S.R. BHAGWAT AND ORS.versusSTATE OF MYSORE

                       S.R. BHAGWAT AND ORS.                                      A
                                      v.
                           STATE OF MYSORE

                          SEPTEMBER 12, 1995

  [S.P. BHARUCHA, FAIZAN UDDIN AND S.B. MA.TMUDAR, JJ.]                           B

      Constitution of India Scheme of :

      Doctline of separation of powers-Legislative powe1~Exercise of-A
binding judicial decision between paities-Whether could be made ineffective       C
by enacting a legislation.

      Se1vice Law :

      Kamataka State Civil Se1vices (Regulation of Promotion, Pay and
Pension) Act, 1973-Section 11(2}-Validity of-Oveniding effect-Sub-sec-            D
tion (2) of Section 11 t1ying to ovenule binding judicial decision against
State--State empowered to review such judgments and orders and pass fresh
orders-Provision held ultra vires, unconstitutional and void.

       Sections 4(2), (3) & (8}-Validity of-Promotions of allottee:,~Bi11ding
directions issued by High Cozat against State-Cannot be nullified by              E
provisions of section 4-Sub-sectio11s (2), (3) (8) of Section 4, held inopera-
tive.

       The petitioners filed a writ petition challenging sub-sections (2), (3),
(4), (5), (6) & (8) of Section 4 and 11(2) of the Karnataka State Civil
Services (Regulation of Promotion, Pay and Pension) Act, 1973, in so far
                                                                                  F
as they conflicted with the order of the High Court, which had become
final between the parties. Petitioner Nos. 1 to 5 were civil servants of the
erstwhile State of Hyderabad and Bombay when their services stood
allotted to the new State of Mysore u/s 115 of the State Reorganisation
Act, 1956, w.e.f. 1.11.56. In pursuance of the direction of the Central           G
Government, the State Government prepared provisional lnter State
Seniority List and directed the appointing authorities of the new State of
Mysore to make provisional promotions on the basis of the provisional
Seniority Lists subject to the condition that promotion should be
revised in accordance with the ranking in the Final Seniority List to be          H
                                      545
    546                    SUPREME COURT REPORTS [1995] SUPP. 3 S.C.R.

A effective from 1.11.1956 as decided by the Government of India in exercise
    of powers u/s 115(5) of the Reorganization Act.

         The petitioners claimed that they were senior in the final seniority
  lists to many others, their juniors had got promoted in the meantime on
  the basis of higher ranking in the provisional seniority list which was
B
  earlier operative till it got superseded by the final seniority list. Their claim
  for being granted deemed dates of promotions with all consequential
  benefits not having been accepted by the State of Mysore, the petitioners
  filed writ petitions before the High Court which were allowed by the
  Division Bench while holding that the case of each of these petitioners be
c considered for promotion to the post next above the cadre of the post he
  was holding on 1.11.1956 as on the date on which only one of his juniors
  according to the final inter state Seniority List was for the first time so
  promoted and that if he was found fit and promoted he be given all the
  benefits consequential thereon including consideration for promotion to
D higher cadres and financial benefits. Pursuant to these directions, the
  respondent State considered the cases of all the petitioners and they had
  been given such deemed dates of promotions. As cons~quential monetary
  benefits on the grant of deemed promotion were not made available, the
  petitioners, filed contempt petitions in the High Court. During the penden-
E cy of these proceedings, the respondent State issued the Mysore State Civil
  Services (Regulation of Promotion, Pay and Pension) Ordinance 1 of 1973
  which ultimately culminated into the impugned Act. By the impugned
  provisions, the actual financial benefits directed to be made available to .
  the petitioners pursuant to the orders of the Division Bench of the High
  Court which had become final were sought to be taken away. The
F
  petitioners filed this writ petition for getting a declaration that the im-
  pugned provisions in so far as they tried to confiscate the financial benefits
  made available to them by the writs of mandamus issued by the High Court
  were null and void as they amounted to legislative over-ruling of binding
  judicial decisions and sought to deprive them of their fundamental rights
G guaranteed under the Constitution.

          The respondent submitted that consequential financial benefits
    directed by the High Court did not cover monetary benefits flowing from
    deemed promotions and all that the Division Bench had directed the State
H   was to consider the case of the petitioners for deemed promotion on the
                         S.R. BHAGWAT v. STATE                             547

basis of th~ final seniority list and that had already been doAe.                 A
      Allowing the writ petition, this Court

       HELD : 1. A binding judicial pronouncement between the parties
cannot be made ineffective with the aid of any legislative power by enacting
a provision which in substance over- rules such judgment and is not in the        B
realm of a legislative enactment which displaces the basis or foundation
of the judgment and uniformly applies to a class of person concerned with
the entire subject sought to be covered by such an enactment having
retrospective effect.

     In Re Cauvery Water Disputes Tribunal, (1993) Supp. 1 SCC 96 (II)
                                                                                  c
and G.C. Kanungo v. State of Orissa, JT (1995) 4 SC 589, relied on.

