PETITIONER:
MOHD RASHID AHMAD ETC.
Vs.
RESPONDENT:
STATE OF U.P. & ANR.
DATE OF JUDGMENT15/12/1978
BENCH:
SEN, A.P. (J)
BENCH:
SEN, A.P. (J)
SARKARIA, RANJIT SINGH
TULZAPURKAR, V.D.
CITATION:
1979 AIR 592 1979 SCR (2) 826
1979 SCC (1) 596
CITATOR INFO :
F 1979 SC1237 (20,24)
D 1988 SC1737 (8,7)
ACT:
U.P. Nagar Mahapalika Adhiniyam, 1959-Act abolished all
municipal boards and other local authorities-Empowered State
Government to constitute Centralised Palika Services
prescribing method of recruitment and conditions of service
of persons appointed to services-Rule 6-Scope of-Rule
6(2)(iv) provided that if no orders of final absorption
passed before a certain date the officer or servant
concerned deemed to have been finally absorbed-Rule
retrospectively amended from time to time on two occasions
extending the date of final absorption to rectify mistakes
in dates-State Legislature, if had power to confer power on
State Government to amend rule retrospectively.
HEADNOTE:
Rule 6(2)(iii)-If imposed a duty on State Government to
act in a quasi-judicial manner. Rules of natural justice-
Applicability of.
The U.P. Nagar Mahapalika Adhiniyam 1959 as well as the
U.P. Municipalities Act, 1916 empowered local bodies in the
State to appoint their employees subject to certain
regulatory control by the State Government. In 1964 s. 112A
was added to the 1959 Adhiniyam empowering the State
Government to make rules for the creation of one or more
services to be known as Centralised Palika Services common
to all the municipal corporations and municipal boards and
prescribe the method for recruitment and conditions of
service of persons appointed to any such service. Section
69B which was added to the U.P. Municipalities Act, 1916 was
in identical terms as s. 112A. Section 577(e) of the
Adhiniyam provided for provisional absorption of officers
and servants of the erstwhile municipalities till they were
finally absorbed in any centralised services created under
the Act. By s. 577(ee) the Administrators of Boards etc.,
were authorised to make temporary appointments of officers
and servants till substantive appointments were made and
such officers and servants were treated as on deputation
with the municipal corporations.
In exercise of the powers conferred under s. 112A the
State Government made the U.P. Palika (Centralised) Service
Rules, 1966 which came into force on July 9, 1966. Since r.
6 of the Rules was found to be contrary to the provisions of
s. 112A and s. 69B, the U.P. Local Self-Government
(Amendment) Ordinance, 1966 (which later became an Act) was
promulgated to validate the 1966 Rules. Section 19 of the
Act provided that the amendments made to the Rules might be
given retrospective effect, limited to a period of one year
from the commencement of the Ordinance. Thereafter the U.P.
Palika (Centralised) Services (Amendment) Rules, 1966 were
passed by which r. 6 was repealed and re-enacted with
retrospective effect from July 9, 1966. Clause (ii) of r.
6(2) empowered the State Government to pass a final order of
absorption in respect of particular officers and servants of
the erstwhile municipal boards if they were found suitable.
Clause (iii) provided that such orders had to be made on or
before March 31, 1967.
827
Since the work of final absorption could not be
completed by March 31, 1967, r. 6(2) (iii) was amended
shifting the date to June 30, 1967. But this amendment
having been made to come into effect from April 1, 1967 the
legal fiction created by cl. (iv) of r. 6 that if no orders
of final absorption were passed till March 31, 1967 the
officer or servant concerned was to be deemed to have been
finally absorbed, came into play. Clause (iii) was,
therefore, again amended shifting the date of passing the
order from March 31, 1967 to August 31, 1967. The rule was
made with retrospective effect from July 9, 1966.
For the purpose of final absorption of all officers and
servants who were found suitable in the two categories viz.,
those appointed under s. 577(e) and s. 577(ee) of the
Adhiniyam, the State Government laid down a procedure. It
constituted Divisional Committees for making necessary
recommendations to the State Government. On January 11, 1967
the State Government issued the first Circular stating that
all officers and servants whose services were proposed to be
determined on the ground of unsuitability might be given an
opportunity of personal interview by the Divisional
Committees. The Government divided the officers and servants
into two categories, those getting salary above Rs. 500/_
and those getting salary below Rs. 500/- and provided that
cases of each category were to be dealt with at different
levels. By this circular the Government re-constituted the
composition of the divisional Committees so far as the five
municipal corporations which were created under the 1959
Adhiniyam were concerned and directed that these Divisional
Committees should make selections for all Centralised
Services except those whose starting salary was Rs. 500/-
and above. The selection for this category was to be made by
the State Selection Committee.
With a view to secure a reasonable uniformity in the
standards to be applied by the Divisional Committees in
making the selection, the third Circular dated February 23,
1967 provided that the Committees should interview the
official concerned to judge his suitability for absorption
in the Centralised Services and that if it was proposed to
declare an official to be unsuitable for absorption on the
basis of adverse entries, the Divisional Committees should
afford an opportunity to the official concerned to appear
before it and clear up his position. It was further provided
that only those adverse remarks which were found to have
been duly communicated to the official concerned might be
considered against him.
Thus the procedure laid down was this: The
recommendations of the Divisional Committees in respect of
persons drawing salary less than Rs. 500/-would be
scrutinised by the State Government in the Local Self-
Government Department and the necessary orders passed
thereon while in respect of the second category officers
drawing a salary above Rs. 500/- p.m. the Secretary to the
Government Local Self-Government Department would obtain the
orders of the Minister concerned in passing the final
orders.
