16 December 1975
Supreme Court


Case number: Appeal Civil 1942 of 1974








CITATION:  1976 AIR 1199            1976 SCR  (2)1034  1976 SCC  (2) 844  CITATOR INFO :  RF         1979 SC 220  (13)  RF         1982 SC1107  (32)

ACT:      Civil Service-Right  of Government  to abolish post and dispense with  services of  incumbent-Abolition of post held by permanent  officer while  retaining  post  held  by  non- permanent officer, legality.      Punjab Civil  Service Rules, r. 3.14-Scope of-Abolition of ex-cadre  post- Right of person holding post to revert to his permanent cadre post.

HEADNOTE:      The respondent  was Head  Assistant  in  the  Panchayat Department  of   the  Punjab   Government.  While   he   was officiating as  Superintendent in  the  Department,  he  was appointed Panchayati  Raj Election Officer, which was an ex- cadre  post.   On  the  reorganisation  of  the  State,  the respondent was  allocated  to  the  appellant-State  and  he continued to  work as Panchayati Raj Election Officer in the appellant-State. In 1972, the State Government abolished the post of  Panchayati Raj Election Officer and the services of the respondent  were dispensed  forthwith. He challenged the order and it was quashed by the High Court.      In appeal to this Court, ^      HELD: Since  the order  of the appellant abolishing the post of  Panchayati Raj Election Officer did not suffer from any infirmity,  the High  Court was in error in quashing it; but on  the abolition  of that  post, under  r. 3.14  of the Punjab Civil  Service, Rules,  the lien of the respondent on the post of Head Assistant stood revived. [1040 F-G]      (1)(a) Whether  a post  should be retained or abolished is essentially a matter for the Government to decide, and as long as the decision is taken in good faith, it could not be set aside  by the  Court  but,  if  it  is  found  that  the abolition was  not in  good faith, but was a cloak or device to terminate the services of an employee, then the abolition of the post may be set aside. [1037 H-1038 C]      M. Ramanatha  Pillai v.  The State  of  Kerala  &  Anr. [1974] 1 S.C.R. 515, followed.      (b) In  the present  case, the  decision to abolish the



post  was  taken  because  of  administrative  reasons.  The Government re-organised  the Panchayat  Department, and  all those duties  which had  nothing  to  do  with  the  job  of Panchayati  Raj   Election  Officer   were  given  to  other officers.  The  only  work  left  with  the  Panchayati  Raj Election  Officer   was  that  of  conducting  elections  of Panchayat Raj  Bodies, and, as this work was of a periodical nature,  the   appellant  abolished  that  post  because  of financial stringency. [1038 G-1039 C]      (c) Whether  greater economy  could have  been  brought about by  adopting some other course is not for the Court to go into.  The fact  that some  of the  functions which  were being previously  performed by  the respondent are now being performed by  others, whose  posts have  not been abolished, would not show that the decision to abolish was not taken in good faith. In deciding which post to abolish, the appellant took into  account the relative usefulness of each post, and as this  matter was  within the administrative discretion of the appellant  and as  the decision was taken in good faith, the Court cannot interfere with it. [1039 C-1039 F]      (d) The fact that the post which was abolished was held by a  person who  is confirmed  in that  post and  the posts which were  not abolished  were held by persons who were not permanent would not also affect the legality of the decision to abolish  the former,  if the  decision was  taken in good faith. [1039 F-G] 1035      (2) Under  r.  3.14(a),  a  competent  authority  shall suspend the lien of a Government servant on a permanent post which he  holds substantively,  if  he  is  appointed  in  a substantive capacity,  to a permanent post outside the cadre on which  he was borne; and under r. 3.15, in the absence of the written  request by  the employee,  the lien  cannot  be terminated. Under  r. 3.14(e), the Government servant’s lien which has  been so  suspended shall  revive as  soon  as  he ceases to  hold a  lien on the ex-cadre post. In the present case, since  there was  no request  by  the  respondent  for terminating his lien on the post of Head Assistant, his lien on that  post should  be held to have immediately revived as soon as  the post  of Panchayati  Raj Election Officer which was an ex-cadre post was abolished. [1039 H-1040 C]      T. R.  Sharma v.  Prithvi Singh  & Anr. [1976] 2 S.C.R. 716, followed.      [It was  for the  Government to  pass all consequential orders regarding his seniority, pension etc.] [1040 C]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 1942 of 1974.      Appeal by  Special Leave  from the  Judgment and  Order dated the  20-5-1974 of the Punjab and Haryana High Court at Chandigarh in Civil Writ No. 2169 of 1972.      L. N.  Sinha, Solicitor  General and Naunit Lal for the Appellant.      Kapil Sibal and P. R. Ramesh for Respondent No. 1.      P. P. Rao for the Applicant-Intervener.      The Judgment of the Court was delivered by      KHANNA, J. This appeal by special leave by the State of Haryana is  directed against  the  judgment  of  Punjab  and Haryana High  Court whereby  petition under articles 226 and 227 of  the Constitution  of India  filed by  Des Raj Sangar respondent was  allowed and order dated July 13, 1972 of the Haryana Government  abolishing the  post of  Panchayati  Raj