       2.1. Section 11 sub-section (2) of the Karnataka State Civil Services
(Regulation of promotion, pay and Pension) Act, 1973 is clearly ultra vires the
powers of the State Legislature as it encroaches upon the judicial field and      D
tries to over -rule the judicial decision binding between the parties. [554-E]

      2.2. In the present case the High Court had not struck down any
legislation which was sought to be re-enacted after removing any defect
retrospectively by the impugned provisions. This is a case where on inter-        E
pretation of existing law, the High Court had given certain benefits to the
petitioners. That order of mandamus was sought to be nullified by the
enactment of the impugned provisions in a new statute. This would be
clearly impermissible legislative exercise. (556-G-H]

       2.3. The petitioners had attacked the impugned provisions only to          F
 the extent they seek to deprive consequential financial benefits to them on
 the basis of deemed promotion given to them by the State in compliance
with the decision of the Division Bench. The respondent, State of Kar-
 nataka, which was a party to the decision of the Division Bench of the High
Court against it had tried to get out of the binding effect of the decision       G
 by resorting to its legislative power. The judgments, decrees and orders of
any court or the competent authority which had become final against the
State were sought to be done away with by enacting the impugned
provisions of sub-section (2) of Section 11. Such an attempt cannot be said
to be a permissible legislative exercise. Section 11(2), therefore, must be
half to be an attempt on the part of the State Legislature to legislatively       H
    548                   SUPREME COURT REPORTS [1995) SUPP. 3 S.C.R.

A   over-rule binding decisions of competent courts against the State. If any
    decision was rendered against the State of Karnataka which was pending
    ill :appeal and had not become final it could rely upon the relevant
    provisions of the Act which were given retrospective effect by sub-sec~ion
    (2) of Section 1 of the Act for whatever such reliance was worth. But when
    such a decision had become final as in the present case when the High
B   Court clearly directed respondent-State to give to the concerned
    petitioners deemed dates of promotions if they were otherwise found fit
    and in that eventuality to give all benefits consequential thereon including
    financial benefits, the State could not invoke its legislative power to
    displace such a judgment. Once this decision had become final and the
C   State Karnataka had not thought it fit to challenge it before this Court
    presumably because in identical other matters this Court had upheld other
    decisions of the Karnataka High Court taking the same view, it passes
    one's comprehension how the legislative power can be pressed into service
    to undo the binding effects of such mandamus. Not only sub-sectiOn (2)
D   of Section 11 seeks to by pass and over-ride the binding effect of the
    judgments but also seeks to empower the State to review such judgmen~
    and orders and pass fresh orders in accordance with provisions of the
    impugned Act. The respondent-State in the present case by enacting sub-
    section (2) of Section 11 of the impugned Act had sought to nullify or
    abrogate the binding decision of the High Court and had encroached upon
E   the judicial power entrusted to the various authorities functioning under
    the relevant statutes and the Constitution. Such an exercise of legislative
    power cannot be countenanced. [563-C-H]

        2.4. The impugned portions of Section 4 sub-section (2), (3) and (8)
  conflict with the binding direction issued by the Division Bench of the High
F Court against the respondent State and in favour of the petitioners. Once
  respondent-State had suffered the mandamus to give consequential finan-
  cial benefits to the allottees like the petitioners on the basis of the deemed
  promotions such binding direction about payment of consequential
  monetary benefits could not be nullified by the impugned provisions of Sec-
G tion 4. Therefore, the impugned portions of sub- sections (2), (3) and (8) of
  Section 4 will have to be read down in the light of orders of the court which
  have become final against the respond_ent-State and in so far as these
  provisions are inconsistent with these final orders containing such direc-
  tions of judicial authorities and competent courts, these impugned
  provisio~ of section 4 have to give way and to the extent of such inconsisten-
H
               S.R. BHAGWAT v. STATE [S.B. MAJMUDAR, J.]               549

cy must be treated to be inoperative and ineffective. Accordingly the A
aforesaid provisions are read down by observing that the statutory
provisions contained in sub- sections (2) (3) and (8) of Section 4 providing
that such persons who have been given deemed promotions shall not be
entitled to any arrears of the period prior to the date of their actual promo-
tion, shall not apply in cases where directions to the contrary of competent
courts against the respondent-State have become final. [564-H, 565-A-D]        B
        CIVIL ORIGINAL JURISDICTION : Writ Petition (C) No. 1501 of
1973.

        Under Article 32 of the Constitution of India.
                                                                              c
        AK. Panda and R.P. Wadhwani for the Petitioners.

        K.M. Reddy, M. Veerappa and K.H. Nobin Singh for the Respon-
dent.

        The Judgment of the Court was delivered by:                           D

       S.B. MAJMUDAR, J. William Macpeace Thakare in his lectures on
"English Humorists of 18th Century" spoke of Jonathan Swift working in
the household of Sir William Temple in the following terms : "His servility
was so boisterous that it looked like independence". As will be highlighted   E
in this judgment the servility of judgment-debtor, State of Mysore, the
precursor of the State of Karnataka was equally boisterous when it tried
to cast off its judgment debtor's role by resorting to legislative inde-
pendence, which as will be demonstrated, has remained a legally futile
attempt.
                                                                              F
       This is a petition under Article 32 of the Constitution of India. The
petitioners have brought in challenge the provisions of the Mysore Or-
dinance 1 of 1973, namely, The Mysore State Civil Services (Regulation of
Promotion, Pay and Pension) Ordinance No. 1 of 1973. By an amendment
to the petition they have also brought in challenge the provisions of the
Karnataka State Civil Services (Regulation of Promotion, Pay and Pension) G
Act1 1973 (hereinafter referred to as 'the impugned Act') which repl,aced
the State Ordinance at the stage of arguments learned counsel for the
petitioner concentrated his attack on the provisions of Sub- sections (2),
(3), (4), (5) (6) and (8) of Section 4 as well as Section 11 Sub-section (2)
of the Act in so far as they conflicted with the order of the High Court, H
    550                   SUPREME COURT REPORTS [1995] SUPP. 3 S.C.R.