The appellant RA was a permanent Assistant Engineer in
the Development Board, Kanpur. Before the coming into force
of the Adhiniyam he was appointed as officiating Executive
Engineer and since then he continued to function in that
capacity on a purely temporary arrangement under s. 577(ee).
The appellant AH was a Sanitary Inspector in the Municipal
Board, Kanpur and
828
continued to hold that post. He was later promoted
temporarily as Assistant Engineer and he stood provisionally
absorbed under s. 577(e).
Writ Petitions filed by the appellants and others
challenging the vires of the Rules were dismissed by the
High Court.
On appeal to this Court it was contended that the
appellants must be deemed to have been absorbed on March 31,
1967 by virtue of the fiction contained in Cl. (iv) of r.
6(2), as originally enacted, because the amendment made to
the Rule shifting the date of final absorption first from
March 31, 1967 to June 30, 1967 and subsequently to August
31, 1967 were legally ineffective and (2) that the impugned
orders were vitiated on account of the failure of the State
Government to afford to the appellants an opportunity of
being heard.
^
HELD: 1. (a) The validity of the two amendments made by
the State Government in r. 6(2) cannot be questioned.
Although a rule cannot be made with retrospective effect,
the Legislature by enacting s. 19 of the U.P. Local Self
Government (Amendment) Act, 1966 expressly conferred powers
on the State Government to make retrospective rules. [837
D].
(b) It is well established that retrospective operation
is not to be given to a statute so as to impain that
existing right or obligation other than as regards matter of
procedure. If the enactment is expressed in a language which
is fairly capable of either interpretation, it ought to be
construed as prospective only. But where it is expressly
stated that an enactment shall be retrospective, courts will
give it such operation. It is competent for the Legislature
by retrospective legislation to make the provision contained
in an carrier enactment ineffective. [838 F-G]
Quinn v. Prairiedate [1958] 25 WWR 241; referred to.
(c) In considering the effect of repeal of an enactment
followed by reenactment in the light of s. 6 of the General
Clauses Act, 1897 the line of enquiry would be not whether
the new Act expressly keeps alive old rights and
liabilities, but whether it manifests an intention to
destroy them. Any incompatibility in the provision has to be
ascertained from a consideration of all the relevant
provisions of the new law and the mere absence of a saving
clause is by itself not conclusive. [839 B-C]
In the instant case by the introduction of the new
fictional date of absorption as August 31, 1967 there was a
clear intention to destroy the earlier fictional date of
March 31, 1967. It would clearly be incompatible, on
consideration of subsequent amendments for both the
provisions i.e. the original clause (iii) fixing March 31,
1967 and the new clause (iii) fixing August 31, 1967 to
operate simultaneously. The effect of introduction of the
new fictional date was to annihilate the earlier fictional
date. The appellants, therefore, did not stand automatically
absorbed by the failure of the State Government to pass the
necessary orders by March 31, 1967, as its powers stood
extended by the subsequent amendment to August 31, 1967.
Before that date expired the State Government, in both
cases, passed the necessary orders terminating the services
of the appellants as they were not found fit for absorption.
[839 D-F].
829
2. (a) The entrustment to the State Government of the
work of determining the suitability or otherwise of officers
and servants of the erstwhile Municipal Boards and other
local authorities for absorption in the newly created
Centralised Services under s. 112A, imposed a corresponding
duty or obligation on the Government to hear the officers
and servants concerned. All such officers were, therefore,
entitled to be heard in the matter of final absorption
irrespective of their salary. [841 A; 843 F].
(b) By virtue of the repealing provision contained in
s. 581 of the Adhiniyam, 1959 the various Municipal Boards
and other local authorities constituted under the relevant
Acts ceased to exist as a result of which the existing posts
held by the officers and servants in these bodies stood
abolished. Consequent upon the abolition of the posts, all
the officers and servants of the erstwhile local bodies lost
their right to hold their posts. The Adhiniyam, however,
provided by s. 577(e) and (ee) for provisional absorption or
temporary appointment of these officers and servants till
substantive appointments were made and these officers and
servants were treated as on deputation with the Municipal
Corporations. Therefore, in the very nature of things the
officers and servants provisionally absorbed under these
sections could not be automatically absorbed in the newly
created Centralised Services. There had to be screening of
all of them for determining their suitability for final
absorption in the Centralised Services. [840 A; B-F]
(c) The very nature of the functions entrusted to the
State Government under r. 6(2) (iii) of the Rules implies a
duty to act in a quasi-judicial manner. Unless the State
Government’s orders conformed to the rules of natural
justice, the orders were liable to be struck down as
invalid. [840 G 841 B].
(d) It is not correct to say that it is incumbent only
on the Divisional Committees to give an opportunity of
personal hearing and that the State Government was absolved
of the duty to hear in respect of officers drawing Rs. 500/-
and above. The first Circular dated January 11, 1967 was all
pervasive and the Government’s policy was made quite clear
in it. The second Circular dated January 31, 1967 was
equally subject to the Government policy. All the officers
and servants of the erstwhile Municipal Boards and other
local authorities were, therefore, entitled to be heard in
the matter of final absorption irrespective of their salary.
[843 E, A, D].
In the case of AH on an overall view of the records it
cannot be said that the Divisional Committee was wrong in
recommending to the Government to terminate his services.
The Government was within its right in passing the impugned
order of termination in regard to him. [844 C]
In regard to RA before passing the impugned order of
termination of services, the Minister for Local Self-
Government did not give him an opportunity of a hearing. The
procedure laid down in the Centralised Services Rules was
not followed. The State Government could decide on the
question of his absorption only after he was found fit but
that has not been done. The order passed by the State
Government, therefore, suffers from a serious legal
infirmity. [844 D-F].
