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PETITIONER: STATE OF GUJARAT & ORS ETC.

       Vs.

RESPONDENT: RAMAN LAL KESHAV LAL & ORS. ETC.

DATE OF JUDGMENT27/01/1983

BENCH: REDDY, O. CHINNAPPA (J) BENCH: REDDY, O. CHINNAPPA (J) VARADARAJAN, A. (J) CHANDRACHUD, Y.V. ((CJ) FAZALALI, SYED MURTAZA TULZAPURKAR, V.D.

CITATION:  1984 AIR  161            1983 SCR  (2) 287  1983 SCC  (2)  33        1983 SCALE  (1)66  CITATOR INFO :  F          1984 SC 385  (11,20)  MR         1985 SC 421  (79)  E&R        1987 SC 415  (16,17)  R          1987 SC1858  (22)  RF         1991 SC1047  (8)

ACT:      Gujarat Panchayats  Act, 1961  (VI of  1962), Ss.  102, 122, 142,  143, 157, 158, 203, 206 and 325 & Constitution of India, 1950.  Arts. 12, 309, 310; Schedule VII, List I Entry 70 and  List II  Entries S. 41-Panchayat Service Constituted under S.  203 whether  ‘civil service of the State’-A person holding a  ‘civil post’  or a  member of  a ‘Civil Service’- Tests for  determination-Administration of a service under a State-What are functions of.      Words &  Phrases-‘Civil Services’-‘Civil  Post’-Meaning of.

HEADNOTE:      The Gujarat  Panchayat Act, 1961 (Gujarat Act No. VI of 1962) came  into force  on June  15, 1962  in the  State  of Gujarat except  in Kutch  area and the district of Dangs. By an order  made by the State Government on March 4, 1963, the areas which  were within  the jurisdiction  of  the  several municipalities constituted  under the  Bombay Municipal Act, 1901 were  declared to be gram or nagar, as the case may be. On April  1, 1963, sections 203 to 205 of the Panchayats Act were brought  into operation.  On March  26, 1963, the State Government entrusted  some  of  its  functions  relating  to recovery  of  land  revenue  etc.  to  the  nagar  and  gram panchayats with  effect from  April 15,  1963. On  August 1, 1963 by  a notification  issued under  section  149  of  the Panchayats Act,  the State  Government delegated some of its powers under the Land Revenue Code and rules made thereunder to the  gram and  nagar panchayats.  Service rules  like the Gujarat Panchayat Service (Conduct) Rules, 1964, the Gujarat Service (Discipline & Appeal) Rules, 1964, Gujarat Panchayat Service (Absorption  Seniority, Pay & Allowances) Rules, the Gujarat Panchayat  Service  (Transfer  of  Servants)  Rules,

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1968, Gujarat  Panchayat Service  (Promotion  to  Cadres  in State  Service)   Rules,  1974,  Gujarat  Panchayat  Service (Pension) Rules,  1976 were  promulgated and  issued by  the State Government.  On January  2, 1967, the State Government passed an  order under sub-section (2) of section 203 of the Panchayats Act  directing that  the Panchayat  Service shall consist of  district cadre, taluka cadre and local cadre and specified the  posts which  were to  belong to  each of such cadres in  the Schedule  appended to the said order. In Part III of  the Schedule  to that  Order, the posts belonging to the local cadre were specified.      Although the  above steps  were taken  by the State for the  constitution   of  the  Panchayat  Service,  the  State Government did  not make any order regarding the equation of posts of  the staff in the local cadre and fixation of their pay scale till 1975 notwithstanding repeated representations made by  the ex-municipal  employees  and  others  who  were included in  the local  cadre. The State Government also did not make any rules prescribing the promotional 145 avenues for  the staff  borne on  the  local  cadre  of  the Panchayat Service,  nor extended the benefit of revisions of pay scales and other allowances which were made on the basis of the  recommendations of  the First Pay Commission (Sarela Commission)  and   of  the   Second  Pay  Commission  (Desai Commission).      The Respondent  Nos. 1  to 5 in the appeal filed a writ application in  a representative  capacity for and on behalf of themselves  and other  officers  and  servants  who  were originally in the employment of several municipalities which had been  constituted under  the Bombay  District  Municipal Act, 1901  and who  were working  as  employees  under  gram panchayats or nagar panchayats which were established in the place of  municipalities under the provisions of the Gujarat Panchayats Act,  1961 for  a Writ, order or direction to the Appellant  (State  of  Gujarat)  and  others  who  had  been impleaded as  respondents directing them: (i) to pass orders regarding appointment  in equivalent  posts in the Panchayat Service of  the State Government, fixation of seniority, pay scales  and   allowances  in   the  equivalent   posts  with retrospective effect and payment of the difference in salary and  allowances,   (ii)  to   frame  rules   providing   for promotional avenues  in the Panchayat Service as also in the State Service, and (iii) to extend the benefits flowing from pay revisions  ordered by  the State Government on the basis of the  recommendations of  the First Pay Commission (Sarela Commission) and the Second Pay Commission (Desai Commission) retrospectively. It was contended that the Panchayat Service was as  much a  service under  the State  as any other Civil Service, that  the State  Government had failed to discharge its statutory duties in relation to the members of the staff included in  the local  cadre of  the Panchayat  Service and that the  denial of  benefits similar  to those  extended to other members of the State Civil Service on the basis of the reports of  the two  Pay  Commissions  amounted  to  hostile discrimination.   The   State   Government   contested   the application alleging  that  the  members  of  the  Panchayat Service were not government servants.      Following its  earlier  decision  in  G.  L.  Shukla  & another v.  The State  of Gujarat  & Ors. 8 GLR 833 the High Court held  that the  respondents who  belonged to the local cadre were government servants and allowed the application.      During the  pendency of  the appeal  to this Court, the Gujarat   Panchayats    (Amendment)   Ordinance   1978   was promulgated by  the Governor amending some of the provisions

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of the  Panchayats Act  and the  said Ordinance was repealed and replaced  by the  Gujarat Panchayats  (Third  Amendment) Act, 1978.  As the  Ordinance and the Amending Act adversely affected the interests of the employees, writ petitions were filed questioning the validity of the Amending Act.      In the  appeal and  writ petitions to this Court on the questions:      (1)   Whether the Panchayat Service was a Civil Service           of the State, and      (2)   Whether under  the unamended  Act,  there  was  a           common Centralized Panchayat Service. ^      HELD: 1.  (i) The  Panchayat Service  constituted under section  203   of   the   Panchayats   Act   has   all   the characteristics of  a Civil  Service of the State. This also appears to  have been  the view of the State Government when it constituted  the Second Pay Commission (Desai Commission) to examine the 146 general  conditions  of  service  applicable  to  Government employees other  than officers of the all-India services but including employees in the Panchayat Service. [165H-166B]      (ii) It  is a  question of  fact to  be decided  in the circumstances of  each case  whether  every  employee  of  a Panchayat should  be treated  as a member of the State Civil Service. [166H-167A]      2. The  provisions contained  in  section  206  of  the Panchayats Act and the provisions in sub-sections (2), (2A), (3) and  (4) of  section  203  clearly  establish  that  the Panchayat service  constituted under section 203 can only be a centralized  service and  recruitment of  candidates to be made under  section 210 of the Panchayats Act by the Gujarat Panchayat Service  Selection  Board  can  only  be  to  that centralised service.  The division  of the Panchayat Service into district  cadre, taluka  cadre and local cadre does not affect the  integrity of the Panchayat Service. It continues to be  a single  service notwithstanding such division. When the  Panchayat  Service  is  a  Statewise  service,  it  has necessarily to be a common centralised service. [167B-C]      3. Municipal  Corporations, city  municipalities,  town municipalities, municipal  boroughs, district  boards, zilla parishads,  taluka   development  boards,  town  panchayats, village panchayats, sanitary boards and town area committees were some  of the different kinds of local bodies which were constituted under the local laws and the management of their affairs were  entrusted subject  to the control of the State Government to  elected bodies.  Each one of them was treated as a body corporate. In the staffing pattern of these bodies there were  at least  three  classes  of  persons.  Officers holding high  administrative posts  such as commissioners of corporations,   deputy    commissioners   of   corporations, municipal health  officers, municipal  educational officers, district development  officers and  chief executive officers of district  boards were usually drawn from the ranks of the provincial or  the State  Services and  they were deputed to the various  bodies to discharge functions which were either statutory or  non-statutory. Even  though  they  drew  their salary and  allowances from  the local  bodies to which they were deputed, they still retained their identity as officers of the State Civil Service and their services were liable to be withdrawn by the State Government at any time it pleased. [159D-E]      4. The  expressions ’civil service’ or ’civil post’ are not formally  defined. Entry  70 of  List I  of the  Seventh Schedule to the Constitution refers to Union Public Services

