judgement:
Civil Appeal No. 420(N) of 1971 From the Judgment and order dated 23rd October 1969 of the Bombay High Court in Special Civil Application No. 1721 of 1966.
R.N. Sachthey and Mr. R.N. Poddar for the Appellant U. R. Lalit, V. N. Ganpule and Mrs. Veena Devi Khanna for Respondents Nos. 1 to 5 section V. Tambewaker for Respondent No. 7 A.K. Sanghi for the intervener M. L. Heble, V. N. Ganpule and Mrs. Veena Devi Khanna for the intervener.
670 The Judgment of the Court was delivered by SEN, J.
In this appeal, by special leave, the question for consideration is whether there was denial of "fair and equitable treatment" within the meaning of sub section
(5) of section 115 of the (hereinafter called 'the Act ') in the matter of determination of relative seniority and equation of posts as between the Assistant Sales Tax officers (abbreviated as ASTOs) from the former States of Madhya Pradesh and Hyderabad and Sales Tax Inspectors (abbreviated as STIs) from the former State of Bombay, who were allocated to the new State of Bombay, and their right to promotion to the posts of Sales Tax officers (abbreviated as STOs) Grade III.
The High Court by its judgment, on a writ petition filed by Respondents I to S, who were STIs of the State of Bombay and passed the prescribed departmental examination for promotion as STOs Gr.
III, has struck down the various resolutions and orders passed by the State Government from time to time relating to integration of services of these officers under sub section
(7) of section 115 of the Act, in compliance with the directives of the Central Government issued under sub section
(5) of section 115 of the Act.
The main question in the appeal is whether the High Court was right in doing so.
To appreciate the points involved, it is necessary to set out a few facts.
On November 16, 1957, the State Government by its Resolution purported to direct that the ASTOs from Madhya Pradesh and Hyderabad should continue in their respective pay scales until such of them were not appointed as STOs Gr.
III under r. 7 of the Allocated Government Servants (Absorption, seniority, Pay and Allowances) Rules, 1957.
Notes 3 and 6 appended to the said Resolution provided that for purposes of promotion, their inter se seniority shall be fixed on the basis of their service as STIs being counted together with their service as ASTOs in Madhya Pradesh and service as Accountants, if any, together with their service as ASTOs in Hyderabad.
In accordance therewith, a provisional gradation list of those who were absorbed as STIs as on November 1, 1956 as also of those who continued as ASTOs in their respective posts with effect from that date was prepared and published by the State Government under r. 2 of the said Rules, on January 21, 1960 and objections thereto were invited within two months from the date of its publication.
On February 3, 1960, the State Government substantially modified r. 7 and a new r. 7 was substituted which provided that generally the seniority of an allocated Government servant in the post or cadre of absorption shall, as 671 on November 1, 1956, be determined by the length of continuous service etc.
On instructions from the Central Government and in further consultation with it.
the State Government clarified that the provisional gradation list as published would not be finalised until representations, if any, of the Government servants were decided by the Government of India in consultation with the Advisory Committee.
Since there were no comparable posts of ASTOs in the former State of Bombay, the Central Government directed that the ASTOs from Madhya Pradesh and Hyderabad should not be equated with the post of STIs, but should be continued in an isolated category and their seniority should be fixed above the persons in the next lower grade.
In accordance with the directive of the Central Government under sub section
(S) of section 115 of the Act, the State Government by its resolution dated September 10, 1960, modified Notes 3 and 6 referred to above and directed that the seniority as on November 1, 1956 of ASTOs from Madhya Pradesh and Hyderabad be fixed above all persons absorbed as STIs and that the inter se seniority of STOs from Madhya Pradesh and Hyderabad be fixed on the basis of their continuous service as ASTOs.
It was further directed that the service rendered by the ASTOs from Madhya Pradesh as Excise Inspectors or Assistant District Excise officers in the Excise Department of that State be counted as equivalent to service as STOs.
On August 17, 1962, the State Government accordingly prepared a fresh provisional gradation list of ASTOs and STIs and invited objections thereto afresh.
It appears that none of the respondents raised any objection.
To resume the narration.
Between November 1, 1956 and August 8, 1960, promotions to the post of STO, Gr.
III were made on the basis of separate departmental examinations held in accordance with the rules framed by the former State Governments concerned.
Upto and until August 8, 1960, departmental examinations for promotion to the post of STOs were conducted under the three different sets of rules applicable to the former States of Bombay, Madhya Pradesh and Hyderabad.
From August 8, 1960, the Bombay Departmental Examination Rules for STOs were made applicable to the ASTOs allocated from Madhya Pradesh and Hyderabad as well in as much as the Bombay Sales Tax Act, 1959 was made applicable to the whole of the State and the C.P. and Berar Sales Tax Act, 1947 and the Hyderabad General Sales Tax , were repealed.
