1. These appeals under section 100 of the Code of Civil Procedure are filed by original plaintiffs.
They filed suits seeking declaration that they being employees of the erstwhile Junagadh State, they could not be retired at the age of 58 years but would be entitled to continue in service till 60 years of age as they would continue to be governed by the rules of erstwhile Junagadh State even after its merger into Saurashtra State which merged into bilingual State of Bombay and then Gujarat State on bifurcation from Bombay State.
2. The appellant of Second Appeal No. 86 of 1997 had filed Regular Civil Suit No. 700 of 1985 and his case in the suit is that he was initially appointed by the Revenue Commissioner vide order dated 10.2.1948 as writer clerk in the erstwhile Junagadh State, that the Junagadh State merged into Saurashtra State and thereafter in Bombay State and then, the State of Bombay was bifurcated and State of Gujarat came into existence with effect from 1.5.1960 and the services of the plaintiff came to be allocated to the newly formed State of Gujarat. During the regime of the Junagadh State, the Junagadh State had framed State Account Code and as per Clause 241-A(13) of the said Code, the superannuation age was provided at the age of 60 years, that the said Rules of Junagadh State were still applicable to the plaintiff and, therefore the plaintiff was to retire at the age of 60 years i.e. 31.10.1986, that the Collector Junagadh passed order dated 30.9.1983 to retire the plaintiff with effect from 31.10.1984 on plaintiff's completing the age of 58 years as on 9.10.1984, that as per the agreement with the Covenanting State, the service condition of the plaintiff were protected till the age of 60 years and that rule 161 of the BCSRs which provided retirement at 58 years was against the provisions of Article 311(2) of the Constitution of India. That as per Section 115(7) of the State Reorganization Act, 1956, such rules could not be framed to the disadvantage of the plaintiff and, therefore, the suit was filed by the plaintiff.
3. The suit was resisted by the defendant State of Gujarat and the Collector Junagadh by filing written statement at Exh. 10 and it was stated that the new rules have come into force and because of the option exercised by the plaintiff for being governed by the new rules, the plaintiff now cannot claim benefit under the resolution of the erstwhile State of Junagadh.
4. The appellant of Second Appeal No. 20 of 1987 had filed Regular Civil Suit No. 103 of 1986 and his case was that he was appointed as book clerk on 22.12.1943 in superior services of erstwhile State of Junagadh, confirmed by order dated 12.12.1946 and promoted as Record Clerk on 23.11.1947, that the State of Junagadh was merged with the erstwhile State of Saurashtra and on 30.1.1949, Ordinance No.319/49 was issued as per which, the Raj Pramukh of the erstwhile State of Saurashtra had guaranteed under Article 16 that the Service conditions of Covenanting State employees shall not be changed to their disadvantage, that the appellant was therefore entitled to retire at the age of 60 years of service as per Article 223-A of the Junagadh Account Code, that when the Saurashtra State came to be merged with the bilingual State of Bombay, it was guaranteed that the service conditions of its employees shall not be changed to their disadvantage, that on 1.5.1960, State of Gujarat came into existence by virtue of the Bombay State Reorganization Act, 1960 and thus, the appellant enjoyed all the protection of statutory guarantee given earlier and thus, would be entitled to continue in service upto the age of 60 years, that still, by order dated 10.10.1985, the appellant was asked to compulsorily retire from service with effect from 31.1.1986 with six other persons, that such order dated 10.10.1985 passed by the respondent authority is illegal, null and void.
5. The suit was resisted by the State Authority stating that the Civil Court had no jurisdiction to entertain the suit; that the appellant had opted for pension rules of the merged State; that as per the provisions of section 161(1)(c) of the Bombay Civil Service Rules, the appellant being class III employee was liable to retire compulsorily at the age of 58 years, therefore, order dated 10.10.85 was passed to retire the appellant at the age of 58 years; that the appellant was bound by the option exercised by him to be governed by the rules of merged State; that the order retiring the appellant compulsorily at the age of 58 years was not in contravention of the constitutional provisions and there is no breach of any fundamental right of the appellant.