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and All-India  Services, and  Entry 41  of List  II of  that Schedule refers  to State  Public Services.  Part XIV of the Constitution deals  with services  under the  Union and  the States.  In  Article  309  of  the  Constitution,  there  is reference to  persons appointed to public services and posts in connection with the affairs of the Union or of any State. Article 310  of the  Constitution distinguishes  the defence service from  the civil service when it refers to members of a ’defence  service or  of a civil service’. But all persons who are  members of  a defence service or of a civil service of the  Union or of an all-India service or persons who hold any post  connected with defence or any civil post under the Union are  treated as  persons serving  the Union  and every person who  is a  member of  the civil service of a State or holds any  civil post  under a  State is treated as a person serving a State. [160D-F]      5. The  true test  for determination  of  the  question whether a person is holding a civil post or is a member of a civil service  is the  existence of a relationship of master and servant between the State and the person holding 147 a post  under it and that the existence of such relationship is dependent  upon the  right of  the State  to  select  and appoint the  holder of  the post,  its right  to suspend and dismiss him,  its right  to control the manner and method of his doing  the work  and the  payment by it of his wages and remuneration. The  relationship of master and servant may be established by  the presence  of all  or some  of the  above factors in conjunction with other circumstances. [161E-F]      State of  Assam &  Ors. v.  Shri Nanak  Chandra  Dutta, [1967] 1  S.C.R. 679: Superintendent of Post Offices etc. v. P. K. Rajamma etc. [1977] 3 S.C.R. 678, referred to.      6. Entry  5 of  List II  of the Seventh Schedule to the Constitution  specifically   refers  to   local  authorities established for  the purpose  of  local  self-Government  or village administration  as part  of  local  government.  The local authorities  are included  in the  definition  of  the expression ’State’ in Article 12 of the Constitution. [165D]      7. The  Panchayats exercise many governmental functions which the  State Government  can perform. They are entrusted with the power to levy taxes and to exercise large number of powers  which   are  loosely   called  as   "police  powers" regulating several  aspects of  human life. Articles 276 and 277 of  the Constitution  also take  note of  the powers  of local authorities to levy certain taxes. [165E]      8. The  Panchayats Act  was enacted  for the purpose of consolidating and  amending  the  law  relating  to  village Panchayats and district local boards in the State of Gujarat with a view to reorganising the administration pertaining to the  local  Government  in  furtherance  of  the  object  of democratic decentralisation of powers in favour of different classes of  panchayats. It provided for the establishment of Panchayats of different tiers viz. a gram panchayat for each gram, a  nagar panchayat  for each nagar, a taluka panchayat for each  taluka and  a district  panchayat for  a district. [151C-D]      9. Section  203 of  the Panchayats Act provided for the constitution of  a Panchayat Service which shall be distinct from the  State Service. The State Government was authorised to determine  by orders issued from time to time the several classes, cadres  and posts  in the Panchayat Service and the initial strength  of the  officers and servants in each such class  and   cadres.  The  Panchayat  Service  consisted  of district cadres,  taluka cadres  and local cadres. A servant belonging to a district cadre was liable to be posted either

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by promotion  or transfer  to any  post in any taluka in the district, a  servant belonging  to a taluka cadre was liable to be  posted similarly  to any post in any gram or nagar in the same  taluka, and  a servant  belonging to a local cadre similarly to  be posted in the same gram or, as the case may be, nagar.  The Panchayat  Service was  also to  consist  of certain posts  designed as  deputation posts,  which may  be filled in  accordance with section 207. The State Government was  empowered   to  make   rules  regulating  the  mode  of recruitment and  conditions of  service of persons appointed to the  Panchayat Service  and  the  powers  in  respect  of appointments,  transfers  and  promotions  of  officers  and servants in  the panchayat  Service and  disciplinary action against any such officers or servants. [154B-E]      10. Under section 206 of the Panchayats Act, it is open to the State Government to allocate to the Panchayat Service such number  of officers  and  servants  out  of  the  staff allotted or  transferred to  a panchayat under sections 157, 158 and 325 as it may deem fit. [154G] 148      11. Sections  102, 122  and 142  of the  Panchayats Act provide that  the gram  panchayat or  the nagar panchayat or the taluka  panchayat or  the district panchayat as the case may be,  shall have  such other officers and servants as may be determined  under section  203 of  the Panchayats Act and such officers  and  servants  shall  be  appointed  by  such authority and  their conditions  of service shall be such as may be  prescribed. Clause (c) of sub-section (2) of section 143 of  the Panchayats Act empowers the District Development Officer to  appoint such  class of  officers and servants as may be prescribed. [163C, B]      12. The  Panchayat Service  contemplated under  section 203 is  a single service for the whole State and it is not a collection  of   distinct  and  separate  services  of  each individual panchayat.  That Panchayat  Service is  a service under the  State is  again emphasized  by section  206 which authorises the  State Government  to pool  together the four classes of persons mentioned therein who originally belonged to four  different sources  and  to  allocate  them  to  the Panchayat Service  and one  class of  such persons are those who belong  to  the  State  Service.  Unless  the  Panchayat Service is held to be a State Service, inclusion of officers and servants  in the State Service will be unconstitutional. [163E-F]      State of Mysore v. H. Papanna Gowda & Anr. etc., [1971] 2 S.C.R. 831, referred to.      In the  instant case  there is  no compelling reason to hold that the Panchayat Service is not a civil service under the  State.   Further  recruitment   of  candidates  to  the Panchayat Service  had to  be made  by the Gujarat Panchayat Service Selection Board constituted by the State Government. [163H]      Jalgaon Zilla  Parishad v.  Duman Govind  & Ors.  Civil Appeals Nos.  24 and 25 of 1968 decided on December 20, 1968 distinguished.      13. Entry  41 of List II of the Seventh Schedule to the Constitution, refers  to State  Public  Services  suggesting that there  can be  more than one State Public Service under the State.  A number  of such  services under  a State  e.g. Police Service,  educational service,  revenue service  etc. State Public  Services may  be  constituted  or  established either by  a law  made by  the State Legislature or by rules made under the proviso to Article 309 of the Constitution or even by  an executive  order made by the State Government in exercise  of   its  powers   under  Article   162   of   the

