Hon'ble B. Amit Sthalekar, J.
(By Hon'ble Dr. D.Y. Chandrachud, C.J.) In the writ proceedings out of which this reference to the Full Bench arises, the seven petitioners seek a mandamus directing the State and its officers to allow to them the scale of pay admissible to Assistant Regional Transport Officers for the period during which they discharged the duties of Assistant Regional Transport Officers, prior to their substantive appointment to the post.
The case of the petitioners is that they were regularly promoted on the post of Assistant Regional Transport Officer1 in 2003 from the lower post. On 18 July 2003, an order was issued by the Principal Secretary in the Transport Department in the name of the Governor, promoting the petitioners on the post of ARTO. They claim that between 1996 to 2003, they were required to discharge the duties of the post of ARTO. Hence, for instance, by an order dated 13 June 1997, a direction was issued by the Commissioner of Transport, requiring some of the petitioners, who were working as Regional Inspectors (Technical) to discharge the duties of ARTO, though in the substantive post of Regional Inspector (Technical). Relying on the provisions of Para 49(i) of Chapter VI of the Financial Handbook, Volume II (Parts II to IV), the petitioners claim to be entitled to the payment of salary of the higher post, while holding a dual charge. Two earlier writ petitions2 were filed under Article 226 of the Constitution, on the ground that the request of the petitioners for the grant of salary in the higher post of ARTO for the period during which they were holding two posts has not been considered. By orders dated 4 October 2012 and 17 October, 2012, the State Government was directed to examine the grievance of the petitioners individually on the basis of a decision rendered by this Court at Lucknow in Subhash Chandra Kushwaha Vs. The State of U.P. & Ors.3. The State Government, by an order dated 16 January 2013, rejected the request of the petitioners. The State Government held that the claim of the petitioners for the payment of salary in the higher post, for having discharged the duties of two posts is not covered by Para 49 of Chapter VI of the Financial Handbook, Volume II (Parts II to IV), on the ground that they had not initially been appointed to a higher post but were only called upon to look after the work of a higher post. The State was of the view that the petitioners did not raise any grievance in regard to the payment of their salary during the relevant period and, hence, it was too late in the day to accept their requests for the payment of salary of the post of ARTO for the period from 1996 to 2003, when they held charge of the post.
The foundation of the case of the petitioners is two decisions of the Division Benches of the Court at Lucknow in Prem Chandra Srivastava Vs. State of U.P. & Ors.4 which relied upon an earlier decision in Subhash Chandra Kushwaha (supra). The decision in Prem Chand Srivastava was carried in appeal to the Supreme Court and resulted in an order dated 4 September 2013 to which, we will shortly advert.
In Subhash Chandra Kushwaha, this Court dealt with the grievance of a person who was working as a Passenger Tax Officer in the Transport Department and was directed to officiate on the post of ARTO since 1996 until 1999 when he was substantively promoted to the post. The claim was for the payment of salary for the period 1996 to 1999 in the higher post of ARTO. The Division Bench after adverting to Para 49 of Chapter VI of the Financial Handbook, Volume II (Parts II to IV) held:
"From the plain reading of the provisions contained in Para 49 of Chapter VI of Financial Handbook Vol. II (Parts II to IV), it is evident that a government servant who is formally appointed to hold full charge of the duties of a higher post in the same office as his own and in the same cadre/line of promotion, in addition to his ordinary duties, shall be paid the pay admissible to him, if he was appointed to officiate in the higher post, unless his officiating pay is reduced under Rule 35 but no additional pay shall be allowed for performing the duties of a lower post. The provisions contained in Rule 49 of the Financial Handbook seem to provide that a government servant who officiates on the higher post shall be entitled for payment of pay-scale admissible to such higher post. ..."
Thereupon, the conclusion which was arrived at, was as follows:
"Right to livelihood is fundamental right, protected by Article 21 of the Constitution of India, vide 1991 Suppl. (1) SCC 600, Delhi Transport Corporation versus D.T.C. Mazdoor Congress. Once the petitioner was permitted to discharge duty on the post of A.R.T.O. for reasonably long period of time, the respondents were not justified in not making payment of pay-scale admissible to the said cadre. Admittedly, there is a difference between the pay-scale of the Passenger Tax Officer and the Assistant Regional Transport Officer. In view of the above, we are of the opinion that the petitioner is entitled to claim higher pay-scale of the post of A.R.T.O. for the period he had discharged duty of the said post."
A similar issue was considered by a Division Bench of this Court at Lucknow in the case of Prem Chandra Srivastava (supra), where a person who was employed on the post of Passenger Tax Superintendent claimed the salary of the post of ARTO for the period between 2003 and 2008 when he was called upon to discharge the duties of the post of ARTO. The Division Bench followed the earlier decision in Subhash Chandra Kushwaha (supra) and held that:
"The provision contained in Financial Handbook has got statutory force. Any condition contained in the officiating order contrary to the provisions contained in the Financial Handbook which confers statutory right on the employees shall not be sustainable and suffers from vice of arbitrariness."
