Holding

The amendment made by the 11 March 1976 notification is valid; repeal does not affect the prior operation of the rule, and it may be amended retroactively under Article 309.

Summary

Mangilal Pindwal, an Upper Division Clerk of the Rajasthan Government, was compulsorily retired on 31 March 1973 under sub‑rule (2) of Rule 244 of the Rajasthan Service Rules, 1951, with payment of three months' salary. He challenged the order, and the Rajasthan High Court set aside the retirement on the ground that the amount paid was short. The State relied on a later amendment (notification dated 11 March 1976) that had substituted sub‑rule (2) and dispensed with the requirement of payment at the time of retirement. The High Court held that the amendment was invalid because it purported to amend a provision that no longer existed. The Supreme Court held that the amendment was valid: a repeal does not erase the prior operation of a rule, and under Article 309 a rule may be amended retroactively to cover the period it was in force. Consequently, the High Court’s finding of invalidity was set aside, though the order in favour of the respondent was left undisturbed.

Issues considered

Whether the notification of 11 March 1976 substituting sub‑rule (2) of Rule 244 of the Rajasthan Service Rules is invalid for attempting to amend a provision that was not in existence at the time of amendment.
What is the effect of the repeal of a statutory provision on its prior operation and can a rule made under Article 309 be amended retroactively?

Legislation cited

Constitution of Indias. Article 309
Rajasthan Service Rules, 1951s. Rule 244(2)

Subjects

Service lawCompulsory retirementStatutory repealRetroactive amendmentArticle 309Rajasthan Service RulesStatutory interpretation

Judgment

A STATE OF RATASTHAN
v.
MANGILAL PINDWAL
-
JULY 8, 1996
B
[S.C. AGRAWAL AND G.T. NANAVAT!, JJ.]

Service Law :

Rajasthan Se1vicc Rules, 1951-Compulsory Retirement-Rule 244 (2)
C as amended by notification dated March 11, 1976-Validity of-Notification
substituting sub-mle (2) repealed the provision that was operative during the
pe1iod from Aug. 19, 1972 to Sep. I, 1975 and replaced it by another
jJIOVision.-Whether can be held invalid on ground that an1endn1ent sought to
an1e11d a }Jtovision 1vhich was not in existenc~Held, No-Repeal does not
D affect previous operation of law which has been repealed during the pe1iod .it
1vas operative prior to the date of re11ea/.

The respondent, employed as an Upper Division Clerk with the
Government of Rajasthan, after he completed 25 years of qualifying ser-
vice, was compulsorily retired by an order dated 31.3.1973 on payment of
E three months' pay and allowances in lieu of notice. Along with the order
a
passed under sub-rule (2) of Rule 244 of the Rules, bank draft for a sum
of Rs. 1,494 representing three months' pay and allowances was sent to the
respondent. The respondent filed a writ petition challenging the order. The
petition was allowed by the High Court by an order dated 17.1.1978 on the
F ground that there was non-compliance with the provisions of sub-rule (2)
of Rule 244 of the Rules inasmuch as the amount paid to the respondent
towards three months pay and allowances was short by Rs. 120. On
28.1.1978 notification dated 11.3.1976 was published, substituting sub-rule
(2) of Rule 244 of the Rules. The amendment which was operative from
19.8.1972 and was to remain in force upto 1.9.1975, the requirement of
G payment of three months'pay and allowances in lieu of notice at the time
of compulsory retirement was dispensed with and it was prescribed that
on retirement the Government servant would be entitled to claim three
months' pay and allowances in lieu of notice. On special appeal, the
Division Bench of the High Court held that the amendment made in the
H Rules vide notification dated 11.3.1976 was invalid. WJ1ile dismissing the
98
STATEv. M.P!NDWAL 99

appeal, it was held that as a result of the substitution of sub-rule (2) of A
Rule 244 by notifications dated September 2, 1975 and November 26, 1975,
provisions of sub- rule (2) of Rule 244, as applicable during the period
from August 19, 1975 till September 1, 1975 stood substituted and, as a
result, the said provisions ceased to exist and must be treated to have been
obliterated and, therefore, Rule 244(2), as it stood on August 19, 1972, was
B
no longer available for suppression, amendment or substitution on March
11, 1976, since the same stood amended and substituted by new provisions
contained in notifications dated September 2, 1975 and November 26, 1975.
This appeal had been filed against the decision of the Division Bench.

