PAIARA LALversusSTATE OF PUNJAB AND ANR.

A                                  PAIARALAL
                                          v.
                          STATE OF PUNJAB AND ANR.

                                 AUGUST 8, 1999

B       [SUJATA V. MANOHAR AND M. JAGANNADHA RAO, JJ.]

          Service Law :

          State Re-Organisation Act, 1956-Proviso to Section 115(7)-Condi-
C tions of Service--Applicability-PEPSU Regulations providing 60 years as the
  age of retirement for Police Constables in the State of PEPSU--State of
  PEPSU later on merged with Punjab State-Punjab State prescribing 58 years
  as age of reti~ement for Police-Constables-Police Constable employed with
  State of PEPSU allotted to Punjab State upon merge~o previous or general
D approval of the Central Government after merger to vary the age of superan-
  nuation-Age of retirement of allotted Constabie-Held, the proviso to Sec-
  tion 115(7) makes it clear that the service conditions of the allotted employees
  cannot be varied to their disadvantage by the State to which they are allotted,
  under re- organisation, after 1111/1956, except with the prev£ous approval of
E the Central Govemment---lt was not open to the Punjab State to retire allotted
  Constable on completion of 58 years.

        Appellant was appointed on 4.U.1949 as a Constable in the Police
  Department of the erstwhile State of PEPSU (Patiala and East Punjab
  States Union). The age of retirement under PEPSU Regulations in the
F State of PEPSU for Class-IV employees including Constables was 60 years.
  The State of PEPSU merged later on 1.11.1956 with the new State of.Punjab
  and the appellant was after 1.11.1956 allotted to the State of Punjab. The
  appellant remained a Class-IV Employee throughout in the State of Pun-
  jab. The age of retirement applicable to Constables in the State of Punjab
G was 58 years and the Superintendent of Police, Punjab rejecting the
  contention of the appellant that his service conditions were protected
  under Section 115 (7) uf the States Re- Organisation Act, 1956 and he
  should be allowed to continue till completion of 60 years, passed orders
  regarding his Superannuation on completion of 58 Years as per the Punjab
H Rules.
                                         386
                               PAIARA LAL v. STATE                           387

...         Appellant challenged the validity of the said order in a civil suit A
      which was decreed by the trial Court holding that in view of the proviso to
      S.115(7) of the Act, the appellant was entitled to continue in service upto
      60 years as per PEPSU Regulations. Appeal filed by State of Punjab
      against the order of the trial Court was dismissed by the first appellate
      Court. Against the order of the first appellate Court, respondent-State, B
      preferred Second Appeal in the High Court which was allowed by a Single
      Judge, without making any reference to the proviso to Section 115(7) of
      the States Re-Organisation Act, by following the Division Bench Judge·
      ment in T1ipat Singh v. State of Punjab, (CWP 8186of1994) dated 8.9.1994.
      Against the judgment of the Single Judge, the appellant has preferred the C
      present appeal.

            The appellant contended that the proviso to Section 115(7) of the Act
      was not given effect to; and that the distinction between persons who were
      before merger and after merger in Class IV till retirement, the category to
      which the appellant belonged, and persons who after merger were D
      promoted to Class III in the State of Punjab, was not noticed by the High
      Court.

             The respondent contended that ttie High Court has rightly applied
      to the appellant the age of retirement applicable to him at the time of his   E
      retirement in the State of Punjab; and alternatively, that even assuming
      the PEPSU Regulations were applicable to him, the appellant was not
      entitled to continue upto 60 years in PEPSU as he was a Class IV employee
      drawing more than Rs. 200/· per month at the time of his retirement.

            Allowing the appeal, the Court                                          F
            HELD: 1.1. The proviso to Section 115(7) of the States Re-Organisa-
      tion Act; .1956 makes it clear that the service conditions of the allotted
      employees cannot be varied to their disadvantage by the State to which
      they are allotted, upon re- organisation, after 1.11.1956, excepi with the G
      previous approval of the Central Government. (392-H; 393-A]

            1.2. The Memorandum of the Central Government dated 11.5.1957
      which was communicated to all the States gave general approval for
      variation of certain specific conditions of service. The said Memorandum
      does not refer to the age of superannuation as one of the conditions of H
    388                  SUPREME COURT REPORTS [1997] SUPP. 3 S.C.R.

