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PETITIONER: STATE OF UTTAR PRADESH AND ANR.

       Vs.

RESPONDENT: AUDH NARAIN SINGH AND ANR.

DATE OF JUDGMENT: 09/03/1964

BENCH: SHAH, J.C. BENCH: SHAH, J.C. GAJENDRAGADKAR, P.B. (CJ) WANCHOO, K.N. AYYANGAR, N. RAJAGOPALA SIKRI, S.M.

CITATION:  1965 AIR  360            1964 SCR  (7)  89  CITATOR INFO :  C          1984 SC 161  (27)

ACT: Government  Servant-Relationship  of  master  and   servant- Tahvildars whether Government Servants-Whether provisions of Art.  311(2) applicable to them-Constitution of  India  Art. 311(2).

HEADNOTE: The  respondent  was appointed in 1949 a  Tahvildar  in  the District  of Azamgarh in the State of Uttar Pradesh  and  he worked, in the Cash Department of the Government Treasury of that  District.   His  appointment was  made  by  Government Treasurer  with the approval of Collector of  the  District. In 1956, he was removed from service under instructions from the  Collector.  He filed a writ petition in the High  Court in  which he challenged the legality of the  order  removing him  from service on the ground that he was a member of  the civil service of the State of Uttar Pradesh or held a  civil post under the State and hence was not liable to be  removed from service without being afforded a reasonable opportunity of showing cause against the action proposed to be taken  in regard  to him under Art. 311(2) of the  Constitution.   The High  Court held that the respondent was an employee of  the State  Government and as the provisions of Art.  311(2)  had not  been observed, the order terminating his  services  was illegal.   The appellant has come to this Court  by  special leave. The  only question raised before this Court was,  whether  a Tahvildar  appointed in the Cash Department in the State  of Uttar  Pradesh  is  a civil servant of the  State  of  Uttar Pradesh or holds a civil post in the State.  Dismissing  the appeal, Held:The respondent was a civil servant of the State of Uttar  Pradesh and as the requirements of Art.  311(2)  were not  conformed  to, the order terminating his  services  was invalid. The  Government  Treasurer is a civil servant of  the  State holding a specific post and he is authorised by the terms of

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his  employment  to  employ  Tahvildars  to  assist  him  in discharging   his  duties.   Payment  of   remuneration   to Tahvildars  is for services rendered in the Cash  Department of  the  District  Treasury of the  State.   The  Tahvildars receive  their remuneration directly from the State and  are subject  to  the  control of the District  Officers  in  the matter   of  transfer,  removal  and  disciplinary   action. Employment  of Tahvildars being for the purpose of  carrying out  the work of the State, even though a degree of  control is exercised by the Government Treasurer and the appointment is  in the first instance made by the Treasurer  subject  to the  approval  of the District Officers,  the  Tahvildar  is entitled to the protection of Art. 311. Whether in a given case, the relationship of master and ser- vant  exists is a question of fact which must be  determined on   a   consideration   of  all   material   and   relevant circumstances  having  a  bearing  on  that  question.    In general, selection by the employer,. coupled with payment by him of remuneration or wages, the, 90 right  to control the method of work and a power to  suspend or remove from employment are indicative of the relation  of master  and  servant.  However, co-existence  of  all  these indicia is not predicted in every case to make the  relation one   of  master  and  ,servant.   In  special  classes   of employment,  the contract of service may exist, even in  the absence  of one or more of these indicia.   But  ordinarily, the right of an employer to control the method of doing  the work  and  the power of superintendence and control  may  be treated as strongly indicative of the relation of master and servant,  for  that relation imports the power not  only  to direct the doing of some work, but also to direct the manner in  which  work  is to be done.  If the  employer  has  such power,  prima  facie,  the relation is  one  of  master  and servant. Shivanandan Sharma v. The Punjab National Bank Ltd. [1955] 1 S.C.R.  1427, Dharangadhara Chemical Works Ltd. v. State  of Saurashtra [1957] S.C.R. 152 and M/s Piyare Lal Adisivar Lal v.   Commissioner of Income-tax, Delhi [1960] 3 S.C.R.  669, referred  to.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 120 of  1963. Appeal  by special leave from the judgment and decree  dated December  13, 1960, of the Allahabad High Court  in  Special Appeal No. 204 of 1957. H.   N.  Sanyal, Solicitor-General of India and C.  P.  Lal, for the appellants. M. C. Setalvad and J. P. Goyal, for the respondents. March 9, 1964.  The Judgment of the Court was delivered by SHAH, J.-Audh Narain Singh-hereinafter called ’Singh’  --was appointed in 1949 a Tahvildar in the District of Azamgarh in the  State of U.P. and worked in the Cash Department of  the Government  treasury of that District.  The  appointment  of Singh   was  made  by  Dhanpat  Singh   Tandon,   Government Treasurer, with the approval of the District Magistrate.  By order dated April 20, 1956, Singh who was then working as  a Tahvildar  in  the  sub-treasury at tahsil  Lalganj  in  the District  of  Azaimarli  was informed  that  he  was,  under instructions  from  the  Collector,  removed  from  service. Against  the order of removal, Singh preferred an appeal  to the   Collector   but   the  same  was   rejected,   and   a representation  made  to  the Commissioner  of  the  Banaras