6. Learned trial Judge in both the suits held that on coming into force the Saurashtra Covenanting State Servants (Superannuation Age) Rules, 1955, Junagadh State Rules did not continue to apply and that Rule 161 of the Bombay Civil Services Rules, 1959 (herein after referred to as “B.C.S.Rs.” for short) would be more advantageous to the plaintiffs. The plaintiffs were thus held not entitled to continue in service till the age of 60 years. Ultimately, the suits of the plaintiffs were dismissed.
7. The appellants unsuccessfully carried the matter to the appellate Court. The appellant of Second Appeal No. 86 of 1997 filed Regular Civil Appeal No.
94 of 1986. The appellant of Second Appeal No. 20 of 1986 filed Regular Civil Appeal No. 14 of 1986. The learned Appellate Judge held that under the Saurashtra Rules, retirement age was fixed at the age of 55 years and thereafter on coming into force of the Bombay Civil Service Rules, superannuation age of 58 years was provided under rule 161 of the Bombay Civil Service Rules which was more advantageous to the plaintiff.
8. The second appeal No. 20 of 1987 was admitted by this Court by order dated 28.12.1987 on the following substantial questions of law :
(1) Whether the learned Judge committed a substantial error of law in interpreting the provisions of the State Organization Act, 1956, the Bombay Re-organization Act, 1960 and the Bombay Civil Services Rules, and the Saurashtra Covenanting States Services (Superannuation Age) Rules, 1955 while holding that he was entitled to continue in service till he reached the age of 60 years and that the order retiring him at
(2) Whether the learned Judge committed a substantial error of law in holding that the service conditions of retirement of the appellant at the age of 58 years fixed under rule 161(1)(c) of the Bombay Civil Services Rules was not less advantageous to him than the service conditions of his retirement at the age of 60 years under Section 233-A of the Junagadh Account Code?
(3) Whether the learned Judge committed a substantial error of law in holding that the appellant had exercised his option giving up his rights for the purpose of pension and retirement and that the same was otherwise governed the conditions of his services irrespective of the fact that the B.C.S.R. fixing the age of retirement was ultra vires or infringing the statutory guarantee given to the Covenanting State like the appellant?
9. The Second Appeal No. 86 of 1997 was admitted by this court by order dated 24.7.1997 on the above same substantial questions of law and subsequently ordered to be heard along with Second Appeal No. 20 of 1987. These appeals are therefore heard and decided together.
10. I have heard learned advocates for the parties on the above substantial questions of law. Learned Advocate Mr. Anshin H. Desai for the appellant plaintiff submitted that the appellant was and would be governed by the rules of the erstwhile State of Junagadh as per which superannuation age of the plaintiff would be 60 years. He submitted that by declaration of the Raj Pramukh at the time of merger of Junagadh State into Saurashtra State, all rules obligations and duties of the Junagadh State as regards service condition of employees were continued and therefore, retirement age provided by the subsequent rules of Saurashtra State would not be applicable to the appellants. He submitted that in fact, the case of the plaintiff would be squarely governed by the decision of Hon'ble the Supreme Court in the case of Bholenath J. Thaker versus State of Saurashtra reported in AIR 1954 SC page 680 because like the facts of that case, the plaintiff also would be entitled to claim the benefit of retirement at the age of 60 years on account of agreement of Covenanting State of Junagadh with the Saurashtra State which provided for declaration made by Raj Pramukh to continue to apply the rules, obligations and duties of the Junagadh State to all the employees of the erstwhile State of Junagadh. Mr. Desai further submitted that the option exercised by the plaintiff was just a contract and would not be binding to the plaintiff because when the plaintiff had become entitled by virtue of the provisions of Covenanting States with the Saurashtra State even if there was any option given by the plaintiff, that would not take away his right under the rules of the erstwhile Junagadh State.
