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PETITIONER: GAJRAJ SINGH

       Vs.

RESPONDENT: THE STATE OF MADHYA- PRADESH & ANR.

DATE OF JUDGMENT28/03/1973

BENCH: SHETTY, K.J. (J) BENCH: SHETTY, K.J. (J) CHANDRACHUD, Y.V.

CITATION:  1973 AIR 1285            1973 SCR  (3) 794  1973 SCC  (1) 793

ACT: Constitution,  art. 311-Madhya Bharat-Retrenchment Terms  in respect  of employees of former States merging to  form  new State-Employees   of   certain   categories    provisionally absorbed-Could be retrenched for certain specified  reasons- When employee is retrenched for one or more of such  reasons Art.   311   is  not  attracted-Tests  are   objective   and retrenchment order can be ’defended on other grounds even if one grounds fails.

HEADNOTE: The appellant was in 1934 first appointed as a constable  in the  erstwhile State of Gwalior and was promoted in 1945  to the  post  of  SubInspector.   In May  1948  the  rulers  of Gwalior,  Indore  and certain other States  formed  under  a covenant  executed by them, a new State, called  the  United States of Madhya Bharat.  The appellant was allowed to  work as a Sub-Inspector in the new State of Madhya Bharat but his name was centered from the very beginning, that is from  May 1948, in the list of ’provisionally absorbed servants,’  and remained  so during all material times.  By a  notification, dated  December  15,  1948,  the  Madhya  Bharat  Government published rules, called the ’Retrenchment Terms’ which  were revised by another notification dated July 9, 1949.  In  the said   notification  principles  were  laid  down  for   the selection  of  Government Servants  for  retrenchment.   The appellant  was retrenched by an order signed by  the  Deputy Inspector-General,  Central  Range, on the ground  that  the appellant  had  a consistent bad record  under  retrenchment category   2  of  the  Retrenment  Terms.   In  appeal   the Inspector-General  confirmed  the  said  order  also   under categories  4 and 7 of the said Terms, that is, besides  the ground  of a consistently bad record, also on the ground  of the  appellant  not  possessing  the  minimum  qualification prescribed  for  the  post,  and  on  the  ground  that  the appellant for reasons considered adequate by the Government, could  not  be absorbed in the Madhya Bharat  service.   The writ petition filed by the appellant challenging this  order was  dismissed  by the High Court on the  ground  of  delay, though  Art.  311  of  the  Constitution  was  held  to   be attracted.   In 1960 the appellant filed a suit  relying  on Art. 311.  The trial court decreed the suit.  The High Court

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however  allowed the State’s appear.. By special  leave  the appellant appealed to this Court and contended : (i) that on the construction of the said Retrenchment Terms the impugned order   amounted  to  one  of  dismissal,   attracting   the provisions  of Art. 311; and (ii) that since the  ground  of consistent  bad record amounted to a stigma, and  could  not therefore  be relied on in support of the order,  the  order fell  and  could not be sustained on the ground of  lack  of minimum educational qualification. Dismissing the appeal, HELD  :  (i)  The classification of  persons  in  the  seven categories  was clearly made to select persons ’from out  of those  who  were in excess of the requirements  of  the  new State.   Since they were not to be absorbed, they could  not be said to have been the employees of the new State and Art. 311 therefore could not apply to their cases.  The claim  of the appellant that the impugned order amounted to punishment or  that for that reason Art. 311 was attracted was  clearly misconceived. [801B] 795 (ii) The respondent-State had relied upon the categories  2, 4  and  7,  as ground for the impugned  order.   So  far  as category  4  was concerned, there can be no doubt  that  the appellant did not have the minimum educational qualification required  for the post of a Sub-Inspector.  Since  that  was so,  he’  would also fall in category No. 7, that is,  as  a person who could not, for reasons considered adequate by the Government,  be  absorbed in the service of the  new  State. Even  if therefore, category 2 could not for some reason  or the  other be taken into consideration, categories 4  and  7 were relevant and valid.  The mere fact that the  Government could not avail of category 2 did not mean that it could not rely on the other two grounds.  The reason is that this  was not  a case of subjective satisfaction, where on failure  of one  of  the  grounds it would be  impossible  to  predicate whether  the  relevant  authority  could  have  reached  its satisfaction  only on the basis of the rest of the  grounds. The tests here were objective ones and if one of the several such tests failed. but the others were sufficient, the order would still have to be sustained. [801E]