Disposing of the appeal, this Court c
HELD : As a result of repeal of a statute the statute as repealed ceases
to exist with effect from the date of such repeal but the repeal does not affect
the previous operation of the law which has been repealed during the period
it was operative prior to the date of such repeal. The effect of the amend-
ments that were introduced in sub-rule (2) of Rule 244 of the Rajasthan D
Service Rules vide notifications dated September 2, 1975 and November 26,
1975 whereby the said sub-rule was substituted with effect from September
2, 1975 is that sub-rule (2) which was introduced on August 19, 1972 ceased
to exist "ith effect from September, 2, 1975 but it was operative during the
period from August 19, 1972 to September 1, 1975. A rule made in exercise E
of the power conferred by Article 309 of the Constitution can have retroac·
tive operation. Since sub-rule (2) of Rule 244 of the Rules, as introduced in
August, 1972, was operative during the period from August 19, 1972 to
September 1, 1975, it could be amended in exercise of the rule.making power
under Article 309 of the Constitution so as to operate during the period
from August 19, 1972 to Se1itember I, 1975. The notification dated March F
11, 1976, by substituting sub-rule (2) of Rule 244 of the Rules, repealed the
said provision that was operative during the period from August 19, 1972 to
September 1, 1975 and replace it by another provision which was to be
operative during the said period. The said notification cannot be held to be
invalid on the basis that the said amendment sought to amend a provision G
which was not in existence. [104-E-H, 105-A]

Koteshwar Vittal Kamath v. K. Rangappa, (1969] 3 SCR 40 and Qudrat
Ullah v. Municipal Board, Bareilly, [1974] 2 SCR 530, referred to.

Craies on Statute Law, 7th Edn.; Sutherland on Statutmy Constntction, H
100 SUPREME COURT REPORTS [1996] SUPP.3S.C.R.

A Vol. I para 1903, referred to. ....
CIVIL APPELLATE JURISDICTION: .Civil Appeal No. 1340 of
1981.

From the Judgment and order dated 15.4.80 of the Rajasthan High
B Court in D.B.C.S.A. No. 17 of 1978.

Aruneshwar Gupta and Manoj K. Das for the Appellant.

The Judgment of the Court was delivered by

c S.C. AGRAWAL, J. The question that falls for consideratiion in this
appeal relates to the validity of the amendment introduced in Rule 244(2)
of the Rajasthan Service Rules, 1951 (hereinafter referred to as 'fhe Rules')
by notification dated March 11, 1976. Rule 244(2) makes provision for
compulsory retirement of a Government servant.
D
The respondent was employed as an Upper Division Clerk with the
Government of Rajasthan. After he had completed 25 years of qualifying
service he was compulsorily retired by order of the Collector, Ajmer dated
March 31, 1973 on payment of three months' pay and allowances in lieu of
notice. The said order was passed under sub-rule (2) of Rule 244 of the
E Rules. Along with the order of compulsory retirement a bank draft for a
sum of Rs. 1,494 representing three months pay and allowances was sent
to the respondent. The respondent filed a writ petition in the Rajasthan
High Court challenging the said order of compulsory retirement. The said
writ petition was allowed by the learned Single Judge of the High Court
F by order dated January 17, 1978 on the ground that there was non-com-
pliance with the provisions of sub-rule (2) of Rule 244 of the Rules
inasmuch as the amount paid to the respondent towards three months pay
and allowances along \vith the order of compulsory retirement was short
by Rs. 120. On January 28, 1978 notification dated March 11, 1976 was
published in the Rajasthan Gazette. By the said notification sub-rule (2) of
G Rule 244 of the rules was substituted. The said amendment was operative
from August 19, 1972 and was to remain in force up to September 1, 1975.
Under the amended provision the requirement of payment of three
months' pay and allowances in lieu of notice at the time of compulsory
retirement was dispensed with and it was prescribed that on retirement the
H Government servant would be entitled to claim three months' pay and
,,
STATEv. M.PINDWAL[S.C.AGRAWAL,J.] 101