A   which had become final between the parties. It is not necessary to refer
    hereinafter to the provisions of the erstwhile Ordinance which has been
    replaced by the Act, the provisions of which are brought on the anvil of
    scrutiny in this petition.

    Background Facts
B
           In order to highlight the grievance of the petitioners against the
    impugned provisions of the Act it is necessary to note at the outset the
    facts leading to this petition. Petitioners Nos. 1 to 5 were civil servants of
    the erstwhile State of Hyderabad and Bombay. Their services stood allotted
C   to the new State of Mysore under Section 115 of the States Reorganisation
    Act, 1956 (hereinafter referred to as the 'Reorganisation Act'). The new
    State of Mysore was formed with effect from 1.11.1956 under the provisions
    of the Reorganisation Act, enacted by the Parliament in exercise of its
    powers under Articles 3 and 4 of the Constitution of India. Section 115 of
D   the Reorganisation act provided for allotment of civil servants of the
    erstwhile State territories of which were transferred to the successor State
    by the provisions of Part II of the Act and accordingly the petitioners'
    services stood statutorily allotted to the new State of Mysore. In this context
    the Parliament conferred the power of integration of services on the
    Central Government under Section 115(5) of Reorganisation Act. Accord-
E   ingly integration of services took effect from 1.11.1956.

           After the reorganisation of the States the central Government for
    purposes of effecting integration of services laid down the principles relat-
    ing to equation of posts and the preparation of seniority lists. The Central
F   Government also directed the State Government to decide provisionally
    the equation of posts and also to fix seniority and to call for representations
    from the aggrieved officials, to send the same for .final decision by the
    Government of India. 11! pursuance of the directions of the Central
    Government, the State Government took its own time to prepare
    provisional Inter-Sate Seniority Lists and to call for objections. The State
G   Go~ernment also directed the appointing authorities of the new State of
    Mysore to make provisional promotions on the basis of the provisional
    inter-State Seniority Lists subject to the clear condition that promotion
    should be revised in accordance with the ranking in the Final Seniority
    Lists to be effective from 1.11.1956 as decided by the Government of India
H   in exercise of its power's under Section 115(5) of the Reorganisation Act.
                S.R. BHAGWAT v. STATE [S.B. MAJMUDAR, J.)                    551

    Sub-section (7) of Section 115 of the Reorganisation Act laid down that, A
    '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 (1) or sub-section
                                                                                 B
    (2) shall not be varied to his disadvantage except with the previous ap-
    proval of the Central 'Government.

           On account of aforesaid integration of services of employees of
    States which got reorganised as aforesaid, till the inter-se seniority of the C
    concerned allotted employees of such State was finally determined by the
    Central Government as required by Sub- section (5) of Section 115 of
    Reorganisation Act, the reorganised States like the State of Mysore were
    permitted to act on the basis of provisional seniority list of such employees
    and to effect promotions on that basis so that the administration of the D
    reorganised States might not suffer. But that was subject to the rider that
    the said provisional list was subject to alterations when final list was
    prepared and once that happened the concerned State Government had to
    give effect to the final list. The said principle was laid down by this Court
    in the case of G.S. Ramaswamy Etc. Etc. v. The Inspector General of Police,
    Mysore State, Bangalore, AIR 1966 SC 175 at page 180 as under:                E

            "The next point that has been urged is that in any case till final


-           integration of service was made, the State Governnient was not
            entitled to take into account the provisional list of sub-inspectors
            and could only proceed to give promotions and to make transfers
            region-wise according to the eligibility lists of former States from
                                                                                    F

            which the territories came to the new State and if that was done
            the petitioners being senior in their region could not be reverted.
            ......... We can see nothing in law which prevents the state Govern-
            ment from proceeding according to the provisional list after such       G
            list was prepared. We are of opinion that the view taken by the
            Mysore High Court in the earlier writ petitions after the framing
            of the provision~l seniority list is correct and the State Government
            would be entitled to act on that list subject of course to this that
            if the provisional list is in any way altered when the final list is
            prepared, the State Government would give effect to the final list."    H
    552                   SUPREME COURT REPORTS (1995) SUPP. 3 S.C.R.

A          Petitioners Nos. 1. 2 and 4 had joined service in the former State of
    Bombay and were on 31)0.1956 in the category of Deputy Conservator of
    Forests. Petitioner No.3 was also a Deputy Conservator of Forests in the
    former Hyderabad State. In the year 1957 the State Government mac:le
    provisional equation. The posts of Senior Conservator of Forests and
    Assistant Conservator of Forests were equated with the post of Depl~~i
B
    Conservator of Forests coming from Hyderabad and Bombay. This was
    objected to by the petitioners and others. The State Government again
    published a list in 1960 with slight modification. However, the Central
    Advisory Committee to whom the representations were forwarded as per
    the provisions of Sub-section (5) of Section 115 of the Reorganisation Act,
c   accepted the petitioners' contentions. As a result in category III only the
    officials, namely, Deputy Conservator of Forests of Hyderabad and Bom-
    bay and Senior Assistant Conservator of forests from Mysore were in-
    cluded. The Government of India accepted the said equation and
    communicated it to the State Government on 7.11.1962.
D
           Thereafter several writ petitions were presented before the Mysore
    High Court being Writ Petition No. 2186 of 1963 and others. They were
    disposed of by the High Court. The main judgment was rendered in
    Shankariah v. Union of India, [1965) 2 Mysore Law Journal 40. The
    correctness of this decision was challenged before this Court. But the
E   appeals were dismissed. Even thereafter in accordance with the directions
    of the Central advisory Committee the Union Government again con-
    sidered the matter and fresh notifications were issued in may 1969. These