830
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1724/69
and 1732 of 1971.
Appeals by Special Leave from the Judgment and Order
dated 12-5-69 of the Allahabad High Court in Special Appeal
Nos. 492 and 437 of 1968.
Naunit Lal and Faqir Chand for the Appellant in CA Nos.
1724/69.
G. N. Dikshit, O. P. Rana for Respondent No.1 in C.A.
1724/69
J. P. Goyal, S. M. Jain and S. K. Jain for Respondent
No.2 in CA Nos. 1724/69
Miss Meera Bali for the Appellant in C.A. 1732/71
G. N. Dikshit and O.P. Rana for the Respondents in CA
1732/71
The Judgment of the Court was delivered by
SEN J. These two appeals by special leave, directed
against the judgment of the Allahabad High Court dated May
12, 1969 raise common questions and therefore, are disposed
of by this common judgment.
By separate notifications issued under section 3 of the
U.P. Mahapalika Adhiniyam, 1959, the State Government
constituted Municipal Corporations in five cities in the
State, namely Kanpur, Agra, Varanasi, Allahabad and Lucknow
w.e.f. February 1, 1960.
The appellant in the present appeal, Mohd. Rashid Ahmad
was a permanent Assistant Engineer in the Development Board,
Kanpur, constituted under the Cawnpore Urban Area
Development Act, 1945. In 1953, an Administrator was
appointed of both the Development Board and the Municipal
Board, Kanpur, constituted under the U.P. Municipalities
Act, 1916, under the U.P. Local Bodies (Appointment of
Administrators) Act, 1953. The two local bodies, however,
continued to have separate legal existence and their
officers and servants continued as the employees of the
respective bodies. The appellant Mohd. Rashid Ahmad was
appointed as Offg. Executive Engineer by the Administrator
of the Municipal Corporation, Kanpur, for a period of one
year on September 12, 1960. He has since then continued to
function in the same capacity, on a purely temporary
arrangement under s.577(ee), that is, for so long as no
substantive appointment could be made to that post under
s.106. The Uttar Pradesh Public Service Commission, however,
considered that he was not fit for appointment for the post
of the Executive Engineer, Municipal Corporation, Kanpur.
831
The appellant in the connected appeal, Ashfaq Hussain
was a permanent Sanitary Inspector in the Municipal Board,
Kanpur. After the constitution of the Municipal Corporation,
Kanpur, he continued to hold that post under s. 577(e). On
July 24, 1967 he was transferred in the same capacity to the
Municipal Corporation, Allahabad, where he was promoted
temporarily as an Assistant Engineer. He, therefore, stood
provisionally absorbed under s.577(e).
Both the U.P. Nagar Mahapalika Adhiniyam, 1959, and the
U.P. Municipalities Act, 1916 empowered these local bodies
to appoint their employees subject to certain regulatory
control by the State Government. By s. 12 of the U.P. Nagar
Mahapalika (Sanshodhan) Adhiniyam, 1964, the State
Legislature added s. 112A to the U.P. NagarMahapalika
Adhiniyam, 1959. Similarly, by s.37 of the U.P.
Municipalities (Amendment) Act, 1964, s.698 was added to the
U.P. Municipalities Act, 1916, which was identical in terms
to s.112A. Section 112A of the Adhiniyam empowered the State
Government to provide by rules for the creation of one or
more services to be known as Centralised Palika Services, as
it may deem fit and proper, common to all the Municipal
Corporations and Municipal Boards, and prescribe the method
for recruitment and conditions of service of persons
appointed to any such service.
Section 112A of the U.P. Nagar Mahapalika Adhiniyam,
1959, enacts:
“112A. Centralization of services.-(1)
Notwithstanding anything contained in section 106 to
110, the State Government may at any time by rules
provide for the creation of one or more services of
such officers and servants as the State Government may
deem fit, common to the Mahapalikas or to the
Mahapalikas and Municipal Boards, of the State, and
prescribe the method of recruitment and conditions of
service of persons appointed to any such service.
(2) When any such service is created, officers and
servants serving on the posts included in the service,
as well as officers and servants performing the duties
and functions of those posts under sub-clause (1) of
clause (ee) of section 577 may, if found suitable, be
absorbed in the service, provisionally or finally, and
the services of others shall stand determined, in the
prescribed manner.
(3) Without prejudice to the generality of the
provisions of sub-sections (1) and (2), such rules may
also provide for
832
consultation with the State Public Service Commission
in respect of any of the matters referred to in the
said sub-sections.”
The State Government in exercise of the powers
conferred by section 112A of the U.P. Nagar Mahapalika
Adhiniyam, 1959 and s.69B of the U.P. Municipalities Act,
1916, made the U.P. Palika (Centralised) Services Rules,
1966, which came into force on July 9, 1966. Rule 3 created
19 Palika (Centralised) Services, covering 76 posts, common
to all the Municipal Corporations and Municipal Boards. The
rules provided for regulating the recruitment and conditions
of service of the persons appointed to these newly created
services. Rule 6 dealt with recruitment to the Centralised
Palika Services. Due to inadvertence r.6 was not drafted in
conformity with the requirements of s.112A and s.69B. That
was because cl.(1) provided for automatic final absorption
of officers and servants provisionally absorbed under
s.577(e), contrary to the provisions of s.112A of the
Adhiniyam and s.69B of the Municipalities Act.
On September 5, 1966, the Governor promulgated the U.P.
