JAWAHAR LAL SAZAWAL AND ORS. v. STATE OF J AND K AND ORS

Citation: [2002] 2 S.C.R. 66

Court: Supreme Court of India

Bench: S. RAJENDRA BABU, RUMA PAL

Judgment text

JAWAHAR LAL SAZAWAL AND ORS. v. STATE OF J AND KAND ORS. FEBRUARY 27, 2002 [S. RAJENDRA BABU AND RUMA PAL, JJ. ] Service Law : Jammu and Kashmir Civil Service Regulations, 1956: Article 207-Scope and interpretation of State Government-Employees-His status, rights and obligations- Determination and modification of State ofJ and K-Government servants-Permanent appointment before 1963 in industrial units ofState-Incorporation ofa private limited company- Entrustment ofState Industrial Units to company-Employees given benefit of revision ofgrades and D. A.

as paid to Government servants despite regulations framed by company-Order passed by Governor-Pursuant thereto orders passed by company-Denial to appellant-employees of parity of service conditions with Government employees-Held not legal-Posts ofGovernment employees could not be abolished on the basis of instructions issued by Governor-Held appellant-employees continue to be servants of State Government-On facts appellants held not guilty of /aches. The appellants, appointed prior to 1963 as permanent Government servants, were serving in industrial units run by the Department of Commerce and Industries of the State of Jammu and Kashmir. Subsequent to the incorporation of Jammu and Kashmir Industries Ltd. the Governor issued an order dated 8th October, 1963 whereby these Undertakings were entrusted to this company.

Even after this "entrustment" the appellants continued working in the industrial undertakings in which they were initially appointed and continued to enjoy the same benefit ofservice with regard to emoluments, leave and pension as other Government employees. Further despite enactment of the Jammu and Kashmir Civil Service Regulation, 1956 by the Company the appellants were given benefits of revision ofgrades and dearness allowance as were paid to the other Government servants of the State. . H JL. SAZAWALv. STATE 67 Thereafter on the basis of the report of the Rajan Committee, which examined the wage structure of the employees of the Public Sector Corporations, the Governor issued an order on 26th April, 1980 and pursuant to this the Company issued two orders both dated 8th May, 1980 one relating to the cost of living allowance and the second relating to fixation of wages.

A third order dated 10th November, 1980 laid down that the leave of regular employees ofthe company would be allowed as per the Factories Act and not as per Leave Rules of the Corporation which were applicable to them in the past. As these three orders had in effect denied the appellants parity ofservice conditions with Government employees they filed a writ petition before this . J( Court challenging these orders. This Court directed that they should first approach the High Court. Before High Court they sought directions that they should be deemed to be governed by Service Rules and Regulations which are applicable to the State employees and be held entitled to the same salary, emoluments, D. A. leave etc. , as would be available to the Government servants under the State Government.

The High Court rejected the appellants' claim on the ground that they had voluntarily surrendered their status as Government servants in 1963 under Article 207 of the Jammu and Kashmir Civil Service Regulations, 1956 and that in any event their claim was barred · by delay and ! aches. Allowing the appeal preferred by employees and setting aside the decision of the High Court. the Court. HELD: 1. The impugned orders of the High Court cannot be constitutionally sustained. 2. The conclusion of the High Court that the appellant's status had been determined under Article 207 of the Regulations is based on an erroneous interpretation· of the Article. The High Court ignored Article l(a) of the ~egulations. Article 207 deals with the conditions of grant of pension. It does not purport to determine status at all.

Article 207 does not itself provide for the procedure for abolition of a permanent post not the mode ofappointment to another post nor for the manner in which the employee has to exercise the option. It only provides for the consequences of a permanent post being abolished, the'·consequence being that the employee shall have the option of accepting another appointment in which event he can count his previous service for the purpose of calculating the qualifying period for pension. Since there was in fact no abolition ofthe Government posts under Article 207, there was no question ofthe appellants exercising any option or surrendering their status under that Article at all. The reliance by the High Court on Article 207 to decide the appellants' status was, in the circumstances wholly misplaced•.. [74-D-E; 75-B-C] 3. No statute or statutory rules have been brought to notice ofthis Court by which the permanent posts held by the appellants were abol~hed.

The High Court proceeded on the erroneous assumption, namely, that as a consequence ofthe Governor's order dated 8th October, 1963 all the which came to be known as the Rajan Committee, submitted its final report in 1980. The report was accepted by a decision of the Cabinet on 22nd April, 1980. On the basis of this Cabinet decision the Governor issued an order on 26th April, 1980 pursuant to which the Company issued two orders both dated 8th May, 1980 one relating to the cost of living allowance and the second relating to fixation ofwages. A third order was issued by the company on I0th November, 1980 seeking to lay down that the leave of regular employees of the Company would be allowed "as per the Factories Act and not as per Leave Rules of the Corporation which were applicable to them in . the past". All three orders in effect denied the employees like the appellants parity of service conditions with Government employees.

~ In 1981 the appellants challenged the orders dated 8th May, 1980 and toth November, 1980 under Article 32 of the Constitution before this Court. According to the appellants when the matter was heard on 22nd March, 1982, this Court was of the view that the appellants should approach the High Court first. As such the . appellants withdrew the writ petition under Article 32 and immediately filed a writ petition under Article 226 before the High Court (SWP 236/82) challenging the order of the Governor dated 26. 4. 1980 as well as the orders dated 8. 5. SO and I0. 11. 80 and asking for a direction on ... the respondents: ".... to treat the petitioners as Government employees and deem the petitioners and their co-employees governed by Service Rules and Regulations which are applicable to the State employees and the petitioners be held entitled to the same salary, emoluments D. As, leave etc. as would be available to the government servants under the State Government". .