A service for the variation of which general approval is given by the Central
    Government. Neither in the Courts below, nor before this Court, was any
    order of the Central Government issued in exercise of powers under the
    proviso to Section 115(7) of the States Re-Organisation Act, 1956 relied
    upon by the respondent to say that the State of Punjab while prescribing
B   58 years as the age of superannuation for 'Constables' had obtained
                                                                                  ...
    approval of the Central Government either generally or specifically. There
    is no dispute that the age of retirement is a condition of service and that
    the age of retirement in PEPSU for class IV employees including
    'Constables' was 60 years.

c         In as much as there is no previous or general approval after
    1.11.1956 to vary the age of superannuation from 60 years to 58 years, it
    was not open to the Superintendent of Police, Punjab to retire the appel·
    lant on completion of 58 years. The High Court erred in not noticing the
    authorities of this Court and statutory provisions and in applying the age
D   of superannuation applicable to Constables recruited in the State of
    Punjab. [393-H; 394-A-D]

          N. Raghvendra Rao v. Deputy Commissioner, South Kanara, Man-
    saiora, [1964] 7 SCR 549; N. Subba Rao v. Union of India, [1975] 3 SCC
£   862 and Mohd. Shujat Ali v. Union of India, [1975] 3 SCC 76, followed.

         Secretary to Government, Punjab v. Niranjan Singh, (SLP
    No.8047/1990 decided on 13.9.1990, relied on.

          State of Haryana v. Amar Nath Bansal, AIR (1997) SC 718, distin·
F
    guished.

          Tripat Singh v. State of Punjab Etc., (C.W.P. 8186 of 1994) dated
    8.9.1994, held inapplicable.

G         2. The contention of the respondent that even if the PEPSU Regula·
    tions applied, the respondent could not continue upto 60 years as he was
    drawing more than Rs.2QO/· p.m. at the time of retirement is rejected as
    this point was not raised either in the written statement in the suit or
    before any of the three Courts, nor was any regulation of PEPSU State
H   placed before thi~ Court to substantiate the said contention.
               PAIARALALv. STAIB [M. JAGANNADHA,J.]                    389

        CIVIL APPELLATE JURISDIC'DON : Civil Appeal No. 5382 of              A
1997.

     From the Judgment and Order dated 25.7.96 of the Punjab and
Haryana High Court in R.S.A. No. 611 of 1996.

     K.B. Bhandari, (R.K. Kapoor) for Anis Ahmed Khan for the                B
Appellant.

        R.D. Kewalramani for R.S. Sodhi for the Respondents.

        The Judgment of the Court was delivered by
                                                                             c
      M. JAGANNADHA RAO, J. 1. Special leave granted. We have heard
the counsel on both sides on the merits of the appeal.

       2. The appellant was appointed as a Constable in the Police
Department of the erstwhile State of PEPSU (Patiala and East Punjab          D
States Union) which merged later on 1.11.1956 with the new State of
Punjab. The Raj Pramukh of the State of PEPSU framed, under the
proviso to Article 309 of the Constitution of India, the PEPSU Services
Regulations. Volume 1 para 2.28 thereof defines 'inferior servant' as
'inferior Government servant' as included in the list in Appendix 1. The     E
said Appendix includes, among others, Police Constables. Notification
dated 20.7.1954 (F.D.1(2)Reg. 64) issued under the proviso to Article 309
by the Raj Pramukh says that the following Note shall be added under
Article 9.1 of PEPSU Services Regulations Volume 1 and the existing Note
shall be numbered as Note (1) :
                                                                             F
          "Note 2: the age for retirement of Class IV Government servants
          will be 60 years".