.... allowances in lieu of notice. In the special appeal filed by the appellant A
State against the judgment of the learned Single Judge reliance was placed
by the appellant on the said amendment in Rule 244(2) and it was urged
that in view of the said amendment it was not pre-requisite that the
payment of three months' pay and allowances in lieu of notice should have
accompanied the order of compulsory retirement and that the order of B
compulsory retirement could not be invalidated if a shorter amount was
paid or no payment at all was made at the time of service of the order of
compulsory retirement upon the concerned Government servant. The said
contention was negatived and the special appeal was dismissed by the
Division Bench of the High Court by the impugned judgment dated April
15, 1980 on the view that the amendment made in the Rules vide notifica- C
tion dated March 11, 1976 was invalid. Hence this appeal. While granting
special leave by order dated April 14, 1981, this Court imposed the
condition that "whatever be the decision of this Court it shall not effect the
respondent and the High Court's decision in his favour shall remain
undisturbed. 11

D
On March 31, 1973, the date of the passing of the order of compul-
sory retirement, sub-rule (2) of Rule 244 of the Rules provided as under :

"(2) The Government, may, after giving at least three months'
previous notice in writing or by payment of three months' pay and E
allowances in lieu of such notice require a Government servant to
retire from the service on the date on which he completes 25 years
of qualifying service or on any date thereafter."

The said provision was introduced vide notification dated August 19,
~ F
By notification dated September 2, 1975, sub-rule (2) of Rule 244 of
the Rules was substituted by the following 'provision :

"(2) The Government, may, after giving at least three months'
previous notice in writing or by payment of three months' pay and G
allowances in lieu of such notice require a Government servant to
retire from the service on the date on which he completes 20 years
of qualifying service or the date on which he attains the age of 50
years whichever is earlier, or on any date thcreafter. 11

By a subsequent notification dated November 26, 1975, Rule 244 of H
102 SUPREME COURT REPORTS (1996] SUPP. 3 S.C.R.

A the Rules was substituted with effect from September 2, 1975. Sub-rule (2)
•.
of Rule 244, thus substituted, read as follows :

"(2) (i) The Government, may, after giving at least three months,
previous notice in writing reqli:re a Government servant to retire
from the service on the date on which he completes 20 yearS of
B qualifying service or the date on which attains the age of 50 years
whichever is earlier, or on any date thereafter ;

Provided that such Government servant may .be retired from
service forthwith, and on such retirement the Government servant
shall be entitled to claim three months pay ancj allowances in lieu
c of notice.

(ii) The Government may publish the order of such retirement in
Rajasthan Rajpatra, and the Government servant shall be deemed
to have retired on such publication, if he h.as not been served with
D the retirement order earlier. 11

The Rajasthan Service (Amendment) Rule, 1976 made by the Gover-
nor under notification dated March 11, 1976, were published in the Rajas-
than Gazette dated January 28, 1978. The said Rules were brought into
force with effect from August 19, 1972 and were to remain in force up to
E September 1, 1975. By the said Rules sub-rule (2) of Rule 244 was sub-
stituted by the following provision :

"(2) The Government, may, after giving at least three months'
previous notice in writing require a Government servant to retire
from the service on the date on which he completes 25 years of
F qualifying service or on any <fate thereafter ;

Provided that such Government servant may be retired from
service forthwith, and on such retirement the Government servant
shall be entitled to claim three months pay and allowances in lieu
of notice. 11
G
The learned Judges of the High Court have held that as a result of
the substitution of sub-rule (2) of Rule 244 by notifications dated Septem- '
ber 2, 1975 and November 26, 1975, provisions of sub- rule (2) of Rule 244,
as applicable during the period from August 19, 1972 till September 1,
H 1975, stood substituted and, as a result the said provisions ceased to exisl
STATEv. M.PINDWAL[S.C.AGRAWAL,J.] 103

and must be treated to have been obliterated and, therefore, Rule 244(2), A
as it stood on August 19, 1972, was no longer available for supersession,
amendment or substitution on March 11, 1976, since the same stood
amended and substituted by new provisions contained in notifications
dated September 2, 1975 and November 26, 1975. The High Court has
placed reliance on the following passages from Craies on Statute Law and
B
Sutherland on Statutory Construction :

"When an Act of Parliament is repealed," said Lord T.enterden in
Swtees v. Ellison," it must be considered (except as to transactions
past and closed) as if it had never existed. That is the general rule."
Tindal C.J. stated the exception more widely. He said : "The effect c
of repealing a statute is to obliterate it as completely from the
records of the Parliament as if it had never been passed; and it
must be considered as a law that never existed except Jor the
purpose of those action which were commenced, prosecuted and
concluded whilst it was an existing law."
D
(Craies on Statute Law, 7th Edn. pp. 411-412)

nsince an amenclatory act alters, modifies, or adds to a prior
statute, all courts hold that a repealed act cannot be amended, that
is, no court will give effect to a repealed law because the legislature E
attempted to amend it."

