the Class II service. A bare look at the notification  dated October  27, 1985 would show that the petitioners figure  at Sr. Nos. 246, 254 and 369.     It is not suggested that the State Government ever moved the  Central  Government seeking its prior approval  to  the proposed  amendment of r.6(b) of the Class I Rules. In  that connection,  it  is necessary to recall that  prior  to  the reorganisation of the States under the States Reorganisation Act,  1956,  a conference of the Chief  Secretaries  of  the States that were to be affected was held at Delhi on May  18 and  19, 1956 for the purpose of formulation of the  princi- ples upon which integration of services was to be  effected. The  Government of India by its circular dated May 11,  1957 to  all  the  State Governments stated inter  alia  that  it agreed  with  the views expressed on behalf of  the  States’ representatives that it would not be appropriate to  provide any protection in the matter of departmental promotion. This circular  has  been interpreted as a prior approval  of  the Central  Government in terms of the proviso to sub-s.(7)  of s. 115 of the Act in the matter of change of the  conditions of  service relating to departmental promotions. These  con- siderations however do not arise in the present case. Admit- tedly, there was no Chief Secretaries Conference as was held prior  to the reorganisation of the States under the  States Reorganisation  Act, 1956. Nor Was there  any  communication issued  by  the Central Government  conveying  its  previous approval  of  the changes in service  conditions  which  the States of Punjab and Haryana might 597 make in terms of the proviso to s.82(6) of the Punjab  Reor- ganisation  Act, 1966. Under the States Reorganisation  Act, 1956 so also under the Punjab Reorganisation Act, 1966,  the power  of  the Governor to make rules under the  proviso  to Art.309  of  the  Constitution had been  controlled  by  the proviso  to s. 115(7) of the former Act and s.82(6)  of  the latter. It follows that the conditions of service applicable immediately  before  the appointed day to the  case  of  any person  referred to in sub-s.(1) or (2) of s.82 of  the  Act could  not  be varied to his disadvantage  except  with  the previous approval of the Central Government. That being  so, the  impugned  notification issued by the  State  Government purporting to amend r.6(b) of the Class I Rules w.e.f.  July

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10, 1964 which rendered members of Class II Service who  are diploma-holders  like the petitioners ineligible for  promo- tion  to the post of Executive Engineer in Class  I  Service making a degree in Engineering essential for such promotion, although  they satisfied the condition of eligibility  of  8 years’  experience in that class of service, must be  struck down  as ultra vires the State Government being contrary  to s.82(6) of the Punjab Reorganisation Act, 1966.   ’     On  the  view that we take, there is no need for  us  to deal  in detail with the other points raised. We shall  only touch upon them.     One  should have thought that the controversy whether  a degree  in  Engineering was an essential  qualification  for promotion of Sub Divisional Officers in Class II Service  to the post of Executive E-ngineer in Class I Service under  r. 6(b)  of  the Class I Rules had ended with the  decision  of this Court in A.S. Parmar’s case. Curiously enough,  learned counsel  for the respondents strenuously contends  that  the decision of this Court in A.S. Parmar’s case was  incorrect. He  presses into service for our acceptance the decision  of the High Court in o.P. Bhatia v. State of Punjab, ILR 1980 P &  H 470 taking a view to the contrary. It is urged that  in the  erstwhile State of Punjab a degree in  Engineering  was essential for recruitment of Assistant Engineers in Class II Service under r. 3(c) of the 1941 Rules as held by the  High Court in O.P. Bhatia’s case and that view was in  consonance with the departmental instructions of the relevant rules  in the State of Punjab and the State of Haryana as also in  the erstwhile State of Punjab that r.6(b) required the promotees to have the essential qualification of a degree in Engineer- ing.  We do not think that it is open to question  the  cor- rectness  of  the decision in A.S. Parmar’s case  which  ex- pressly  overrules the view taken by the High Court in  O.P. Bhatia’s  case. That apart, the proviso to r.5 of  the  1941 Rules  conferred power on the State Government to relax  the requirement of r.3(c) on the recom- 598 mendation of the Chief Engineer in order to admit the promo- tion  of  a  member of  the  Overseers  Engineering  Service (Irrigation  Branch),  Punjab if he was an officer  of  out- standing merit although he did not possess the qualification prescribed in r.3(c) i.e. the educational qualification of a degree in Engineering. The requirement of a degree in  Engi- neering  for  recruitment to the Class II Service  was  done away  with in the 1970 Rules. The contention also  fails  to take  note of the fact that the requirement of a  degree  in Engineering which was an essential educational qualification for  purposes of direct recruitment of  Assistant  Executive Engineers  in Class I Service under r. 6(a) of the  Class  I Rules could not be projected for promotion of Sub-Divisional Officers  belonging  to  Class II Service to  the  posts  of Executive Engineers in Class I Service under r. 6(b) as they form two distinct sources from which the appointments to the posts of Executive Engineers could be made. As laid down  in A.S. Parmar’s case, what was of the essence for purposes  of promotion  of  Sub-Divisional Officers who were  members  of Class II Service to the post of Executive Engineer under r.6 (b)  of the Class I Rules was not a degree  in  Engineering, but 8 years’ experience in that class of service i.e.  Class II Service.     More  fundamental  is the contention that  the  impugned notification  issued by the State Government  purporting  to amend  r.6(b) with retrospective effect from July  10,  1964 which rendered members of Class II Service who are  diploma- holders  like the petitioners. ineligible for  promotion  to