Election Officer  and terminating  the services  of the said respondent was quashed.      Des Raj  Sangar respondent  (hereinafter referred to as the respondent)  joined service  as a clerk in the Panchayat Department of  the  then  Punjab  Government  in  1942.  The respondent was  in due course promoted and confirmed as Head Assistant. In 1961 while the respondent was officiating as a Superintendent in the Panchayat Department, he was appointed Officer on  Special Duty (Elections). The post of Officer on Special Duty (Elections) was an ex-cadre post, while that of Superintendent was  included in  the cadre. With effect from November 1, 1961 the post of Officer on Special Duty was re- designated  as   Panchayati  Raj   Election   Officer.   The respondent held  the post of Panchayati Raj Election Officer temporarily till 1964 when that post was made permanent. The respondent was  confirmed as Panchayati Raj Election Officer with effect from September 19, 1964. The decision to confirm the respondent  was taken  with a view to ensure the lien of the respondent  on that  post as  the  respondent  had  been selected by  the  Government  of  India  as  Gram  Panchayat Officer in the Indian Aid Mission, Nepal. An undertaking was also obtained  from  the  respondent  at  the  time  he  was confirmed that  this would not affect the seniority of B. N. Sharma, who  was senior  to the  respondent and who was then holding the  temporary post  of  Planning  Officer.  On  the reorganization of  the erstwhile State of Punjab with effect from 1036 November 1,  1966 the post of Planning Officer held by B. N. Sharma was  allocated to  the State of Punjab, while that of Panchayati Raj  Election Officer  held by the respondent was allocated to  the State  of Haryana.  From November  1, 1966 till April  16, 1971  the respondent worked as Planning-cum- Panchayati Raj  Election Officer in the Panchayat Department of  Haryana  Government.  On  April  16,  1971  the  Haryana Government created eight temporary posts of Deputy Directors in the  Panchayat Department  in the  pay scale  of Rs. 400- 1100. The  post of  the respondent was also re-designated as Deputy Director Panchayat with effect from April 16, 1971. A notification  was   subsequently  issued  on  May  13,  1971 superseding the  earlier notification  and the  respondent’s post was again designated as that of planning-cum-Panchayati Raj Election  Officer. On  the same day instead of the eight temporary posts  of Deputy  Directors, nine  posts of Deputy Directors were  created. Two  of those Deputy Directors were to be  posted at  the headquarters,  one to  deal with  land development work  and the  other to  deal with  legal  work, while seven  of the  Deputy Directors  were to  work in  the field. These  seven posts  of Deputy Directors meant for the field work  were subsequently  abolished.  Another  post  of Officer on  Special Duty (Planning) in the grade of Rs. 400- 800 was created in October 1971. A. N. Kapur, who was junior to  the   respondent  but   who  had   been   confirmed   as Superintendent,  was   appointed  Officer  on  Special  Duty (Planning). On  April 13,  1972 the  impugned order was made and the same reads as under:                            ORDER           The Governor  of Haryana  is pleased to order that      in  view   of  the  extreme  financial  stringency  the      permanent post  of the  Panchayati Raj Election Officer      in the  Panchayat Department,  Haryana, in the scale of      Rs.  400-40-1000/50-1100   should  be   abolished  with      immediate effect.           2. Consequent  upon the  abolition of  the post of      the Panchayati  Raj Election  Officer the  Governor  of