11. Mr. Desai further submitted that under Article 16, a clear declaration was made by Rajpramukh at the time of merger of erstwhile State of Junagadh with the State of Saurashtra, that service conditions of the Junagadh State employees shall not be less advantageous. Any rules made subsequently by Saurashtra State or Bombay State would have no application and would not take away the right already accrued to the plaintiffs. Mr. Desai submitted that since before changing service conditions to the disadvantage of the appellant, no permission of the Central Government was taken as required by section 115(7) of the State Reorganization Act, 1956, the order retiring the appellant at the age of 58 years was illegal. He thus submitted that both the Courts below have not considered the above aspects of the matter while deciding the suit of the plaintiff and, therefore, this court may allow the appeal of the plaintiff on the substantial questions of law formulated by this court at the time of admitting this appeal. He submitted that the option was for the purpose of giving up pension as the same was otherwise governed by the conditions of service. Such option could not be relied against the Rules of Junagadh State as the option cannot wipe out the effect of proclamation made by the Rajpramukh. He submitted that the appellant continued to be governed by Article 233A of the Junagadh Account Code under which the appellant was entitled to serve upto 60 years of age. In support of his submissions, Mr. Desai placed reliance on the decision in the case of (1) Bholenath J. Thaker versus State of Saurashtra reported in AIR 1954 SC page 680 and (2) Takhetray Shivdattray Mankad v. State of Gujarat, AIR 1970 SC 143.
12. Mr. Dhiren Mehta appearing for Mr. P.V. Hathi in Second Appeal No. 20 of 1987 has made similar submissions and has also stated to take into consideration the written contentions submitted to the Court. He also relied on the above said two authorities cited by Mr. Desai.
13. On the other hand learned AGP Shri Gurjar has submitted that the Courts below have not committed any error in dismissing the suit of the appellants because not only the appellants with open eyes exercised the options to be governed by the rules of of merged State but on coming into force of Saurashtra Covenanting State Servants (Superannuation Age) Rules, 1955, the rules of erstwhile Junagadh State stood automatically repealed and the appellants were then governed by the Saurashtra Rules which provided for superannuation age of 55 years. He submitted that the appellants were in fact retired at the age of 58 years under Rule 161 of BCSRs which was more advantageous to the appellants. He further submitted that both the Courts below have rightly interpreted the provisions of the Junagadh Account Code, and Saurashtra Rules, 1955 and after considering the judgment of the Hon'ble Supreme Court in the case of Bholenath (supra) have rightly held that the said decision would not be applicable to the facts of the present case. He thus submitted that none of the substantial question of law has arisen for consideration of this court as claimed by the appellants as the claim of the appellants was based on the rules of erstwhile Junagadh State which had already stood repealed by Statutory Rules having come into force subsequently fixing superannuation age at 55 years.
14. Having heard learned Advocates for the parties and on perusal of the record of the cases, what emerges are following important facts which are not in dispute:
(1) Service Conditions of the employees of the erstwhile State of Junagadh were governed by Junagadh State Account Code. Article 223-A provided as under:
“223A. The date on which a state servant must compulsorily retire is ordinarily the date on which he attains the age of l60 years, but in the case of a state servant who is required to retire between the ages of 55 and 60, the date of compulsory retirement, is the date from which he is required to retire.
An officer may be granted privilege leave combined with any other kind of leave due to him, preparatory to retirement, if he has applied for it, while on duty, in sufficient time, before the date of compulsory retirement, provided that in the event of attaining the age of 60 years, during the period of leave, he must cease to be on leave from that date. “
(2) Erstwhile State of Junagadh was merged with the State of Saurashtra in the year 1949 and the Raj Pramukh of the State of Saurashtra promulgated Ordinance providing for guarantee of service conditions of the employees of Conventing State by Article 16. Article 16 reads as under:
“Article XVI:
(i) The United State of Kathiawar hereby guarantees either the continuance in service of the permanent members of the public services of each of the Covenanting States on conditions which will be not less advantageous than those on which they were serving before the date on which the administration of that State is made over to the Rajpramukh or the payment of reasonable compensation.
(ii) The United State of Kathiawar further guarantees the continuance of pensions and leave salaries sanctioned by the competent authorities in any of the covenanting States to members of the public services of that State who have retired, or proceeded on leave preparatory to retirement, before the date referred to in paragraph (1) of this Article.
(iii) The provisions of paragraphs (1) and (2) of this Article shall apply also in relation to the public services of any other State in Kathiawar merging in the United State of Kathiawar and the provisions of paragraph (1) shall apply also in relation to any staff of the Regional Commissioner, Western India and Gujarat States which may be transferred to the service of the United State of Kathiawar.”