F
    notifications were on the same line as the earlier notifications. A fresh
    batch of writ petitions as filed before the High Court of Mysore which
    dismissed them by order dated 21.9.1971. Special Leave 1Petitions against
                                                              I
                                                                                    -
    this decision were also dismissed by this Court on 22.14.1972. Thus final
    adjudication was made regarding the claim of petitioners and others
    similarly situated for. equation and seniority.

          In the background of the aforesaid settled legal pos1t10n the
G petitioners claimed that though they were senior in the final seniority lists
    to many others, their juniors had got promoted in the meantime on the
    basis of higher ranking in the provisional seniority list which was earlier
    operative till it got superseded by the final seniority list as aforesaid. As
    their claim for being granted deemed dates of promotions with all conse-
H   quential benefits was not accepted by the State of Mysore, the petitioners
             S.R. BHAGWAT v. STA.TE [S.B. MATMUDAR, J.]                 553

filed writ petitions before the High Court of Karnataka being Writ Petitions   A
Nos. 2598 of 1970 and others. All these five writ petitions filed by the
petitioners came to be allowed by a Division Bench of the High Court of
Mysore at Bangalore by an order dated 21.9.1971. The State of Mysore was
the first respondent in those petitions and which is the main respondent in
the present writ petition. While allowing these writ petitions the Division
                                                                               B
Bench of the High Court granted relief to the petitioners in the following
terms:

        "We, therefore, make a common order in all these writ petitions
        that the case of each of these petitioners be considered for promo-
        tion to the post next above the cadre of the post he was holding C
        on 1.11.1956 as on the date on which any one of his juniors
        according to the final inter State Seniority List was for the first
        time so promoted and that if he is found fit and promoted he be
        given all the benefits consequential thereon including considera-
        tion for promotion to higher cadres and financial benefits. Time D
        three months."

       It is not in dispute between the parties that pursuant to the aforesaid
direction issued by the Division Bench of the High Court the respondent-
State has considered the cases of all the petitioners for being granted
deemed dates of promotions and they have been given such deemed dates E
of promotions. The aforesaid decision of the Division Bench has become
final between the parties. As consequential monetary benefit on the grant
of deemed promotions to the petitioners as directed by the aforesaid
decision were not made available to the petitioners they filed contempt
petitions in the High Court. These contempt petitions.were got adjourned
from time to time before the High Court by the respondent-State. In the F
meantime the respondent-State resorted to its legislative powers and issued
the impugned Ordinance which ultimately culminated into the impugned
Act.· By the impugned provision of the Ordinance and the Act the actual
financial benefits directed to be made available to the petitioners pursuant
to lhe orders of the Division Bench of the High Court which had become G
final are sought to be taken away as can be seen from the scrutiny of the
Act. lt is under these circumstances that the petitioners filed this petition
under article 32 for getting a declaration that the impugned provisions in
so far as they tried to confiscate the financial benefits made available to
them by the writs of mandamus issued by the High Court are null and void
as they amount to legislative over-ruling of binding .iudicial decisions and H
    554                  SUPREME COURT REPORTS [1995) SUPP. 3 S.C.R.

A seek to deprive them of their fundamental rights guaranteed under the
    Constitution.

    Rival contentions

           Learned counsel for the petitioners in support of his submission has
B   relied upon a number of decisions of this Court with a view to submitting
    that the impugned provisions clearly seek to nullify final binding decisions
    of the High Court against the State and in favour of the petitioners. It is
    an admitted position that common decision of the Division Bench of the
    High Court, has not been challenged higher up by the respondent State.
    Learned senior counsel for the respondent Shri Madhava Reddy on the
c   other hand fairly submitted that he could not support provisions which
    attempted to bypass the High Court's directions. His principal submission,
    however, was that consequential financial benefits directed by the High.
    Court did not cover monetary benefits flowing from deemed promotions.
    he also in passing submitted that the foundation of the High Court judg-
D   ment was displaced by the impugned Act but ultimately did not pursue the
    point any further. Hence we need not dilate on that additional aspect any
    further.

    Conclusion and Reasons for the Same

E         Having given our anxious consideration to rival contentions we have
    reached the conclusion that the impugned provision of the Act, namely,
    Section 11 Sub-section (2) is clearly ultra vires the powers of the State
    Legislature as it encroaches upon the judicial field and tries to over-rule
    the judicial decision binding between the parties and consequently the
    relevant sub-sections of Section 4 which are also in challenge will have to
F   be read down as indicated hereinafter in this Judgment. Before we advert
    to the relevant provisions of the impugned Karnataka Act it will be ap-
    propriate to keep in view the settled legal position governing the present
    controversy.