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Constitution. The  recruitment and  conditions of service of the officers  and servants  of the State Government may also be regulated by statute, rules or executive orders. [164A-B]      14. The  administration of  a  service  under  a  State involves  broadly   the   following   functions:   (1)   the organisation of  the Civil  Service and the determination of the  remuneration,   conditions  of  service,  expenses  and allowances of  persons serving  in it;  (ii) the  manner  of admitting  persons  to  civil  service;  (iii)  exercise  of disciplinary control  over members  of the service and power to transfer,  suspend, remove  or dismiss them in the public interest as and when occasion to do so arises. [164C-D]      In  the   instant  case,   the  Panchayat   Service  is constituted by  the Panchayats  Act and the State Government is  empowered   to  make  orders  and  rules  regarding  its organisation and  management. Having  regard  to  the  broad features  of  the  Panchayat  Service,  the  declaration  in Section 203  that the  Panchayat Service,  shall be distinct from the  State Service,  appears to  have been made only to distinguish the Panchayat Service from other services of the State attached  to the  several departments  which are under the direct control of the State Government. [164E] 149      15. If  the members of the Panchayat Service are not to be members  of a  Service under the State Government but are to be  the officers  and servants  of the  panchayat unit to which they are allotted then sub-sections (2), (2A) and 4(a) of section  203 of  the Panchayats  Act would to some extent become unworkable,  as every  time there is a transfer of an officer borne  on the  Panchayat Service  there would  be  a change of  master. The  Legislature could not have contended such a bizarre result. [164F]      16. The  reason for  treating Panchayat  Service  as  a service distinct  from State  Service appears to be that the law intended that persons belonging to the Panchayat Service should be  transferable from  one post  in  a  panchayat  to another post in a panchayat and unless there was an order of promotion, such  persons could  not be  transferred to posts outside the Panchayats. [165B]      17. Merely  because the  Panchayats are  declared to be body corporates,  it cannot  be said that any of the persons working under  them cannot  be considered  as members  of  a civil service  under a  State.  The  panchayats  constituted under the  Panchayats Act  derive their  authority from  the statute and  are under  the control of the State Government. They form  part of  the local  self-Government  organisation which the  State Government is under an obligation to foster under Article 40 of the Constitution. [165C]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeal No. 359 of 1978.      Appeal by  special leave  from the  Judgment and  Order dated 28-1-1977  of the  Gujarat High Court in Special Civil Application No. 309/1975.                             WITH             WRIT PETITION NOS. 4266-4270 of 1978            (Under Article 32 of the Constitution)      V. M.  Tarkunde, Niranjan  Mehta, P.  H. Parekh,  C. B. Singh and  M. Mudgal  for the  Petitioners in Writ Petitions and Respondents 1-3 and 5 in CA 359/78.      D. V.  Patel, R. H. Dhebar, M. N. Shroff and G. A. Shah for the  Appellants in CA 359/78 and Respondents 1-2 in Writ

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Petitions.      Nirajan Mehta,  Vimal Dave  and Miss  Kailash Mehta for the Applicant intervener in Writ Petition.      The Judgment of the Court was delivered by      VENKATARAMIAH,  J.   The  State   of  Gujarat  and  the Development Commissioner  of the State of Gujarat have filed Civil Appeal  No. 359  of 1978  under  Article  136  of  the Constitution against  the judgment, dated January 28th, 1977 passed in  Special Civil  Application No. 309 of 1975 on the file of  the High  Court of Gujarat. Respondents Nos. 1 to 5 in the  above appeal  were the  petitioners in the aforesaid Special Civil Application. They had filed the 150 said application  with the  leave of  the High  Court  in  a representative capacity  for and on behalf of themselves and other officers  and servants  who  were  originally  in  the employment  of   several  municipalities   which  had   been constituted under  the Bombay  District Municipal  Act, 1901 (hereinafter referred  to as  ’the Municipal  Act’) and  who were working as the employees under gram panchayats or nagar panchayats which  were  established  in  the  place  of  the municipalities referred to above under the provisions of the Gujarat Panchayats  Act, 1961  (Gujarat Act  No. VI of 1962) (hereinafter referred  to as  ’the  Panchayats  Act’)  under Article 226 of the Constitution requesting the High Court to issue an  appropriate writ,  order or direction to the State of Gujarat  and others who had been impleaded as respondents therein directing  them (i)  to pass  orders  regarding  the appointment of  the persons for and on whose behalf the said application had  been  filed  in  equivalent  posts  in  the Panchayat Service of the State Government, fixation of their seniority and  pay scales  and allowances  in the equivalent posts with  retrospective effect  and payment to them of the difference in  salary and  allowances to  which  they  would become entitled  on such  fixation of  salary and allowances payable  to   them,  (ii)   to  frame  rules  providing  for promotional avenues to them in the Panchayat Service as also in the  State Service  and  (iii)  to  extend  to  them  the benefits flowing from the pay revisions ordered by the State Government on  the basis of the recommendations of the first Pay  Commission  (Sarela  Commission)  and  the  second  Pay Commission (Desai  Commission)  retrospectively.  They  also prayed for certain incidental reliefs.      Writ Petitions  Nos. 4266 to 4270 of 1978 were filed by them before this Court under Article 32 of Constitution in a representative  capacity   with  the  leave  of  this  Court requesting the  Court  to  declare  the  Gujarat  Panchayats (Amendment) Ordinance, 1978 (hereinafter referred to as ’the Ordinance’) as  unconstitutional, void  and of no effect and to grant  them such reliefs as may be permissible consequent upon such  declaration. After  the above writ petitions were filed, the  Ordinance  was  repealed  and  replaced  by  the Gujarat Panchayats  (Third Amendment) Act, 1978 (Gujarat Act No. 28  of 1978)  (hereinafter referred  to as ’the Amending Act’). Thereafter the petitioners prayed for an amendment of the writ  petitions requesting  the Court  to permit them to question the  validity of  the Amending  Act in so far as it adversely  affected   them.  Their  prayer  was  accordingly granted. The  writ petitions  are  contested  by  the  State Government. 151      For purposes of convenience, respondents Nos. 1 to 5 in Civil Appeal No. 359 of 1978 who are also petitioners in the writ petitions  Nos. 4266  to 4270  of  1978  are  hereafter referred to as the petitioners.