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the  post of Executive Engineer although they satisfied  the condition  of  eligibility of 8 years’  experience  in  that class of service was unreasonable, arbitrary and  irrational and thus offended against Arts. 14 and 16(1) of the  Consti- tution.  It is urged that they were eligible  for  promotion under  the unamended r.6(b) of the Class I Rules and  had  a fight  to be considered for promotion to the post of  Execu- tive  Engineer,  and  a retrospective  amendment  of  r.6(b) seeking  to  render  them  ineligible  was  constitutionally impermissible.  It  is  said that the reason  for  this  was obvious inasmuch as immediately prior to the  reorganisation of the State of Punjab i.e. prior to November 1, 1966 even a member  of  the Overseers Engineering Service, a  Class  III Service,  having only a diploma was eligible for being  pro- moted as Executive Engineer in Class I Service in due course since in the matter of promotion under the unamended  r.6(b) it  was not necessary to possess a degree in Engineering  as held by this Court in A.S. Parmar’s case. It follows  there- fore that every member of the Overseers Engineering  Service was  eligible for promotion first as Assistant  Engineer  or Sub-Divisional Officer in Class II Service and thereafter, 599 in due course, to the post of Executive Engineer in Class  I Service  even  without the educational  qualification  of  a degree in Engineering. In substance, the submission is  that a retrospective amendment of r.6(b) by the impugned  notifi- cation  which seeks to take away the eligibility of  members of Class II Service who are diploma-holders for purposes  of promotion  to  the posts of Executive Engineers in  Class  I Service  from a back date ranging over 20 years and  thereby renders invalid the promotions already made is constitution- ally impermissible.     It  is  well-settled that the power to  frame  rules  to regulate the conditions of service under the proviso to Art. 309  of the Constitution carries with it the power to  amend or alter the rules with a retrospective effect: B.S. Vadhera v.  Union of India, [1968] 3 SCR 575, Raj Kumar v. Union  of India, [1975] 3 SCR 963, K. Nagaraj & Ors. v. Sate of A.P. & Anr.,  [1985] 1 SCC 523 and State Of J & K v.  Triloki  Nath Khosla & Ors., [1974] 1 SCR 771. It is equally  well-settled that  any  rule which affects the right of a  person  to  be considered for promotion is a condition of service  although mere  chances  of promotion may not be. It  may  further  be stated  that an authority competent to lay  down  qualifica- tions for promotion, is also competent to change the  quali- fications. The rules defining qualifications and suitability for  promotion  are conditions of service and  they  can  be changed  retrospectively. This rule is however subject to  a well-recognised  principle that the benefits acquired  under the existing rules cannot be taken away by an amendment with retrospective  effect, that is to say, there is no power  to make such a rule under the proviso to Art. 309 which affects or  impairs vested rights. Therefore, unless it is  specifi- cally  provided in the rules, the employees who are  already promoted  before the amendment of the rules, cannot  be  re- verted  and  their promotions cannot be recalled.  In  other words,  such rules laying down qualifications for  promotion made  with retrospective effect must necessary  satisfy  the tests  of Arts. 14 and 16(1) of the Constitution:  State  of Mysore  v. M.N. Krishna Murty & Ors., [1973] 2 SCR 575  B.S. Yadav & Ors.  v. State of Haryana & Ors., [1981] 1 SCR  1024 State  of Gujarat & Anr. v. Ramanlal Keshavlal Soni &  Ors., [1983]  2 SCR 287 and Ex-Captain K.C. Arora & Anr. v.  State of Haryana & Ors., [1984] 3 SCR 623.     A Constitution Bench of this Court in State of Gujarat &