G          It is now well settled by a catena of decisions of this Court that a
    binding judicial pronouncement between the parties cannot be made inef-
    fective with the aid of any legislative power by enacting a provision which
    in substance over-rules such judgment and is not in the realm of a legisla-
    tive enactment which displaces the basis of foundation of the judgment and
    uniformly applies to a class of persons concerned with the entire subject
H   sought to be covered by such an enactment having retrospective effect. We
                           U.O.L v.AK.PATNAIK                              455

        It would thus be clear that an officer though performs official quasi     A
 judicial functions, his conduct in the discharge of the. quasi judicial act or
 omission relates to the activity in the course of the discharge of his duties
 as a servaiit of the Government and bears reasonable relation or nexus with
 the naturer.md conduct of the service and when it casts reflection upon his
 reputation, integrity or devotion to duty as a public servant, that would be     B.
 squarely referable to the conduct of the public servant amenable to dis-
 ciplinary proceeding. When it is a misconduct, the competent authority is
 equally entitled to take a decision whether an officer has impeccable
 integrity and absolute devotion to duty for further continuation in service.
 The competent authority would be free to consider the material, particular-
 ly the latest one, and form a bona fide decision in the public interest to       C
 compulsorily retire an officer from service .

        . Since the competent authoriiies at different .levels had considered the
  material and ultimately had decided to compulsorily retire the respondent
  from service, it cannot be said that it is an arbitrary d~cision. It is true that
  pending the proceedings the respondent has already retired from service D
  o·n ·attaining the age of superannuation, but that would not provide a
  ground to dispose of this matter without giving any finding on the action
  taken by the competent authority. Otherwise, in all cases it would cause
  grave damage to public justice. The employee would get away with it due
, to pending proceedings. Therefore, it needs to be considered and decision E
  rendered thereon whether the action taken by the Government or the
  competent authority is valid in law. In that perspective, mere retirement of
  the officer by efflux of tlme pending proceedings would not be a ground
  to close the matter.

      · The appeal is accordingly allowed and the order of the Tribunal is        F
 set aside and that of the appellant is upheld. But in the circumstances
 without costs.

 R.P.                                                         Appeal allowed. ·
    556                  SUPREME COURT REPORTS (1995) SUPP. 3 S.C.R.

A           the State Legislature is used by enacting impugned 1991 Amend-
            ment Act to nullify or abrogate the awards of the Special Arbitra-
            tion Tribunals by arrogating to itself, a judicial power. [See Re:
            Cauve1)' Water Disputes T!ibunal [1991) Supp. 2 SCR 497. From
            this, it follows that the State Legislature by enacting the 1991
            Amendment Act has encroached upon the judicial power
B
            entrusted to judicial authority resulting in infringement of a basic
            feature of the Constitution - the Rule of Law. Thus, when the 1991
            Amendment Act nullifies the awards of the Special Arbitration
            Tribunals, made in exercise of the judicial power conferred upon
            them under the 1984 Amendment Act, by encroaching upon the
c           judicial power of the State, we have no option but to declare it as
            unconstitutional having regard to the well settled and undisputed
            legal position that a legislature has no legislative power to render
            ineffective the earlier judicial decisions by making a law which
            simply declares the earlier judicial decisions as invalid and not
            binding, for such powers, if exercises, would not be legislative
D
            power exercised by it, but judicial power exercised by it encroach-
            ing upon the judicial power of the State vested in ·a judicial
            Tribunal as the Special Arbitration Tribunals under 1984 Amend-
            ment Act. Moreover, where the arbitral awards sought to be
            nullified under the 1991 Amendment Act are those made by
E           Special Arbitration Tribunals constituted by the State itself under
            1984 Amendment Act to decide arbitral disputes to which State
            was a party, it cannot be permitted to undo such arbitral awards
            which have gone against it, by having recourse to its legislative
            power for grant of such permission as could result in allowing the
            State, if nothing else, abuse of its power of legislation."
F
         In view of the aforesaid settled legal position let us see how far the
    impugned provisions of the Act bear scrutiny.

          We may note at the very outset that in the present case the High
G Court had to struck down any legislation which was sought to be re-enacted
    after removing any defet~ retrospectively by the impugned provisions. This
    is a case where on interpretation of existing law, the High Court had given
    certain benefits to the petitioners. That order of mandamus was sought to
    be nullified by the enactment of the impugned provisions in a new statute.
H   This in our view would be clearly impermissible legislative exercise.
                          STATE v. S.GUPTA                           457

and observations made by t.he High Court in the impugned order and          A
purely based on the merits of the case. Shri P.P. Rao, learned senior
counsel for the appellant, has very fairly agreed for this suggestion.

      In view of the above very fair stand taken by both the counsel, we
reiterate that the courts below are free to dispose of all the pending or
connected matters between the parties on their merits without being         B
influenced by any of the findings and observations made by the High Court
in the impugned order.

     The appeal is disposed of accordingly.

T.NA.                                                Appeal disposed of.    C




                                                   --
              '
    558                    SUPREME COURT REPORTS [1995) SUPP. 3 S.C.R.