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Division was unsuccessful.  Singh then preferred a  petition under  Art.  226 of the Constitution in the  High  Court  of Judicature  at Allahabad for a writ of  certiorari  quashing the  order of removal passed against him and for a  writ  of mandamus or an order directing the Collector of Azamgarh and the State of Uttar Pradesh, Dhanpat Singh Tandon, Government Treasurer, and the Commissioner of Banaras Division to treat him  as  Tahvildar  in the sub-treasury at  Lalganj  in  the District of Azamgarh.  Singh claimed that be was a member of the civil service of the State of Uttar Pradesh or 91 held a civil post under the State, and was not liable to  be removed  from  service without being afforded  a  reasonable opportunity of showing cause against the action proposed  to be taken in regard to him under Art. 311(2) of the Constitu- tion.   Mehrotra  J., who heard the petition held  that  the Government  Treasurer  being  an employee of  the  State,  a Tahvildar employed by the Government Treasurer to carry  out the  work entrusted by the State, subject to the control  of the   State  Government,  was  an  employee  of  the   State Government,  and the impugned order of removal  was  invalid because  Singh was not afforded a reasonable opportunity  of showing  cause  against the action proposed to be  taken  in regard to him. The  order  of Mehrotra J., was confirmed in appeal  by  the High Court of Allahabad.  In the view of the High Court,  no direct relationship of master and servant between Singh  and the State was established because Singh was appointed by the Treasurer, but the Treasurer having authority to employ  him in  order to carry out the work of the State, Singh  was  as much under the control of the State as he was under the con- trol of the Treasurer and therefore he could claim to hold a civil  post under the State and to have the benefit of  Art. 311  of the Constitution.  Against the order passed  by  the High.  Court, this appeal is preferred with special leave. The  question  which  falls to be determined  is  whether  a Tahvildar  appointed in the Cash Department in the State  of Uttar  Pradesh  is  a civil servant of the  State  of  Uttar Pradesh or holds a civil post in the State.  In the State of Uttar   Pradesh,  contracts  for  administering   the   Cash Department  of the District treasuries are given to  persons who are called Government Treasurer.  The Treasurer holds  a post  specifically created in the District Treasury:  he  is appointed  by the Collector subject to the approval  of  the Finance Secretary.  On being appointed. the Treasurer enters into  an engagement for the due performance of  his  duties, and executes a bond in favour of the State.  The tenure of a Government Treasurer is temporary and he is not entitled  to privileges  of  leave and pension, but he  performs  various duties connected with the executive functions of the  State. His  appointment  is made by the Collector  subject  to  the approval  of  the Finance Secretary.  He has to  maintain  a true  and faithful account of the property entrusted to  him and  his  dealings  therewith  and  to  submit  returns   as prescribed.   He is also bound by the conditions, rules  and regulations  of the Government and also  departmental  rules and orders as may be in force, especially with reference  to his  relations  and  dealings  with and  the  right  of  his subordinates.  He has to attend the Government Treasury  for the  purpose of discharging his duties, and to show  to  his superior   officers  whenever  called  upon   the   property entrusted to him.  A Government Treasurer is not in 92 the  position  of  an independent contractor;  he  does  not merely undertake to produce a given result, without being in

