The Accountant General, Bihar and Another v. N. Bakshi

Shah J. "8. A separate account shall be opened in 11terling in the case of each officer, and, if such officer is married, for his wife, and, if he has children, for ea.ch chili!. Th<'se accounts 11ha.IJ he credited reRpcctively with the cost of the piis~ageR to which the offioor, his wife and chililrrn &r<' i>nt.itlerl unrfor R.f'gnla.tion r. * * *"

"14. No person whosoever shall h&Vfl any claim on th" Genera.I Passage Fund beyond the provi11ion of the benefits, if any, conferrr:'d on him by these rcgulation11 and anv balance remaining at the crC'dit of any person after such pe!"lon bas ceaB<'d to be eligible for any such benefits shall lapse to the Fund."

Passage benefit providerl under Rule 12 was clearly part of the salary to be paid out of a fund called the General Pa.RSagc Fund which was formed out of the paslll\ge pay.

Several amendments wore made to these Rules from time to time, but we a.re concerned with the amendments made by Notifications No. F-178/ 11/1/24 dated October Ii, 1921i, and No. F-li-15/26 dated June 16, l!l'.:!6. Rule 12, as a.mended, read11 nR follows:- "12. In addition to the pay prescribed by these Rules, passages shall be· granted, subject to the conditions set out in Schedule IV, to the members of the service11 and holders of appointments enumerated in Appendix A to that Schedule.''

The Regulations under Sch. IV were, after the amedment, ca.lied Revision of Pay, Passage and Pension Regulations. Original regulations 3, 4 and 5 were omitted and regulations 6, 8, 11 and H were Th~ .4.ccoll'11'1">it Oeri1Tol, BihtJr amended. The effect of these amendments was that v. instead of allowing as part of salary, a paRsage N. Bokshi pay of Rs. 50/- and carrying over that amount to S\ah J. the credit of the officer concerne9 in the General Passage Fund, by cl. 6 of the Regulations it was directed that a separate "passage account" be open-ed for each officer and if he be married for hiR wife and children, if any. Subject to Regulation 8, the accounts were to be credited respectively with the number of passages to which the officer, his wife and children were entitled under the new re-gulations. Within the limits of these credits, the officer was entitled to draw for himself, his wife and his children respectively the cost of a journey between a port in India and a port outside Asia. Whereas by the Rules as originally framed in 1924 an additional salary of Rs. 50/- per mensem was awurded to each offiPer as passage pay which was to be credited to the General Passage Fund out of which passage bene-fits to Officers were provided, according to the scheme of the Rules as amended in 1926, a separate passage account was to be maintained for. each officer for the maximum benefits prescribed by Rule 3 and the disbursement in respect thereof were to be made of the General Revenue of the State. By the amendment made in the Rules in 1926, the passage benefit. ceased to be a part of the salary and became an allowance or privilege.

The respondent obtained benefit of these passages in 1930, 1950-51 anrl 1952-53 for himself and the members of his family. In 1957 he was not granted the passage lienefi.t for his wife and his children, and he has filed this petition under Art. 226 for an order that the Union of India and the Accountant General do carry out their Statutory obligations.

512 SUPREME OOURT REPORTS [1962) SUPP.

IHI The conditions or eervioe to which membe!'ll 7li Acco1111,.., of the Indian Civil Service were entiled under the Om11ai •. Biliar Government of India Aot, 1919, were guaranteed

N. Bakslri to them by s.247(1) of the Government of India SMA J. Act, 1935. That section provided:

"247 (I). 1The conditions of service of all persons appointed to a civil 11ervice or civil post by the Secretary of State shall :- (a) as respects pay, leave and pension and general rights in regard to medical at-tendance, be such as may be prescribed by rules to be made by the Secretary or State; (b) as respeot.B other matters with res-pect to which exprell8 provision is not made by this chapter, be such as may be prescribed by rules to be made by the Secretary of State in 10 far as he thinks fit to make such rules, and, in so far and so long as provision is not made by such rules, by ruleB to be made, as respeote pel'Bons serving in con-nection with the affail'B of the Federation, by the Governor-General or some pel'Bon or persons suthorised by the Governor-General to make rulea.Jor the purpose and, as respects persons eening in oonnection with the affairs of a Province, by the Governor of the Province or some person or persons authorised by the Governor to make rules for the purpose:

Provided that no rule made under this au b-section shall have effect so as to give to any person appointed to a civil service or civil post by the Secretary of State Iese favour· able terms ae respeot.e remuneration or pension than were given to him by the rules in force on the date on which he waa first appointed to his service or was appointed to hiE rest." The proviso makes it abundantly olear that the power to make rules cannot be exercised by the Secretary of State so as to give to any officer of 1911 the class specified terms less favourable as respects Tiu A.cc.un.tt1nt remuneration or pension than were given to him by Gen6T•l, Bihttr the rules in force on the date on which he was Y, N.Bahhi first appointed to his service or to his post. This guarantee was confirmed by s. IO, sub·s. (2) of the S"4h J. Indian Independence Act, 1947, wherein it was provided, in so far as it is material, that "Every person who-

( a) havining been appointed by the Secretary of State or Secretary of State in Council, to a civil service of the Crown in India continues on and after the appointed day to 8erve under the Government of either of the new Dominions or of any province or part thereof; or

(b) * * * * shall be entitled to receive from the Govern-· ments of the Dominions and Provinces or parts which he is from time to time serving or, as the case may be * * • the same conditions of service as respects remune-ration, leave and pension, and the same rights as respects disciplinary matters or as the case may be, as respects the tenure of his office, or rights as similar thereto as changed circum-stances may permit, as -that person was entitled to immediately before the appointed day."

The expression "remuneration" was defined in s. 19(4) of that Act as incl usive of leaye :!Jay, allowances and the cost of any privileges or facilities provided iu kind. By Art. 314 of the Constitution, persons who were appointed by the Secretary of State or Secret,ary of State in Council to a civil service of the Crown in India and continued on and after the comme:O:ce-ment of the Constitution to serve under the Gov-ernment of India or of a State were to receive from the Government of India and the Goverument of the State which they were from ti.mo to time 1961 serving, the same conditions of service as respects Tiu Accountant remuneration leave and pension which they wc·rc OeNro/1 BiMr entitled to immediately before such oommmenoe-

v. ment. The Parliament of India enacted the All N, BaJ;shi

India. Services Act, 61 of 1951, to regulate the Shah J, recruitment, and the conditions of service of per·

sons appointed, to tho all India Services common to the Union and tho States, and bv s. 3 of that Act the Central ·Government was authorised to make rules for the reguhtion of recruitmPnt, and the conditions of service of persons appointed, to the All India Service. By s. 4 it was provided that all rules in force immediately before the com-menccment of the Act and applicable to an All-India Service were to continue to b9 in force and were t-0 be deemed to be rules made under the Act. On September 8, 1954, the Central Government ·framed rules called the Indian Administrative Ser-vices Recruiting Rules and hy Rule 2(d) the mem, hors of the Indian Civil Service who continued to serve on and after the commencement of the Con-stitution were to be regarded for the purpose of the rules as members of the Indian Administrative Seryice. On February 15, J9fi7, the All India Ser-vices (Overseas Pay, P888age and Leave Salary) Rules, 1957, were promulgated in exercise of the powers conferred by sub-s ( 1) of s.3 of the All India Services Act, 1951, and thereby passage benefits in favour of the memtiers of the Indian Administra-tive Service, who were originally mt1mbers of the Indian Civ,J Service were cancelled.

The only question which falls to be deter-mined in this a ppcal is whether cl. 3 of the All India Services (Overseas Pay, Passage and Lea1•c Salary) Rules, 1957, was competently enacted, hav· ing regard to tho guarantee contained in Art. 314 of the Constitution as to tb.e conditions of service as respects remunoration, leave and Pf'n· sion of the persons appointed by tht Secretary of Seate or Secretary of State for India in Council to I a civil sorvice of the Crown in India. Since the All In:lia Services Act was enacted there 1961 is manifestly no existing service known as the Tiu Accouirt.mt Iadian Civil Service. The members of the Indian '.Jenera/, Bihar Civil Service who were appointed by the Secretary v. N. Bakshi of State for India became members of the Indian J. Administrative Service, but their rights in the Shah matter of conditions of service as respects remu· m:ration, leave and pension stood guaranteed by Art. 314.