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Anr.  v. Ramanlal Keshavlal Soni & Ors. (supra) had to  con- sider  the constitutional validity of the proviso to s.  102 (1)(a)  of the Gujarat Panchayat Act, 1961 as introduced  by the  Gujarat  Panchayat  (Third Amendment)  Act,  1978  with retrospective effect and sought to extinguish the status  of secretaries, officers and servants of the Gram and Nagar 600 Panchayats  who became members of a service under the  State on  being  allocated  to the panchayat  service.  The  Court speaking through Chinnappa Reddy, J. observed:               "Now,  in  1978 before the  Amending  Act  was               passed, thanks to the provisions of the  Prin-               cipal Act of 1961, the ex-municipal  employees               who had been allocated to the Panchayat  Serv-               ice  as Secretaries, Officers and Servants  of               Gram  and Nagar Panchayats, had  achieved  the               status of government servants. Their status as               Government servants could not be extinguished,               so  long as the posts were not  abolished  and               their services were not terminated in  accord-               ance  with  the provisions of Art.311  of  the               Constitution. Nor was it permissible to single               them  out  for  differential  treatment.  That               would offend Art. 14 of the Constitution." The learned Judge observed that the Amending Act was  sought to  be given retrospective effect to get over the  constitu- tional  safeguards  of Arts. 311 and 14 by  reverting  to  a situation that existed some 17 years ago. He said that there was no power to do so and observed:               "The  legislation  is pure and  simple,  self-               deceptive,  if we may use such  an  expression               with  reference to a legislaturemade law.  The               legislature is undoubtedly competent to legis-               late with retrospective effect to take away or               impair any vested fight acquired under  exist-               ing  laws but since the laws are made under  a               written  Constitution, and have to conform  to               the  do’s and don’ts of the Constitution  nei-               ther prospective nor retrospective laws can be               made  so a to contravene  Fundamental  Rights.               The  law must satisfy the requirements of  the               Constitution  today  taking into  account  the               accrued  or  acquired rights  of  the  parties               today.  The law cannot say, twenty  years  ago               the  parties  had no  fights,  therefore,  the               requirements  of  the  Constitution  will   be               satisfied  if the law is dated back by  twenty               years.  We are concerned with  today’s  rights               and  not  yesterday’s.  A  legislature               cannot  legislate  today with reference  to  a               situation  that obtained twenty years ago  and               ignore  the march of events and the  constitu-               tional  rights  accrued in the course  of  the               twenty  years. That would be  most  arbitrary,               unreasonable and a negation of history." The  learned  Judge relied with approval  on  the  following observations 601 of  Chandrachud,  CJ. speaking for a Constitution  Bench  in B.S. Yadav & Ors. v. State of Haryana & Ors. (supra):               "Since the Governor exercises the  legislative               power  under  the proviso to Art. 309  of  the               Constitution, it is open to him to give retro-               spective  operation  to the rules  made  under               that  provision. But the date from  which  the

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             rules  are made to operate, must be  shown  to               bear  either from the face of the rules or  by               extrinsic evidence, reasonable nexus with  the               provisions contained in the rules,  especially               when  the retrospective effect extends over  a               long period as in this case. ’ ’ and summed up:               "Today’s  equals  cannot be  made  unequal  by               saying that they were unequal twenty years ago               and we will restore that position by making  a               law today and making it retrospective. Consti-               tutional  rights,  constitutional  obligations               and  constitutional  consequences  cannot   be               tempered  with that way. A law which  if  made               today  would be plainly invalid  as  offending               constitutional  provisions in the  context  of               the existing situation cannot become valid  by               being made retrospective. Past virtue (consti-               tutional)  cannot be made to wipe out  present               vice (constitutional) by making  retrospective               laws.  We are, therefore, firmly of  the  view               that the Gujarat Panchayats (Third  Amendment)               Act,  1978 is unconstitutional, as it  offends               Arts.  311 and 14 and is arbitrary and  unrea-               sonable."     Following  the view the Court in K.C. Arora’s  case  re- ferred  with  approval to the observations of the  Punjab  & Haryana  High Court in Harbhajan Singh v. State  of  Punjab, [1977] 2 SCR 180 to the effect:               "Now the rule-making authority must have  been               aware  that  a  competitive  examination   for               appointment to the service had been held under               the old rules and appointments were yet in the               offing. Surely, the rule-making authority  did               not intend to exclude from appointment  candi-               dates  who were eligible under the  old  rules               but  became ineligible by reason of an  amend-               ment  of the rules made after the  process  of               selection had almost reached a final stage."               602 And then queried:               "Are  they to be penalised "by  barring  their               entry into the Punjab Civil Service  (Judicial               Branch) because they accepted employment at  a               time  when acceptance of such  employment  was               not a bar to appointment to the service? We do               not  think  that we will be justified  in  at-               tributing  such an unreasonable  intention  to               the  rule-making authority. In our  view,  the               only reasonable interpretation of the  amended               rule,  consistent with the  prevailing  situa-               tion,  is to hold that only those persons  who               having joined the service of the Union or  the               State  or a post under the Union or the  State               previously  continued to hold the post on  the               date of the coming into force of the rule, are               excluded from appointment to the Punjab  Civil               Service  (Judicial  Branch).  The   expression               ’joined  or joins’ must be given a  reasonable               interpretation in the context of the situation               and we think that our interpretation does  not               strain  the language or attributes  unreasona-               bleness to the rule-making authority. In  that               view,  the  petitioner cannot be  said  to  be               ineligible for appointment."

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The view expressed by the High Court has received the impri- matur of the Court in K.C. Arora’s case. That appears to  be the present trend.     In  the result, the petitions must succeed and  are  al- lowed  with costs. The impugned notification dated June  22, 1984 issued by the State Government of Haryana purporting to amend  r.6(b) of the Punjab Service of Engineers,  Class  I, Public Works Department (Irrigation Branch) Rules, 1964 with retrospective  effect from July 10, 1964 is declared  to  be ultra vires the State Government. P.S.S.                                             Petitions allowed. ?603