In addition, the Division Bench held that since eight persons who were working on the post of Passenger Tax Officers and who had officiated as ARTOs had been given the salary of the post of ARTO for the period of officiation, it was not open to the State to discriminate against the petitioner. A mandamus was issued to the State directing it to pay the difference of salary and arrears for the period when the petitioner discharged the duties and officiated on the post of ARTO together with costs which were quantified at Rs. 2 lac, of which an amount of Rs. 1 lac was to be withdrawn by the petitioner and the balance was to be paid over to the Mediation Centre of the High Court at Lucknow.
The decision of the Division Bench in Prem Chandra Srivastava was challenged by the State of Uttar Pradesh by filing a Special Leave Petition5 before the Supreme Court. On 4 September 2013, the Supreme Court disposed of the proceedings with the following order:
"Taken on Board.
Leave granted.
Upon hearing the learned counsel for the appellants and looking to the facts of the case, in our opinion, the cost awarded by the High Court is quite excessive. We reduce the amount of Rs. 2 lacs to Rs. 10,000/-, which shall be paid to the present respondent within two months from today.
Subject to above modification, the appeal is dismissed with no order as to costs."
When the writ proceedings in the present case, came up for hearing before the Division Bench, the learned Judges found themselves unable to agree with the principle enunciated in both the decisions in Subhash Chandra Kushwaha and Prem Chandra Srivastava. The Division Bench was of the view that the earlier decisions of the Court have failed to correctly interpret the provisions of Para 49 of Chapter VI of the Financial Handbook, Volume II (Parts II to IV). Accordingly, the following questions of law have been referred for decision6:
(a) Whether the law laid down by the Division Bench of the High Court in the case of Prem Chandra Srivastava which directs that merely on holding additional charge of an additional post, the incumbent would become entitled to salary of higher post even in absence of sanction from the finance department, lays down the correct law or not;
(b) What is the effect of the order of the Supreme Court dated 4 September 2013 dismissing the appeal filed by the State of U.P. against the judgment of the Division Bench of this Court at Lucknow in the case of Prem Chandra Srivastava (supra); and
(c) Whether proviso to Para 49 of Chapter VI of Financial Handbook, Vol. II (Parts II to IV) which requires the concurrence of the finance department, if officiating appointment is to be continued beyond 90 days would be applicable in respect of appointments covered by Clauses (i) & (ii) of Para 49 or the said proviso would be applicable to appointments under Clause (iii) only.
On behalf of the petitioners, the following submissions have been urged:
(1) The post of Passenger Tax Officer/Goods Tax Officer and of Regional Inspector is in the same cadre in the Transport Department of the State of U.P. The next promotional post is that of ARTO. The petitioners were holding the permanent post of Regional Inspectors at different places and were directed to hold charge of the post of ARTO in addition to their original post on the place of posting as Regional Inspector. The first petitioner officiated on the post of ARTO from 31 July 1996 to 17 July 2003, petitioner no. 2 from 14 May 1998 to 17 July 2003, petitioner no.3 from 31 July 1996 to 17 July 2003, petitioner no. 4 from 14 May 1998 to 27 May 1999, and petitioner nos. 5 to 7 from 16 June 1997 to 17 July 2003 and thereafter all the petitioners were regularized/appointed substantively on the post of ARTO without any break with the approval of the Uttar Pradesh Public Service Commission7;
(2) Five other officers who were officiating on the post of ARTO withdrew the salary of the higher post on their own signatures being Drawing and Disbursing Officers. The government issued recovery notices and thereafter they had filed a contempt petition following which the government cancelled the recovery notices and accepted their claim;
(3) The decisions of two Division Benches of this Court at Lucknow in the case of Subhash Chandra Kushwaha and Prem Chandra Srivastava allowed the claim of salary in the higher post of ARTO for the period during which the employees in a lower substantive post had discharged the duties of the post of ARTO. The Supreme Court in a special leave petition which arose from the decision in Prem Chandra Srivastava granted leave and dismissed the appeal, save and except for a modification of the quantum of costs from Rs. 2 lac to Rs. 10,000/-;
(4) The petitioners would be entitled to the benefit of the decisions in Subhash Chandra Kushwaha and Prem Chandra Srivastava. The reference has been made in the present case by the Division Bench only because the Court was in doubt whether the proviso to Para 49 (iii) of Chapter VI of the Financial Handbook, Volume II (Parts II to IV) is applicable to Para 49(i). However, according to the petitioners, government servants covered by Para 49 (i) are entitled to the salary of the higher post on which they are officiating without the concurrence of the Finance Department.
(5) Once the Supreme Court had granted leave to appeal and dismissed the appeal filed by the State against the decision of the Division Bench in Prem Chandra Srivastava, the judgment of the Division Bench has merged in the order of the Supreme Court. Consequently, it would not be open to the State Government to contend that the decision of the Division Bench at Lucknow Bench did not consider any aspect of the matter since the decision of the Supreme Court would bind the State; and (6) The petitioners would be governed by Para 49(i) of Chapter VI of the Financial Handbook and not by Para 49 (iii). Moreover, it is not open to the State to discriminate against the petitioners.