       As per document Ex. P3 (at points Ex.P3/1 and Ex.P3/2) filed in the
trial court, the 'Police Constable and 'Sipahis' were included in the list of G
inferior class IV employees. While so, the appellant who was born on
1.12.1930 and who was appointed on 4.11.1949 as Constable in PEPSU and
who after 1.11.1956 was allotted to the State of Punjab was sought to be
retired at the age of 58 years which was the age of retirement applicable
to Constables' in the State of Punjab. The appellant contended that having
been allotted from the State of PEPSU to the State of Punjab on 1.11.1956, H
      390                   SUPREME COURT REPORTS [1997) SUPP. 3 S.C.R.

· A his service conditions in the former State of PEPSU including his age of
      superannuation were protected under sub- clause (7) of the States Re-Or-
      ganisation Act. 1956 and he should be allowed to continue till he completed
      60 years even though, at the time of retirement, he was employed by the
      State of Punjab. This contention was not accepted and the Superintendent
 B    of Police, Punjab passed orders on 29 .11.1988 regarding his superannuation
      on completion of 58 years w.e.f. 30.11.1988 (AN), as per the Punjab Rules.

             3. The appellant challenged the validity of the said order in Civil Suit
      No. 596 filed on 16.11.1991. The trial court decreed the suit on 20.9.1994
      holding that in view of the proviso to s.115(7) of the States Re-Organisation
 C    Act, the appellant was entitled to continue in service upto 60 years as per
      PEPSU Regulations. The appeal by the State of Punjab was dismissed by
      the Additional District Judge, Patiala (Punjab) on 16.10.1995. However, the
      Second Appeal, RSA 611/1996 preferred by the State was allowed by the
      High Court on 25.7.1996 following the Division Bench judgment in Tripat
 D    Singh v. State of Punjab Etc., (CWP 8186 of 1994) dated 8.9.1994. In that
      case, it was held by the Division Bench that the age of superannuation
      applicable to the employees is the one applicable to them at the time of
      retirement in the State of Punjab. That was a case in which the employees
      were working in a higher post, a Class-III post on promotion from
 E    Class-IV. The Division Bench held that it was the age of retirement
      applicable to the post which a person was holding at the time of
      retirement that was relevant. Following the said judgment, the learned
      Single Judge allowed the Second Appeal holding that notwithstanding
      the fact that the plaintiff was not promoted to class III after allotment
      to Punjab, still the principle stated in the Division Bench judgment
 F    applied and that inasmuch as in Punjab, a Constable was to retire at 58
      years, the appellant could not claim any higher right based upon the
      regulations obtaining in the State of PEPSU. No reference was made by
       the learned Single Judge to the proviso to Section 115(7) of the States
       Re-Organisation Act, 1956 while taking this view, even though the trial
  G    court and the first appellate court had made reforence to the said
       provision. Some other Judgments of learned Single Judges of the Punjab
       and Haryana High Court decided with reference to Section 115(7) were
       not followed in view of the judgment of the Division Bench even though
       on the facts of the present case, the appellant had never been promoted
  H    to class III in the State of Punjab, after allotment to that State of Punjab.
                PAIARALALv. STATE [M.JAGANNADHA,J.)                          391

         4. In this appeal, learned counsel for the appellant has relied upon       A
  an unreported judgment of this Court in Secretary to Government, Punjab
  v. Niranjan Singh, (SLP No. 8047\1990) dated 13.9.1990. That was an
  appeal from the judgment of the Punjab & Haryana High Court in LPA
  No. 354 of 1990, wherein in respect of a Cobler (Mochi) recruited in
. PEPSU who was in class IV and who was allotted to the State of Punjab,            B
  a Division Bench of the High Court held that in view of the proviso to
  ~ection 115(7) ~f the States Re-Organisation Act, 1956, the employee was
  entitled to continue upto 60 years. This Court dismissed the SLP preferred
  by the State of Punjab by a reasoned order. Learned counsel for the
. appellant contended that the learned Single Judge erred in not giving effect      C
· to the proviso to Section 115(7) and in not noticing the distinction between
  persons who were before 1.11.1956 and after in class IV till retirement and
  who, after 1.11.1956 were promoted to Class III in the State of Punjab. The
 appellant belonged to the former category.