The ASTOs from Vidarbha and Marathwada regions of Madhya Pradesh and Hyderabad were called upon to appear at the examination prescribed for the STOs of the old Bombay region.
Accordingly, promotions to the post of STO Gr.
III were regulated under the Bombay Departmental Examination Rules and in consequence some of the ASTOs from Madhya Pradesh and Hyderabad who had been promoted as STOs Gr.
III were reverted to the post of ASTO due to their failure to pass the said examination.
In the meanwhile, the State Government, on January 20, 1961, amended r. I(b) (ii) of the Recruitment Rules for the Sales Tax Officers Grade III by the addition of the words "and also the Departmental Examination for Sales Tax Officers" after the words "time for promotion" which had the effect of making the passing of such an examination a condition precedent to promotion as STOs Gr.
On representations made by the ex Hyderabad ASTOs, the Government by its Resolution dated June ]3, 1964, directed: Rules 2(d) of the Departmental Examination Rules of Sales Tax officers and Assistant Sales Tax officers issued by the Finance Department of the former Hyderabad Govt.
under their Notification number 1118/3 section T. dated the 24th January, 1956 lays down that Inspecting officers, Sales Tax Officers (Class I and II) and Assistant Sales Tax Officers who are not confirmed in their respective posts, should pass the examination within the period specified in clause (c) of Rule 2 of the said Rules failing which they would be reverted to their substantive post.
In accordance with this Rule Government have reverted some Sales Tax officers from the former Hyderabad State for not having passed the Departmental Examination within the prescribed time.
The Government of Andhra Pradesh has brought to the notice of this Government the instructions contained in Ex Hyderabad, Finance Department, Letter No. 7851/ Admn.
dated the 31st October 1956 according to which officers and the staff of the Sales Tax Department of the former Hyderabad State, even though they have not passed the prescribed Departmental Examination ate to be con firmed, if they are otherwise found deserving of confirmation on the basis of their confidential records, efficiency and seniority.
The said letter dated 31st October 1955 of the Hyderabad Finance Department, also laid down that such 673 confirmed personnel should not be promoted to higher A posts until such times as they complete the prescribed Departmental Examination.
The validity of the instructions issued in Ex Hyderabad Finance Department letter No. 7851/Admn.
dated the 31st October, 1956 was under the consideration of Government for some time and it has now been decided to observe the instructions contained in the Finance Department letter of the Ex Hyderabad Slate, and is, therefore, pleased to order that the officers and staff of the Sales Tax Department of the former Hyderabad State, who were otherwise found deserving of confirmation on the basis of their confi dential records, efficiency and seniority may be confirmed in their respective posts held prior to 1st November 1956 against clear vacancies in terms of General Administration Department Circular No. 97 G.A.D. 12 SR 55 dated 10th September 1956 issued by the Ex Hyderabad Government.
Such confirmed personnel should, however, not be promoted to higher posts until such times as they complete the prescribed Departmental Examination.
(emphasis supplied) Similarly, on representations made by the ex Madhya Pradesh ASTOs, the State Government by its Memorandum dated November 21 ,1964, ordered: Recruitment Rules for the Sales Tax officers prescribed for the old Bombay State appearing in Government Resolution Finance Department No. STO 1654 dated 28th July 1954 as amended by the Government Resolution, Finance Department No. STE 1159/Ol81/61 XIII dated the 29th January 1961 lays down that a Sales Tax Inspector is not eligible for promotion of Sales Tax Officers without passing the examination prescribed for the Sales Tax officers.
According to Govt.
Circular, Political and Services Department No. STI 1080 D dated the 29th April 1960 pending unification of the Recruitment Rules sanctioned by the Government of the former State of Bombay, M.P. and Hyderabad Recruitment to the post and services in the various component parts of the State is to be regulated according to the rules framed by the former Govern 674 ments concerned and not according to the Bombay Civil Service Rules.
In view of this, the recruitment rules of old M.P. and the exhibit Hyderabad State will be applicable to the allocated Government servants coming from those areas until such time as a unified set of recruitment rules is prescribed by Government.
As there is no condition in the recruitment rules of the M.P. State or the exhibit Hyderabad State to the effect that persons should pass the Sales Tax Officers Examination before he is promoted as a Sales Tax Officer it would not be correct to ask the Assistant Sales Tax Officers and Sales Tax Inspectors allocated from the old M.P. State and Hyderabad State to pass the Sales Tax Officers examination before being considered for promotion.