    Haryana is  further pleased  to order that the services      of Shri  Des Raj  Sangar who is holding the post of the      Panchayati  Raj   Election  Officer  in  a  substantive      permanent capacity  should be  dispensed with immediate      effect. He  should relinquish  the charge  of his  post      immediately. He  is allowed  three  months’  emoluments      i.e. pay  and allowances  as gratuity  in lieu of three      months notice in accordance with the provisions of rule      5.9 of the Civil Services Rules, Volume II. He shall be      entitled to  pension/gratuity in  accordance  with  the      rules in  Chapter VI of the Civil Service Rules, Volume      II, as amended from time to time, but the pension shall      not be  payable for  the period  in respect of which he      has been  allowed gratuity  in lieu  of  three  months’      notice.                                                J. S. Sarohia                                   Secretary to Govt. Haryana      Chandigarh           Development & Panchayat Department      Dated: 13th July, 1972 1037      The respondent  in his  petition  while  assailing  the impugned order  levelled allegations  of mala  fide  against Shri  Shyam   Chand,  then   Minister  for  Development  and Panchayats,  Haryana  but  the  said  allegations  were  not pressed at  the time of arguments. Following two contentions were advanced on behalf of the respondent:      (1) The  impugned order  dated July 13, 1972 abolishing the post  of Planning-cum-Panchayati  Raj  Election  Officer held by the respondent and the consequent termination of his services was  arbitrary and had no reasonable nexus with the object sought  to be achieved, namely, meeting the financial stringency. The impugned order was stated to be violative of articles 14  and 16  of the  Constitution  inasmuch  as  the respondent who  was at  all times  selected for higher posts and got  promotions from  the lower  posts in  the cadre was being thrown  out of the job on the pretext of the abolition of the  post permanently held by him, whereas persons junior to him  in  rank  and  less  meritorious  were  retained  in service.      (2) In  view of  the provisions  of rule 3.14 and other relevant rules  of Punjab  Civil Services  Rules, the moment the post  held by  the respondent was abolished his lien got revived on  the post  of Head  Assistant which  he had  held substantively before  his promotion to the ex-cadre post and therefore his  services could  not be terminated, and he was in any case entitled to the admittedly existing post of Head Assistant.      As against  the above,  it was  urged on  behalf of the State of  Haryana that  the Government  was well  within its rights to  decide as  to which  posts should be abolished to effect economy to meet the financial stringency and that the court could  not go  into the  matter and decide whether the abolition of  the post  was justified  or not.  It was  also stated that the respondent could not be reverted to the post of  Head  Assistant  as  his  lien  on  the  post  had  been terminated when  he was confirmed against the permanent post of Planning-cum-Panchayati Raj Election Officer.      The learned  Judges of  the High  Court held  that  the impugned order  was arbitrary, unreasonable and violative of articles 14  and 16  of the  Constitution. The order as such was quashed.  In view  of the  above  finding,  the  learned Judges did  not go  into the  second contention  advanced on behalf of  the respondent  on the  basis of rule 3.14 of the Punjab Civil Services Rules.      In appeal before us learned Solicitor General on behalf