On the other hand, the following submissions have been made on behalf of the State:
(A) The doctrine of merger has a limited application. It is not a doctrine of rigid and universal application. The application of the doctrine depends on the nature of the appellate or revisional order in each case and the scope of the statutory provisions conferring the appellate or revisional jurisdiction;
(B) Even if the doctrine of merger is applied, the order of the Supreme Court dated 4 September 2013 granting leave and dismissing the appeal subject to a reduction of the costs awarded by the High Court from Rs. 2 lac to Rs. 10,000/-, does not make any declaration of law within the meaning of Article 141 of the Constitution either expressly or by necessary implication. It cannot be said that the same is binding as a precedent and is not open to reconsideration by a larger Bench of the High Court; and (C) A decision which is not expressed and is not founded on reasons nor proceeds on a consideration of the issue cannot be deemed to be law declared to have a binding effect as is contemplated by Article 141 of the Constitution. Uniformity and consistency are core of judicial discipline. But that which escapes in the judgment without any occasion is not the ratio decidendi.
The rival submissions now fall for consideration.
At the outset, it would be necessary to note the existence of two separate sets of rules framed under Article 309 of the Constitution:
(i) The Uttar Pradesh Transport (Subordinate) Technical Service Rules, 19808 govern the services of persons appointed as Technical Inspector/Regional Inspector (Technical) and Assistant Regional Inspector (Technical). The appointing authority as defined in Rule 3(a) is the Transport Commissioner.; and
(ii) The Uttar Pradesh Transport Service Rules, 19909 govern the services of persons appointed as Assistant Regional Transport Officer, Regional Transport Officer, Deputy Transport Officer and Additional Transport Commissioner. The salient features of the 1990 Rules are that:
(a) The appointing authority is the Governor [Rule 3(a)];
(b) The procedure for appointment is provided in Rules 15 and 16;
(c) Academic qualifications are provided in Rule 8;
(d) Sources of recruitment are provided in Rule 5;
(e) Appointment is provided in Rule 19.
The source of recruitment to the post of ARTO is under Rule 5(1) which provides for 50 percent by promotion and 50 percent by direct recruitment by the Commission on the basis of a combined State Services' Examination. The promotional avenue to 50 percent of the posts is through the Commission from amongst permanent Passenger/Goods Tax Officers and Technical Inspectors/Regional Inspectors (Technical) who have put in at least five years' continuous service. Rule 15 provides for the procedure which is to be followed by the Commission in carrying out direct recruitment to the post of ARTO. Rule 16 lays down the procedure for making recruitment by promotion to the post of ARTO and stipulates as follows:
"16. Procedure for recruitment by promotion to the post of Assistant Regional Transport Officer.- Recruitment by promotion shall be made on the basis of merit in accordance with the Uttar Pradesh Promotion by selection in consultation with Public Service Commission (Procedure) Rules , 1970 as amended from time to time."
Rules 17 deals with the procedure for recruitment by promotion to the posts other than ARTOs. Rule 19 states that the appointing authority shall make appointments by taking the names of candidates in the order in which they stand in the lists prepared under Rules 15, 16 or 17, as the case may be.
Significantly, under Rule 19, it has been stipulated that even appointments in a temporary or officiating capacity have to be made from the lists mentioned in Rule 19(1). If no candidate borne on these lists is available, the appointing authority may make appointments in such vacancy from amongst persons eligible for appointment. Such an appointment shall not last for a period exceeding one year or beyond the next selection under the rules, whichever is earlier. Rule 19 (4) reads as follows:
"(4) The appointing authority may make appointments in temporary or officiating capacity also from the list mentioned in sub-rule (1). If no candidate borne on these lists is available, he may make appointments in such vacancy from amongst persons eligible for appointment under these rules. Such appointments shall not last for a period exceeding one year or beyond the next selection under these rules, whichever be earlier, and where the post is within the purview of the Commission, the provisions of Regulation 5(a) of the U.P. Public Service Commission (Limitation of Function) Regulations 1954 shall apply."
Rule 23 deals with scales of pay.
The petitioners were appointed as Regional Inspectors (Technical). The substantive post which they held at the material time was admittedly not that of an ARTO. They were transferred as Regional Inspector (Technical) by the Transport Commissioner. But in the copy which was endorsed to the petitioners, the Transport Commissioner mentioned that they shall discharge the duties of ARTOs. The Transport Commissioner, it must be noted, was not the appointing authority to the post of ARTO. The services of Regional Inspectors (Technical) on one hand and of ARTOs on the other are governed by different set of rules. ARTOs are governed by the 1990 Rules and their appointing authority is the Governor. Under Rule 19 of the 1990 Rules, it is only the appointing authority which can make even a temporary or officiating appointment. The petitioners were not substantively appointed to the post of ARTO for the period during which they claim their salary. They were not appointed even in an officiating or temporary capacity by the appointing authority to the post of ARTO in accordance with the provisions of Rule 19.