~ • Some other employees, who are not appellants before us, filed a similar writ petition before the High Court (SWP No. 287/82). Yet a third group of employees filed a writ petition: Waryam Chand v. State ofJ & K, (SWP No. 549183) raising the same issues. Waryam Chand's (SWP 549/83) case came to be listed separately and was dismissed by a Single Judge on 29. 6. 88. The other two writ petitions (SWP 236/82 and SWP 287/82) were placed before another Learned Judge who referred the issue for consideration by a larger bench. In 1998, the Division Bench dismissed both the writ petitions by the order impugned before us. The impugned decision directly conflicts with the earlier dedsion of 74 SUPREME COURT REPOlffS [2002] 2 S. C. R. the same High Court in Ghulam Quadir's case (supra) on the issue as to the status of Government employees like the appellants. The decision in Ghulam Quadir has remained unchallenged by the State respondents till today and was binding on the Court.

In the absence of some distinguishing feature it should have been followed. It was not even referred to. We could have allowed the appeal before us on this short ground, but since the issue raised affects a large number of employees, it is necessary to decide the issue on merits. On the merits we may start by reaffirming the statement of the law laid down by this Court in Roshan Lal Tandon v. Union of India that: "once appointed to his post or office the Government servant acquires a status and his rights and obligations are no longer determined by consent of both parties, but by statute or statutory rules which may be framed and altered unilaterally by the Government. " No statute or statutory rules have been drawn to our attention by which the permanent posts held by the appellants were abolished. The High Court held that the appellant's status had been determined under Article 207 " of the Regulations.. The conclusion is based on an erroneous interpretation of the Article.

To start with the High Court ignored Article 1-(a) of the Regulations which clarifies that these "Regulations are intended to define the conditions under which Salaries, Leave, Pension, Travelling or other allowances are earned by Service in the Civil Departments and in what manner they are calculated. They do not deal otherwise than indirectly and incidentally 0 with matters relating to recruitment, promotion, official duties, discipline or the like. " (Emphasis supplied) Article 207 is contained in Chapter XVII of the Regulations which deals with the conditions of grant of pension. It was, in this context that the Article had been framed. It deals with pension and its computation. It does not purport to determine status at all. It reads: "207.

If an officer is selected for discharge owing to the abolition of his permanent post he shall, unless he is appointed to another post the conditions of which are deemed to be at least equal to those of his own, have the option - (a) of taking any compensation pension or gratuity to which he may be entitled for the service he has rendered; or (b) of accepting another appointment on such pay as may be offered and continuing to count his previous service for pension. " It is clear that the Article does not itself provide for the procedure for abolition of a permanent post nor the mode of appointment to another post nor for the manner in which the employee has to exercise the option. It only ' provides for the consequ·onces of a permanent post being abolished, the consequence being that the employee shall have the option of accepting another appointment in which event he can count his previous service for the purpose of calculating the qualifying period for pension.

Since there was in fact no abolition of the Government posts under Article 207, there was no question of the appellants exercising any option or surrendering their status under that Article at all. The reliance by the High Court on Article 207 to decide the appellants status was, in the circumstances wholly misplaced. The High Court also proceeded on the erroneous assumption, namely, that as a consequence ofthe "order dated 8th October 1963 all the Government 1 industrial undertakings stood abolished with the formation of the Company". Firstly what is referred to as an 'order' by the High Court was not an "order" at all but an "instruction" under Article 89 of the Articles of Association of the Company. It had no statutory force. Neither the Government Industrial Undertakings nor the posts of its employees could be abolished by such an instruction.

The Governor could not in exercise of powers under the Articles of Association of the Company abolish industrial units belonging to the State Government and then transfer the undertakings to the Company. It would amount to an unilateral taking over of the industrial units by the Company without any instrument of transfer being executed by the State Government either in the form of an agreement or Statute. In fact and in law there was no abolition of the posts held by the appellants and none was intended. There is nothing in the instructions which could remotely be construed as an order abolishing the posts held by the appellants. Had the appellants been appointed as employees of the Company they should have been issued letters of appointment by the Company. No appointment letter was issued to any of the appellants by the Company.

The irresistible conclusion is that the appellants were and continue to be servants of the State Government and as permanent residents of the State of Jammu and Kashmir are entitled under Section 10 ofthe State Constitution to be treated on par with other Government servants in keeping with Article 14 and 16 of the Constitution of India. By the impugned orders, the State Government has sought to deny the appellants such equality. The impugned orders cannot, therefore, be constitutionally sustained and must consequently be quashed. 0 But should th_e appellants be denied their right to relief because of the finding of delay and laches by the High Court? We think not. The narration of facts clearly show that there was in fact no delay or laches on the part of the appellants. Till 1972 at least, the High Court in Ghulam Mohamad's case (supra) found the State had not denied parity of status and the employees were granted the right to '.

::hallenge any denial of status if and when it took place. The appellants were in fact treated on par with other Government employees till the impugned orders were issued on the basis of the 1980 Wage Committee Report. These were challenged in 1981 before this Court and in 1982 before the High Court by the appellants. The fact that the High Court took 16 years to dispose of the matter cannot operate aga~nst the appellants. The dismissal of the writ petitions on the ground of delay and laches is, in the circumstances, unsustainable. The decision of the High Court is accordingly set aside and the appeal is allowed by granting relief to the appellants as prayed for in their writ petition. Costs to be paid by the respondent-State to the appellants jointly >- · assessed at Rs. 15000 (Rupees fifteen thousand only). T. N. A. Appeal allowed. ~--