A             posts or offices only on the ground of their eligibility to promotions,
              resulting. in the continuance of even unsuitable civil servants in
              promotional posts or offices to the detriment of public interest;

                 And whereas it is necessary and expedient to provide against
              the said consequences;
B
                  And whereas the Central Government has given previous ap-
              proval under the proviso to sub-section (7) of section 115 of the
              States Reorganisation Act, 1956 (Central Act 37 of 1956) com-
              municated in letter No. 5/5/73 SR (S) dated 22nd February 1973
c             of the Government of India, Cabinet Secretariat, Department of
              personnel and Administrative Reforms;"

  A mere look at the third and fourth paragraphs of this preamble shows the
  legislative intent to bypass the final directions contained in the Division
D Bench judgment of the High Court or any other same final Judgment in
  favour of concerned parties and they may be given retrospective promo-
  tions and all monetary benefits pursuant thereto. Keeping in view the
  aforesaid key to the passing of the Act, we will turn now to the relevant
  provisions of the Act. As per sub-section (2) of Section 1 of the Act,
  Section 1 as well as Sections 2 to 10 and 12 shall be deemed to have into
E force on the first day of November 1956. It is to be noted that 1st November
  1956, was the date on which the States reorganisation Act, 1956 was
  brought into force and which date under the Reorganisation Act was
  treated as the appointed day. Section 2 Clause (a) defines an 'allottee' to
  mean, 'a Government servant allotted or deemed to have been allotted to
F serve in connection with the affairs of the State of Karnataka under or in
  pursuance of Section 115 of the States Reorganisation Act, 1956 (Central
  Act 37 of 1956)'. It is necessary to note that State of Mysore subsequently
  got re-designated as state of Karnataka. As per clause (C) of Section 2
  'final seniority list' means, 'an inter~State seniority list of allottees prepared
  in accordance with the decisions of central Government under the
G provisions of sub-section (5) of Section 115 of the States Reorganisation
  Act, 1956 (Central Act 37 of 1956)'. Clause (d) of Section 2 defines
  'inter-State seniority list' to mean, 'an inter-State seniority list prepared
  from time to time on the basis of the seniority in which the eligibility of an
  allottee to promotion to higher post or posts is considered. As the
H petitioners are allottees within the meaning of the said term as defined by
             S.R. BHAGWAT v. STATE [S.B. MAJMUDAR, J.]                     559

Section 2(a) we may straightaway turn to Section 4 of the Act which deals         A
with such allottees. As some parts of sub-sections of Section 4 are brought
in challenge in these proceedings it will be profitable to reproduce entire
Section 4 with its sub-sections at things stage :

        "4. Promotions, etc., of allottees - (1) Where the seniority of an
        allottee as specified in the provisional inter- state seniority list in
                                                                                  B
        any class of post or office has been altered in the final seniority
        list relating to that class, every promotion made on any date after
        the first day of November 1956, on the basis of seniority-cum-merit,
        shall be reviewed with reference to the qualifications and other
        conditions laid down in the rules of recruitment applicable at the c
        relevant time for such promotion and the ranking in the final
        seniority list assigned to the allottees in that class of post or office.
        If any person senior in rank than the person promoted is held to
        be suitable for promotion on such date (hereinafter in this section
        referred to as the date of eligibility), an order shall, subject to D
        Section 9, be made promoting the said person to officiate in the
        said post or office with effect from a prospective date to be
        specified in the order.

        (2) As soon as may be, after the person promoted under sub-sec-
        tion (1) is declared to have satisfactorily completed the period of       E
        officiation in the promoted post or office an order shall, subject
        to section 9, be made directing that he shall be entitled to initial
        pay on the date of actual promotion to the post or office as if he
        was holding the said post or office from the date of eligibility and
        drawn the pay and allowances accordingly, but such pe1:son shall          F
        not be entitled to payment to any arrears for the pe1iod prior. to the
        date of his actual promotion. His rank in the seniority list of persons
        in the class, or grade of service to which he is promoted shall be
        fixed as if he had been promoted to that class or grade of service
        on the date of eligibility.
                                                                                  G
        (3) Where consequent upon the review of promotions made under
        Sub-section (1), it is found that an allottee, who, before the coming
        into force of sections 3, 11 and 13 had been promoted to a higher
        class or grade of service found eligible for promotion to that higher
        class or grade of service from a date prior to the date of actual         H
    560                 SUPREME COURT REPORTS (1995) SUPP. 3 S.C.R.

A         promotion and subject to section 9, .is declared. to have satisfac-
          torily completed the period of officiation in the promoted post or
          office, an order shall be made directing that he shall be entitled
          to initial pay on the date of actual promotion to the post or office
          as if he was holding the said post or office from the date on which
          he is found eligible for promotion and drawn the pay and allowan-
B
          ces accordingly, but he shall not be entitled to payment of any OITears
          for the petiod plior to the date of the actual promotion. [Where, on
          such review he is found eligible for promotion to a higher class or
          grade of service from a date subsequent to the date of his actual
          promotion to such class or grade of service, his pay on the d<"lte of
c         eligibility shall be refixed as if he had been promoted on such date
          but he shall not be liable to refund the excess pay and allowances
          drawn by him up to the date of issue of the order fixing the date
          of eligibility.] His rank in the seniority list of persons in the class
          or grade of service to which he is promoted shall be fixed as if he
          had been promoted to that class or grade of service on the date
D
           on which he is found eligible for promotion.

          (4) Where an order is made in respect of any allottee under
          sub-section (2) or, as the case may be, under sub-section (3), and
          the ranking in the seniority list of persons in the promoted class
E         or grade of service, as fixed by such order, stands revised, the
          promotions made from that class or grade of service to the next
          higher class or grade of service shall be reviewed in accordance
          with and subject to the provisions of sub- section (1) as if reference
          therein to the final seniority list were references to the aforesaid
          revised seniority list and the provisions of sub-section (2) shall,
F
          mutatis mutandis, be applicable to every promotion so made.