Now, it is in this background that it would be necessary to advert to the provisions of Para 49 of Chapter VI of the Financial Handbook, Volume II (Parts II to IV). Para 49 reads as follows:
"49. The Government may appoint a Government servant already holding a post in a substantive or officiating capacity to officiate, as a temporary measure, in one or more of other independent posts at one time under the State Government. In such cases, his pay is regulated as follows:
(i) Where a Government servant is formally appointed to hold full charge of the duties of a higher post in the same office as his own and in the same cadre/line of promotion, in addition to his ordinary duties, he shall be allowed the pay admissible to him, if he were appointed to officiate in the higher post, unless his officiating pay is reduced under Rule 35 but no additional pay shall be allowed for performing the duties of a lower post.
(ii) Where a Government servant is formally appointed to hold dual charge of two posts in the same cadre in the same office carrying identical scales of pay, no additional pay shall be admissible irrespective of the period of dual charge;
Provided that if the Government servant is appointed to an additional post which carries a special pay, he shall be allowed such special pay.
(iii) Where a Government servant is formally appointed to hold charge of another post or posts which is or are not in the same office, or which, though in the same office, is or are not in the same cadre/line of promotion, he shall be allowed the pay of the higher post, or the highest post if he holds charge of more than two posts, in addition to ten percent of the presumptive pay of the additional post or posts, if the additional charge is held for a period exceeding thirty days but not exceeding ninety days:
Provided that if in any particular case, it is considered necessary that the Government servant should hold charge of another post or posts for a period exceeding ninety days, the concurrence of the State Government in the Finance Department shall be obtained for the payment of the additional pay beyond the period of ninety days.
(iv) No additional pay shall be admissible to a Government servant who is appointed to hold current charge of the routine duties of another post or posts irrespective of the duration of the additional charge.
(v) If compensatory or sumptuary allowances are attached to one or more of the posts, the Government servant shall draw such compensatory or sumptuary allowances as the State Government may fix:
Provided that such allowances shall not exceed the total of the compensatory and sumptuary allowances attached to all the posts." (Emphasis supplied) Para 49 provides that the Government may appoint a government servant already holding a post in a substantive or officiating capacity to officiate, as a temporary measure, in one or more of other independent posts at one time. Para 49 (i) deals with a situation where a government servant is formally appointed to hold full charge of the duties of a higher post in the same office as his own and in the same cadre or line of promotion, in addition to his ordinary duties. The important aspect to be emphasised in Para 49 (i) is the expression 'formally appointed'. In other words, there has to be a formal appointment of the government servant to hold full charge of the duties of a higher post. The formal appointment as contemplated by Para 49 (i) is obviously an appointment by the appointing authority which alone can issue an order of formal appointment to hold full charge of the duties of a higher post. In the present case, as the facts before the Court would disclose, the appointing authority under the 1990 Rules is the Governor. Rule 19 (4) contemplates expressly that it is the appointing authority who may make appointments in a temporary or officiating capacity. Even these appointments have to be from the lists mentioned in Rule 19 (1) and if no such person borne on those lists is available, appointments in such vacancies have to be made from amongst the persons eligible for appointment under the rules. The appointment cannot exceed a period of one year or till the next selection, whichever is earlier. In the present case, there was no appointment by the appointing authority as required by Rule 19 (4) in a temporary or officiating capacity. Para 49 (i) has clearly no application. As a matter of fact, Para 49 (iv) provides that no additional pay would be admissible to a government servant who is appointed to hold current charge of the routine duties of another post or posts irrespective of the duration of additional charge.
The referring order makes a reference to the proviso to Para 49 (iii) and one of the issues which was raised by the referring Bench was whether this would qualify only clause (iii). Prima facie, it is evident that several of the sub-clauses of Para 49 have separate provisos. But that, in our view, does not carry the case of the petitioners any further for the simple reason that for a claim to fall within the purview of Para 49 (i), as suggested by the petitioners, there has to be a formal appointment of a government servant for holding full charge of the duties of a higher post. In the present case, as we have indicated, there was no such appointment by the appointing authority as contemplated in Rule 19 (4) of the 1990 Rules. A mere endorsement by the Transport Commissioner who, it must be emphasized at the cost of repetition, was not the appointing authority, would not entitle the petitioners to the higher salary attached to the substantive post of ARTO merely because the petitioners discharged the duties of that post.
The view which we have taken is consistent with a body of precedent of the Supreme Court on the subject. In Ramakant Shripad Sinai Advalpalkar Vs. Union of India & Ors.10, the Supreme Court drew a distinction between a substantive promotion to higher post of a government servant, and a situation where a person is merely required to discharge the duties of a higher post. The Supreme Court held as follows:
"...The distinction between a situation where a government servant is promoted to a higher post and one where he is merely asked to discharge the duties of the higher post is too clear to require any reiteration. Asking an officer who substantively holds a lower post merely to discharge the duties of a higher post cannot be treated as a promotion."