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    Before the  Panchayats Act was enacted there existed in the State  of Gujarat a number of municipalities constituted under the  Municipal Act  and the petitioners and those whom they represent  in these  proceedings by virtue of the leave granted  to   them  to  prosecute  these  proceedings  in  a representative   capacity    were    employees    of    such municipalities.      The Panchayats  Act was  enacted  for  the  purpose  of consolidating and  amending  the  law  relating  to  village panchayats and district local boards in the State of Gujarat with a  view to  reorganise the administration pertaining to the  local  Government  in  furtherance  of  the  object  of democratic decentralisation of powers in favour of different classes of  panchayats. It provided for the establishment of panchayats of different tiers viz. a gram panchayat for each gram, a  nagar panchayat  for each nagar, a taluka panchayat for each  taluka and  a district  panchayat for  a district. Section  9   of  the  Panchayats  Act  empowered  the  State Government to  declare any  local area  comprising a revenue village or  a group  of revenue  villages or hamlets forming part of  a revenue village or such other administrative unit or part  thereof to  be a  nagar, if  the population of such local area  exceeded 10,000 but did not exceed 20,000 and to be a  gram, if  the population  of such  local area  did not exceed 10,000  by issuing  a notification  in  the  Official Gazette to  that effect.  Section 307  of the Panchayats Act provided that where any local area was declared to be a gram or nagar  under  section  9  and,  immediately  before  such declaration, the local area was co-extensive with the limits of a  municipal district  or a municipal borough or included an area comprising a municipal district or municipal borough as well as any other area, then with effect from the date on which such local area was so declared to be a gram or nagar, the   consequences    mentioned    therein    would    ensue notwithstanding anything  in the relevant municipal law. Two of the  consequences which  flowed from  such a  declaration were that  the municipality functioning in such a local area or part  thereof would  cease to  exist and all officers and servants in  the  employ  of  the  municipality  immediately before the  said date  would become officers and servants of the interim  panchayat under  the Panchayats  Act and  shall until other  provision  was  made  in  accordance  with  the provisions thereof would receive salaries and allowances and be subject  to the  conditions of service to which they were entitled or  subject  on  such  date.  Section  308  of  the Panchayats Act required the 152 District Development  Officer to take steps to hold election for a new gram panchayat or nagar panchayat, as the case may be, within  a period not exceeding one year from the date on which the  interim panchayat came into existence. Chapter XI in which  sections 203  to 211  of the  Panchayats  Act  are included sets  out provisions  relating to services. Section 203 of  the Panchayats  Act prior to the promulgation of the Ordinance read as follows:-           "203.  (1)  For  the  purpose  of  bringing  about      uniform scales of pay and uniform conditions of service      for persons  employed in the discharge of functions and      duties of  panchayats, there  shall  be  constituted  a      Panchayat Service  in connection  with the  affairs  of      panchayats. Such  service shall  be distinct  from  the      State Service.           (2) The  Panchayat Service  shall consist  of such      classes, cadres  and posts  and the initial strength of      officers and  servants in  each such  class  and  cadre

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    shall be  such, as  the State  Government may  by order      from time to time determine:           Provided that  nothing in  this sub-section  shall      prevent a  district panchayat  from altering,  with the      previous approval  of the  State Government, any class,      cadre or  number of  posts so  determined by  the State      Government.           (2A) (a) The cadres referred to in sub-section (2)           may consist  of district cadres, taluka cadres and           local cadres.                (b) A  servant belonging  to a district cadre           shall be  liable to be posted whether by promotion           or transfer  to any  post in  any  taluka  in  the           district.                (c) A  servant belonging  to a  taluka  cadre           shall be liable to be posted, whether by promotion           or transfer  to any  post in  any gram or nagar in           the same taluka.                (d) A  servant belonging  to  a  local  cadre           shall be  liable to be posted whether by promotion           or transfer  to any  post in  the same gram or, as           the case may be, nagar.           (2B)  In  addition  to  the  posts  in  the  cadre      referred to  in sub-section  (2A), a panchayat may have      such  other   posts  of   such  classes  as  the  State      Government may  by general  or special order determine.      Such posts shall be called "deputation posts" and shall      be filled  in accordance with the provisions of section      207. 153           (3) Subject  to the  provisions of  this Act,  the      State Government  may make rules regulating the mode of      recruitment either by holding examinations or otherwise      and conditions  of service  of persons appointed to the      panchayat  service   and  the   powers  in  respect  of      appointments, transfers  and promotions of officers and      servants in  the  Panchayat  Service  and  disciplinary      action against any such officers or servants.           (4) Rules  made under  sub-section  (3)  shall  in      particular contain-                (a) a  provision entitling  servants of  such           cadres in  the Panchayat  Service to  promotion to           such  cadres  in  the  State  Service  as  may  be           prescribed.                (b) a  provision specifying  the  classes  of           posts recruitment  to which  shall be made through           the District Panchayat Service Selection Committee           and the  classes of  posts, recruitment  to  which           shall be  made by  the Gujarat  Panchayat  Service           Selection Board, and                (c) a  provision regarding  the percentage of           vacancies  to  be  reserved  for  the  members  of           Scheduled  Castes,   Scheduled  Tribes  and  other           backward classes in the Panchayat Service.           (5) Such  rules  may  provide  for  inter-district      transfer of servants belonging to the panchayat service      and the  circumstances  in  which  and  the  conditions      subject to which such transfers may be made.      Section 205  of the  Panchayats Act states that subject to any  rules made  under section  203, appointments  to the Panchayat Service  shall be  made (i) by direct recruitment, (ii) by  promotion and  (iii) by  transfer of members of the State Service  to the  Panchayat Service. Section 206 of the Panchayats Act  before the Amending Act was passed empowered the State  Government by  a  general  or  special  order  to

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allocate  to  the  Panchayat  Service  (i)  such  number  of officers  and   servants  out   of  the  staff  allotted  or transferred to  a panchayat  under sections 157, 158 and 325 as it  may deem  fit, (ii)  all officers and servants of the municipalities  dissolved   under  section  307,  (iii)  all officers and  servants in  the  service  of  district  local boards and  district school  boards immediately before their dissolution under  the Panchayats Act and transferred to the panchayats under  sections 155  and 326  and (iv)  and other officers and  servants employed  in the State service as may be  necessary   to  enable   the  panchayats   to  discharge efficiently their functions and duties 154 under the  Panchayats Act. Section 210 of the Panchayats Act provides  for  the  establishment  of  a  Gujarat  Panchayat Service Selection  Board for  the purpose  of recruitment of candidates to the several posts in the Panchayat Service.      The  provisions   contained  in   Chapter  XI   of  the Panchayats Act  may be  summarised thus:  Section 203 of the Panchayats Act  provides for the constitution of a Panchayat Service which  shall be distinct from the State Service. The State Government is authorised to determine by orders issued from time  to time  several classes, cadres and posts in the Panchayat Service  and the initial strength  of the officers and servants  in each  such class  and cadre.  The Panchayat Service may  consist of  district cadres,  taluka cadres and local cadres.  A servant  belonging to  a district  cadre is liable to  be posted  either by promotion or transfer to any post in any taluka in the district, a servant belonging to a taluka cadre is liable to be posted similarly to any post in any gram or nagar in the same taluka and a servant belonging to a  local cadre  may similarly  be posted in the same gram or, as  the case  may be,  nagar. The  Panchayat Service may also consist  of  certain  posts  designated  as  deputation posts, which may be filled in accordance with the provisions of section  207. The  State Government  is empowered to make rules regulating  the mode  of recruitment and conditions of service  of    appointments,  transfers  and  promotions  of officers  and   servants  of   appointments,  transfers  and promotions of officers and servants in the Panchayat Service and  disciplinary   action  against  any  such  officers  or servants. Sub-section  (4) of  section 203 of the Panchayats Act provides  that rules  may be  made under sub-section (3) thereof containing  provisions entitling  servants  of  such cadres in the Panchayats Service to promotion to such cadres in the  State Service  as may be prescribed. We have noticed earlier that  under section 206 of the Panchayats Act, it is open to  the State  Government to  allocate to the Panchayat Service such  number of  officers and  servants out  of  the staff allotted  or transferred to a panchayat under sections 157, 158  and 325  as it  may deem  fit. Section  157 of the Panchayats  Act   provides  that   notwithstanding  anything contained in any law for the time being in force, the. State Government may  subject to  such conditions  as it may think fit to  impose,  transfer  by  an  order  published  in  the Official Gazette  to a  district panchayat  any such powers, functions and duties relating to any matter as are exercised or performed  by the  State Government  or  any  officer  of Government under  any enactment  which the State Legislature is competent  to enact,  or otherwise in the executive power of the State, and appear 155 to relate  to matters arising within a district and to be of an administrative  character and  shall  on  such  transfer, allot to  the district  panchayat such fund and personnel as