Local Self-Government (Amendment) Ordinance, 1966, which was
replaced by the U.P. Local Self-Government Laws (Amendment)
Act 1966. Section 19 of the Act reads as follows:
“19. Deeming, validation, etc. The Uttar Pradesh
Palika (Centralised Services Rules, 1966, shall be
deemed to have been made under the provisions of the
Uttar Pradesh Nagar Mahapalika Adhiniyam, 1959, and the
U.P. Municipalities Act, 1916, as if the amendments
made by this Act to the said Acts were always in force
and be deemed to be and always to have been valid and
shall, subject to any amendments made thereto, continue
in force, and notwithstanding anything contained in the
said Acts, the power to make amendments to the said
rules may, during the period ending on September 4,
1967, be exercised retrospectively.”
It, in effect, amended section 112A of the Adhiniyam
and s.69B of the Municipalities Act. Section 4 of the Act
provided that the U.P. Palika (Centralised) Services Rules,
1966 shall be deemed to be valid. The Act further provided
that the amendments made to the rules may be given
retrospective effect. The power of making retrospective
rules was, however, limited to a period of one year from the
commencement of the ordinance.
833
On October 10, 1966, the State Government passed the
U.P. Palika (Centralised) Services (Amendment) Rules, 1966.
These rules repealed and re-enacted r.6 with retrospective
effect from July 9, 1966. Under cl. (ii) of r.6(2) the State
Government had to pass a final order of absorption, in
respect of particular officers and servants of the erstwhile
Municipal Boards, if they were found suitable, in accordance
with s.112A of the Adhiniyam. Clause (iii) provided that
such orders had to be made on or before March 31, 1967. By
cl.(iv) if no orders of final absorption were passed till
then, the officer or servant concerned was to be deemed to
have been finally absorbed. The State Government was,
however, constrained to make the U.P. Palika (Centralised)
Services (Amendment) Rules, 1967 on March 30, 1967 and amend
cl. (iii) of r.6(2), as the work of final absorption could
not be completed by March 31, 1967. The date of passing the
necessary orders in that behalf was sought to be shifted to
June 30, 1967. A new cl. (iii) was accordingly substituted
by this amendment effected on March, 30, 1967. But,
unfortunately the amendment was made to come into effect
from April 1, 1967. This created a serious legal infirmity,
as on the expiry of March, 31 1967, the legal fiction
embodied in cl. (iv) was brought into play.
Thereafter, the State Government made the last
amendment to the U.P. Palika (Centralised) Services
(Amendment) Rules, 1967 on June 26, 1967, in supersession of
the U.P. Palika (Centralised) Services (Amendment) Rules,
1967 made on March 30, 1967. This amendment introduced a new
cl.(iii) to r.6(2), in place of the existing cl.(iii) of
U.P. Palika (Centralised) Services Rules, 1966, by which the
date of passing the order was shifted from March 31, 1967 to
August 31, 1967, with retrospective effect from July 9,
1966.
Having provided for the creation of Centralised Palika
Services, the State Government had, in the meanwhile, laid
down the procedure by which an office or servant
provisionally absorbed under s. 577 (e) of temporarily
appointed under s.577(ee), were to be finally absorbed, if
found suitable, under s.112A. By its three circulars dated
January 11, 1967; January 31, 1967 and February 23, 1967,
addressed to the Divisional Commissioners, it intimated the
constitution of Divisional Committees for making necessary
recommendations to the State Government in this behalf. The
first circular embodied the Government policy in these
terms:
“Government desire that all officers and servants,
whose services are proposed to be determined on grounds
of unsuita-
834
bility may be given an opportunity of personal
interview by the Committee.”
After such interviews, the Committees were to finalise
their recommendations and furnish the same to the
Government. In view of the limited time available to the
Government, for finalising action in the matter, it was
desired that the first meeting of the Committees should be
held in the last week of January or in the first week of
February, 1967. The Divisional Commissioner were required to
intimate the date to the Secretary to the Government, Local
Self-Government Department, so that all necessary
arrangements could be made to forward the character rolls
and service records of the Centralised Services officers and
servants.
By the second circular, the State Government re-
constituted the Committees, so far as the five Municipal
Corporations were concerned, and directed that these
Divisional Committees were to make selections for all
Centralised Services except those whose starting salary was
Rs. 500/- and above. Selection for the posts in the latter
category were to be made by the State Selection Committee.
Thus, the Government divided the officers and servants into
two categories, and their cases were to be dealt with at two
different levels for purposes of final absorption under
r.6(2)(iii) read with s.112A.
By its third circular, the State Government without
disturbing the earlier categorisation of officers and
servants into two classes, laid down certain broad criteria
with a view to secure a reasonable uniformity in the
standards to be applied by the Divisional Committees in
making the selection. It may, however, be observed that the
Government reiterated its declared policy that all such
officers and servants, whose services were proposed to be
determined on the ground of unsuitability be given an
opportunity of personal interview by the Committees stating:
“..the committee should interview the official
concerned to judge his suitability or otherwise for
absorption in the centralised services.
…When it is proposed to declare an official to
be unsuitable for absorption on the basis of adverse
entries, the divisional committee should afford an
opportunity to the official concerned to appear before
it and clear up his position.”
It was also desired that only those adverse remarks may
be considered against the official concerned, which were
found to have been duly communicated to him.