In a subsequent decision of the Supreme Court in State of Haryana Vs. S.M. Sharma & Ors.11, an employee was entrusted with the current duty charge of the post of Executive Engineer which was subsequently withdrawn. The employee challenged the withdrawal of charge on the ground that it amounted to reversion. The Supreme Court held that the employee was only given a current duty charge on the higher post of Executive Engineer and was neither promoted nor appointed to the post. The withdrawal of the charge was, therefore, held not to amount to a reversion.
These decisions were followed in a judgment of a Division Bench of this Court in Sheo Shanker Tripathi Vs. Director of Education (Sanskrit) U.P., Allahabad & Ors.12. The Division Bench held as follows:
"... Appointment to a post on ad hoc or officiating basis is different than mere discharge of duties of a higher post. In other word, the petitioner was only given current duty charge in addition to the substantive post he held. In our view, this arrangement did not result in promotion to the post of which the current duty charge was handed over to the petitioner unless an order of promotion is issued by the management in favour of the petitioner."
Consequently, the view of the Division Bench was that the petitioner was neither appointed on the post of Principal nor was his appointment an ad hoc appointment made in accordance with the U.P. Higher Education Services Commission Act, 1980 or the U.P. Higher Education Services Commission (Removal of Difficulties) Order, 1983 and, hence, he would not be entitled to a mandamus for the payment of salary on the post of Principal. The Division Bench held as follows:
"Since the petitioner was never appointed on the post of Principal, therefore, the question of payment of salary of the said post would not arise. Even otherwise, as we have already noticed, the management did not make any ad-hoc appointment in accordance with the procedure prescribed, i.e. 1980 Act read with 1983 Order and therefore, also, a mandamus for payment of salary to the petitioner for the post of Principal cannot be issued. Even if it is assumed that the petitioner was appointed by the management on officiating basis, the said appointment being inconsistent to the procedure prescribed, it would not result in conferring any right upon him to claim salary on the basis of such illegal appointment, if any."
The decision of the Division Bench of this Court at Lucknow in Subhash Chandra Kushwaha was rendered without the attention of the Court being drawn to the governing provisions of the 1990 Rules. The Division Bench was not apprised of the position under the Rules framed under Article 309 that the appointing authority to the post of ARTO is the Governor, and to the relevant provisions of the rules including Rules 15 and 16 which provide for the procedure for recruitment and Rule 19 which deals with the power of appointment. The provisions of Rule 19 (4) which confer upon the appointing authority, namely the Governor, the power to make even temporary or officiating appointments have not been noticed in the judgment of the Division Bench. The decision in Subhash Chandra Kushwaha does not consider the governing rules framed under Article 309 of the Constitution and is hence, with respect, rendered without taking into account these rules. That apart and for the reasons which we have indicated, it is not possible to agree with the view taken by the Division Bench on the construction of Para 49 of Chapter VI of the Financial Handbook, Volume II (Parts II to IV). The view of the Division Bench is inconsistent with the principles enunciated in the judgments of the Supreme Court noted above. The petitioners cannot raise a plea of discrimination in the face of the Rules framed under Article 309 of the Constitution. Once there is no valid appointment by the appointing authority under the 1990 Rules during the period when the petitioners held charge of the duties of the post of ARTO, they would not be entitled to the salary of the post of ARTO prior to their substantive appointment. An illegality cannot give rise to an expectation of similar treatment under Article 14. The petitioners were not appointed even in an officiating capacity under Rule 19(4) by the Governor who is the appointing authority.
The issue, however, which falls for consideration is whether the Full Bench is precluded from taking this view on the ground that the decision in Subhash Chandra Kushwaha was followed in a subsequent decision of the Division Bench in Prem Chandra Srivastava against which a Special Leave Petition was filed before the Supreme Court where leave was granted and an order was passed by the Supreme Court dismissing the appeal subject to a reduction in the costs awarded.
The answer to this issue would have to be closely analysed, based on the doctrine of merger. The doctrine of merger postulates that when a decree or order of an inferior court or tribunal is subject to a remedy before a superior forum, the disposal of the lis by the superior forum - whether the decree or order in appeal is set aside, modified or confirmed - renders the decree or order of the superior court final and binding. The decree or order which was passed by the original court, tribunal or authority merges in the final and binding decree and order of the superior forum.
In Kunhayammed & Ors. State of Kerala & Anr.13 a Bench of three learned Judges of the Supreme Court, after adverting to the body of the precedent on the subject, held as follows:
"...In State of Madras Vs. Madurai Mills Co. Ltd., AIR 1967 SC 681 this Court held that the doctrine of merger is not a doctrine of rigid and universal application and it cannot be said that wherever there are two orders, one by the inferior authority and the other by a superior authority, passed in an appeal or revision there is a fusion or merger of two orders irrespective of the subject-matter of the appellate or revisional order and the scope of the appeal or revision contemplated by the particular statute. The application of the doctrine depends on the nature of the appellate or revisional order in each case and the scope of the statutory provisions conferring the appellate or revisional jurisdiction."