          (5) The provisions of sub-section (4), mutatis mutandis, be ap-
          plicable in respect of promotions of allottees to the neist higher
          classes or grades of the same service.
G
          (6) The provisions of sub-section (3) shall, mutatis mutandis, be
          applicable in respect of review of promotions of allottees made
          under sub-sections (4} and (5).

H         (7) Where in respect of promotions on the basis of seniority-cum-
    S.R. BHAGWAT v. STATE (S.B. MAJMUDAR, J.]                  561

merit from any class or grade of service to the next higher class or A
grade of service, the rules of recruitment require service for a
minimum period in the former class or grade to become eligible
for promotion, the said period shall in its application to an allottee
eligible for promotion under this section be deemed to be the
period during which he satisfactorily completes the period of B
officiation in the post or office of that class or grade of service and
no such minimum service shall be necessary in the case· of an
allottee whose record of service shall be necessary in the case of
an allottee whose record of service was satisfactory on the relevant
dates of eligibility or the relevant dates on which he is found C
eligible for promotion.

(8) In respect of promotions from any class or grade of service by
selection to the next higher class or grade of service, where an
allottee would have been eligible for consideration if he had been
promoted to the former class or grade of service on the basis of D
his seniority in the final seniority list, such allottee, shall, subject
to section 9, be considered for selection to the next higher class
or grade of service, immediately after he satisfactorily completes
the period of officiation in the said former class or grade of service.
If he is selected and promoted to the higher class or grade of E
service and satisfactorily completes his period of officiation in the
said class or grade, he shall be entitled to initial pay on the date
of actual promotion to the said class or grade as if he was holding
the said post or office from the date on which his immediate junior
in the lower class or grade was promoted to the said class or grade F
of service, but he shall not be entitled to payment of any aTTears for
the peliod prior to the date of his actual promotion. His rank in the
seniority list of the persons in the said class or grade shall be fixed
 as if he had been promoted on the date immediately preceding the
 date on which his immediate junior in the lower class or grade was G
promoted to the selection class or grade of service.


(9) An order under Sub-section (2) in respect of an allottee who
had been reduced to a lower stage in a time scale and whose
increment had been withheld shall be subject to such modification    H
    562                   SUPREME COURT REPORTS (1995) SUPP. 3 S.C.R.

A           as the state Government may, by order direct.

             (10) No promotions of allottees made on the basis of any
           · provisional inter-State seniority list, shall be reviewed except after
             the publication of the final seniority list and in the manner provided
             in the section.
B
            Explanation : For purposes of this sub-section provisional inter-
            State list includes every inter-State seniority list used as the basis
            for carrying on the day-to-day administration whether prepared by
            the State Government or declared by court as operative until the
c           publication of the final seniority list."

          We may recapitulate at this stage that the petitioners have mounted
    a limited attack on the impugned provisions of the Act in so far as they
    deprive them of the monetary benefits flowing from the deemed promotion
    to be given to them pursuant to the orders of the Division Bench of the
D   High Court which have become final between the parties. We have ex-
    tracted the aforesaid Section with its relevant sub-sections wherein the
    impugned provisions of the concerned clauses have been indicated by
    underlining them. Petitioners contend that underlined portions of sub-sec-
    tions (2), (3) and (8) of Section 4 clearly fall within the teeth of binding
E   decision of the Division Bench of the High Court and they are in clear
    conflict with the said binding decision. As we are not concerned with other
    provisions of the Act except Section 11(2) we may straightaway turn to
    Section 11. The said provision deals with over-riding effect of the Act. It
    reads as under :

F           "Over-·1iding effect. - (1) The provisions of this Act or any order
            made thereunder shall have effect notwithstanding anything incon-         ;

            sistent therewith contained in any law or order having the force of
            law or rules made under the proviso to Article 309 of the Con-
            stitution of India for the time being in force or any provision
            regulating t.he conditions of service of any allottee or in any order
G
            made by virtue of any such law, rules or provisions.

            (2) Notwithstanding anything contained in any judgment, decree
            or order of any court or other competent authority the right to
            which a civil servant is entitled to in respect of matters to which
H           the provisions of this Act are applicable, shall be determined in
             S.R. BHAGWAT v. STATE [S.B. MAJMUDAR,J.]                  563