JUDGMENT: CIVIL  APPELLATE  JURISDICTION : Civil Appeal  No.  1259  of 1967. Appeal  by special leave from the judgment and  order  dated December  20, 1966 of the Madhya Pradesh High Court,  Indore Bench in First Appeal No. 61 of 1962. Rameshwar Nath, for the appellant. Ram  Panjwani,  I.  N. Shroff and H.  S.  Parihar,  for  the respondents. The Judgment of the Court was delivered by SHELAT,  ACTING  C.J.-The appellant was in 1,934  first  ap- pointed  as  a police constable in the  erstwhile  State  of Gwalior and was promoted in March 1945 to the post of a Sub- Inspector.   In May 1948, the rulers of Gwalior, Indore  and certain  other States formed, under a covenant executed  ’by them,  a  new  State, called the  United  States  of  Madhya Bharat.   The  appellant  was  allowed to  work  as  a  Sub- Inspector  in the new State of Madhya Bharat, but  his  name was entered from the very beginning, that is from May  1948, in  the  list  of  "provisionally  absorbed  servants",  and remained so during all material times. By  a  notification,  dated December 16,  1948,  the  Madhya

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Bharat Government published rules, called the  "Retrenchment Terms".   As revised by another notification, dated July  9, 1949,  these Retrenchment Terms so far as they are  relevant for the purposes of this appeal read as under "Government of the United State of Madhya Bharat.                      NOTIFICATION      After a careful consideration of the Mohan Rau     Committee’s recommendations regarding the retrench- 796 ment  of surplus staff of the acceding States of the  Madhya Bharat  Union and compensation terms to be offered  to  such staff, the Government of Madhya Bharat have been pleased  to sanction  the  following principles which, will  govern  the selection of Government servants for discharge from  service and  the  grant  of compensation to  them.   Owing  to  wide diversity of rules relating to leave and pension in force in the various acceding Units of Madhya Bharat, the  Government are  constrained to frame a separate set of rules,  modelled on the terms sanctioned by the Government of India to  their retrenchment  personnel.   The  Government  are  aware  that cessation  of employment is bound to cause distress  and  in order to soften the blow, as far as possible, they have kept in view the need for providing each retrenched servant  with a reasonable subsistence which would enable him to tide over the period necessary for building up new associations               1.  Principles  to  govern  the  selection  of               Government Servants for retrenchment               (a)   The  retrenchment  should  embrace   the               following categories               (1) Those who have attained the age of  super-               annuation.               Note:-The age of superannuation shall be taken               as   55  years  for  Government  servants   in               superior  service  and 60 years for  those  in               inferior service.               (2)   Those whose record of service is consis-               tently bad.               (3)   Temporary  and  officiating   Government               servants.               (4)   Those  who  do not possess  the  minimum               qualification prescribed for the post held  by               them.               Note:-It  will be the right of  Government  to               retain  an  exceptionally  good  person   even               though be may not be possessed of the  minimum               qualification prescribed.               (5)  Those who have put in qualifying  service               for 30 years and more. 797 .lm15 (6)  Permanent  Government  servants who have  less  than  3 years’ service. (7)  Government  servants  who are  treated  as  surplus  to requirements  either  because the posts held  by  them  have ceased  to  exist,  or  because  they  cannot,  for  reasons considered  adequate  ’by  the Government,  be  absorbed  in Madhya Bharat service. *      *      *      *      * These orders shall have effect from the 1st of July, 1948." While  the  appellant  was working at  Bhilsa  as  the  sub- inspector,  he  received  an  order  signed  by  the  Deputy Inspector-General,  Central  Range, to the effect  that  the appellant  was "retrenched. for consistent bad record  under retrenchment  category  2" of the said  Retrenchment  Terms. The order, however, informed the appellant that he would  be