While summing up its conclusion, the Supreme Court held thus:
"Doctrine of merger is not a doctrine of universal or unlimited application. It will depend on the nature of jurisdiction exercised by the superior forum and the content or subject-matter of challenge laid or capable of being laid shall be determinative of the applicability of merger..."
The decision in Kunhayammed's case was considered in a subsequent judgment of a Bench of two learned Judges in S. Shanmugavel Nadar Vs. State of T.N. & Anr.14. In that case, the State Legislature had enacted the Madras City Tenants' Protection (Amendment) Act, 1960 to amend certain provisions of the Madras City Tenants' Protection Act, 1921. The constitutional validity of the Amending Act was challenged in writ petitions which were disposed of by the High Court in the case of M. Varadaraja Pillai Vs. Salem Municipal Council15. Against this decision of a Division Bench of the Madras High Court, appeals by special leave were filed before the Supreme Court. The Supreme Court by its order dated 10 September 1986 dismissed the appeals with the following observations:
"The constitutional validity of Act 13 of 1960 amending the Madras City Tenants' Protection Act, 1921 is under challenge in these appeals. The State of Tamil Nadu was not made a party before the Trial Court. However, the State was impleaded as a supplemental respondent in appeal as per orders of the High Court. When the appellants lost the appeal, they sought leave to appeal to this Court. The State of Tamil Nadu was not made a party in the said leave petition. In the SLP before this Court also the State of Tamil Nadu was not made a party. A challenge to the constitutional validity of the Act cannot be considered or determined, in the absence of the State concerned. The learned counsel now prays for time to implead the State of Tamil Nadu. This appeal is of the year 1973. In our view it is neither necessary nor proper to allow this prayer at this distance of time. No other point survives in these appeals. Therefore, we dismiss these appeals, but without any order as to costs."
Subsequently, the Madras City Tenants' Protection (Amendment) Act, 1994 (Tamil Nadu Act 2 of 1996) was enacted by the State Legislature. The constitutional validity was challenged before the Madras High Court in several writ petitions where reliance was placed on behalf of the State on the earlier decision in Varadaraja Pillai. The Division Bench, while entertaining a doubt about the correctness of the law laid down by the earlier Division Bench in Varadaraja Pillai, referred the matter to a Full Bench of three learned Judges. However, the Full Bench formed an opinion that since the appeals against the judgment of the Division Bench of the High Court in Varadaraja Pillai had been dismissed by the Supreme Court, the judgment of the Division Bench merged with the decision of the Supreme Court and, therefore, it was not open to the Full Bench to examine the correctness of the law laid down by the earlier Division Bench in Varadaraja Pillai. In this background, while dealing with the doctrine of merger, the Supreme Court observed as follows:
"Firstly, the doctrine of merger. Though loosely an expression merger of judgment, order or decision of a court or forum into the judgment, order or decision of a superior forum is often employed, as a general rule the judgment or order having been dealt with by a superior forum and having resulted in confirmation, reversal or modification, what merges is the operative part i.e. the mandate or decree issued by the Court which may have been expressed in a positive or negative forum. For example, take a case where the subordinate forum passes an order and the same, having been dealt with by a superior forum, is confirmed for reasons different from the one assigned by the subordinate forum, what would merge in the order of the superior forum is the operative part of the order and not the reasoning of the subordinate forum; otherwise there would be an apparent contradiction. However, in certain cases, the reasons for decision can also be said to have merged in the order of the superior court if the superior court has, while formulating its own judgment or order, either adopted or reiterated the reasoning, or recorded an express approval of the reasoning, incorporated in the judgment or order of the subordinate forum."
The Supreme Court then referred to the decision in State of U.P. Vs. Mohd. Nooh16 and to a subsequent decision of three learned Judges of the Supreme Court in State of Madras Vs. Madurai Mills Co. Ltd.17, where it was held as follows:
"The doctrine of merger is not a doctrine of rigid and universal application and it cannot be said that wherever there are two orders, one by the inferior authority and the other by a superior authority, passed in an appeal or revision, there is a fusion or merger of two orders irrespective of the subject-matter of the appellate or revisional order and the scope of the appeal or revision contemplated by the particular statute. The application of the doctrine depends on the nature of the appellate or revisional order in each case and the scope of the statutory provisions conferring the appellate or revisional jurisdiction."