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may  be  necessary  to  enable  the  district  panchayat  to exercise the power and discharge the functions and duties so transferred. Sub-section (2) of section 157 sets out some of the departments  whose powers, functions and duties that may be transferred  under section  157 (1).  Section 158  of the Panchayats  Act  provides  that  any  functions  and  duties relating to  any of  the matters  specified in the Panchayat Functions List  performed before  the commencement  of  that section by  the State Government through its officers within a gram,  nagar, taluka  or district  shall, subject  to such exceptions as  the State  Government may by order in writing specify, be  transferred to  the district panchayat together with the funds provided, and the staff employed therefor. By section 325  of  the  Panchayats  Act,  the  Bombay  Village Panchayats Act,  1958 was  repealed  and  all  officers  and servants  in  the  employ  of  the  old  village  panchayats immediately before  the said  date became  the officers  and servants of  the new  gram panchayats  established under the Panchayts Act.      We shall  now briefly  refer to some of the steps taken under the  Panchayats Act  after it  came into force on June 15, 1962  in the  State of  Gujarat except in Kutch area and the district  of Dangs. On March 4, 1963 by an order made by the State  Government,  the  areas  which  were  within  the jurisdiction of the several municipalities constituted under the Municipal  Act were declared to be gram or nagar, as the case may  be. On  April 1,  1963, sections 203 to 205 of the Panchayats Act  were brought  into operation.  On March  26, 1963, the  State Government  entrusted some of its functions relating to  recovery of  land revenue etc. to the nagar and gram panchayats  with effect  from April 15, 1963. On August 1, 1963  by a  notification issued  under section 149 of the Panchayats Act,  the State  Government delegated some of its powers under the Land Revenue Code and rules made thereunder to the  gram and  nagar panchayats.  On July  13, 1964,  the Gujarat Panchayat  Service (Conduct) Rules, 1964 promulgated under section  203 of the Panchayats Act came into force. On July 16,  1964, the  Gujarat Service  (Discipline &  Appeal) Rules, 1964  came into  force. On  November  11,  1965,  the Gujarat Panchayat  Service  (Absorption,  Seniority,  Pay  & Allowances) Rules were promulgated. On October 16, 1968, the Gujarat Panchayat Service (Transfer of Servants) Rules, 1968 were promulgated.  The Gujarat  Panchayat Service (Promotion to cadres  in State  Service) Rules,  1974  were  issued  on September 16, 1974. 156 The Gujarat  Panchayat Service  (Pension) Rules,  1976  were issued on  January 9,  1976. The  State Government passed an order under sub-section (2) of section 203 of the Panchayats Act of  January 2, 1967 directing that the Panchayat Service shall consist  of district  cadre, taluka  cadre  and  local cadre and  specified the  posts which were to belong to each of such  cadres in  the Schedule appended to the said order. In Part  III of  the  Schedule  to  that  Order,  the  posts belonging to  the local cadre with which we are concerned in these cases  were specified.  It is  stated that  by certain administrative  orders   the  State   Government  had   also undertaken the  liability  of  reimbursing  the  panchayats, either wholly or in part in respect of the remuneration paid by them to the specified staff even though under section 204 of  the   Panchayats  Act,   the  expenditure  towards  pay, allowances  etc.  of  officers  and  servants  in  Panchayat Service should be met out of panchayat funds.      Although the  above mentioned and some other steps were taken by  the State  Government  under  the  Panchayats  Act

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providing for the constitution of the Panchayat Service, the State Government  did  not  make  any  order  regarding  the equation of  posts of  the staff  in  the  local  cadre  and fixation of  their pay  scale till  1975 notwithstanding the fact that  repeated representations  were made  by  the  ex- municipal employees  and others  who were  included  in  the local cadre.  The State  Government also failed to extend to the staff  borne on the local cadre of the Panchayat Service the benefit  of revisions of pay scales and other allowances which were  made on  the basis of the recommendations of the first Pay  Commission (Sarela  Commission) and of the second Pay Commission (Desai Commission). The State Government also did not  make any  rules prescribing the promotional avenues for the  staff borne  on the  local cadre  of the  Panchayat Service. The petitioners, therefore, filed the Special Civil Application No. 309 of 1975 on the file of the High Court of Gujarat out  of which  the above appeal arises under Article 226 of  the Constitution  for several  reliefs, referred  to above. The  said application  was resisted  by the  State of Gujarat  and  the  Development  Commissioner  who  had  been impleaded as  the respondents.  The contentions urged by the petitioners before the High Court among others were that the Panchayat Service  was as  much a service under the State as any other State Civil Service; that the State Government had failed to  discharge its statutory duties in relation to the members of  the staff  included in  the local  cadre of  the Panchayat Service and that the denial of benefits similar to those extended  to other  members of the State Civil Service on the basis 157 of the  reports of  the two Pay Commissions to them amounted to hostile discrimination. The principal contention urged on behalf of  the State  Government was that the members of the Panchayat  Service   were  not   Government  servants   and, therefore, could  not claim  the reliefs prayed for by them. In support  of the  above contention, reliance was placed by the State  Government on  section 203  (1) of the Panchayats Act which  stated that  the Panchayat  Service was  distinct from the State Service. It should be mentioned here that the question whether the Panchayat Service constituted under the Panchayats  Act   was  a   Civil  Service  under  the  State Government or  not arose  for consideration  before the High Court of  Gujarat in  G. L.  Shukla &  Anr. v.  The State of Gujarat &  Ors.(1). That  was a  case in  which some  of the employees of  the State  Government working  in  the  Public Works Department questioned the constitutional validity of a notification issued  by the  State  Government  transferring certain, functions  of the  Public Works  Department to  the panchayats  and   transferring  some  of  the  officers  and servants  working   in  that  department  to  the  Panchayat Service. The  petitioners therein  who had  been allotted to the Panchayat  Service under  that order  contended that the notification was  violative of  Articles 14,  310 and 311 of the Constitution  on  the  ground  that  by  virtue  of  the impugned  notification,  they  had  been  removed  from  the service of  the State  Government against  their will and in violation of  their rights  under the Constitution. The High Court dismissed  the petition  holding  that  they  had  not ceased to be Government servants by reason of the allocation of their services to the Panchayat Service. Bhagwati, J. (as he then  was) observed in the course of the said decision at page 845 thus:           "When an  order of  allocation is  made under sec.      206, the  Government servant  who is allocated does not      cease to be a State servant and become a servant of the

