Holding

The Railway Servants (Pass) Rules, 1986, which confer privileges based on the classification and pay scale of railway servants, are not violative of Article 14 and are not arbitrary; the petitioners' claim of discrimination is rejected.

Summary

The petitioners, Assistant Audit Officers (Group B Gazetted) employed by the Comptroller and Auditor General of India in the Railway Audit Department, claimed that they were denied railway passes, quarters and other facilities available to Group B railway officers, alleging discrimination in violation of Article 14 of the Constitution. The Railway Board had earlier allowed such facilities only to those officers who obtained Group B gazetted status between 1 March 1984 and 31 December 1985, excluding later appointees. The Central Administrative Tribunal rejected the petitioners' grievance and the petitioners appealed via Special Leave Petitions. The Supreme Court examined whether the Railway Servants (Pass) Rules, 1986, which tie benefits to the classification of railway servants based on pay scale, were arbitrary or violative of Article 14. The Court held that the Rules, made under the President's authority pursuant to Article 309, validly differentiate benefits according to the class of railway servants and do not constitute unlawful discrimination. Consequently, the petitioners' claim was dismissed and the Tribunal's order upheld.

Issues considered

Whether the exclusion of Assistant Audit Officers (Group B Gazetted) appointed after 31 December 1985 from the benefits under the Railway Servants (Pass) Rules, 1986 violates Article 14 of the Constitution.
Whether the Railway Servants (Pass) Rules, 1986 are arbitrary or unconstitutional.
Whether the differential treatment amounts to unlawful discrimination against the petitioners.
Whether the order of the Central Administrative Tribunal can be set aside.

Subjects

Article 14discriminationRailway Servants (Pass) Rules, 1986Group B classificationrailway passesprivileges and facilitiesSpecial Leave PetitionCentral Administrative Tribunalconstitutional lawpay scale

Judgment

1
A CENTRAL RAILWAY AUDIT STAFF
ASSOCIATION AND OTHERS ETC. ETC.
v ..
DIRECTOR OF AUDIT, CENTRAL RAILWAY AND OTHERS ETC.
ETC.
B
APRIL 20, 1993

[P.B. SA WANT ANDN. VENKATACHALA,JJ.]

Railway Servants (pass) Rules, 1986:

c Facilities and benefits ofpasses/P.T.O, Quarters etc. allowed to Railway
officers Group B category-Whether Assistant Audit Officers, Group B Gaze11ed,
under Comptroller and Auditor General of lndia, working in Railway Audit
Department also entitled-Whether exclusion ofAssistant Audit Officers Group
B gaze11ed, in p8)' scale Rs. 2000-3200, from Group B category of Railway
Officers violative of Article 14 of Constitution- Whether allowing the benefits,
D only to Assistam Audit Officers given Group B Gaze11ed status, between March 1,
1984 and December 31, 1985, is discriminatory.

Petitioners we~e in service, under Comptroller and Auditor General of
India (C & AG for 'short), as Assistant Audit Officers- (A.A.O. for short)
Group B Gazetted, in pay scale Rs. 2000-3200, and were working in Railway
E Audit Department, after December 31, 1985. In 1960, Railway Board spelled
out its policy, stating that scale of passes/P.T .Os. and the rules governing their
issue to staff of the Railway Audit Department will be the same as applicable
to Railway servants. However some distinctioD.s were made as regards Indian
Audit and Accounts Service Officers (IA & AS OOicers) of Railway Audit
Department, on recommendatio~ of the C & AG., Central Government
F sanctioned higher scale of pay effective from March 1, 1984, for 80 per cent
of Section officers in the Railway Audit Department to be designated as
A.A.Os (Group B-Gazetted). Their pay scale was revised to Rs. 2000-3260
from January 1, 1986, on recomm'~ndation ofFotirth Pay Commission. They'·,.
continued to have the privileges and facilities of Group B Officers of Indian
Railway. In 1987, consequent to the revision of pay scales of Railway posts, on
·G recommendation by the F~urth Pay Commission, the posts under Indian
Railways were re-classified. Posts in scale of Rs. 2000-3200 were classified as
Group 'C' instead of Group B. In 1989, the Railway Board, in view of
restructuring of cadre of Indian Audit and Accounts Department, creation of
posts of A.A.Os in scale of Rs. 2000-3200, classified as Group B- Gazetted
H status, issued instructions that Audit Officers in Scale of Rs. 2000-3200 may