The earlier decision in Kunhayammed was also adverted to as having reiterated that the doctrine of merger is not of universal or unlimited application and, the nature of jurisdiction exercised by the superior forum and the content or subject-matter of challenge laid or which could have been laid, shall have to be kept in view. The Supreme Court consequently held that the decision which was rendered on 10 September 1986 by the Supreme Court in the appeal arising out of the judgment of the Division Bench of the Madras High Court did not result in the statement of law or the reasons recorded by the Division Bench of the High Court merging in the decision of the Supreme Court. This was because a reading of the order of the Supreme Court dated 10 September 1986 indicated that neither the merits of the order of the High Court nor the reasons which were reduced by the High Court or the law laid down therein had been gone into. The Supreme Court held thus:
"...In this view of the law, it cannot be said that the decision of this Court dated 10-9-1986 had the effect of resulting in merger into the order of this Court as regards the statement of law or the reasons recorded by the Division Bench of the High Court in its impugned order. The contents of the order of this Court clearly reveal that neither the merits of the order of the High Court nor the reasons recorded therein nor the law laid down thereby were gone into nor could they have been gone into."
The observations which have been made in paragraphs 12, 13 and 14 of the judgment of the Supreme Court consider the matter from the perspective of Article 141 of the Constitution:
"...The issue ought to have been examined by the Full Bench in the light of Article 141 of the Constitution and not by applying the doctrine of merger. Article 141 speaks of declaration of law by the Supreme Court. For a declaration of law there should be a speech i.e. a speaking order. In Krishena Kumar v. Union of India, (1990) 4 SCC 207, this Court has held that the doctrine of precedents, that is being bound by a previous decision, is limited to the decision itself and as to what is necessarily involved in it. In State of U.P. v. Synthetics and Chemicals Ltd., (1991) 4 SCC 139, R.M. Sahai, J. (vide para 41) dealt with the issue in the light of the rule of sub-silentio. The question posed was: can the decision of an appellate court be treated as a binding decision of the appellate court on a conclusion of law which was neither raised nor preceded by any consideration or in other words can such conclusions be considered as declaration of law? His Lordship held that the rule of sub-silentio, is an exception to the rule of precedents. "A decision passes sub-silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the court or present to its mind." A court is not bound by an earlier decision if it was rendered "without any argument, without reference to the crucial words of the rule and without any citation of the authority". A decision which is not express and is not founded on reasons, nor which proceeds on consideration of the issues, cannot be deemed to be a law declared, to have a binding effect as is contemplated by Article 141. His Lordship quoted the observation from B. Shama Rao v. Union Territory of Pondicherry, AIR 1967 SC 1480 "it is trite to say that a decision is binding not because of its conclusions but in regard to its ratio and the principles, laid down therein". His Lordship tendered an advice of wisdom - "Restraint in dissenting or overruling is for sake of stability and uniformity but rigidity beyond reasonable limits is inimical to the growth of law." (SCC p. 163, para 41) Rup Diamonds v. Union of India, (1989) 2 SCC 356 is an authority for the proposition that apart altogether from the merits of the grounds for rejection, the mere rejection by a superior forum, resulting in refusal of exercise of its jurisdiction which was invoked, could not by itself be construed as the imprimatur of the superior forum on the correctness of the decisions sought to be appealed against. In Supreme Court Employees' Welfare Association v. Union of India, (1989) 4 SCC 187, this Court observed that a summary dismissal, without laying down any law, is not a declaration of law envisaged by Article 141 of the Constitution. When reasons are given, the decision of the Supreme Court becomes one which attracts Article 141 of the Constitution which provides that the law declared by the Supreme Court shall be binding on all the courts within the territory of India. When no reason are given, a dismissal simpliciter is not a declaration of law by the Supreme Court under Article 141 of the Constitution. In Indian Oil Corporation Ltd. v. State of Bihar, (1986) 4 SCC 146, this Court observed that the questions which can be said to have been decided by this Court expressly, implicitly or even constructively, cannot be re-opened in subsequent proceedings; but neither on the principle of res judicata nor on any principle of public policy analogous thereto, would the order of this Court bar the trial of identical issue in separate proceedings merely on the basis of an uncertain assumption that the issues must nave been decided by this Court at least by implication.
It follows from a review of several decisions of this Court that it is the speech, express or necessarily implied, which only is the declaration of law by this Court within the meaning of Article 141 of the Constitution."
In this view of the matter, the Supreme Court held that though the operative part of the order of the Division Bench merged in the decision of the Supreme Court, the reasons had not merged nor had the Supreme Court made any declaration of law under Article 141 of the Constitution. The statement of the law as contained in the judgment of the Division Bench of the High Court continued to remain the decision of the High Court, binding as a precedent on subsequent Benches of coordinate or lesser strength but open to reconsideration by a Full Bench:
"...The statement of law as contained in the Division Bench decision of the High Court in M. Varadaraja Pillai's, case would therefore continue to remain the decision of the High Court, binding as a precedent on subsequent Benches of coordinate or lesser strength but open to reconsideration by any Bench of the same High Court with a coram of Judges more than two."