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the  actual  execution under the control of the  person  for whom  he  does  the work.  He is in  the  execution  of  his duties, and in the manner, method and mode of his work under the control of the State Government. A Government Treasurer is entitled to appoint Tahvildars  to assist him in the discharge of his duties, but the  appoint- ment  is made ’with the approval of the District  Collector. Originally Tahvildars were directly appointed by the Govern- ment of the Province to specific posts for performing duties in  the District Treasuries.  In 1927,  however,  Government Order  dated July 25, 1927, was issued by the  Secretary  to Government Uttar Pradesh, Finance Department, reciting  that Tahvildars   in   sub-treasuries  were  appointed   on   the nomination  of the Treasurer of the District  Treasury,  who was responsible for their work and honesty, the intention of the  Government being that a Treasurer might  dispense  with the  services  of  a  Tahvildar  as  soon  as  he  had  lost confidence in him, but it had not been possible to put  this intention  into practice, because the Tahvildars  were  paid from  the  general revenue and  were  whole-time  Government servants  and  entitled  to  the  protection  given  to  all Government servants by the Classification Rules, and it  was difficult  to  hold the usual enquiry for the removal  of  a Tahvildar for he must be removed from service as soon as  he lost   the  confidence  of  the  Treasurer,  otherwise   the responsibility  of the Treasurer to the Government would  be impaired.   In the circumstances, the best solution  was  to abolish the post of Tahvildars, to increase the remuneration of  the  Treasurer by an amount equal to the  pay  given  to Tahvildars and to make ’him responsible for carrying on  the work   at  sub-treasuries  through  his  own  servants.    A reservation,  however was made that the Treasurer  must  not employ  any person in the treasury or  sub-treasury  without the  approval  of  the District Officer  and  the  Treasurer shall, when required by such District Officer remove without delay any person so employed.  Pursuant to -this  Government Order, in the Manual of Orders the following  paragraph-1561 was incorporated:               "Tahvildars  at sub-treasuries are  no  longer               Government servants.  They are employed by the               Treasurer  who  receives  an  allowance   from               Government  to  cover  their  pay  and   leave               salary.   The  Treasurer  however,  shall  not               employ  any person as a Tahvildar without  the               approval   of  the  District   Officer.    The               Treasurer shall remove a Tahvildar or transfer               him from one Tahsil to another if required  by               the  District Officer to do so on  any  ground                             which  in  the latter’s opinion  would   justify               such a step." 93 Even  after  the  posts  of  Tahvildar  were  abolished  the Government of Uttar Pradesh did not adopt a consistent atti- tude and from time to time issued orders which indicate that a  ,considerable  degree of control was  maintained  by  the District  Officers  upon  the Tahvildars in  the  matter  of appointment, removal from service, suspension and  transfers and  in  the  matter of payment  of  remuneration,  dearness allowance  and  making available certain  medical  benefits, Tahvildars  were treated on a par with other civil  servants of  the State.  On December 9, 1939, a Government Order  was issued  for  payment  of  remuneration  to  the   Tahvildars directly from the ,Government Treasury.  It had come to  the notice  of  the Government that the Treasurers paid  to  the