(3) During the regime of the erstwhile State of Saurashtra, the Saurashtra Covenanting State Servants (Superannuation Age) Rules, 1955 and the retirement age of the Government servant was fixed at 55 years under Rule 3 thereof which reads as under:
“3. Age of retirement.- Notwithstanding anything contained in any law, rule, circular, notification, order, Tharav or Hazur Hukum issued by a competent authority of a Covenanting State (hereinafter collectively referred to as the law of the Covenanting State) or in any order or decree of a Civil Court-
Government, retire from service on his completing 55 years of age;
(ii)A Government servant who has retired on completing 55 Ayers of age before the coming into force of these Rules shall be deemed to have been lawfully retired and shall have no claim against Government merely on the ground that under the conditions of service applicable to him under the law of the Covenanting State to which he belonged, he should have been continued in service even after completion of 55 years of age.”
In these rules, amongst other States, erstwhile State of Junagadh was also included as Covenanting State.
(4) The erstwhile State of Saurashtra was then merged with the bilingual State of Bombay and as per section 115(7) of the State Reorganization Act, 1956, service conditions of the employees of the State of Saurashtra were guaranteed. Section 115(7) of the State Reorganization Act, 1956 reads as under:
“115. Provisions relating to other services.-
(1)Every person who immediately before the appointed day is serving in connection with the affairs of the Union under the administrative control of the Lieutenant Governor or Chief Commissioner in any of the existing States of Ajmer, Bhopal, Coorg, Kutch and Vindhya Pradesh or is serving in connection with the affairs of any of the existing States of Mysore, Punjab,Patiala and East Punjab States Union and Saurashtra shall, as from that day, be deemed to have been allotted to serve in connection with the affairs of the successor State to that existing State.
(7) Nothing in this section shall be deemed to affect after the appointed day the operation of the provisions of Chapter I of Part XIV of the Constitution in relation to the determination of the conditions of service of persons serving in connection with the affairs of the Union or any State:
Provided that the conditions of service applicable immediately before the appointed day to the case of any person referred to in sub- section (2) shall not be varied to his disadvantage except with the previous approval of the Central Government.”
(5) The Bilingual State of Bombay was then bifurcated on 1.5.60 and under section 81(6) of the Bombay Reorganization Act, 1960, similar guarantee was continued for the employees of the erstwhile State of Saurashtra.
(6) Bombay Civil Services Rules, 1959 came into force whereunder as per Rule 161, retirement age of Class III employees was fixed at 58 years.
15. It appears that there was no ordinance or treaty between the merging State and the merged States especially the State of Saurashtra for continuation of the existing laws, rules and regulations or the Code of erstwhile State of Junagadh on its merger with the merged State. In absence of any agreement between the merging and merged States to continue with the laws, rules governing service conditions of the employees of merging States, on coming into force of the Saurashtra Covenanting State Servants (Superannuation Age) Rules, 1955, the Junagadh Account Code and rules of the erstwhile State for age of retirement stood automatically repealed and would no longer apply to the employees of the erstwhile State of Junagadh.
16. At this stage, judgment relied by Learned Advocates for the appellants need to be referred. In the case of Bholenath J. Thakar, there was ordinance based on agreement between the merging and merged States wherein merged States guaranteed continuation of service of permanent members of public service of each of the Covenanting State which would not be less advantageous and of the existing laws of the merging State until repealed. In the said decision, the appellant was appointed on 2nd August, 1936 in Vadhwan State and continued to serve Vadhwan State till the administration of the said State was made over to the Saurashtra Government on 16th March, 1948. The Ruler of the Wadhwan State appointed in 1946 a Committee to frame rules for the conditions of service and for pensions and other matters regarding the service. The Committee made its report on 22nd November, 1947 and on the recommendations of the Committee, the Ruler of the Wadhwan State promulgated, on the 3rd February 1948, Dhara (Act) No.29 of St. 2004 which came into force with effect from 1st January, 1948. Section 5 of said Dhara fixed the superannuation age for the State civil servants at 60 and the appellant thus become entitled to remain in service till he completed his age of 60 years.
The Rajpramukh took his oath of office on the 15th February 1948 and on the 1st March 1948 promulgated an ordinance being Ordinance No. 1 of 1948 continuing in force all laws, ordinances, Acts, rules, regulations etc. having the force of law in the Covenanting State until repealed or amended under the provisions of the ordinance. The ruler of the Wadhwan State made over the administration of the State to the Saurashtra Government on the 16th March 1948 and a proclamation was issued on the said date by the Saurashtra Government declaring that whatever rights, jurisdiction and authority were with the Thakore sahib (Ruler) with respect to the said State were then vested in the Saurashtra Government and the duties and obligations with regard to the Ruler's own State passed to the Saurashtra Government and the Saurashtra State would fulfil the same.