(Sutherland Oil Statutory Consouction, Vol. I para 1903, pp. 328-
329)

As pointed out by this Court, the process of a substitution of F
statutory provision consists of two steps; first, the old rule is made to cease
to exist and, next, the new rule is brought into existence in its place. (See
: Koteshwar Vittal kamath v. K. Rangappa, [1969] 3 SCR 40, at p. 48. In
other words, the substitution of a provision results in repeal of the earlier
provision and its replacement by the new provision. As regards repeal of G
a statute the law is thus stated in Sutherland Oil Statutmy Constmction :

"The effect of the repeal of a statute where neither a saving clause
nor a general saving statute exists to prescribed the governing rule
for the effect of the repeal, is lo destroy the effectiveness of the
repealed act in futuro and to divest the right to proceed under the H
104 SUPREME CO CRT REPORTS [1996] SUPP. 3 S.C.R.

A statute, which, except as to proceedings past and closed, is con·
sidered as if it had never existed."

(Vol. I, para 2042, pp. 522-523)

Similarly in Crawford's Interpretation of Laws it has been said :
B
"Effect of Repeal, Generally. - In the first place, an outright repeal
will destroy the effectiveness of the repealed act in futuro and
operate to destory inchoate rights dependent on it, as a general
rule. In many cases, ho\vcveri where statutes are repealed, they
continue to be the law of the period during which they were in
c force with reference to numerous matters." (pp. 640-641)

The observations of Lord Tentcrden and Tindal C.J. referred in the
abovementioned passages in Craies on Statute law also indicate that the
principle that on repeal a statute is obliterated is subject to exception that
D it exists in respect of transactions past and closed. To the same effect is
the law laid down by this Court. (See : Qudrat Ullah v. Municipal Board,
Bareilty, [1974) 2 SCR 530, at p. 539)

This means that as a res.ult of repeal of a statute the statute as
repealed ce'ases to exist with effect from the date of such repeal but the
E repeal does not affect the previous operation of the law which has been
repealed during the period it was operative prior to the date of such repeal.
The effect of the amendments that were introduced in sub-rule (2) of Rule
244 of the Rules vide notifications dated September 2, 1975 and November
26, 1975 whereby the said ·sub-rule was substituted with effect from Sep-
F tember 2, 1975 is that sub-rule (2) which was introduced on August 19,
1972 ceased to exist with effect from September 2, 1975 but it was operative
during the period from August 19, 1972 to September 1, 1975. It is settled
law that a rule made in exercise of the power conferred by Article 309 of
the Constitution can have retroactive operation. Since sub-rule (2) of Rule
244 of the Rules, as introduced in August, 1972, was operative during the
G period from August 19, 1972 t~ September 1, 1975, it could be amende\i
in exercise of the rule making power under Article 309 of the Constitution
so as to operate during the period from August 19, 1972 to September 1,
1975. The notification dated March 11, 1976, by substituting sub-rule (2)
of Rule 244 of the Rules, repealed the said provision that was operative
H during the period from August 19, 1972 to September 1, 1975 and replaced
'-
.. STATE v. M. PINDWAL[S.C.AGRAWAL,J.] 105

it by another provision which was to be operative during the said period. A
The said notification cannot be held to be invalid on the basis that the said
amendn1ent sought to amend a provision \vhich was not in existence. The
Statement of Law in Sutherland on Statutory Construction, on which
reliance was placed by the learned Judges of the High Court, that a
repealed law cannot be amended has no application in the present case.
B
For the reasons ·aforementioned, "the judgment of the High Court
dated April 15, 1980, in so far as it holds that the amendment made in Rule
244(2) of the Rules vide notification dated March 11, 1976, is invalid,
cannot be upheld and is set aside. The setting aside of the judgment of the
High Court in this regard would not, however, affect the respondent and c
the decision of the High Court in his favour shall remain undisturbed. The
appeal is disposed of accordingly. No order as to costs.

R.A. Appeal disposed of.