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cashier staff of the treasuries less than what they received on  their  account  from  the  Government,  after  obtaining receipts  for full amount.  It was therefore  directed  that the  Treasurer should prepare a statement showing in  detail the emoluments of the staff, but -payment of emoluments  was to be made to the persons concerned by the Treasury  Officer personally  and  their acknowledgment taken.   In  1945  the Government of Uttar Pradesh raised with effect from April 1, 1945, the allowance to be paid to Government Treasurers  for the pay of "the cashier staff of treasuries." By para 3(a) a scheme  for  payment  of gratuity  on  retirement  was  also devised  for  the benefit of permanent Tahvildars.   It  was provided that when a permanent Tahvildar retired, a gratuity of one month’s pay will be given to him for ,each  completed year of service, subject to a maximum of 25 years’ completed service,   the  gratuity  being  admissible   to   permanent incumbents  of  posts  and  also  to  future  entrants  when appointed permanently, but not if the service of a Tahvildar was  found either unsatisfactory, or if he resigned  or  was removed or dismissed from service.  Gratuity was to be  paid in the same manner as salaries were paid to the  Tahvildars, and provisions on account of the increase due to the pay  of Government Treasurers and allowances payable for the pay  of the  cashier  staff  of  treasuries and  for  the  grant  of gratuity to the cashier staff were made under the Heads "25- General Administration-B-District Administration (a) General Establishment,  Pay  of  Establishment-Contract  and   Extra Contract  Establishment" and  "55-Superannuation  Allowances and  Pensions  and  Gratuities Voted"  respectively  in  the budget.  By ,a letter dated June 17, 1953, addressed by  the Joint  Secretary  to the Government, it was brought  to  the notice  of the Collectors of Districts that  the  Government Treasurers  had  frequently dispensed with the  services  of Tahvildars  working  under them without  sufficient  reasons justifying  such  a course of action and attempts  had  been made  to  harass  such staff and that as a  result  of  such arbitrary  action on the part of the Government  Treasurers, hardship had been caused to those employees.  The Government therefore informed the Collectors to bring to the 94 notice of the Treasure that adverse notice of such action is likely  to be taken by the Government in future in  case  it was established that the Government Treasurers had  indulged in  high-handedness in their dealings with their staff.   It was  also  recorded  by  the  Collector  of  Azamgarh   that instances  had come to his notice in which the  services  of the  employees in the Cash Department of the treasuries  had been  dispensed  with arbitrarily without  framing  specific charges  against them or obtaining explanations, and it  was ordered that in future when services of the employees in the Cash  Department  were to be dispensed with,  a  report  for their suspension should be made and specific charges  framed against  them and they should be given time to  explain  the charges and their services should not be dispensed with as a result  of arbitrary action of the subordinate staff or  the Treasurer.  Orders have also been lately issued in 1959,  by which the scale of dearness allowance of the Tahvildars  was revised  and certain facilities for free medical  attendance were also provided. It  also appears that in some cases in which the  Tahvildars who had been dismissed or suspended were reinstated by order of  the  Collector.  For instance, under  Treasury  Officer, Azamgarh’s order dated August 14, 1948, it was recorded that under  the  Collector’s  order  Naunidh  Prasad,  Tahvildar, Phulpur (under suspension), was reinstated with effect  from

