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PETITIONER: J.K. VASAVADA & ORS.

       Vs.

RESPONDENT: CHANDRAKANTA CHIMANLAL BHAVSAR & ANR.

DATE OF JUDGMENT28/08/1975

BENCH: ALAGIRISWAMI, A. BENCH: ALAGIRISWAMI, A. UNTWALIA, N.L. FAZALALI, SYED MURTAZA

CITATION:  1975 AIR 2089            1976 SCR  (1) 499  1975 SCC  (4) 734

ACT:      States  Reorganisation   Act,  1956-Sec.  115(7)-Bombay States Reorganisation  Act, 1960-Sec.  81(b)  and  Sec.  87- Change in  conditions of  service  to  the  disadvantage  of allotted  government   employees-Approval  of   the  Central Government under  earlier  Re-organisation  Act-Circular  of Central Government dated 11th May, 1957.

HEADNOTE:      The appellants  and  the  respondents  were  originally servants of  the State  of Bombay  and were  allotted to the State of  Gujarat on  its formation on 1st of May, 1960. The State of  Gujarat issued certain orders in the year 1962 and thereafter which  provided  that  passing  of  G.D.C.  &  A. examination was  necessary for  the  purpose  of  getting  a promotion to  the  higher  grades.  It  also  provided  that persons  who   were  already   promoted  would   lose  their increments and in some cases further increments were stopped unless they  passed the  said examination.  The  respondents filed  a   Writ  Petition  in  the  High  Court  of  Gujarat challenging the  validity of  the said  orders on the ground that the said orders varied the conditions of service of the respondents to  their disadvantage  without the  approval of the Central  Government. The respondents contended that they had passed  all the prescribed departmental examinations, as required by the Rules of the State of Bombay. The High Court of Gujarat  struck down  the said  orders on the ground that they varied  the  conditions  of  service  of  the  allotted employees to  their disadvantage without the approval of the Central Government.      On appeal  by special  leave, it  was contended  by the appellants:      (1) In  view of the circular of 1957, the conditions of service of the employees of the then Bombay States in so far as promotion  is concerned  could have  been varied to their disadvantage. The  said right  of the  State of  Bombay  was available to the State of Gujarat.      (2) No  circular  similar  to  the  1957  circular  was required to  be issued  under s.  81(6) of  the Bombay State Reorganisation Act.      The respondents  contended that  the circular issued on

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11th May  1957 was  under the  States Reorganisation  Act of 1956  and   cannot  therefore,  apply  in  relation  to  the provisions of  the Bombay States Reorganisation Act of 1960, which came into force subsequently.      Allowing the appeal, ^      HELD :  (1) The  condition of service applicable to the employees of  the State  of Bombay  included not  merely the rules  made   under  the   proviso  to   Art.  309   of  the Constitution. It  also included  a liability to be subjected to any other rule that might be made under that proviso till 1st May  1960 by  the State of Bombay. The reorganised State of Bombay  could have  made rules  making the  G.D.C.  &  A. examination a  necessary qualification  for  promotion  even though there  was  no  such  rule  earlier.  Therefore,  the conditions of  service of  the servants  of the  reorganised State of  Bombay before 1st of May 1960 included a condition that they would be subject to any rule made by that State in respect of their promotion. [503-AB, DE]      (2) The  power granted  to  the  reorganised  State  of Bombay should  be deemed  to accrue to the successor States, that is, the States of Maharashtra and Gujarat. [503E]      (3) Section  87 of the Bombay State Reorganisation Act, 1960 provides  that the  provisions of  Part II of the State Act shall not be deemed to have effected 500 any change  in the  territories to  which any  law in  force immediately before   the  appointed day  extends or applies. Section 2(d)  of the said Act defines "law" as including any enactment,  Ordinance   Regulation,  order,  bye-law,  rule, scheme, notification or other instrument having the force of law in  the whole or in any part of the State of Bombay. The circular of  11th May  1957 was,  therefore, law, and would, therefore, continue  to be  in force  in the  new States  of Maharashtra and  Gujarat. The Gujarat Government, therefore, even in  terms of  the circular  of the  Central  Government dated 11th  May 1957  was competent  to make the rules which they made in 1962 thereafter. [503G-H, 504A-B]

JUDGMENT:      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1856 of 1970.      Appeal by  special leave  from the  judgment and  order dated the  24th June,  1969 of  the Gujarat  High  Court  in Special Civil Application No. 231 of 1968      V. M.  Tarkunde, V. N. Ganpule and P. C. Kapur, for the appellant.      S. T.  Desai, Rajen  Yash Paul  and R.  B.  Datar,  for respondents 1, 3, 4-6 & 8.      M. V. Goswami, for respondents 11-54.      M. N. Shroff, for respondent 9.      S. T.  Desai, P.  H.  Parekh  and  Manju  Jaitley,  for respondent 7 & Intervener (K. C. Swami & Ors.)      The Judgment of the Court was delivered by      ALAGIRISWAMI, J.  This appeal  filed  in  pursuance  of special leave  granted by  this Court by certain officers of the Co-operation  Department of the Government of Gujarat is against the  judgment of the High Court of Gujarat in a writ petition filed by the respondents.      The appellants  as well as the respondents (hereinafter called petitioners) were originally servants of the State of Bombay and  were allotted  to the  State of  Gujarat on  its formation on  1st May,  1960. The  petitioners alleged  that