835
It must at once be stated that though the State
Government had by its circular dated January 31, 1967
entrusted the task of determining the suitability or
otherwise of officers and servants holding Centralised
Services posts drawing less than Rs. 500/-, to Divisional
Committees, and reserved such function in respect of
officers and servants drawing Rs 500/- or more, to the State
Selection Committee, and by its subsequent circular dated
February 23, 1967 maintained the classification of such
officers and servants for purposes of judging their
suitability for absorption in the Centralised Palika
Services, the final orders of absorption in each case under
s.112A were passed by the State Government. In the former
class, the recommendations of Divisional Committees were
scrutinised by the State Government in the Local Self-
Government Department, in the light of the service records
of the officials concerned, and the necessary orders thereon
were passed. In respect of the latter category, the
Secretary to the Government, Local Self Government
Department prepared a note and put it up for the Minister
for passing the final orders.
It is also worthy of mention that the delay in
completing the work of final absorption by the State
Government was mainly due to three factors, namely; (1) due
to shortness of the time available at its disposal, (2) the
number of officers and servants holding the Centralised
Services posts under s.577(e) and (ee) was quite large, and
(3) because of delay on the part of the erstwhile Municipal
Boards to forward the character rolls and service records of
the officers and servants concerned. On account of this, the
task of absorption under s.112A could not be completed
before March 31, 1967 i.e., the date originally fixed by
cl.(iii) of r.6(2) of the U.P. Palika (Centralised) Services
Rules 1966. The period was, therefore, subsequently extended
from March 31, 1967 to June 30, 1967, and thereafter from
March 31, 1967 to August 31, 1967.
Eventually, the State Government in exercise of its
powers under cl.(iii) of r.6(2) of the U.P. Palika
(Centralised) Services Rules, 1966 determined the services
of the appellant Mohd. Rashid Ahmad on July 18, 1967 and
that of Ashfaq Hussain on August 27, 1967, on the ground
that they were not found fit for absorption under s.112A of
the Adhiniyam.
The two appellants and several other employees of the
erstwhile Municipal Boards and District Boards challenged
the validity of the various orders passed by the State
Government terminating their services before the Allahabad
High Court on several grounds. Amongst others, they
challenged the validity of r.6(2) (iii), framed under s.
112A
836
of the Adhiniyam, on the ground that it was ultra vires the
State Government as it brings about extinction of the
relationship of employer and employees between them and the
erstwhile Municipal Boards. It was also urged that the
impugned orders were violative of Articles 14 and 16 of the
Constitution because the classification made by the State
Government by its circular dated January 31, 1967 entrusting
the task of determination of the suitability or otherwise of
officers and servants holding Centralised Services posts
drawing less than Rs. 500/- to Divisional Committees, which
were enjoined to give them the right of a personal hearing
to have their say in the matter of final absorption, and
entrusting of such function in respect of officers and
servants drawing Rs. 500/- and above to the State Selection
Committee without a corresponding right of hearing, was
without any rational basis. It was also urged that the
impugned orders were vitiated being in breach of the rules
of natural justice. A Division Bench of the Allahabad High
Court, however, rejected all these contentions.
In view of the language of Entry 5, List II of the
Seventh Schedule, the objection regarding the validity of
r.6(2) (iii) was rightly not pressed before us. On the view
that we take of the various circulars issued by the State
Government laying down the procedure for dealing with the
question of suitability or otherwise of officers and
servants of the erstwhile Municipal Boards for absorption in
the Centralised Services under r.6(2)(iii) the contention
based on Articles 14 and 16 of the Constitution also does
not arise.
Learned counsel appearing for the appellants assailed
the impugned orders of the State Government on two grounds,
namely:
1. By reason of the legal fiction contained in
cl.(iii) of r.6(2), the services of the appellants
stood finally absorbed in the U.P. Palika Centralised
Services on March 31, 1967 due to the failure of the
State Government to pass the necessary orders in that
behalf before that date. Under the legal fiction
contained in cl.(iv) thereof, and the subsequent
amendment made by the U.P. Palika (Centralised)
Services (Amendment) Rules, 1967 which came into force
on April 1, 1967, the vested rights acquired by them to
hold their respective posts could not be affected to
their detriment; and
2. The orders of termination of services passed by
the State Government were vitiated due to its failure
to give to the appellants an opportunity of hearing.
837
With respect to the first contention it is urged that
the appellants stood provisionally absorbed under s. 577(e)
read with cl(i) of r.6(2). It is said that they would be
deemed to have been finally absorbed on March 31, 1967, if
no orders contemplated by cl.(ii) thereof were made with
respect to them on or before that date. The argument is that
the two subsequent amendments made on March 30, 1967 and
June 26, 1967, by which the State Government purported to
shift the date first from March 31, 1967 to June 30, 1967
and then from March 31, 1967 to August 31, 1967, were
legally ineffective, as the first amendment made to cl.(iii)
of r.6(2) came into force on April 1, 1967 by which date the
appellants already stood finally absorbed. There was,
therefore, no power in the State Government to re-open the
question of final absorption under s. 112A(2) of the
Adhiniyam.
There is a fallacy in the argument. The validity of the
two amendments made by the State Government in r.6(2) from
time to time cannot be questioned. While it is true that a
rule cannot be made with retrospective effect, the
legislature by enacting s.19 of the U.P. Local Self-
Government (Amendment) Act, 1966, expressly conferred powers
on the State Government to make retrospective rules. Indeed,
the validity of the amendments was not questioned before us.
Even if the first amendment of March 30, 1967 was
ineffective because it was brought into force from April 1,
1967, the second amendment of June 26, 1967, which
introduced a new clause (iii) to r.6(2) with retrospective
effect from July 9, 1966, was fully effective. It shifted
the date for passing of the order of final absorption from
March 31, 1967 to August 31, 1967. Till the expiry of the
date now fixed, i.e. August 31, 1967, the legal fiction
contained in cl. (iv) of r.6(2) would not be brought into
play. That is the inevitable legal consequence of the
subsequent amendment made on June 26, 1967.