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the  date  of taking over charge.  There is  also  an  order passed  by  the  District  Magistrate,  Allahabad,  in  1952 deputing  one Ganesh Prasad working as Tahvildar  in  Handia sub-treasury for Kumbha Mela duty.  There is also the record of   the  disciplinary  proceeding  held  by  the   District Magistrate  on  April  12, 1948,  against  Tahvildar  Ganesh Prasad for improper conduct. It  is therefore clear from the record that Tahvildars  were appointed  to perform the duties of cashiers  in  Government Treasuries.   Their appointment was made by  the  Government Treasurer  with the approval of the District Collector,  but it   was  made  for  performance  of  public   duties,   and remuneration  was  paid  to  them  by  the  State  directly. Tahvildars were liable to be transferred under orders of the Collector and to be suspended or removed from service  under his  orders.  An instance already referred to shows  that  a Tahvildar  who  had,  been suspended by  the  Treasurer  was ordered to be reinstated by the Collector.  It is from these circumstances  that the relationship between the  Government of Uttar Pradesh and Tahvildars has to be ascertained. Whether  in  a  given case the relationship  of  master  and servant  exists  is  a  question  of  fact,  which  must  be determined  on a consideration of all material and  relevant circumstances having a bearing on that question.  In general selection  by the employer, coupled with payment by  him  of remuneration  or wages, the right to control the  method  of work, and a power 95 to  suspend or remove from employment are indicative of  the relation  of  master and servant.  But co-existence  of  all these  indicia is not predicated in every case to  make  the relation  one of master and servant.  In special classes  of employment,  a  contract of service may exist, even  in  the absence of one or more of these indicia.  But ordinarily the right  of  an employer to control the method  of  doing  the work,  and the power of superintendence and control  may  be treated as strongly indicative of the relation of master and servant,  for  that relation imports the power not  only  to direct the doing of some work, but also the power to  direct the manner in which the work is to be done.  If the employer has  the power, prima facie, the relation is that of  master and servant. The  work of the Government Treasurers has to  be  conducted according  to  the  Rules  and  Regulations  framed  by  the Government,  and directions issued from time to  time.   The Government Treasurer holds a post in a public employment and he  is  assisted  by Tahvildars in the  performance  of  his duties.   The Tahvildar acts not on behalf of the  Treasurer in  performing  his  duties, but on  behalf  of  the  State. Undoubtedly the Treasurer undertakes responsibility for  the loss which may be occasioned by the Tahvildar, but solely on that account it cannot be held that the Tahvildar is  merely an  appointee of the Treasurer and is not a servant  of  the State.   The  selection  of Tahvildar  though  made  by  the Treasurer  is controlled by the Collector; the Tahvildar  is remunerated  by the State, method of his work is  controlled by the State, and the State exercises the power to  suspend, dismiss  and  reinstate him.  In Shivanandan Sharma  v.  The Punjab National Bank Ltd.(1) it was held that a head cashier in one of the branches of the Punjab National Bank Ltd., who was  appointed  by  the  Treasurer  in-charge  of  the  Cash Department under an agreement with the Bank, was an employee of  the Bank.  In the view of the Court, the  direction  and control  of  the  cashier and of the  ministerial  staff  in charge of the Cash Department the Bank being entirely vested

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in the Bank, the cashier must be deemed to be an employee of the Bank.  Sinha J., observed at p. 1442:               "If   a   master   employs   a   servant   and               authorizes  him to employ a number of  persons               to do a particular job and to guarantee  their               fidelity    and   efficiency   for   a    cash               consideration, the employees thus appointed by               the   servant  would  be  equally   with   the               employer, servants of the master." Similarly in Dharangadhara Chemical Works Ltd. v. State of Saurashtra(2) it was held that "the prima facie test of" the (1) [1955] 1 S.C.R. 1427. (2) [1957] S.C.R. 152. 96 relationship of master and servant "is the existence of  the right  in the employer not merely to direct what work is  to be done but also to control the manner in which it is to  be done,  the  nature  or extent of  such  control  varying  in different  industries and being by its nature  incapable  of being precisely defined." In M/s Piyare Lal Adishwar Lal  v. The  Commissioner of Income-tax, Delhi(1) it was  held  that the Treasurer appointed by the Bank who was to carry out the duties  as directed by the Bank was a servant of  the  Bank, and not an independent contractor. The  Government  Treasurer is a civil servant of  the  State holding  a specific post, and he is authorised by the  terms of  his,  employment to employ Tahvildars to assist  him  in discharging  his  duties.  Payment of  remuneration  to  the Tahvildars   is  for  services  rendered  in  the   "cashier department  of  the District treasury" of  the  State.   The Tahvildars  receive  their remuneration  directly  from  the State,  and  are  subject to the  control  of  the  District Officers in the matter of transfer, removal and disciplinary action.   Employment of Tahvildars being for the purpose  of carrying out the work of the State, even though a degree  of control  is  exercised by the Government Treasurer  and  the appointment  is in the first instance made by the  Treasurer subject to the approval of the District Officers, it must be held  that the Tahvildar is entitled to the  protection  of’ Art. 311 of the Constitution. The  order  removing  Singh from service  was  made  at  the instance  of  the  Collector, and did  not  conform  to  the requirements  of Art. 311(2) of the Constitution and was  on that: account invalid. We  therefore agree with the High Court, that  the  impugned order must be declared invalid. The appeal fails and is dismissed with costs. Appeal dismissed. (1)  [1960] 3 S.C.R. 669. 97