        accordance with the provisions of this Act, and accordingly, any A
        judgment, decree or order directing promotion or consideration
        for promotion of civil servants and payment of salaries and al-
        lowances consequent upon such promotion shall be reviewed and
        orders made in accordance with the provisions of this Act."
                                                                             B
 A mere look at sub-section (2) of Section 11 shows that the respondent,
 State of Karnataka, which was a party to the decision of the Division Bench
 of the High Court against it had tried to get out of the binding effect of
 the decision by resorting to its legislative power. The judgments, decrees
 and orders of any court or the competent authority which had become final
·against the State were sought to be done away with by enacting the          c
 impugned provisions of sub-section (2) of Section 11. Such an attempt
 cannot be said to be a permissible legislative exercise. Section 11(2),
 therefore, must be held to be an attempt on the part of the State Legisla-
 ture to legislatively over-rule binding decisions of competent courts against
 the State. It is no doubt true that if any decision was rendered against the D
 State of Karnataka which was pending in appeal and had not become final
 it could rely upon the relevant provisions of the Act which were given
 retrospective effect by sub-section (2) of Section 1 of the Act for whatever
 such reliance was worth. But when such a decision had become final as in
 the present case when the High Court clearly directed respondent-State to
 give to the concerned petitioners deemed dates of promotions if they were E
  otherwise found fit and in that eventuality to give all benefit consequential
  thereon including financial benefits, the State could not invoke its legisla-
 tive power to displace such a judgment. Once this decision had become
 final and the State of Karnataka had not thought it fit to challenge it before
 this Court presumably because in identical other matters this Court had F
 upheld other decisions of the Karnataka High Court taking the same view,
  it passes one's comprehension how the legislative power can be pressed in
  service to undo the binding effects of such mandamus. It is also pertinent
  to note that _not only sub-section (2) of Section 11 seeks to bypass and
  over-ride the binding effect of the judgments but also seeks to empower G
  the State to review such judgments and orders and pass fresh orders in
  accordance with provisions of the impugned Act. The respondent-State in
  the present case by enacting sub-section (2) of Section 11 of the impugned
  Act has clearly sought to nullify or abrogate the binding decision of the
  High Court and has encroached upon the judicial power entrusted to the
  various authorities functioning under the relevant statutes and the Con- H
    564                   SUPREME COURT REPORTS (1995] SUPP. 3 S.C.R.

A   stitution. Such an exercise of legislative power cannot be countenanced.

          It was contended by Shri Madhava Reddy that even assuming that
  the Division Bench judgment remained binding on the State despite the
  provisions of the impugned Act, all that the Division Bench has directed
  the State is to consider the Case of the petitioners for deemed promotions
B on the basis of the final seniority list.. That has already been done and the
  petitioners have no grievance for the same. So far as the consequential
  financial benefits are concerned they would not cover the monetary benefit
  flowing from such deemed promotion. Even this submission cannot be
  countenanced. We have already extracted earlier the operative portion of
c the judgment of the Division Bench. It has been in terms directed that if
  petitioner is ·found fit and promoted he may be given all the benefits
  consequential thereto including the financial benefits. It is, therefore, ob-
  vious that once the deemed date of promotion is given to the concerned
  petitioners it cannot be merely notional promotion re~ftxing his pay in the
  promotional cadre with increments etc. but also would bring in its wake all
D consequential financial benefits, namely, the salaries that have accrued to
  them on account of such deemed promotions. Whether such deemed
  promotions can also entail actual monetary benefits when the concerned
  employees had not worked on the promotional posts, is a question which
  could have been agitated by the respondent-State, if so advised, by chal-
E lenging the order of the Division Bench before .this Court. That was not
  done. Instead it resorted to its legislative power for undoing the said
  directions of the Division Bench by arming itself with the power to review
  that judgment by resort to its legislative function. That was clearly not
  permissible as it was an act of encroachment on the judicial pronounce-
F ment of the High Court which had remained binding on the respondent-
  State. The ratio of the decisions of this Court as discussed earlier clearly
  get attracted on the facts of the present case and on the same grounds on
  which this Court invalidated the relevant provisions of Arbitration ( Orissa
  Second Amendment) Act, 1991 in G.C. Kanungo (supra) Section 11 sub-
  section (2) of the impugned Act also has to be declared ultra vires and
G invalid.

           We, therefore, strike down Section 11 sub-section (2) as unconstitu-
    tional, illegal and void. So far as the underlined impugned portions of
    Section 4 sub-sections (2), (3) and (8) are concerned, they clearly conflict
H   with the binding direction issued by the Division Bench of the High Court
             S.R.BHAGWAT v. STATE[S.B.MAJMUDAR,J.)                         565

against the respondent-State and in favour of the petitioners. Once respon- A
dent-State had suffered the mandamus to given consequential financial
benefits to the allottees like the petitioners on the basis of the deemed
promotions such binding direction about payment of consequential
monetary benefits cannot be nullified by the impugned provisions of Sec-
tion 4. Therefore, the underlined portions of sub-sections (2), (3) and (8)
                                                                             B
of Section 4 will have to be read down in the light of orders of the court
which have become final against the respondent-State and in so far as these
provisions are inconsistent with these final orders containing such direc-
tions of judicial authorities and competent courts, these impugned
provisions of Section 4 have to give way and to the extent of such incon-
sistency must be treated to be inoperative and ineffective. Accordingly the c
aforesaid provisions are read down by observing that the statutory
provisions contained in sub-sections (2), (3) and (8) of Section 4 providing
that such person who have been given deemed promotions shall not be
entitled to any arrears for the period prior to the date of their actual
promotion, shall not apply in cases where directions to the contrary of D
competent courts against the respondent-State have become final.

       In the result. this writ petition succeeds. Section 11 sub- section (2)
is struck down as ultra vires the legislative powers of the State. Sub-sections
(2), (3) and (8) of Section 4 are read down as aforesaid. The respondent-
State shall comply with the directions contained in the binding decision of       E
the High Court of Kamataka dated 21.9.1971 in Writ Petition Nos. 2598,
3302-3304 and 4586 of 1970 and shall make available all consequential
financial benefits to the concerned petitioners as directed by the High
Court within a period of eight weeks from the receipt of the orders of this
Court at its end. Rule issued in the Writ Petition is accordingly made
absolute with costs.                                                              F

R.A.                                                         Petition allowed.