Under Article 16(1) of the Covenant the United States of Kathiawar had guaranteed either the continuance in service of the permanent members of the public services of each of the Covenanting States on conditions which would not be less advantageous than those on which they serving before the date on which the administration of the State was made over to the Raj Pramukh or the payment of reasonable compensation.
By an order dated the 29th June 1948 the Appellant was retired by the Saurashtra State on the ground that he had passed the age of superannuation which was taken at 55 years, on payment of three months' leave salary and a monthly pension of Rs. 40- 13-0. The Appellant accepted the amount of the leave salary, that is Rs. 716-4-0 and pension under protest and without prejudice to his claim for compensation on the ground that under the Wadhwan State Service Rules he was entitled to continue in service till the completion of 60 years of age. The above order was challenged by the appellant therein by filing the civil suit.
17. In the above facts situation, Hon'ble the Supreme Court held that the rights by virtue of Dhara 29/2004 were carried over and were in existence when the appellant was sought to be retired and the appellant therefore could have enforced such rights in the Court of law. Hon'ble Supreme Court has further observed that there was no dispute arising out of the Covenant and what the Appellant was doing was merely to enforce his right Under the existing laws which continued in force until they were repealed by appropriate legislation.
18. Thus, in the said case, there were different facts situation and, therefore, Hon'ble Supreme Court has held the appellant of the said case was entitled to continue in service till the age of 60 years. Such are not the facts in the present case. In the present case, neither there was agreement by covenanting State nor was there a promulgation of ordinance to continue the laws of merging State and, therefore, by virtue of Rule 3 of the Saurashtra Covenanting State Servants (Superannuation Age) Rules, 1955, all laws, rules of the covenanting State governing service condition stood automatically repealed on coming into force of the Saurashtra Rules, 1955. In my view, because of the said Rule, even guarantee of Rajpramukh would not survive. Therefore, reliance placed on the decision of the Hon'ble Supreme COurt in the case of Bholanath J. Thakar could not be of any help to the appellants.
19. In another case relied on by the learned advocates for the appellants in the case of Takhetray Shivdattray Mankad v. State of Gujarat, AIR 1970 SC 143, the appellant was retired from service before attaining the age of 55 years. The appellant therein was also an employee of the erstwhile State of Junagadh like the appellants in the present case. The Hon'ble Supreme Court held that the rule 3 of the Saurashtra Covenanting State Services (Superannuation Age) Rules, 1955 provided for giving of special reasons as directed by the Government, for retirement before 55 years and even if rule 3 provided for retirement before 55 years without special reasons, such would have been declared as invalid, therefore, the Hon'ble Supreme Court has held that since the condition of service of the appellant in that case was varied to his disadvantage by retiring him before the age of 55 years, previous sanction of the Central Government was required which was not obtained and, therefore, action of retiring the appellant of the said case was held to be invalid.
20. In the case on hand, by retiring the appellants at the age of 58 years, the condition of service was not varied to the disadvantage of the appellants. In fact, as per the guarantee given by Raj Pramukh of Saurashtra State, the appellants were required to retire at the age of 55 years which was the age provided in the rule 3 and such would not have been to the disadvantage of the appellants. However, they have been retired under the provisions of the BCSRs which provided for retirement age of 58 years, which was more advantageous to them. In such situation, not only there was due compliance of the guarantee given by Rajpramukh but there was also no breach of sec. 115(7) of the Reorganization Act, 1956 as no prior permission of Central Government was required in the facts of this case. Therefore, in my view, the correct interpretation of the Junagadh Code, Saurashtra Covenanting State Services (Superannuation Age) Rules, 1955, the States Reorganization Act, 1956 and the Bombay Reorganization Act, 1960 is that the appellants would ceased to be governed by the service rules of the erstwhile State of Junagadh namely Junagadh Accound Code on coming into force of the Saurashtra State Services (Superannuation Age) Rules, 1955 and the change of service condition of the appellants was not less advantageous to the appellants by subsequent rules providing for retirement age of 58 years.