296
CENTRAL RAILWAY AUDITSTAFFv.DIRECTOR 297
STATF.OF_

be given privileges and facilities viz Passes/P.T.Os. Quarters etc,. as admis- A
sible to Railway employees in identical scale. Consequently they were not
entitled to the privileges and facilities admissible to gazetted Railway Offic-
ers. classified in Group B in scale of Rs. 2000-3500. However, Assistant Audit
Officers given Gazetted status between March 1, 1984, and December 31,
1985 were allowed to continue to enjoy the facilities of Passes/P.T.Os quarters
etc. Petitioners fded application before the Central Administrative Tribunal, B
Principal Bench, claiming that Assistant Audit Officers, given Gazetted
status Group B after December 31, 1985, were also entitled to the privileges
and facilities admissible to Railway Officers, classified 'Group B'. The
application was rejected by the Tribunal and the Petitions filed Special Leave
petition seeking redressal.
c
This Court dismissed the special leave petition and,

HELD: Th~t conferring special privileges and facilities, to Assistant
Audit Officers, which arc not prO\·ided to Railway servantsJ~ identical pay
scale would lead to unjust result<;. It would result in oo~ferring special D
privileges and facilities, by the Indian Railways to persons belonging to
foreign department ofComtrollcr and Auditor General oflndia, while their
own servants, who hold equivalent posts on the same scale of pay will. be
denied such privileges and facilities. The Railway Board's letter dated April
14, 1960 also shows that the staff of the Railway Audit Department is treated
more generously than the officers of the same Audit Department in matters E
of issuance of Passcs/P.T.Os. The Assistant Audit Officers, who had been
given status of gazetted Group B, by the comptroller and Audit General,
cannot be treated, by the Indian Railways on par, with Railway servants,
classified group B. In matters relating to conferring privileges and giving of
.facilities. The Railway Servant (Pass) Rules, 1986, made in Consonance with
F
classification of Railway servants, rightly made by the President of India,
consequent upon the Railway services (Revised Pay) Rules, 1986, issued
under the proviso to Article 309 of the Constitution, confer facilities and
privileges according to class to which Railway servants belong, they cannot be
treated as Rules violative of Article 14 of the Constitution. Nor can they be
regarded as arbitrary. (303-C, 304-G) G

That even if discrimination was brought about hy the Railways in regard
to officers of the same category, that Is, Assistant Audit Officers, such
discriminatory treatment accorded to a small number cannot be avaUed of by
the Petitioners, to obtain she benefit of such wrongly conferred privileges and
facilities. However, this Court did not consider it appropriate to pronounce H

.:
298 SUPREME COURT REPORTS [I 993] 3 S.C.R.

A upon the correctness of the conferment of such privileges and facilities to the
Assistant Audit Officers, given status of Qa~etted Group B between M~rch 1,
1984 and December 31, 1985, when they had not been impleaded as party-·
respondents. (305-A-C)

CIVIL APPELLATE-JURISDICTION: Special Leave Petition (Civil) No ..
B 10784 of 1992 .etc. etc.

From the judgment and Order dated 13.3.1992 of the Central Administrativi~
Tribunal, New Delhi in O.A. No. 262of1991.

c M.K. Ramamoorthy, H.S. GururajaRao, R. Venkataramani, S.M. Garg, T.L.
Roy, T. V. Ratnam, E.X. Joseph, D .N. Paul and M.M. Kash yap forthe Petitioners.

D.N. Dwivedi, Addi. Solicitor General, V.K. Verma and Ms. Ameeka Singh
for the Respondents.

D
The Judgment of the Court was delivered by

VEN KATA CHA LA, J. In these _Special Leave Petitions, we are concerned
with the grievance of the employees_ ~ejonging to the office of the Comptroller and
Auditor General of India, working in the Railway Audit Department. These
E employees who wer~ Section Officers prior to 1st March, 1984, got promotion
from that day .as Assistant Audit Officers on a pay-scale of Rs. 650-30-740-35-
800-EB-40-1040 and were designated as Officers 'Grqup-B Gazetted'. On the
recommendations of the Fourth Pay Commissi.on; the said pay-scale of Assistant
Audit Officers was revised to Rs. 2,000:3,200 from Ist January, 1986. The
grievance of the Assistant Audit Officers-Group B Gazetted, is that the Indian
Railways shoutd. not have denied to them the benefitS, such as, issue of Railway
Travel Passes/P. T. Os., allotm~nt of Railway Quarters, giving of accommodation
in Rest Houses/Retiring Rooms, takiag of family members while on tour, etc. -
admissible to Group-B Gazetted Officers of the Railways.