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they had passed all the prescribed departmental examinations as required  by  the  rules  of  the  State  of  Bombay  and challenged the  validity of certain orders of the Government of Gujarat.  One of them was an orders of May 10, 1962 which provided that  persons already  promoted would  have to pass the examination  of G.D.C.  & A.  within a  period of  three years and  if they  did not their increment would be stopped and if  they have reached the maximum of the scale their pay would be  reduced to the next lower stage, until they passed the examination.  It  also  laid  down  G.D.C.  &  A.  as  a necessary  qualification  for  promotion.  Another  impugned order was  dated June  18, 1965  which contained  rules made under the  proviso to  Article 309  of the  Constitution  of India and  laid  down  the  qualification  of  G.D.C.  &  A. examination for  promotion. They  also complained against an order dated  January 23,  1968  that  they  should  draw  no further increments  and what  had been  paid to them earlier without giving effect to that order should be recovered. 501      It is  unnecessary to  set out  the impugned  orders in extenso. For  the purposes  of this case it is enough to say that the  main grievance  of the petitioners before the High Court of Gujarat was the laying down of the qualification of G.D.C. &  A. for  purposes of  earning increments as well as for promotion. They complained that under the rules in force in the  State of  Bombay they were not required to pass this examination either  for earning  increments or for promotion and the  rules and  resolutions of the Government of Gujarat laying down  the passing of the G.D.C. & A. examination as a necessary qualification for promotion as well as for earning increments   contravened    s.   81(6)    of   the    Bombay Re-organisation Act,  1960 which  is in pari materia with s. 115(7)  of   the  States   Re-organisation  Act,  1956.  The appellants who were the respondents in the writ petition had passed the  G.D.C.  &  A.  examination  and  therefore  been promoted  earlier   than  the   respondents  who   were  the petitioners and  had therefore  been impleaded as parties to the writ petition.      As regards  the complaint  about  the  petitioners  not being allowed  to get future increments till they passed the examination and  reduction by  one stage  of persons who had reached the  maximum in  their grade and the recovery of the amounts which they had already drawn, they are no longer the subject matter of any grievance because the State of Gujarat have removed  those  grievances  by  Note  1  to  Regulation 13(4)(iii) found  in the  order of the Government of Gujarat dated September  14, 1967  at pages  17 to  22 of  the paper book. There  is a certain amount of confusion in the records regarding this.  As against the rule above referred to there is an  order dated  23-1-1968 ordering  recovery. But it was made clear  during the  course  of  the  arguments  that  no recovery will  be made.  We are,  therefore, concerned  only with the  question of  the validity  of the  orders  of  the Government insofar  as they  laid down  the qualification of G.D.C. & A. as one of the requisites for promotion to higher posts.      Before the High Court it was contended on behalf of the State of Gujarat that immediately before the "appointed day" the petitioners  were governed  by the 1939 Bombay Rules, of which Note  to Rule 6-A provided the passing of the G.D.C. & A. as a qualification for promotion. On the ground that what was produced  was a  typed compilation  consisting  of  some circular letters and rules of the Cooperative Department and that the  learned advocate  appearing for the government had not been  able to  tell the  Court whether  the  rules  were

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gazetted or  otherwise notified  rules and whether they were made in  any particular year and by what authority and under any particular  provision of  law and  that it was not known when the  ’note’ to  the rule  was added the High Court held that it would not be proper to rely upon Rule 6-A and that a note to a rule had in any case no legal effect.      In the  course  of  arguments  before  this  Court  the relevant rules  were sought  to be  Produced. Based  on  the existence of those rules 502 and on  the decision  of this  Court in  Mohd. Shujat Ali v. Union of  India it  was argued  on behalf  of the appellants that rules  relating to  promotion do  not come  within  the scope of  s. 81  (6). The  above decision  of this Court was concerned with  s. 115(7)  of the States Reorganisation Act. There was  in that case a circular of the Central Government dated May  11, 1957  to all State Governments stating, among other things,  that so  far as  departmental  promotion  was concerned the  decision of  the Central  Government was that "it would  not be  appropriate to  provide any protection in the matter".  On the  basis of  that circular it was pointed out by  this Court that so far as departmental promotion was concerned the  State Governments  might, if they so desired, change the  conditions of  service and for this purpose they might assume the previous approval of the Central Government as required  by the  proviso to s. 115(7) and as the Central Government had  given its  approval to  any alteration which the State Government might wish to make in the conditions of service relating to departmental promotion they did not need to be  protected, and  held that the Andhra Rules and Andhra Pradesh Rules  regarding promotion  did not  contravene  the proviso to  s. 115(7). In view of this decision the question whether there  was any  corresponding rule  in the  State of Bombay before  the parties in this case were allotted to the State of  Gujarat becomes  academic. Whether  there  was  or there was not any rule governing the parties while they were serving the Bombay State requiring that they should pass the G.D.C. & A. examination in order to qualify for promotion to higher posts the rule made by the Gujarat Government in ]962 should be  held to  be not  hit by  s. 81(6)  of the  Bombay Reorganisation Act, 1960.      It was,  however, argued  on behalf  of the petitioners that the  circular of the Central Government which was under consideration by  this Court in the decision above cited was dated 11-5-1957  and cannot  therefore apply  in relation to the provisions of the Bombay Reorganisation, Act, 1960 which came into force subsequently. But there is a fallacy in this argument. Section 81(6) reads:           "Nothing  in  this  section  shall  be  deemed  to      affect, after  the appointed  day the  operation of the      provision or 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 State of Maharashtra      or Gujarat.           Provided that the conditions of service applicable immediately before  the appointed  day to  the case  of  any person provisionally  or finally  allotted to  the State  of Maharashtra or  Gujarat under  this  section  shall  not  be varied to his disadvantage except with the previous approval of the Central Government." 503 The question,  therefore, is  what were  the  conditions  of service applicable  immediately before  the appointed day to the parties  in this  case ?  They were the rules and orders