of the  appellant-State has  urged that  it is for the State Government to  decide as  to which  post should be abolished and  in   case  the   State  Government   so   decides   for administrative reasons, its order in this respect should not have been  quashed by  the High  Court. As against that, Mr. Sibal on  behalf of  the respondent  has canvassed  for  the correctness of  the view  taken by the High Court. There is, in  our   opinion,  considerable  force  in  the  contention advanced on behalf of the appellant in this respect.      Whether a  post should  be  retained  or  abolished  is essentially a  matter for  the Government to decide. As long as such decision of 1038 the Government  is taken  in good  faith, the same cannot be set aside  by the  court. It  is not open to the court to go behind the  wisdom of  the decision  and substitute  its own opinion for  that of  the Government  on  the  point  as  to whether a  post should  or  should  not  be  abolished.  The decision to  abolish the  post should,  however, as  already mentioned, be taken in good faith and be not used as a cloak or pretence  to terminate  the services  of a person holding that post. In case it is found on consideration of the facts of a  case that  the abolition of the post was only a device to terminate  the services  of an employee, the abolition of the post  would suffer from a serious infirmity and would be liable to  be set  aside. The  termination of a post in good faith and  the consequent termination of the services of the incumbent of  that post would not attract article 311. In M. Ramanatha Pillai  v. The  State of Kerala & Anr.(1) Ray C.J. speaking for the Constitution Bench of this Court observed:           "A post  may be abolished in good faith. The order      abolishing the post may lose its effective character if      it  is  established  to  have  been  made  arbitrarily,      malafide or  as a  mask of some penal action within the      meaning of article 311 (2)." It was further observed:           "The abolition of post may have the consequence of      termination of  service of  a government  servant. Such      termination is  not dismissal  or  removal  within  the      meaning  of   article  311  of  the  Constitution.  The      opportunity  of  showing  cause  against  the  proposed      penalty of  dismissal or  removal  does  not  therefore      arise in  the case  of abolition of post. The abolition      of  post   is  not   a  personal  penalty  against  the      government  servant.   The  abolition  of  post  is  an      executive policy  decision. Whether  after abolition of      the post,  the Government  servant who  was holding the      post would or could be offered any employment under the      State would therefore be a matter of policy decision of      the Government  because the  abolition of post does not      confer on  the person  holding the  abolished post  any      right to hold the post."      According to  the  impugned  order,  the  post  of  the Panchayati Raj Election Officer was abolished in view of the extreme financial stringency. In support of the above order, Shri G.  L. Bailpur, Secretary to the Government of Haryana, filed affidavit.  According to  that affidavit,  the post of Panchayati Raj  Election Officer  was created simply for the conduct of elections of the Panchayati Raj Bodies. The other duties which were performed by the respondent were only as a measure of temporary arrangement. In order to streamline the Department the Government felt that the Department should be reorganised and  as a  result of reorganisation those duties which had  nothing to  do with the job of the Panchayati Raj Election Officer  were with  drawn  and  given  to  separate