The PrinciparRench of the Central Administrative Tribunal, to be referred
G
to herein-after as "the Tribunal". which ex:ruruned the said grievance, rejected it
by order dated 13th March, 1992. The grievance, so rejected by the Tribunal, is
again ventilated in these Special Leave Petitions, seeking redressal therefor.

Since the facts which have given rise to the grievance, furnish the back-
H ground, for examining its merit, it would be advantageous to advert to them at the
ffiNlRALRAil...WAY AUDITSTAFFv.DIRECTOR[VENKATACHALA,J:] 299

out set. A

The Railway Board in its letter No. E (G) 58PS5-20/1 dated 14th April, 1960,
addressed to the General Managers of the Indian Railways, spelled out its policy
in the matter of issuance of Railway Passes/P.T.Os. to the staff of the Railway
Audit Department including the Indian Audit & Accounts Service Officers

- (IA&AS Officers) of that Department, thus:- B

i. The scale of Passes/P.T.Os. and the rules governing their issue
will be the same as applicable to Railway servants from time to time.

ii. Passes/P.T.Os. to IA & AS Officers, if are to be issued when C
they are procyeding on leave exceeding four months, they should
have completed one year's service in the Railway Audit Depart-
ment and the Comptroller and Auditor General of India oµght to
assure by declaring that the Officers concerned will return to
Railway Audit Department on the expiry of such Officers' leave.
D
iii. IA 8\: AS Officers working in the Railway Audit Department will .
9ot be entitled to grant of certificates which would entitle them to
obtain travel concessions on Railways outside India.

iv. Passes/P.T.Os. will be issued by the Chief Auditors irrespective E•
of home or foreign line.

It was mentioned iri the above letter that the same was issued with the
sanction of the President of India. The policy contained in the above letter was
followed by the Indian Railways for several years.
F
In the meantime, the Director of Audit, Central Railway, by his notice dated
19th December, 1983, made it known that the Central Government had, on the
recommendations of the Comptroller and Auditor General of India, sanctioned
higher scale of pay of Rs. 650-30-740-35-800-EB-40-1040 to 80 per cent of
Section Officers on the staff of the Railway AuditDepartmentandthatscaleofpay G
would become effective from 1st March, 1984. It was indicated in that notice that
the Section Officers on the staff of the Railway Audit Department getting such
' higher scale of pay, will have their designation as Assistant Audit Officers (Group-
_.,. B Gazetted). Similar notice, it is said, was issued by the concerned Director of
1 Audit of every other Zone of the Indian Railways. The said scale of the pay of the
( Assistant Audit Officers (GroQp-B Gazetted) came to be revised as Rs. 2,000- H
(

~<
\
300 SUPREME COURT REPORTS (1993) 3S.C.R.

A 3,200 from 1st January, 1986 as per the recommendations of the Fourth Pay
Commission. Even then, the Assistant Audit Officers who were designated as
'Group-B Gazetted' continued to have the privileges and facilities of 'Group-B
Officers' of the Indian Railways.

However, by its letter No. E(W) 87PS51/3 dated 27th July, 1989 addressed
B to all General Managers, Indian Railways, the Railway Board referring to the
creation of posts of Assistant Audit Officers in the Railway Audit Department and
the incumbents in those posts having been given Group-B Gazetted status, stated
thus:-
-
c "As a result of restructuring of the cadre of Indian Audit. and
Accounts Department, a number of posts of Assistant Audit Offic-
ers have been created in the scale of Rs. 2000-3200 and classified
~ as Group 'B' posts carrying a gazetted status. The eligibility of these
officers to various facilities as admissible to the Gazetted Officers
on Railways in scale of Rs. 2000-3500 has been considered but the
D same has not been agreed to. It has been decided that the Audit
Officers in scale of Rs. 2000-3200maybe given the privileges and·
facilities viz. Passes/PTOs. allotment of Railway Quarters and Rest ·1
Houses/retiring Rooms and taking family with them while on tour
etc. as admissible to the Railway Employees in identical scale of
pay viz. Rs. 2000-3200."
E
The said letter shows that it had been issued with the concurrence of the Finance
Directorate of the Ministry of Railways. But. the contents of the said letter were