It would be clear that cl. (iii) of r. 6(2), as amended
on October 10, 1966, gave power to the State Government to
pass an order of absorption under s. 112A of the Adhiniyam,
of an officer or servant of the Municipal Corporations
provisionally absorbed under s. 577(e) if found suitable, on
or before March 31, 1967. If there was a failure on the part
of the State Government to pass such an order in respect of
a particular officer or servant by that date, it would,
unless there was a provision to the contrary, bring into
play the legal fiction contained therein, and he would, by
its force, be deemed to be finally absorbed in the post held
by him.
838
The State Government in their return have candidly
stated that due to inadvertence, the subsequent amendment
effected on March 30, 1967, was made to take effect on April
1, 1967, by which date the legal fiction under cl. (iv) had
already taken effect. It, therefore, became necessary to
correct the serious legal infirmity. It was for that reason
that the subsequent amendment was made on June 26, 1967 by
which a new cl. (iii) was substituted in place of the
existing cl. (iii) to r.6(2). The amendment substituted new
cl. (iii) to r. 6(2) with effect from July 9, 1966 i.e.,
from the very inception.
It was legitimately within the powers of the State
Government to give to the amended rule a retrospective
effect. As a result of the amendment, the original cl. (iii)
was substituted by a new cl. (iii) by which the date for
passing an order of absorption by the State Government was
shifted to August 31, 1967, which again introduced another
legal fiction. It provided that if there was a failure on
the part of the State Government to pass an order of
absorption by August 31, 1967, the officer or servant
concerned shall be deemed to be finally absorbed. This legal
fiction was brought into force with effect from July 9,
1966.
It is needless for us to stress that both the legal
fictions, one created by the original cl. (iii) fixing the
fictional date of absorption as March 31, 1967 and the
subsequent legal fiction providing for the fictional date of
absorption as August 31, 1967, could not co-exist. With the
subsequent amendment effected on June 26, 1967, the earlier
legal fiction was never brought into play, as by reason of
the amendment, the State Government had the power to pass
the necessary orders till August 31, 1967. The introduction
of the second fictional date i.e., August 31, 1967, was to
“eclipse” the earlier fictional date of absorption.
Perhaps no rule of construction is more firmly
established than this-that retrospective operation is not to
be given to a statute so as to impair an existing right or
obligation other than as regards the matter of procedure,
unless that effect cannot be avoided without doing violence
to the language of the enactment. If the enactment is
expressed in a language which is fairly capable of either
interpretation, it ought to be construed as prospective
only. But where, as here, it is expressly stated that an
enactment shall be retrospective, the courts will give it
such an operation. It is obviously competent for the
legislature, in its wisdom, to make the provisions of an Act
of Parliament retrospective.. That is precisely the case
here. In Quinn v. Prairiedale where a subsequent enactment
provided that the relevant section should be
839
deemed never to have been contained in the earlier statute,
it was held to be sufficient to rebut the presumption
against retrospectivity.
In State of Punjab v. Mohar Singh and in Inder Sohan
Lal v. Custodian of Evacuee Property Delhi & Ors.(3) this
Court had to consider the effect of repeal of an enactment
followed by re-enactment in the light of s.6 of the General
Clauses Act, 1897. The line of enquiry, as observed in Mohar
Singh’s case, would be not whether the new Act expressly
keeps alive old rights and liabilities, but whether it
‘manifests an intention to destroy them’. It was held that
s. 6 of the General Clauses Act was not entirely ruled out
when there was a repeal of the enactment followed by a fresh
legislation unless the new legislation manifested an
intention to the contrary. Such incompatibility had to be
ascertained from a consideration of all the relevant
provisions of the new law and the mere absence of a saving
clause was, by itself, not conclusive.
In the present case, however, there can be no doubt
that by the introduction of the new fictional date of
absorption as August 31, 1967, there was a clear intention
to destroy the earlier fictional date of March 31, 1967. It
would clearly be incompatible, on consideration of
subsequent amendment, for both the provisions, i.e., the
original cl. (iii) fixing March 31, 1967 and the new cl.
(iii) fixing August 31, 1967 to be the fictional date, to
operate simultaneously. The effect of introduction of the
new fictional date was to annihilate the earlier fictional
date. The appellants, therefore, did not stand automatically
absorbed by the failure of the State Government to pass the
necessary orders by March 31, 1967, as its powers stood
extended by the subsequent amendment to August 31, 1967.
Before that date expired, the State Government in both these
cases, passed the necessary orders terminating the services
of the appellants as they were not found fit for absorption
under s. 112A (2) of the Act. The first contention,
therefore, fails.
That takes us to the second contention, namely, whether
the impugned orders are vitiated on account of the failure
of the State Government to afford to the appellants an
opportunity of a hearing.
With the establishment of Municipal Corporations in
five cities in the State, namely, Kanpur, Agra, Varanasi,
Allahabad and Lucknow, w.e.f. February 1, 1960, the
Municipal Boards, Improvement Trusts, Development Boards
etc. in these cities, ceased to exist with the
840
repeal, by s.581 of the U.P. Nagar Mahapalika Adhiniyam,
1959, of the U.P. Municipalities Act, 1916, the U.P. Town
Improvement Act, 1919, the U.P. District Boards Act, 1922,
the Cawnpore Urban Area Development Act 1945, the U.P. Local
Bodies (Appointment of Administrator) Act 1953, with effect
from that date, in relation to these cities. In consequence
thereof, the existing posts held by the officers and
servants of these bodies stood abolished. Consequent upon
the abolition of the posts, all officers and servants of the
erstwhile local bodies lost their right to hold their posts.