       5. On the other hand, learned counsel for the respondent-State               D
 contended that the learned Single Judge rightly applied to the appellant
 the age of retirement applicable to him at the time of his retirement in the
 State of Punjab. He also contended that even assuming that the PEPSU
 Regulations were applicable, a class IV employee who was drawing more
 than Rs. 200 p.m. at the time of his retirement was not entitled to continue       E
 upto 60 years in PEPSU.

        6. At the outset, we may say that the contention for the respondent
 that even if the PEPSU Regulations applied, the respondent could not
 continue upto 60 yeas as he was.drawing more than Rs.200 p.m. at the time          F
 of retirement is a point not.raised either in the written statement in the suit
 or before any of the three Courts, .nor was any regulation of PEPSU State
 placed before us to.substantiate the said contention. We, therefore, reject
 this additional contention raised by the respondent for the first time before
 us.
                                                                                    G
        7. Coming to the. main, point Section 115(7) in so far as it is relevant,
· reads as follows : .

             "115. Provisions relating to other services.
          (1) Every person who immediately before the appointed day is              H
    392                  SUPREME COURT REPORTS [1997] SUPP. 3S.C.R.

A          serving in connection with the affairs of the Union under the
           administrative control of the Lieutenant-Governor of Chief Com-
           missioner 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
B          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.

                (2) Every person who immediately before the appointed day is
            serving in connection with the affairs of an existing State Part of
C           whose territories is transferred to another State by the provisions
            of Part II shall, as from that day, provisionally continue to serve
            in connection with the affairs of the principal successor State to
            that existing State, unless he is required by general or special order
            of the Central Government to serve provisionally in connection
D           with the affairs of any other successor State.

               (3) xx         xx        xx        xx        xx        xx

               (4) xx         xx        xx        xx        xx        xx

E              (5) xx         xx        xx        xx        xx        xx

                (6) xx        xx         xx       xx        xx        xx

                (7) Nothing in this section shall be deemed to affect after the
            appointed day the operation of the provisions of Chapter I of Part
F           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
G
            sub-section (1) or sub-section (2) shall not be varied to his disad-
            vantage except with the previous approval of the Central Govern-
            ment."

          8. In our view, the proviso to Section 115(7) makes it clear that the
H service· conditions of the allotted employees cannot be varied to their
              PAIARALALv. STATE [M.JAGANNADHA,J.]                      393

disadvantage by the State to which they are allotted, upon re-organisation, A
af~er 1.11.1956, except with the previous approval of the Central Govern-
ment. Question is whether the State of Punjab is entitled to apply the age
of retirement for class IV employees in Punjab, namely 58 years, ignoring
the age of retirement of class IV employees, namely 60 years as obtaining
in PEPSU.
                                                                             B
       9. The point arising before us has been dealt with previously by three
Constitution Benches of this Court, which, unfortunately, were not placed
before the High Court. The first of these decisions is the one in N.
Raghvendra Rao v. Deputy Commissione1; South Kenara, Mansaiora, [1964)
7 SCR 549. In that case, the State to which the employee was allotted relied C
upon a letter of general approval issued by the Central Government dated
11.5.1957 (Memorandum No. S.O. SR Dl-l.APM-57) which was communi-
cated to all States on re-organisation. It was said in that letter that certain
conditions of service enumerated therein in respect of allotted employees
are not protected. This Court held that the word 'previous approval' in the D
proviso to Section 115(7), would include the 'general approval' granted by
the Central Government in regard to the variation of the conditions of
service of the allotted personnel. The said Memorandum of the Central
Government says that the Central Government is permitting the States to
whom the employees are allotted, to vary their conditions of service in
respect of 'travelling allowance' discipline, control, classification appeal, E
conduct, probation and departmental promotion. Tlie other conditions of
service as applicable to the employee in his parent State remained
protected. It was held in the facts of the case that certain Rules of 1959
made after 1.11.1956 by the State to which the employee was allotted,
modifying certain benefits of service and increments, were valid. The F
contention that 'previous approval' meant specific' previous approval and
not a general approval was rejected. The above decision was followed by
another Constitution Bench of this Court in N.Subba Rao v. Union of India,
[1975] 3 SCC 862 (See para 38 at p. 872-82). The matter came up again
before another Constitution Bench of this Court in Mohd. Shujat Ali v.
Union of India, [1975) 3 sec 76. It was held (see Para 16 to is, pp.96-100) G
that the view taken in N. Raghvendra 's case was to be followed.