F
modified by a telegram, which read thus:-

"No. E(W) 87PS5 l/3. In partial modification ofMinistry ofRailway's
-
letter of even number dated 27.7.89 Ministry of Railway have
decided that the Assistant Audit Officers given the Gazetted status
between l st March, 1984 and 31.12.1985 shall continue to enjoy the ·
facility of passes, PTOs. Quarters etc. enjoyed by them as a result
of conferring of the gazetted status on them during the period
G mentioned above (As personal to them.)"

The said telegram makes it obvious that those Assistant Audit Officers in the /

Railway Audit Department who got Gazetted status between 1st March, 1984 and
31st December, 1985, shall alone be entitled to the facilities of Passes/P.T.Os.,
H Quarters etc, and not those who got such Gazetted status after 31st December,
CENTRAL RAILWAY AUDITSTAFFv. DIRECTOR [VENKATACHALA,J.] 301

1985. A

Then, there is the letter No. PCIV/86/ hnp./46 dated 30th October, 1987
issued by the Railway Board to the General Managers of the Indian Railways,
which shows that the president of India had, consequent upon the revision of pay-
scales of the Central Government employees recommended by the Fourth Pay
Commission, reclassified all the posts under the Indian Railways, thus:- B

"Classification Description of Posts
of osts
Group A All posts in scale Rs. 2200-4000 and above.
c
,.
I
GroupB Posts in scale Rs. 2375-3500 applicable to
accounts Offi~ers only and other posts of
Officers in scale Rs. 2000-3500 .
(all Deptts.)
Groupe, All posts in scales Rs. 825-1200 and above
including posts of Post-graduate Teach· D
ers (Selection Grade)/Head-masters-
Middle School (Selection Grade ) in scale
Rs. 2000-3500, Supervisors in scale Rs.
2375-3500 and excluding those mentioned
forGroups_'A' and 'B'.
GroupD All posts in scales Rs. 750-940, Rs. 775- E
1025 and Rs. 800-1150."

The said classification of posts in the Indian Railways is done, as becomes
clear from the said letter, consequent upon the introduction of Railway Services
(Revised Pay) Rules, 1986. In this context, rt would be necessary to advert to the F
Railway Servants (Pass) Rules, 1986 made by the President of India under the
proviso to Article 309 of the Constitution regulating the issuance of passes anct'
Privileged Ticket Orders to Railway servants. Meaning of 'railway servant' for the
purposes of the said Rules is given in clause (h) of Rule 2 thereof, thus:-

"railway servant' means a person who is a member of a service or G
who holds a post under the administrative control ofRailway Board
and includes a person who holds a post in the Railway Board.
Persons lent frOII\ a service or post which is not under the adminis-
trative control of the Railway Board to a service or post which is
under such administrative control do not come within the scope of
this definition. This tenn excludes casual labour for whom special H

)
302 SUPREME COURT REPORTS [1993) 3 S.C.R.

A orders have been framed."

Schedule II of the said Rules contains the classification (categorisation) of
Railway servants into Group-A, Group-B, Group-C and Group-D and refers to
certain privileges admissible to them. That Schedule, which provides for issue of
passes on privilege account to Railway servants puts Group-A Group-B Railway
B servants in one category. Group-C Railway servants are put in altogether a
different category for the purpose of issue of passes to them.

From the said facts, it becomes clear that the Assistant Audit Officers in the
Railway Audit Department, who hold the posts on the pay-scale ·of Rs. 2,000-
c 3,200, although designated as Group-B Officers, are not treated on par with
Railway servants of the Indian Railways in the category of Group-B Officers, to
wit, the Railway servants holding the posts of Assistant Accounts Officers and
other Officers on the higher pay Scale of Rs 2,000-3,500. Therefore, the obvious
reason fordenial of the privileges conferred upon Group-B Railway Officers under
the Railway Servants (Pass) Rules, 1986, to Assistant Audit Officers of the
D Railway Audit Department, was the latter holding posts of lower pay-scale of Rs.
2,000- 3,200.