The Adhiniyam, however, provided by s.577(e),
notwithstanding anything contained in ss.106 and 107, for
the provisional absorption of these officers and servants in
the Municipal Corporations, till they were finally absorbed
in any Centralised Services created by rules made under
s.112A, or their services did not stand determined in
accordance with such rules. By s.577(ee) the Administrator
was authorised to make temporary appointments of officers
and servants against the posts mentioned in s.106 till
substantive appointments were not made thereto as provided
in the Adhiniyam, and they were to be treated as on
deputation with the Municipal Corporations.
This was, not doubt, an ad interim arrangement until
the State Government by rules framed under s.112A(1)
provided for the creation of the Centralised Palika
Services, common to all the Municipal Corporations and
Municipal Boards, and made final absorption of officers and
servants serving on the posts included in such Centralised
Services under s.112A(2). In the very nature of things, the
officers and servants provisionally absorbed under s.577(e)
or temporarily appointed under s.577(ee) could not be
automatically absorbed in the newly created Centralised
Services. There had to be a screening of all such officers
and servants with a view to determine their suitability or
otherwise for final absorption in Centralised Services. It
was particularly necessary to weed out the dead-wood to
bring about an overall improvement in the municipal
administration in these cities.
The very nature of the functions entrusted to the State
Government under r.6(2) (iii) of the U.P. Palika
(Centralised) Services Rules, 1966 for purposes of final
absorption under s.112A of the Adhiniyam, implies a duty to
act in a quasi-judicial manner. It cannot be denied that an
officer or servant provisionally absorbed under s.577(e) or
temporarily appointed under s.577(ee) had the right to be
considered for purposes of final absorption. Such officers
or servants, particularly those in permanent employment who
had put in 20 to 25 years of service in the erstwhile
Municipal Boards or Development Boards were vitally affected
in the matter of final absorption.
841
By s.112A of the Act, the legislature created a
machinery for determining the suitability or otherwise of
such officers or servants for absorption in the newly
created Centralised Services. The entrustment of this work
to the State Government under s.112A, imposed a
corresponding duty or obligation on the Government to hear
the officers and servants concerned. In view of this, it is
rightly urged that the impugned orders, unless they conform
to the rules of natural justice, were liable to be struck
down as invalid.
It is a fundamental rule of law that no decision must
be taken which will affect the rights of any person without
first giving him an opportunity of putting forward his case.
In Local Government Board v. Arlidge Lord Haldane, L. C.
tried to reconcile the procedure of a Government department
with the legal standards of natural justice. In Ridge v.
Baldwin & Ors. Lord Reid stated:
“It is not suggested that he holds the position of a
judge or that the appellant is entitled to insist on
the forms used in ordinary judicial procedure, but he
had ‘a duty of giving to any person against whom the
complaint is made a fair opportunity to make any
relevant statement which he may desire to bring forward
and a fair opportunity to correct or controvert any
relevant statement brought forward to his prejudice.”
These decisions rest on the classical formulation of
the “duty to hear” evolved by Lord Loreburn in Board of
Education v. Rice. The main requirements of a fair hearing
are two:
(1) a person must know the case he is to meet, and (2)
he must have an adequate opportunity of meeting that case.
There has, ever since the judgment of Lord Reid in
Ridge v. Baldwin (supra), been considerable fluctuation of
judicial opinion in England as to the degree of strictness
with which the rules of natural justice should be extended,
and there is growing awareness of the problems created by
the extended application of natural justice, or the duty to
act fairly, which tends to sacrifice the administrative
efficiency and despatch, or frustrates the object of the law
in question. Since this Court has held Lord Reid’s judgment
in Ridge v. Baldwin would be of assistance in deciding
questions relating to natural justice, there is always “the
duty to act judicially”. There is, therefore, the insistence
upon the requirement of a “fair hearing”.
842
In A. K. Kraipak v. Union of India there was a
reiteration of the principles, albeit in a different form,
laid down by this Court in Dr. (Miss) Binapani Devi v. State
of Orissa and by the House of Lords in Padfield v. Minister
of Agriculture, Fisheries & Food that the executive should
not arbitrarily or capriciously act and that the myth of
executive discretion is no longer there. Indeed, in
Kraipak’s case (supra) it was observed:
“The dividing line between an administrative power and
a quasi-judicial power is quite thin and is being
gradually obliterated…. Under our Constitution the
rule of law pervades over the entire field of
administration. Every organ of the State under our
Constitution is regulated and controlled by the rule of
law. In a welfare State like ours it is inevitable that
the jurisdiction of the administrative bodies is
increasing at a rapid rate. The concept of the rule of
law would lose its vitality if the instrumentalities of
the State are not charged with the duty of discharging
their function in a fair and just manner. The
requirement of acting judicially in essence is nothing
but a requirement to act justly and fairly and not
arbitrarily or capriciously. The procedures which are
considered inherent in the exercise of a judicial power
are merely those which facilitate if not ensure a just
and fair decision. In recent years the concept of
quasi-judicial power has been undergoing a radical
change. What was considered as an administrative power
some years back is now being considered as a quasi-
judicial power.”
This Court pertinently drew attention to the basic
concept of natural justice vis-a-vis administrative and
quasi-judicial enquiries, and stated that any decision,
whether executive, administrative or judicial or quasi-
judicial, is no decision if it cannot be “just”, i.e. an
impartial and objective assessment of all the pros and cons
of a case, after due hearing of the parties concerned.
In the light of these principles, we have to see
whether the State Government acted in breach of the rules of
natural justice in passing the impugned orders.