      10. It will be noticed that the Memorandum of the Central Govern-
ment dated 11.5.1957 which was communicated to all the States gave
'general approval' for variation of certain specific conditions 0f service to H
    394                   SUPREME COURT REPORTS [1997] SUPP. 3 S.C.R.

A which we have referred above. The said Memorandum does not refer to
    the age of superannuation as one of the conditions of service for the
    variation of which general approval is given by the Central Government.
    Neither in the Courts below, nor before us, was any order of the Central
    Government issued in exercise of powers under the proviso to Section
B   115(7) of the States Re-Organisation Act, 1956 relied upon by the respon-
    dent to say that the State of Punjab while, prescribing 58 years as the age
    of superannuation for 'Constables' had obtained approval of the Central
    Government either generally or specifically. There is no dispute before us
    that the age of retirement is a condition of service and that the age of
    retirement in PEPSU for class IV employees including Constables' was 60
C   years. In as much as there is no previous or general approval after 1.11.1956
    to vary the age of superannuat:on from 60 years to 58 years, it was not open
    to the Superintendent of Police, Punjab to retire the appellant on comple-
    tion of 58 years. The High Court erred in law in not noticing the above
    authorities and statutory provisions and in applying the age of superannua-
D   tion applicable to Constables recruited in the State of Punjab. The un-
    reported Judgment of this Court in Secretaiy to Govt. Punjab v. Niranjan
    Singh above referred to is also in favour of the appellant and is consistent
    with the view taken in the above rulings of the Constitution Bench.


E          11. Learned counsel for the respondent relied upon a recent decision
    of this Court in State of Haiyana v. Amar Nath Bansal, (1997) SC 718. That
    case is clearly distinguishable. In that case, the respondent was recruited
    in the State of Jind on 12.7.1943 as a civilian clerk and the age of super-
    annuation in Jind was 62 years. Jind State merged with PEPSU before
    1.11.1956 by virtue of a covenant. The respondent was thereafter allotted
F   to the State of Punjab after 1.11.1956 and still later to the State of Haryana.
    He was employed as an Asstt. Treasury Officer in the State of Haryana
    when he was retired from service on 30.9.1987 as per the age of retirement
    in Haryana which was 58 years. In the appeal by the State, it was held by
    this Court that there was no declaration by PEPSU in 1948 recognising the
G   duties and obligations of the Jind State and hence the Jind regulations were
    not applicable, even in PEPSU. In fact, the Ordinance issued by the Raj
    Pramukh of PEPSU or 20.8.1948 had the effect of repealing all previous
    rules applicable in Jind State. In our view, the above case has no relevance
    because there was no statute protecting the service conditions of employees
H   of Jind State when it merged with PEPSU. Under the covenant. PEPSU
    had not undertaken to recognise the obligations of Jind and, therefore,
              PAIARALALv. STATE[M.JAGANNADHA,J.)                         395

PEPSU could issue the Ordinance varying the service conditions of the A
Jind employees without the need to get any approval from the Central
Government. The events relate to 1943 and not to 1.11.1956.

       12. for the aforesaid reasons, this appeal is allowed. The judgment
of the High Court is set aside and the judgment of the trial court as
affirmed by the first appellate Court is restored. The appeal is allowed with   B
costs.

A.KT.                                                       Appeal allowed.