In dealing with the status of the members of the former Indian Civil Service since the Indian Inde· pendenoe Act, 1947, this Court in 8tate of Madras v. K. M. Rajagop£1lan (1) held :

thiit (1) the conferral of independence on India brought about an automatic and legal termination of service on the date of Inde· pendence;

(2) all persons previously holding civil posts in India are deemed to have been appointed and hence to continue in service, except those governed by general or special orders arrangements affecting their respecti vo cases;

(3) the guarantee about prior conditions of service and the previous statutory safe guards relating to disciplinary action conti-nues to apply to those who are thus deemed to continue in st>rvice but not to others;

and

(4) those previously holding civil posts in India had the right, and were in fact given the option, of declining to "continue in service" under the new regime and in the event of their exercising that option they ceased to serve on and from the date of the passing of the constitution .

510 ~UPRRME O)URT REPORTs (1962] SUPP.

l.:11dcr the Statulnry RuleH framed in 1!1:!4 Tht Accounlant passage benefits granted to persons employed in Get.tr al, BJtar the Indian Civil Service, their wives am! children

v. wne expressly made part of the sl\lary or rcmu-N. Bt1kJlii

lleration. Cnder the amendment of 19:W, these pas· Slu;h J. sage benefits atqnired the eharacter of allowance,

privilege or facility of office. By the Act ,,f 1935 (s. 2-li) priviJ.,gcs, iriter al·i<J as to remuneration under the Governrmmt of Indi.'I Act of IHl!J wero expressly guarnt<'cd in favour of the members of I the Indiau Ci,·il s,,rvire. By the Indian Ind .. pen-dence Act 1947, a similar guurantllc in respcet. of conditions of service as respects remuneration was also conferred and by s. l!l ( 4) of that Act n·munc-ration was dt'fincd as indusive of pay, allowam·cs or privileges or facilitil's paynblc in kind. By .<\rt. ill4 of the Constitutio11, the conditions of scr\"ice, prior to llw C1•nstitution as ri:spt•cts rr.m1m1,,·ation, leave and p(•nHion of . the members of the .Indian Civil Service were protected.

Thero is 11 o dr·fiuit.ion of 'remuneration' in the C1Jnstitution, but that is not a gromul f1Jr hold· iug that the expression ii; used in any limited ~ensP as merely l!lllary. The PXprcssion 'remuneration', in it" ordinary conn<>tation means "reward, recom-pense, pay, wages or salary for service rendcrd" In R. v. Po8trrwster General(') Blackhurn, ,J., obser · ved, "I think th" word 'rcmnnreatfon' ...... means a quid pm quo. If a ma.n gives his services; what.over consideration he gets for giving his services scL·ms to lie a rcmuncrat.iun for them. ConH1.•quc11tly, I think if a person wai; iu receipt. of a paym .. nt., or in receipt of a percentage, or any kin1\ of paym<•nt which would not be actual money payment, the amount. he would receive annually in rcsppct of thi• would he remuneration." Th11 expression 'r<·mune1 .. •tio11° appears to have been used in the Constitution in this wide con-notation. As already observed, the right to passage

(I) (187611 Q. B. D. 6SB.

was originally marle a part of the salary, but under 1961 the Rules framed in 1926, the provision for setting The Accountant apart a fixer! sum of money as salary out of the General, Bihar General PaRsagc Funrl was alt<>rcd anrl passages Y, N. Bakshi' wc·re crNlited to the account of members of Civil Services and debited as and when they were availed of out of the general Revenue of the State. This alte-ration was made merely for administrative conveni-ence and did not alter the character of the benefit.

Under the Rules of 1924, the provision for passage was part of the remuneration and it continued to he such even after tlw amendment of the Rules in 1926.

The right to passage benefits was statu-tory, and was under the Indian Independence Act in the nature of an allowance, or in any event privilege or facility paid in kind. It was expressly made part of the remuneration earned bv the members of the Indian Civil Service. ·The conditionK of service as to remune-mtion having been guaranteed, the right to this benefit remained guaranteed to those members of the Indian Civil Serviee who were entitled to it before the Constitution. This guarantee which was continut•d in force even after the commencement of the Constitutiou was for th" first timv by Rules made in June 19.)7 by rotr'ospective amendment of the St.atutory Rules from July 12, 1956 sought to be cancelled. But the Central Government in exercise of Rule making p0wcr was incompetent to destroy or cancel ii C<>nst.itutiowil guarantee.

The High Court was, thcr 3fore, in our judg· ment, right in holding that rule 3 of the All India Services (Overseas Pay, Passage and Leavl! Salary) Rnles, l95i, was ultm vi'.res.

In that view of the case thi:< appeal fails al'

is dismissed with costs.

Appeal dismissed.