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given  all  the benefits of leave, pension etc. due  to  him under the Rules.  Aggrieved by the said order, the appellant filed an appeal before the Inspector-General of Police.  The Inspector-General  issued a notice to the appellant to  show cause  why the said order should not be made absolute  under category  2,  as also under categories 4 and 7 of  the  said Retrenchment Terms.  The appellant submitted his explanation showing  cause.   By his order, dated January 2,  1954,  the Inspector-General rejected the appeal and confirmed the said order, also Under categories 4 and 7 of the said Terms, that is, besides the (,round of a consistently bad record,  also, on  the ground of, the appellant not possessing the  minimum qualification  prescribed for the post, and the ground  that the  appellant,  for  reasons  considered  adequate  by  the Government,  could  not  be absorbed in  the  Madhya  Bharat service. Resort  to departmental authorities for redress against  the said  order  having  failed,  the  appellant  filed  a  writ petition  in  the  High Court of  Madhya  Pradesh,  pleading inter-alia  that the impugned order amounted to  removal  by way   of punishment  which  attracted  Art.  311  of   the Constitution.  On October 22, 1959, the High Court dismissed the writ petition on the ground of delay.  Nevertheless, the High  Court  went into the question whether the  said  order amounted to dismissal or removal and attracted Art. 311.  In doing  so, the High Court observed that although  the  order was  sought  to  be  supported both on  the  ground  of  the appellant’s consistent bad record, as’ also on the ground of his  not possessing the minimum  educational  qualification. the  State had relied on the first ground only,  the  second ground not having been pressed either 798 in its return or in the argument before the High Court,  The High Court observed :               "The result is that the administration  having               gone into the question of. undersirability  or               consistent  badness of the record, was,  under               the  law  obliged  to  follow  ’the  procedure               prescribed  in Article 311. Having  admittedly               failed  to do so,. the removal  order,  though               ostensibly one of retrenchment, would be bad." The  High  Court  also observed that  had  the  appellant  a approached it without delay, it would have been possible  to grant him relief. In  1960,  the  appellant filed the suit,  from  which  this appeal  arises,  in  the Court of  the  Additional  District Judge, Indore for a declaration that the said order was  bad by  reason of failure to hold an inquiry under Art. 311  and that  he  therefore  continued to be in service  and  for  a decree  for  the salary for the entire  period.   The  Trial Judge  decreed  the suit relying upon the  aforesaid  obser- vations  of the High Court in the said writ  petition.   The State of Madhya Pradesh thereupon filed an appeal before the High  Court  against  the said  judgment  and  decree.   The Division  Bench of the High Court, which heard  the  appeal, had on it coincidently Krishnan, J., who also was one of the judges  on  the  Bench  which  had  earlier  dismissed   the appellant’s said writ petition in 1959. The High Court allowed the State’s appeal and set aside  the decree  passed  by the Trial Judge.  This was  done  on  the ground that in "retrenching" the appellant the State had two grounds; (1) a consistent bad record, and (2) the  appellant not possessing the minimum educational qualification.  There being  thus two grounds, although the impugned  order  could not  be  supported  by the first ground  by  reason  of  the

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failure  to  comply with the provisions of Art.  31  1,  the second ground was a good ground and being a separate ground, the  impugned  order,  on  the basis  of  that  ground,  was justified.   This appeal, by special leave,  challenges  the judgment of the High Court, Two  contentions  were pressed upon us by  counsel  for  the appellant :               (1)  that  on  the construction  of  the  said               retrenchment Terms the impugned order amounted               to one of dismissal attracting the  provisions               of Art. 311, and               (2)  that since the ground of  consistent  bad               record  amounted  to a stigma, and  could  not               therefore  be  relied  on in  support  of  the               order,  the  order  fell  and  could  not   be               sustained on the second ground. 799 The appellant, without doubt, was a permanent servant of the erstwhile  Gwalior  State  and vis-a-vis  that  State,  was, therefore, entitled to all the rights obtainable under  the law   of  that  State,  whatever  such  rights  there   were thereunder.  On the accession of Gwalior State to the United States  of  Madhya Bharat, his  position,  however,  totally changed, in that, it was for the new State to absorb him  or not  into its service.  It may be that the covenant, by  and under which Gwalior State acceded to the newly formed State, might  have provided for the continuance in the  service  of the  new State of all the employees of the acceding  States. The  terms  of the covenant were not placed before  us,  nor before the High Court.  Assuming, however, that the covenant did  so provide, it being one between the high  parties,  no right  accrued  thereunder to an individual who  was  not  a party  to it.  Obviously, the appellant could not claim  any right  to being absorbed or continued in the service of  the new State, unless the new State had agreed to or absorbed or retained  him  in its service.  In fact, the  new  State  of Madhya  Bharat  had not done so.  It would  appear,  on  the contrary,  that  while  the question of  how  many  And  who amongst  the ex-employees of the acceding States should  be, absorbed  in  the service of the new State was  pending  and under consideration, the appellant’s name was entered in the list of "the provisionally absorbed" employees. It  would  seem from the said Retrenchment  Terms  that  the problem, before the new State was as to what to do with  the surplus  personnel who were the ex-employees of the  various acceding  States  and how many of them could and  should  be absorbed  in  the service of the new State.  To  soften  the blow  which would fall of those who could not be,  absorbed, the  new  State  framed the said  Retrenchment  Terms  which provided   two  things,  (1)  laying  down  principles   for selection of those who were to be absorbed, and (2) to grant some  benefit by way of a reasonable subsistence  to  those, who  would not be absorbed, which would enable them to  tide over the period necessary for building up new  associations. The  rerenchment  Terms  were framed on  the  basis  of  the recommendations  made by the Mohan Rau  Committee  appointed for  going into the question of the surplus  personnel,  who until  then  were in the service of the  erstwhile  acceding States, such as Gwalior.  In order to be fair and not to  be arbitrary in the matter of selection of those who were to be absorbed  in the service of the new State, the  Retrenchment Terms laid down seven categories of persons who were not  to be absorbed. It is clear from the said Retrenchment Terms themselves that they dealt with a two-fold problem, (1) of the surplus staff