It was contended by the learned counsel for the petitioners that the Assistant .,
Audit Officers working in the Railway Audit Department could not have been
treated differently from Group-B Officers of the Indian Railways in the matter of
E
issue of privilege Passes/P.T.Os. to them when the latter No. E. (G) 58PS5-20/l
dated 14th April, 1960 issued by the Railway Board with the sanction of the
President, clearly laid down the policy that scale of Passes/P.T.Os. and the Rules
governing their issue will be the same as applicable to Railway servants from time
to time. It was also contended by them that the Railway Servants (Pass) Rules,
F 1986 issued by the President of India, since exclude the Assistant Audit Officers
from 'B' category Officers, they would be violative of Article 14 of the Constitu-
tion. Lastly, it was contended by them that the decision of the Indian Railways that
the Assistant Audit Officers of the Railway Audit Department, who were given the
Gazetted status between 1st March, 1984 and 3 lst December, 1985, alone shall \

continue to enjoy the facilities of Passes/P.T.Os., Quarters etc. has since resulted
.G in denial of such facilities to the Assistant Audit Officers who were given the
Gazetted status after 31st December, 1985, the same (decision) is violative of
Article 14 of the Constitution. We are unable to find merit in any of the said
contentions urged on behalf of the Assistant Audit Officers in support of their
H grievance, for the reasons which we shall presently state.

/_
CENTRAL RAILWAY AUDITSTAFFv. DIRECfOR [VENKATACHALA, J.] 303

The Assistant Audit Officers although working in the Railway Audit A
Department, are the Officers who are appointed by the Comptroller and Auditor
General of India and work under his control and supervision. No doubt, the
Railway Board, as seen from its letter dated 14th April, 1960 adverted to earlier,
had decided to give to the staff and Officers working in the Railway Audit
Department the facilities admissible to Railway servants of comparable status. It
is not for us to go into the question whether it was obligatory for the Railways to B
confer such facilities on the staff and Officers of the Railway Audit Department,
who in reality belong to the Department of Comptroller and Auditor General of
India, inasmuch as that question is not required to be decided by us. When the said
letter dated 14th April, 1960, containing the Railway Board's policy of issuance
of Passes/P.T.Os. is seen, i~ shows that the staff of the Railway Audit Department
is treated more generously than the Officers of the same Audit Department in the
c
matter of issuance of Passes/P.T.Os. to them (Officers), in that, the issuance of
passes to the latter category is made subject to certain restrictions. No doubt, when
certain Section Officers were promoted as Assistant Audit Officers and conferred
the status of 'Group-B Gazetted' by the Comptroller and Auditor General oflndia,
such Officers were treated notwith-standing their lower pay-scale, on par with 'B' D
Group Officers in the Indian Railways as regards privileges/facilities obtainable
by them from the Railways. But, when the scale of pay of the Assistant Audit
Officers of the Railway Audit Department was revised on the recommendations
of the Fourth pay Commission, the scale of pay of the Assistant Audit Officers,
•,
who had been designated as Group 'B' &ficers, by the Comptroller and Auditor
General of India, fell short Qf the scale of pay of the Railway servants of tbe E
Railway Department classified as Group 'B' Officers by the President of India. It
canriot be overlooked that it is the President of India, who made the Railway
Services (Revised Pay) Rules, 1986, on the basis of the pay-revision of the Central
Government Servants, as recommended by the Fourth Pay Commission and it is
again the orderof the President oflndia, which classified the Railway servants into
Group-A, Group-B, Group-C, and Group-D according to the minimum and F
maximum scale of pay of the posts held by them. Indeed, it was not disputed on
behalf of the petitioners that the Assistant Audit Officers of the Railway Audit
Department who are on the pay-scale of Rs. 2,000-3,200 are treated on par with
the Railway servants (Officers) who are on the pay-scale of Rs. 2,000-3,200 in
matters of giving the facilities or conferring of privileges. What has happened is G
that"the Railway Servants (Pass) Rules, 1986, when are made, certain extra
privileges relating to issuance of Passes/P.T.Os. are conferred on Railway
servants, that is, Officers in Group 'A' and Group 'B' However, Group 'B'
Railway servants, accorqing to classification made by the president of India, on
revision of their pay-scales are those whose pay-scales ·are Rs.2,000-3,500. What
is contended for on behalf of the Assistant Audit Officers, is that the fact that their H
304 SUPREME COURT REPORTS [1993] 3 S.C.R.