Deputy Directors of Panchayats. The 1039 duties pertaining  to legal  matters and  complaints against Panchas, Sarpanches and the members of the Panchayat Samitis were  of   such  nature  that  the  same  required  a  legal background and  field experience by the officer handling the subject. Those  duties  were,  therefore,  given  to  Deputy Director of Panchayat (Legal) who was a Law graduate and had a long  field experience  as Block Development and Panchayat Officer. After  the reorganisation  of the  Department,  the only work  left with the Panchayati Raj Election Officer was that of  conducting elections  of Panchayati  Raj Bodies. As this work was of a periodical nature, the Government thought it fit  to  abolish  it.  It  was  also  stated  in  another affidavit filed  on behalf  of the  appellant-State that the post of  Panchayati Raj Election Officer and the seven posts of field  Deputy Directors  were  abolished  as  an  economy measure to  meet financial  stringency.  We  see  no  cogent ground  to   question  the   averments  made  in  the  above affidavits. The  averments show that the decision to abolish the post  of  Panchayati  Raj  Election  Officer  was  taken because  of  administrative  reasons.  The  question  as  to whether greater  economy could  have been  brought about  by adopting some  other course is not for the court to go into, for the  court cannot  sit as  a court  of  appeal  in  such matters. It  may be  that some  of the  functions which were being previously  performed by  the respondent are now being performed by  Deputy Directors  whose posts  have  not  been abolished, this  fact would  not show  that the  decision to abolish the  post held  by the  respondent was  not taken in good faith.  After the  posts of  Deputy Directors  had been created and  had been  in existence  along with  the post of Panchayati Raj  Election Officer for a number of months, the Government, it  would appear, decided to abolish some of the posts to  meet  the  financial  stringency.  In  taking  the decision as  to which  post to  abolish  and  which  not  to abolish, the  Government, it  seems, took  into account  the relative usefulness  of each post and decided to abolish the seven posts  of field  Deputy Directors  and the one post of Panchayati Raj  Election Officer.  This was  a  matter  well within the  administrative discretion  of the Government and as the  decision in  this respect appears to have been taken in good  faith, the same cannot be quashed by the court. The fact that  the post  to be abolished is held by a person who is confirmed  in  that  post  and  the  post  which  is  not abolished is held by a person who is not permanent would not affect the  legality of  the decision  to abolish the former post as long as the decision to abolish the post is taken in good faith.  We would,  therefore, hold  that the High Court was in error in quashing the order of the Government whereby the  post  of  Panchayati  Raj  Election  Officer  had  been abolished.      There appears to be, however, considerable force in the second contention  advanced on behalf of the respondent that on the  abolition of  the post  of Panchayati  Raj  Election Officer, his  services  should  not  have  been  terminated. According to  clause (a)  (2) of  rule 3.14  of Punjab Civil Services Rules Vol. I Part I as applicable to Haryana State, a competent authority shall suspend the lien of a Government servant on  a permanent post which he holds substantively if he is  appointed in  a substantive  capacity to  a permanent post outside  the cadre  on which  he is borne. According to clause (e) of that rule, a 1040 Government servant’s  lien which  has been  suspended  under



clause (a) of that rule shall revive as soon as he ceases to hold a  lien on  the post  of the  nature specified  in sub- clauses (1), (2) or (3) of that clause. The above provisions were considered by us in the case of T. R. Sharma v. Prithvi Singh &  Anr.(1) and  it was  held that  in the absence of a written request  by the  employee concerned, the lien on the post permanently  held by  him cannot  be terminated.  It is nobody’s case  that any  written request  was  made  by  the respondent for  terminating his  lien on  the post  of  Head Assistant. As  such, the  lien of the respondent on the post of Head Assistant should be held to have immediately revived as soon  as the  post of Panchayati Raj Election Officer was abolished.      It has been pointed out by Mr. Sibal that officials who were junior  to the  respondent have  in the  meanwhile been promoted to  higher posts.  It would  be for the authorities concerned  to  take  such  consequential  steps  as  may  be necessary in  accordance  with  the  rules  because  of  the revival of  the lien  of the  respondent on the post of Head Assistant.      Mr. Sibal  has also  stated  that  the  respondent  may exercise  his  option  of  taking  compensation  pension  in accordance with  rule 5.2 of the Punjab Civil Services Rules Vol. II  because of  the abolition of the post of Panchayati Raj Election  Officer. In  case the  respondent does  so, it would be  for the  Government to  pass appropriate orders in the matter.  Submission has  further been  made by Mr. Sibal that the  respondent should  not in  view  of  the  hardship suffered by  him be  compelled to  make refund  out  of  the salary which  he has been drawing during the pendency of the appeal. This  again is  a matter  which is  entirely for the Government to  decide and  we are  sure that  the Government would  pass  appropriate  order  keeping  in  view  all  the circumstances of the case.      We accordingly  accept the  appeal and  set  aside  the judgment of  the High  Court. We  hold that the order of the Government abolishing  the post  of Panchayati  Raj Election Officer does  not suffer  from any  infirmity and as such is not liable  to be  quashed. We  further  hold  that  on  the abolition of  that post,  the lien  of the respondent on the post of  Head Assistant  stood revived.  The parties  in the circumstances shall bear their own costs throughout. V.P.S.                                       Appeal allowed. 1041