It is, however, strenuously urged on behalf of the
State Government that on a true construction of the two
circulars in question, while it was incumbent on the
Divisional Committees to give all officers
843
and servants whose services were proposed to be determined
on the ground of unsuitability, an opportunity of a personal
hearing, no such duty was cast on the State Government. We
are unable to agree with this line of reasoning. The first
circular dated January 11, 1967 was all pervasive, and it
covered all categories of officers and servants either
provisionally absorbed under s.577(e) or temporarily
appointed under s.577(ee), irrespective of their salary. The
Government policy was made quite clear in that circular,
which we have quoted earlier.
At this stage, the functions of the Divisional
Committees were to be purely recommendatory in nature. The
Committees had to make their selection of officers and
servants suitable for absorption after an interview of all
such officers and servants, and forward their
recommendations to the Government, for finalising action in
the matter of final absorption under s.112A. The subsequent
circular dated January 31, 1967, making a categorisation of
the officers and servants concerned, into two groups,
reserving the power of selection for final absorption to the
State Selection Committee in case of all Centralised
Services whose starting salary was Rs. 500/- and more, and
entrusting the function to the Divisional Committees in case
of those whose starting salary was less than Rs.500/-, was
still subject to the Government policy already laid down. It
is, therefore, not right to suggest that the State
Government was absolved of the “duty to hear” the officers
and servants of the erstwhile Municipal Boards and other
local authorities drawing Rs. 500/- and above
All the officers and servants of the erstwhile
Municipal Boards and other local authorities provisionally
absorbed under s.577(e) or temporarily appointed under s.577
(ee) were therefore, entitled to be heard in the matter of
their final absorption under s.112A read with r.6(2) (iii),
irrespective of their salary.
The requirements of a fair hearing are fulfilled in the
case of officers and servants of the erstwhile Municipal
Boards and other local authorities drawing a salary of less
than Rs. 500/- but not in the case of those drawing Rs.
500/- or more.
It is accepted before us that the appellant Ashfaq
Hussain was called for an interview by the Divisional
Committee. The State Government in its return has placed
material showing that he had a uniformly bad record and
there were adverse entries in his character rolls for
several years. It is not disputed that Ashfaq Hussain had
been called for an interview by the Divisional Committee. We
are not impressed by the submission that the adverse remarks
were not put to him when he appeared before the Divisional
Committee. It is clear
844
from the two circulars of the State Government dated January
11, 1967 and February 23, 1967 that in all cases in which
the services of an officer or servant were to be determined
on the ground of his unsuitability, they were to be given an
opportunity of personal interview by the Committee. The
whole purpose of the personal interview was that when it was
proposed to declare such an official unsuitable for
absorption, the Committee had to afford an opportunity to
appear before it and clear up his position. It is reasonable
to presume that when the appellant, Ashfaq Hussain, was
called for that purpose, the adverse remarks in his
character rolls must have been put to him. On an overall
view of the record of service of Ashfaq Hussain, the
Divisional Committee was not wrong in recommending to the
Government to terminate his services, and the Government was
within its rights in passing the impugned order of
termination in regard to him.
In the case of the appellant Mohd. Rashid Ahmad, it
however appears from the return filed by the State
Government that no such opportunity was afforded to him
before the State Government passed the impugned order dated
July 18, 1967 terminating his services. It is evident, no
doubt, from the return filed by the State Government that
the service record of the appellant was before the
Government, on the basis whereof it was decided that he was
unsuitable for being finally absorbed and also that the
Secretary for Local Self-Government in his note of July 10,
1967 recommended that he was not suitable for final
absorption in the Centralised Services, but it is clear that
the Minister for Local Self-Government before passing the
impugned order of termination dated July 11, 1967 did not
give to the appellant an opportunity of a hearing. The order
of termination of his services passed by the State
Government, therefore, suffers from a serious legal
infirmity.
It was said, however, on behalf of the State Government
that under s.107(1) of the Adhiniyam no appointment to a
post carrying an initial salary of not less than Rs. 500/-
per mensem, could be made except after consultation with the
Public Service Commission, and that the Commission did not
find the appellant fit for appointment as Executive
Engineer, Municipal Corporation, Kanpur. It was also pointed
out that under s. 108 the appellant could not hold the post
beyond the period of one year. It was, therefore, urged that
the State Government was justified in terminating the
services of the appellant as he could not be finally
absorbed in the post of an Executive Engineer in the
Centralised Services. It was said that the post had to be
advertised for filling up the vacancy as required under s.
107 of the Adhiniyam. We are afraid, the contention cannot
be accepted.
845
Under s. 112A (1) of the Adhiniyam, the State
Government having by U.P. Palika (Centralised) Services
Rules, 1966, constituted the Centralised Palika Services,
the appellant Mohd. Rashid Ahmad, who was performing the
duties and functions of the post of Executive Engineer under
s. 577(ee), was entitled to be considered, if found
suitable, for absorption under s.112A(2). Admittedly, the
appellant was not heard in the matter of his final
absorption. It is also not in dispute that the procedure
laid down in the U.P. Palika (Centralised) Services Rules,
1966, was not followed. If the appellant was at all found
fit for absorption, it was for the State Government next to
decide the suitable post on which he could be absorbed. The
method of recruitment provided by r. 20 had to be followed.
Evidently, this has not been done.
In view of the fore-going reasons, Civil Appeal No.
1724 of 1969 succeeds and is allowed, while Civil Appeal No.
1732 of 1971 fails and is dismissed. There shall be no order
as to costs.
P.B.R.
C.A. 1724/69 allowed.
C.A. 1732/71 dismissed.
846