Lastly, on the question of option, following observations made by Hon'ble Supreme Court in the case of N. Lakshmana Rao and others versus State of Karnataka and others, reported in 1976 (2) SCC 502= AIR 1975 SUPREME COURT 1646, need to be referred. In the said case, Hon'ble Supreme Court held as under :
“20. As a result of the exercise of option by the teachers of the local bodies they became Government servants. The term that the service conditions would not be varied to their disadvantage would mean that they would be like all other Government servants subject to Article 310 (1) of the Constitution. This could mean that under the law these teachers would be entitled to continue in service up to the age of superannuation. The exercise of option does not mean that there was a contract whereby a limitation was put on prescribing an age of superannuation. It has been held by this Court that prescribing an age of superannuation does not amount to an action under Article 311 of the Constitution. Article 309 confers legislative power to provide conditions of service.
The Legislature can regulate conditions of service by law which can impair conditions or terms of service.
21. This Court in Roshan Lal Tandon v. Union of India,[ (1968) 1 SCR 185 = (AIR1967 SC 1889)] said that there is no vested contractual right in regard to the terms of service. The legal position of a Government servant is one of status than of contract. The duties of status are fixed by law. The terms of service are governed by statute or statutory rules which may be unilaterally altered by the Government without the consent of the employee.
22. The form of option is contract. This exercise of option is itself the contract. The option is to be absorbed or not to be absorbed. The contractual term is that the teacher will be absorbed as a Government servant. The term in the agreement between the Government and the Local Body that the conditions of service will not be varied to the disadvantage of the teachers has been read by all teachers who exercised the option to be absorbed. The conditions of service referred to therein are the conditions of service of the State of Mysore.
23. In B. S. Vadera v. Union of India [(1968) 3 SCR 575 = (AIR 1969 SC l18)] this Court held that if an appropriate legislature has passed ) an Act under Article 309 the Rules framed under the proviso to Article 309 would have effect subject to that Act. In the absence of any Act of the appropriate legislature the Rules made by the President or such person as he may direct, are to have full effect.
24. There is legislative power under Entry 41, List II to legislate for State public services. There is no fetter on the legislative power to legislate with regard to service or with regard to any other matter mentioned in the Legislative List. In Gurdev Singh Sidhu v. State of Punjab [(1964) 7 SCR 587 = (AIR 1964 SC 1585)] this Court stated that there were two exceptions to the protection afforded by Article 311. One is where a permanent public servant is asked to retire on the ground that he has reached the age of superannuation which is reasonably fixed. The other is where a public servant is compulsorily retired under the Rules which prescribe the normal age of superannuation and provide reasonably long period of qualified service after which compulsory retirement could be valid. It is only when a rule is framed prescribing a proper age of superannuation and another rule is framed giving power to the State to retire permanent public servant compulsorily at the end of 10 years of his service that this Court has apprehended such cases to be not within the protection of Article 31l.
26. It, therefore, follows that teachers who exercised the form of option were subject to change in the conditions of service under Rules framed under Article 309. There is no constitutional limitation to reduce the age of retirement. A Government servant enjoys the status of a Government servant. He cannot be removed and his services cannot be terminated except in accordance with the provisions of the Constitution. Fixing an age of retirement does not amount to removal or termination.”
21. In view of the above, though learned advocates for the appellant state that the option was only in respect of pensionary benefits but considering the option for adopting new rules, such option could be said to have been consciously exercised by the appellants which would disentitle the appellants from claiming that they would still be governed by the rules of the erstwhile State of Junagah and they would be entitled to continue in service till the age of 60 years. However, irrespective of option exercised by the appellants, in view of the interpretation of Saurashtra Covenanting States Services (Superannuation Age) Rules, 1955, States Reorganization Act, 1956, Bombay Reorganization Act, 1960 with Bombay Civil Services Rules, since the appellants are not found entitled to be continued in service till age of 60 years, I am of the view that the courts below have not committed any error in holding that the appellants were not entitled to continue in service till age of 60 years. I find no substance in any of the substantial question of law raised by the appellants. There are no merits in these appeals. Same are, therefore, dismissed.
(C.L. Soni,J.) an vyas