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    panchayat. There  is no termination of his service as a      State servant  and the  only effect  of  the  order  of      allocation is  that whereas,  prior  to  the  order  of      allocation, he was a member of one civil service of the      State, namely,  the State Service, he is now, after the      order of  allocation, a member of another civil service      of the  State, namely,  the panchayat  service.  He  is      merely transferred  from one civil service of the State      to another.  The Panchayat  Service contemplated  under      the Act  is as much a civil service of the State as the      State service. The Legislature by enacting 158      the Act provided for the establishment of the Panchayat      Organization  of   the  State  and  for  the  efficient      administration   of    the   Panchayat    Organization,      particularly in  view of  the fact that a large part of      the service  personnel would  be drawn  from  different      sources  and  would,  therefore,  be  heterogeneous  in      composition with  widely differing  scales of  pay  and      conditions of  service, the  Legislature felt  that  it      would be  desirable to have a separate civil service of      persons employed  in the  discharge  of  functions  and      duties of  panchayats with  uniform scales  of pay  and      uniform conditions  of service and, therefore with that      end in  view the  Legislature provided for constitution      of the panchayat service. All the provisions of the Act      relating to  the panchayat  service point  unmistakably      and inevitably  to one and only one conclusion, namely,      that the  panchayat service  is one single service with      the State as the master."      Following the  decision in  Shukla’s case  (supra)  the High Court  held in the case out of which this appeal arises that the  petitioners herein who belonged to the local cadre were Government  servants and  directed the State Government (i) to  issue suitable  orders, in  so far  as  the  members included in  the local  cadre were  concerned regarding  the equivalence of posts, fixation of pay scales for such posts, fixation of  the  petitioners  and  the  persons  whom  they represent at  an appropriate  stage in  such pay  scales and other incidental  matters and  to give effect to such orders from the  date of  allocation of  the petitioners and others whom they  represent to  the Panchayat  Service, that  is to say, from  February 11,  1969, (ii) to fix their initial pay scales and  allowances and to revise them in accordance with the orders  passed by  the State  Government in  the case of other Government  employees on  the basis  of the  first Pay Commission  (Sarela   Commission)  and  of  the  second  Pay Commission (Desai  Commission) with effect from the dates on which similar  benefits were  extended to  other State Civil Services, and  (iii) to  consider  the  question  of  making suitable provisions  in the  appropriate rules providing for promotion of  members of  the local  cadre who were formerly the  employees  of  the  municipalities.  Aggrieved  by  the directions issued  by the  High Court,  the State Government and the Development Commissioner have filed this appeal.      During the  pendency of  the above  appeal,  as  stated above, the  Ordinance was  issued by the Governor of Gujarat amending some  of the  provisions of  the Panchayats Act and the said  Ordinance was replaced by the Amending Act. As the petitioners  felt   that  their   interests  were  adversely affected by  the Ordinance  and the Amending Act, they filed the writ petitions referred to above. 159      Although several  questions arise  for consideration in the above   appeal,  at this  stage we  propose to deal with

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only the  following two  contentions as per orders passed by the Court on July 24, 1980:-           "(1) Whether  the Panchayat  Service was  a  Civil      Service of the State and           (2) whether  under the  unamended Act, there was a      common centralized Panchayat Service?"      It  is   well-known  that   in  India   experiment   in administration of  local self  Government had  been going on for well  over  a  century  in  almost  all  British  Indian provinces and  many princely  States that  were in existence before the commencement of the Constitution. There were laws having local  operation under which different kinds of local self-Government bodies  were constituted  to enable  persons living in  different  local  areas  to  participate  in  the administration of  such local  areas in  so far as functions that were delegated to them by law. All those laws continued to  be   in  force   even  after  the  commencement  of  the Constitution. Some  of them  have since  been  repealed  and replaced  by   new  laws.   Municipal   corporations,   city municipalities,  town  municipalities,  municipal  boroughs, district boards, zilla parishads, taluka development boards, town panchayats,  village panchayats,  sanitary  boards  and town area  committees were  some of  the different  kinds of local bodies  which were constituted under the said laws and the management  of their  affairs were  entrusted subject to the control  of the State Government to elected bodies. Each one of  them was  treated as  a body corporate. In so far as the staffing  pattern of  these bodies  was concerned, there were at  least three  classes of persons working under them. Officers  holding   high  administrative   posts   such   as commissioners  of   corporations,  deputy  commissioners  of corporations,   municipal    health   officers,    municipal educational  officers,  district  development  officers  and chief executive  officers of  district boards  were  usually drawn from the ranks of the provincial or the State Services and they  were deputed  to the  various bodies  to discharge functions which were either statutory or non-statutory. Even though they  drew their salary and allowances from the local bodies to which they were deputed, they still retained their identity as  officers of  the State  Civil Service and their services were liable to be withdrawn by the State Government at any time it pleased. There was a second class of officers like chief  executive officers  of town  municipalities  who were officers  belonging to  the provincial  or State  local self-Government  Service   and  who   were  liable   to   be transferred from  one local  body to  another. There  was  a third class of officers and servants of the local bodies who were appointed  by them  and who  were for  all intents  and purposes 160 the employees  of  the  local  bodies  by  which  they  were appointed. They could not be transferred from one local body to another.  The foregoing shows that in the case of persons borne on  the State  Civil Service  or the  Provincial local self-Government Service,  the fact  that they  were for  the time being working under a local body and were in receipt of salary and  allowances from  them did  not militate  against their status  as members of the Service from which they were drawn. That  was so  because even when they were functioning under local  bodies, they were engaged in discharging duties and functions  which  legitimately  belonged  to  the  State Government but  which had  been  transferred  to  the  local bodies   with    the   intention   of   the   decentralizing administrative functions  and of fostering democratic ideals amongst the people.

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    The first  question is  whether the  Panchayat  Service constituted under  the Panchayats  Act is a civil service of the State.  The expressions  ’civil service’ or ’civil post’ are not  formally defined. Entry 70 of List I of the Seventh Schedule to the Constitution refers to Union Public Services and All-India  Services, and  Entry 41  of List  II of  that Schedule refers  to State  public services.  Part XIV of the Constitution deals  with services  under the  Union and  the States.  In   Article  309  of  the  Constitution,  we  find reference to  persons appointed to public services and posts in connection with the affairs of the Union or of any State. Article 310  of the  Constitution distinguishes  the defence service from  the civil service when it refers to members of a ’defence  service or  of a civil service’. But all persons who are  members of  a defence service or of a civil service of the  Union or of an all-India service or persons who hold any post  connected with defence or any civil post under the Union are  treated as  persons serving  the Union  and every person who  is a  member of  the civil service of a State or holds any  civil post  under a  State is treated as a person serving a  State. The factors which govern the determination of the  question whether a person holds a civil post or is a member of  civil service  were considered  by a Constitution Bench of  this Court  in State of Assam & Ors. v. Shri Nanak Chandra Dutta(1)  and Bachawat,  J. speaking  for the  Bench observed thus:           "There is  no  formal  definition  of  "post"  and      "civil post".  The sense  in which they are used in the      Services Chapter  of Part  XIV of  the Constitution  is      indicated by their context and setting. A civil post is      distinguished in Article 310 from a post connected with      defence; it  is a  post on  the civil  as distinguished      from  the   defence  side  of  the  administration,  an      employment in  a civil  capacity under  the Union  or a      State. See marginal note to Article 311 161      In Article  311, a  member of  a civil  service of  the      Union or  an all-India  service or a civil service of a      State is mentioned separately, and a civil post means a      post not  connected with  defence outside  the  regular      civil services.  A post  is a  service or employment. A      person holding a post under a State is a person serving      or employed  under the State. See the marginal notes to      Articles 309,  310 and  311. The  heading and  the sub-      heading of Part XIV and Chapter I emphasise the element      of service.  There is  a  relationship  of  master  and      servant between  the State  and a person holding a post      under  it.   The  existence  of  this  relationship  is      indicated by  the State’s  right to  select and appoint      the holder  of the  post,  its  right  to  suspend  and      dismiss him, its right to control and manner and method      of his  doing the  work and  the payment  by it  of his      wages or  remuneration. A  relationship of  master  and      servant may  be established  by the  presence of all or      some  of   these  indicia  in  conjunction  with  other      circumstances and it is a question of fact in each case      whether there  is such a relation between the State and      the alleged holder of a post."      According to  the above  decision, the  true  test  for determination of  the question whether a person is holding a civil post  or is  a member  of the  civil  service  is  the existence of  a relationship  of master  and servant between the State  and the  person holding  a post under it and that the existence  of such  relationship is  dependent upon  the right of  the State  to select and appoint the holder of the