These principles are clearly applicable here. The judgment of the Division Bench of this Court at Lucknow in Prem Chandra Srivastava was challenged before the Supreme Court by the State of U.P. which had filed a Special Leave Petition under Article 136 of the Constitution. The Supreme Court granted leave. The order of the Supreme Court dated 4 September 2013 indicates that the only aspect which was dealt with in the order was the costs of Rs. 2 lacs which had been imposed by the Division Bench of this Court. Finding the costs excessive, the quantum of costs was reduced to Rs.10,000/- and subject to the reduction of the quantum of costs awarded, the appeal was dismissed. The order dated 4 September 2013 of the Supreme Court did not result in a merger of the order passed by this Court as regards the statement of law or the reasons indicated in the judgment of the Division Bench at Lucknow. On the contrary, the contents of the order of the Supreme Court dated 4 September 2013 clearly indicate that the merits of the order of the High Court, the reasons recorded therein and the law laid down were not the subject matter of the decision. As the Supreme Court has held in a consistent line of authority, the doctrine of merger is not a doctrine of rigid and universal application. The doctrine depends upon the nature of the jurisdiction exercised by the superior forum and the content or subject-matter of challenge laid or which could have been laid in a given case. What merges is the operative part, i.e. the mandate or decree issued by the superior court. However, in certain cases, the reasons for the decision may also be said to have merged in the order of the superior court, if the superior court, while formulating its judgment or order has adopted or reiterated the reasoning or recorded an express approval of the reasoning incorporated in the decision of the inferior forum. Considering the matter from this perspective, it is clear that the reasons which were indicated in the judgment of the Division Bench at Lucknow have not merged in the order of the Supreme Court for the simple reason that the order dated 4 September 2013 of the Supreme Court only dealt with the quantum of costs which were awarded by this Court. Considering the matter from a different perspective, it is also well settled that it is the speech, express or necessarily implied, which only is the declaration of law laid down under Article 141 of the Constitution.
For these reasons, we are of the view that the statement of the law which was contained in the judgment of the Division Bench in Prem Chandra Srivastava (as well as the earlier decision in Subbash Chandra Kushwaha) would be a binding precedent on subsequent Benches of a coordinate or lesser strength of the High Court but is open for reconsideration by a Full Bench of three Judges. This emerges as a clear position in law following the decisions of the Supreme Court including in Shanmugavel.
The learned Senior Counsel appearing on behalf of the petitioners placed reliance on a judgment of the Supreme Court in Omprakash Verma & Ors. Vs. State of Andhra Pradesh & Ors.18, where the following principle has been enunciated:
"It is well settled by a catena of decisions of this Court that once a decision of the High Court is set aside by this Court, it ceases to exist. It falls on all four corners and it is not open to contend subsequently that a particular aspect or argument was not considered by this Court or that it can be relied upon. In Kausalya Devi Bogra v. Land Acquisition Officer, (1984) 2 SCC 324, this Court held that once the Supreme Court sets aside a judgment of the High Court, the High Court judgment is a nullity and cannot be revived."
This is, indeed, a well settled principle of law. Once a decision of the High Court is set aside by the Supreme Court, the decision of the High Court ceases to exist and it is not open to urge that a particular submission was not considered by the Supreme Court. The issue in this case is, however, distinct. The issue in the present case is, whether on a plain reading of the judgment of the Supreme Court dated 4 September 2013, can it be held that the statement of law or the reasons which were contained in the judgment of the Division Bench of this Court in Subhash Chandra Kushwaha had merged in the decision of the Supreme Court. For the reasons which we have indicated, the answer is in the negative.
For these reasons, we have come to the conclusion that the view which has been taken in the earlier decisions of the Division Benches at Lucknow in Subhash Chandra Kushwaha and Prem Chandra Srivastava is, with respect, erroneous and without considering the governing principles of the Rules framed under Article 309 of the Constitution and cannot be regarded as a binding precedent. The decisions have failed to notice the decisions of the Supreme Court and the principles laid down in those decisions, noted earlier.
We, accordingly, answer the questions referred to the Full Bench as follows:
(a) The law laid down by the Division Benches of this Court in Prem Chandra Srivastava and in Subhash Chandra Kushwaha, that an incumbent merely on holding an additional charge of a higher post would become entitled to the salary of a higher post, does not lay down the correct position in law;
(b) The dismissal of the appeal filed against the judgment of the Division Bench in Prem Chandra Srivastava, by the Supreme Court did not result in the merger of the reasons for the decision of the Division Benches of the Court nor did it amount to an approval by the Supreme Court, of the statement of law or the reasons contained in the decision of the Division Bench; and
(c) In the view which we have taken, the issue raised in the referring order in regard to the proviso to Para 49 (iii) of Chapter VI of the Financial Handbook, Volume II (Parts II to IV) will not survive.
The reference is answered accordingly. The proceedings shall now be placed before the appropriate Bench for disposal in the light of the present decision.
August 8, 2014 (Dr. D.Y. Chandrachud, C.J.) (Dilip Gupta, J.) (B. Amit Sthalekar, J.) Judgment has been delivered today under sub-rule (2) of Rule 1 of Chapter VII of the Allahabad High Court Rules, 1952.
(Dr. D.Y. Chandrachud, C.J.) (Dilip Gupta, J.)