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applicable to  them when  they were servants of the State of Bombay  before  May  1,  1960.  The  conditions  of  service applicable to  them included not merely the rules made under the proviso  to Article  309 of  the Constitution.  It  also included liability  to be  subjected to  any other rule that might be  made under  that proviso  till May  1, 1960 by the State of  Bombay. The  States Reorganisation  Act, 1956  was also applicable  to them.  It would be remembered that under the States  Reorganisation Act, 1956 the new State of Bombay included not  merely the  pre-reorganisation State of Bombay but also  areas of  Kutch, Marathwara from the old Hyderabad State and the Vidharba region from the old Central Provinces and Berar.  In respect  of all  Government servants who were allotted to the reorganised State of Bombay s. 115(7) of the States Reorganisation  Act applied. It was under the proviso to that section that the above mentioned circular of May 11, 1957 was  issued by  the Government  of  India.  Under  that circular it  was open  to the reorganised State of Bombay to make any  rules for promotion of its servants which were not applicable to  them before  the formation of the reorganised State of  Bombay. In  other words  the reorganised  State of Bombay  had   the  right   to  make  rules  regarding  those Government servants  including the parties in this case. The reorganised State of Bombay could have made rules making the G.D.C. &  A. a  necessary qualification  for promotion  even though  there  was  no  such  rule  earlier.  Therefore  the conditions of  service of  the servants  of the  reorganised State of Bombay before 1st of May, 1960 included a condition that they would be subject to any rule made by that State in respect  of  their  promotion.  The  power  granted  to  the reorganised State  of Bombay  should be  deemed to accrue to the successor States, that is, the States of Maharashtra and Gujarat.      We may  in this connection refer to s. 87 of the Bombay Reorganisation Act, 1960 which reads:           "87. Territorial extent of laws.-The provisions of      Part II shall not be deemed to have effected any change      in  the   territories  to   which  any   law  in  force      immediately  before   the  appointed   day  extends  or      supplies, and  territorial reference in any such law to      the State of Bombay shall until otherwise provided by a      competent legislature  or other competent authority, be      construed as  meaning the territories within that State      immediately before the appointed day."      Law is defined in that Act in s. 2(d) as follows:           "law"   includes    any   enactment,    ordinance,      regulation, order,  bye-law, rule, scheme, notification      or other  instrument  having,  immediately  before  the      appointed day,  the force of law in the whole or in any      part of the State of Bombay;" 504 The memorandum  of Central  Government dated  11th May, 1957 was an  approval in  terms of  the proviso  to sub-s. (7) of s. 115  of the  States Reorganisation Act. It is, therefore, an order or other instrument having the force of the law for the purposes  of the  definition of ’law’. That circular had certainly the  force of  law in  the whole  of the  State of Bombay and  as s.  87 provides that law would continue to be in force  within the  territories of  the  State  of  Bombay immediately before  the appointed  day which,  included  the territories of the State of Maharashtra as well as the State of Gujarat  the reference  to the  State Governments  in the circular would  include reference  to the Governments of the State or  Maharashtra and  the State  of Gujarat. It should, therefore, be held that even in terms of the circular of the

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Central  Government   dated  11th   May,  1957  the  Gujarat Government was  competent to  make the  rules which they had made in  1962. The  argument on  behalf of  the  petitioners therefore that  no approval  could have been, given in terms of s.  87 of  the Bombay  Reorganisation Act  by a  circular issued even in 1957 before that Act was passed has no force.      The result  is that  the order  of  the  Government  of Gujarat  State   of  1962   laying  down  the  G.D.C.  &  A. examination  as  a  necessary  qualification  for  promotion should be  held to be valid. The appeal is therefore allowed and the  judgment or  the Gujarat  High Court set aside. We, however, make  it clear  that no recovery shall be made from the respondents.  In the  circumstances of  this case  there will be no order as to costs. P.H.P.    Appeal allowed. 505