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post. its  right to  suspend and  dismiss him,  its right to control the  manner and method of his doing the work and the payment by  it of  his wages and remuneration. It is further held that  the relationship  of master  and servant  may  be established by  the presence  of all  or some of the factors referred to  above in  conjunction with other circumstances. Applying these tests, this Court held that a Mauzadar in the Assam Valley  who was  engaged in  the work of collection of land  revenue   and  other   Government  dues   and  in  the performance or  certain other  special duties  was a  person holding a  civil post  under the  State. Following the above decision in  Superintendent of  Post Offices etc. etc. v. P. K. Rajamma  etc. etc.  this Court held that persons who were working as  extra  departmental  agents  of  the  Posts  and Telegraphs Department were persons holding civil posts. 162      Section 102 of the Panchayats Act before it was amended by the Amending Act read as follows:-           "102. (1)  Subject to  the provisions  of this Act      and the rules made thereunder-                (a) there shall be a Secretary for every gram           panchayat  and   nagar  panchayat   who  shall  be           appointed in accordance with the rules;                (b) a  gram panchayat  or as the case may be,           nagar panchayat  shall have such other servants as           may be determined under section 203. Such servants           shall be  appointed by  such Authority  and  their           conditions of  service shall  be such  as  may  be           prescribed :.. "      Section 122 of the Panchayats Act reads:           "122. Subject  to the  provisions of  this Act and      the rules made thereunder-                (1) there  shall be  a  Secretary  for  every                taluka panchayat,                (2) the  Taluka Development officer who shall           be an  officer belonging  to the State Service and           posted under  the  panchayat,  shall  be  the  ex-           officio Secretary of the panchayat.                (3) a  taluka panchayat shall have such other           officers and  Servants as  may be determined under           section 203.  Such officers  and servants shall be           appointed by  such authority  and their conditions           of service  shall be  such as may be prescribed. ’           The officers  and servants  so appointed  shall in           the  discharge   of  their  functions  and  duties           exercise such  powers as  may be conferred on them           by the  panchayat, subject  to rules, if any, Made           in this behalf."      Clause (c)  of sub-section  (2) of  section 123  of the Panchayats Act  authorises the Taluka Development officer to appoint such  class of  officers  and  servants  as  may  be prescribed.      Section 142 of the Panchayats Act reads:           "142. Subject  to the  provisions of  this Act and      the rules made thereunder-                (1) there  shall be  a  secretary  for  every                district panchayat;                (2) (a) a District Development officer posted           under the panchayat, shall be ex-officio secretary           of the panchayat;                (3) a  district  panchayat  shall  have  such           other officers  and servants  as may be determined           under section  203.  Such  officers  and  servants           shall be appointed by such authority and 163

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         their conditions  of service  shall be such as may           be  prescribed.   The  officers  and  servants  so           appointed  shall   in  the   discharge  of   their           functions and  duties exercise  such powers as may           be conferred  on them by the panchayat, subject to           rules, if any, made in this behalf."      Clause (c)  of sub-section  (2) of  section 143  of the Panchayats Act  empowers the District Development officer to appoint such  class of  officers  and  servants  as  may  be prescribed.      It is significant that sections 102, 122 and 142 of the Panchayats Act  provide that the gram panchayat or the nagar panchayat or the taluka panchayat or the district panchayat, as the  case may  be, shall  have such  other  officers  and servants as  may be  determined under  section  203  of  the Panchayats Act  and such  officers  and  servants  shall  be appointed by  such authority and their conditions of service shall be  such as  may be  prescribed. As mentioned earlier, Section 203  (1) of  the Panchayats  Act provides that there shall be  constituted a Panchayat Service in connection with the affairs  of panchayats  i.e. gram  and nagar  panchayat, taluka panchayat  and district  panchayat for the purpose of bringing about  uniform scales of pay and uniform conditions of service  of the  person  employed  in  the  discharge  of functions and duties of panchayats. It may be noted that the Panchayat Service  contemplated under  section  203  of  the Panchayats Act  is a  single service for the whole State and it is  not a collection of distinct and separate services of each individual  panchayat.  That  Panchayat  Service  is  a service under  the State  is again emphasized by section 206 which authorises  the State Government to pool together four classes of persons mentioned therein who originally belonged to four  different sources  and  to  allocate  them  to  the Panchayat Service  and one  class of  such persons are those who belong  to  the  State  Service.  Unless  the  Panchayat Service is held to be a State service, inclusion of officers and servants  in the State service will be unconstitutional. Sections 157  and 158  would also  be exposed  to a  similar attack. (Vide  State of  Mysore v.  H. Pappana  Gowda & Anr. etc.) It is a well-settled rule of construction that a court ought not to interpret statutory provisions unless compelled by their  language in  such a  manner as would involve their unconstitutionality because  the legislature  is presumed to enact a  law which  does not contravene the Constitution. In the instant case, we feel that there is no compelling reason to hold  that the  Panchayat Service  is not a civil service under the  State. It  is seen  that further  recruitment  of candidates to  the Panchayat  Service has  to be made by the Gujarat Panchayat Service Selection Board constituted by the State Government.  Entry  41  of  List  II  of  the  Seventh Schedule to the Constitution, 164 as mentioned  earlier, also  refers to State Public Services suggesting that  there can  be more  than one  State  Public Service under  the State.  We have  indeed a  number of such services under  a State  e.g,  Police  Service,  educational service, revenue  service etc.  State Public Services may be constituted or established either by a law made by the State Legislature or  by rules made under the provision to Article 309 of  the Constitution  or even by an executive order made by the  State Government  in exercise  of its  powers  under Article  162   of  the  Constitution.  The  recruitment  and conditions of  service of  the officers  and servants of the State Government  may also be regulated by statute, rules or executive orders.  The administration  of a  service under a