A scale of pay is lower then Rs. 2,000-3,500 as applicable to 'B' Group Gazetted
Officers of the Railways should be ignored and the status that is conferred upon
them by the Comptroller and Auditor General of India as 'Group B Gazetted' alone
should form the basis to give them facilities or confer privileges on par with 'B'
Group Gazetted Railway servants.

B J?e submission made on behalf of the Railways, was to the contrary.
According to the submission, the fact that the Assistant Audit Officers in the
Railway Audit Department, on the pay-scale ofRs. 2,000-3,200, are designated by
the Comptroller and Auditor General of India as 'Group -B Gazetted' is not
sufficient to equate them with Group-B Officers of the Indian Railways who hold
c higher posts with scaleofpay of Rs. 2,000-3,500. If the Railways give the facilities
and privileges to the Assistant Audit officers, who are not Railway servants,
treating them on par with Railway servants of Group 'B' they could find no valid
reason to deny such facilities and privileges to the Railway servants holding posts
on the pay-scale of Rs. 2,000-3,200. If that has to be done, the Indian Railways
would be required to extend similar facilities and privileges to all Railway servants
D who hold posts in the Indian Railways on the scale of pay of Rs. 2,000-3,200. It
means extending the .benefits to t!!.ousands of Railway servants involving heavy
financial burden on the Indian Railways. We find that the contentions raised on
behalf of the Assistant Audit Officers, are unacceptable in that, if accepted, they
. would lead to unjust results of the Indian Railways conferring special privileges
and facilities upon persons belonging to foreign Department of Comptroller and
E Auditor General of India, while their own servants who hold equivalent posts on
the same scale of pay will be denied such privileges and facilities. Therefore. there
is substance in the submissions made on behalf of the Indian Railways that the
grievance sought to be made out-on b_ehalf of the Assistant Audit Officers lacks
merit and calls to be rejected. We, accordingly, reject the contention advanced on
behalf of the Assistant Audit Officers that they. should be treated by the Indian
F
Railways on par with Railway servants classified in Group 'B '"in matters relating
to the conferring of privileges and giving of facilitie~. Again, when the Railway
Servants (Pass) Rules, 1986, made in consonance with the classification of
Railway servants, rightly made by the President of Indian consequent upon tbe
Railway services (Revised Pay) Rules, 1986 issued under the proviso to Article
G 309 of the Constitution, confer facilities or privile~es according to the class to
which Railway servants belong, they cannot be treated as Rules which are
violative of Article 14 of the Constitution. Nor can they be regarded as arbitrary.
H.ence. the contentions raised on behalf of the Assistant Audit Officers on tbe
unsustainability oftbe Railway Servants (Pass) Rules, 1986 based on Article 14
H of the Constitution, warrant rejection as those lack in merit.
CENTRAL RAILWAY AUDITS 1AFFi'. DIRECTOR[VENKATACHALA.J.) 305

- Coming to the last contention, viz, that the privileges given to and facilities
conferred on the Assistant Audit Officers. who had been given the status of
'Group-B Gazetted' by the comptroller and Auditor General of India, between I st
A

. March, 1984 and 3 lst December, 1985. are discriminatory, all that we would wish
to say is that even if such discrimination is brought about by the Railways in regard
to the officers of the same category, that is. Assistant Audit Officers, such
discriminatory treatment accorded to a small number cannot be availed of by the 8
petitioners to obtain the ben€;fitof such wrongly conferred privileges and facilities.
However, we do not consider it appropriate to pronounce upon the correctness of
the conferment of such privileges and facilities on a small number of Assistant
Audit Officers in these petitions. when they are not impleaded by the petitioners
as party-respondents, in these petitions. Hence. we reject the last contention, as
well.
c

We, th_er.efore, find no good reason to disagree with the orderofthe Tribunal
impugned.in these Special Leave Petitions.

In the result, we dismiss these Special Leave Petitions. However, in the facts D
and circumstances of the cases we make no order as to costs.

ISG. SLPs dismissed.