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of  the acceding States, and (2) of payment of a  reasonable subsistence  to such of the surplus personnel who could  not be absorbed. 800 Though   the   said  notification  called   its   provisions "Retrenchment   Terms",  there  was  no  question   of   any retrenchment  in  the  sense in  which  that  expression  is ordinarily  understood.  The question of retrenchment  could arise  duly  in  the case of persons who  had  already  been absorbed and continued in the service of the new State.   As aforesaid,  the process of absorption was pending and  under consideration.   Until it was completed,  the  appellant’s name  figured  in the list of  the  "provisionally  absorbed persons".   It  was,  therefore,  not  as  if  the   surplus employees  of the acceding States had already been  absorbed or  retained in the service of the new State and  then  were retrenched or removed from service. The  seven  categories of persons classified  in  the,  said Retrenchment Terms also indicate that those persons were not to  be  absorbed  and not that they were to  be  removed  or retrenched  from  the service of the new  State.   There  is nothing  on record to show that the new State was  bound  to absorb  in  its service all the employees  of  the  acceding States even if they were surplus.  As aforesaid, even if the covenant  under  which the acceding States  joined  the  new State  so provided, the individual employees of such  States did  not  thereunder  acquire any right to  be  absorbed  or continued  in service of the new State.  The  non-absorption of  persons  falling  in the  seven  categories  could  not, therefore,  amount  in  law to  removal  or  dismissal  from service.   They were simply not absorbed in the  service  of the  new  State  and  had, therefore,  not  yet  become  its employees.   No question thus of removal or dismissal  could possibly arise. It  is  true  that  of  the  seven  categories  of  persons, category .2 related to persons whose previous service record was  consistently  bad.   The decision not  to  absorb  such persons, however, could not amount to any punishment for the reason  that  they  were not yet absorbed  or  continued  in service of the new State and had, therefore, not become  its employees.  It is true that these persons along with persons falling in the other categories continued to work in the new State  after its formation.  But that was only by way  of  a provisional arrangement, until the process of absorption was finalised.    No   question   of   paying   subsistence   or compensation also could have arisen if their  non-absorption amounted   to  either  removal  or  dismissal  by   way   of punishment. Category 1 consisted of those who had reached the age of  55 years,  if  they were in superior service, or 60  years,  if they  were  in  inferior  service.   Their   non-absorption, surely, could not constitute either removal or dismissal  as and  by  way of punishment.  The same would be the  case  of those  in  categories  3, 5 and  6,  namely,  temporary  and officiating  government  servants, persons who  had  put  in Service  for  30 years and more,  and  permanent  government servants  who  had less than three years  service  to  their credit.  These 801 persons  were placed in these categories presumably for  the reason  that  their  non-absorption  would  not  work  as  a hardship or be unfair as against persons Who were  permanent government  servants  and  who had a long period  to  be  in service.   The  classification  of  persons  in  the   seven categories was thus clearly made to select persons from  out

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of  those who were in excess of the requirements of the  new State.   Since they were not to be absorbed, they could  not be said to have been the employees of the new State and Art. 31 1, therefore, could not apply to their cases.  The  claim of  the  appellant  that  the  impugned  order  amounted  to punishment or that for that reason Art. 3 1 1 was  attracted was clearly misconceived. The respondent-State had relied upon categories 2, 4 and  7, as grounds for the impugned order.  So far as category 4 was concerned, there can be no doubt that the appellant did  not have the minimum educational qualification required for  the post  of a Sub-Inspector.  Since that was so, he would  also fall in category No. 7, that is, as a person who could  not, for  reasons  considered  adequate  by  the  Government,  be absorbed  in  the  service  of  the  new  State.   Even  if, therefore,  category  (2) could not for some reason  or  the other  be taken into consideration, categories 4 and 7  were relevant and valid.  The mere fact that the Government could not  avail  of category (2) did not mean that it  could  not rely  on the other two grounds.  The reason is hat this  was not  a case of subjective satisfaction, where on failure  of one  of  the  grounds it would be  impossible  to  predicate whether  the  relevant  authority  could  have  reached  its satisfaction  only on the basis of the rest of therounds. The tests here were objective ones and if one of the several such tests failed, but the others were sufficient, the order would still have to be sustained. We  agree,  in the circumstances, with the judgment  of  the High  Court, though for the reasons set out above.   In  the result,  the  appeal  fails, but since the  appellant  is  a person who was not absorbed in service, we make no order  as to costs. G.C.                                Appeal dismissed. 8 02