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State involves  broadly the  following  functions:  (i)  the organisation of  the Civil  Service and the determination of the  remuneration,   conditions  of  service,  expenses  and allowances of  persons serving  in it;  (ii) the  manner  of admitting  persons  to  civil  service;  (iii)  exercise  of disciplinary control  over members  of the service and power to transfer,  suspend, remove  or dismiss them in the public interest as  and when  occasion to  do  so  arises.  In  the instant case,  the Panchayat  Service is  constituted by the Panchayats Act and the State Government is empowered to make orders and  rules regarding its organisation and management. It is  true that  section 203  of the  Panchayats Act, it is stated that the Panchayat Service shall be distinct from the State Service.  Having regard  to the  broad features of the Panchayat  Service,  we  are  of  the  view  that  the  said declaration appears  to have  been made  only to distinguish the Panchayat  Service from  other  services  of  the  State attached to  the several  departments which  are  under  the direct control  of the  State Government.  If the members of the Panchayat Service are not to be the members of a Service under the  State Government  but are  to be the officers and servants of  the panchayat  unit to  which they are allotted then sub-sections  (2), (2A)  and 4(a) of section 203 of the Panchayats Act  would to  some extent  become unworkable  as every time  there is  a transfer  of an officer borne on the Panchayat Service  there would  be a change of master. We do not think  that the  Legislature  intended  such  a  bizarre result.  Sub-section  (2)  of  section  203  authorises  the division of  the Panchayat  Service into  different classes, cadres and  posts. Sub-section  (2A) of section 203 provides that the  Panchayat Service  may consist of district cadres, taluka cadres  and local cadres and that a servant belonging to a  district cadre  may be  transferred from a post in any one taluka  to a  post in  another taluka in the district, a servant belonging  to a taluka cadre may be transferred from a post  in any  gram or nagar to a post in any other gram or nagar in  the same  taluka. Sub-section  (4) of  section 203 authorises promulgation  of rules providing for promotion of servants in the Pan- 165 chayat  Service   to  cadres  in  the  State  Service.  Such promotion is  possible only  because the State Government is the master of the Panchayat Service. The reason for treating Panchayat Service  as a  service distinct from State Service appears to be that the law intended that person belonging to the Panchayat  Service should  be transferable from one post in a  panchayat to  another post  in a  panchayat and unless there was  an order  of promotion, such persons could not be transferred to posts outside the panchayats.      Merely because  the panchayats  are declared to be body corporates, it  cannot be  said  that  any  of  the  persons working under  them cannot  considered as members of a civil service under  a State. The panchayats constituted under the Panchayats Act  derive their  authority from the statute and are under  the control  of the  State Government.  They form part of  the local  self-Government organisation  which  the State Government  is under  an obligation  to  foster  under Article 40  of the  Constitution. Entry  5 of List II of the Seventh Schedule  to the Constitution specifically refers to local authorities established for the purpose of local self- Government  or  village  administration  as  part  of  local Government.  The  local  authorities  are  included  in  the definition of  the expression  ’State’ in  Article 12 of the Constitution.  The  panchayats  exercise  many  governmental functions which  the State  Government can perform. They are

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entrusted with the power to levy taxes and to exercise large number of powers which are loosely called as "police powers" regulating several  aspects of  human life. Articles 276 and 277 of  the Constitution  also take  note of  the powers  of local authorities  to levy certain taxes. In addition to the express  powers   granted  to   the  panchayats,  the  State Government is  also authorised  under the  Panchayats Act to delegate many  of its functions to them and to transfer many of  its  officers  and  servants  to  function  under  their supervision and control as members of the Panchayat Service. It is  manifest from  the foregoing  that it  cannot be said that person  working as members of the Panchayat Service are not  persons   engaged  in   governmental   functions   and, therefore, it  is not  possible to  treat them as members of the State  Civil Service. We, however, make it clear that it is quite  possible that  under the statute it may be open to the panchayats  to  employ  servants  for  the  purpose  of, administration of  the panchayats  who may not be members of the Panchayat  Service. We are concerned in these cases only with the  members of the Panchayat Service constituted under section  203(1)   with  regard   to  whose  appointment  and conditions  of   service  the   Government  alone  has  been entrusted with the power to make rules under section 203(3). We are of the view H. that the Panchayat Service constituted under  section  203  of  the  PanchaYats  Act  has  all  the characteristics of a Civil Service of the State. This 166 also appears  to have  been the view of the State Government when  it   constituted  the  second  Pay  Commission  (Desai Commission) as  can be  seen from  the Government Resolution constituting the said Commission requiring it to examine the general  conditions  of  service  applicable  to  Government employees other  than officers of the all India services but including  employees   in  the   Panchayat   Service   (Vide Resolution No.  PDS  1672/1526/P  dated  November  20,  1972 passed by  the  Government  of  Gujarat)  and  there  is  no justification for taking a view different from the one taken by the  High Court  of Gujarat  in Shukla’s  case (supra) as early as  1967. Several  orders  and  rules  issued  by  the Government of  Gujarat under  the Panchayats  Act since  its commencement also support the aforesaid view.      At this  stage, it  is necessary to refer to a decision of this  Court in  Jalgaon Zilla  Parishad v. Duman Govind & Ors on  which reliance was placed by the learned counsel for the State  Government in  support of the contention that the Panchayat Service  cannot be  considered as  a  State  Civil Service.  In   that  case,  the  question  which  arose  for consideration was  whether kotwals  who were  holding  posts under the Slate Government ceased to be the employees of the Government on  the  transfer  of  their  services  to  Zilla Parishads. This  Court held  that  they  ceased  to  be  the Government servants  as they  had been  transferred  to  the services of the Zilla Parishads. That decision turned on the true construction  of section  239 of  the Maharashtra Zilla Parishads and Panchayat Samitis Act, 1961 which provided for the  constitution  by  the  State  Government  as  from  the appointed day  a District  Technical Service  (Class III), a District Service  (Class III)  and a District Service (Class IV) for  each Zilla Parishad. We do not have a corresponding provision  in   the  Panchayats   Act  providing   for   the constitution of  a service  for each  panchayat but  on  the other hand,  the statutory  requirement is  that a Panchayat Service  should   be  constituted  in  respect  of  all  the panchayats i.e.  district panchayats,  taluka panchayats and gram and nagar panchayats. Such a common service constituted

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for the  benefit of  all panchayats  leads to the inevitable conclusion that  the State  alone can  be the  master of the members of  that Service  and not the individual Panchayats. The decision  relied on  has, therefore,  no bearing  on the question before  us. We, therefore, reject the contention of the State  Government that  the Panchayat  Service is  not a civil service  under the  State. We,  however, make it clear that the  view taken  by us  in the  present case  does  not necessarily lead  to the conclusion that every employee of a local body  who is  not a  member of  the Panchayat  Service should be treated as a member of the State 167 Civil Service.  It is  a question  of fact  to be decided in each case depending on the circumstances of that case.      The second  question is  a  simple  one  and  does  not require  much   elaboration.  The  provisions  contained  in section 206 of the Panchayats Act and the provisions in sub- sections (2),  (2A), (3)  and (4)  of  section  203  clearly establish  that  the  Panchayat  Service  constituted  under section  203   can  only   be  a   centralized  service  and recruitment of  candidates to  be made  under section 210 of the  Panchayats   Act  by   the  Gujarat  Panchayat  Service Selection Board can only be to that centralized service. The division of  the  Panchayat  Service  into  district  cadre, taluka cadre  and local  cadre does not affect the integrity of the  Panchayat Service.  It  continues  to  be  a  single service notwithstanding  such division.  When the  Panchayat Service is  a State-wide  service, it  has necessarily to be held that it is a common centralised service      In the  result, we  answer the two points which are set down for decision at this stage as follows:-           "1. The  Panchayat Service  constituted under  the      Panchayats Act  is a  civil service  of  the  State  of      Gujarat; and           2. that  under the  unamended  Act,  there  was  a      common centralized Panchayat Service."      The cases  shall now  be posted before a Bench of three Hon’ble Judges  for  further  hearing  on  other  points  as directed by the Court on July 24. 1980. N.V.K. 168