Government has, therefore decided that all Assistant S.T.Os and S.T.ls who have been allocated from the old M.P. and Hyderabad States should he considered eligible for promotion without passing the STOs examination if they are otherwise fit for the promotion.
Such persons will have to pass STOs examination within such period as laid down in their respective departmental examination rules or recruitment rules as the ease may be.
(emphasis added) On the representations made by the ASTOs from Madhya Pradesh and Hyderabad, the Government of India, on March 9, 1965, addressed a letter to the State Government to the effect: The specific approval of the Government of India under the proviso to section 115(7) of the S.R. Act is necessary not only for applying the amended rules to the erstwhile employees of Vidarbha and Marathwada but also for amending the rules to the disadvantage of the erstwhile Bombay employees.
The 1954 rules of Bombay only provided that preference should be given to an Inspector who had passed the Departmental Examination of Sales Tax officers before he could be considered for promotion to the post of Sales Tax officer.
But the amended rules now provide that passing this examination is a prerequisite for consideration for promotion to the post of Sales Tax officer.
The Government of India have normally been accord ing approval under the section R. Act for prescribing such departmental tests subject to the following conditions: 675 1.
Additional time which may be double that of the time that is ordinarily permissible for passing such tests be allowed to the employees from the integrating units in cases where tests of higher standard are prescribed, or where tests were not prescribed under the parent State Governments.
Employees of the integrating unit should be promoted subject to their passing the test within the additional time referred to at item (i) above in other words promotions should not be withheld merely because the employees have not passed a Departmental test, and 3.
Government Servants of the age of 45 years or more should be exempted from passing departmental test and when exempted, they should be eligible for pro motion equally with one who has passed the tests.
I am to request that the State Government may examine the matter on the above lines and forward to the Government of India for approval their reconsidered proposals together with a draft of the amendment to the rules which the State Government may desire to make.
I am also to request that relevant extract of the rules of the erstwhile Government of Hyderabad, Madhya Pradesh and Bombay which are to be affected by the proposed amendment may also be forwarded to this Ministry.
(emphasis added) As the Central Government was of the opinion that the Bombay Departmental Examination Rules should not be made applicable to the allocated ASTOs from Madhya Pradesh and Hyderabad to their disadvantage, all the ASTOs from Madhya Pradesh and Hyderabad who were compelled earlier to appear for the said examination and who had failed to pass it were reinstated as STOs.
As a direct consequence of this, the Respondents l and 2 who had been promoted to officiate as STO, Gr.
III were reverted as STls by orders dated April 28, 1965 and June 30, 1965.
Since the amendment made to rule I (b) (ii) on January 20, 1961 operated to the disadvantage of STIs from Bombay, the State Government by its orders dated October 1, 1965, suspended the said amendment to the Recruitment 676 Rules until further orders.
In view of these changes, the State Government reviewed the cases of all the ASTOs and STIs from the three regions, and those who were otherwise found suitable were according to their seniority promoted to the post of STO Gr.
III even though they had not passed the STO examination.
On January 6, 1966, the State Government published a revised gradation list of ASTOs and STIs and invited objections thereto.
None of the respondents except Respondent 4 filed any objection.
That representation, on being forwarded by the State Government, was duly considered by the Government of India, who rejected the same.
The decision of the Government of India is contained in the counter affidavit of Shri Shukla, Deputy Secretary, Ministry of Home Affairs, which reads: I say that the Government of India carefully considered the representation made inter alia by the 4th petitioner and the recommendations of the State Advisory Committee and rejected the said representations and upheld the said gradation list dated the 6th Jan. 1966 as there was no reason to alter the principles on which the same had been prepared.
As stated hereinabove the Government of India was of the opinion that the decision of the State Government to treat Assistant Sales Tax Officers as an isolated category and to place The same above Sales Tax Inspec tors was just and fair.
The Government of India also considered the alterations made by the State Government in the rules relating to the passing of a Departmental Examination before a Sales Tax Inspector could be promoted to the post of a Sales Tax officer Grade III.
I say that different rules were prevalent in the different integrating areas regulating departmental promotions.
The State Govt.
decided that until unified recruitment rules were framed promotions might be given to all without their having to pass an examination i.e. without any discrimination.
The Government of India who have examined the matter in consultation with the State Advisory Committee was of the view that the deletion of departmental examination altogether was fair and just because by doing so and discrimination between employees coming from different integrating areas was removed.
(emphasis added) 677 It would appear that till 1973 there were no unified rules by which ASTOs from Madhya Pradesh and Hyderabad and STIs from Bombay were governed.
The Maharashtra Sales Tax officers ' Rules, 1973, framed by the State Government in exercise of the powers under the Proviso to article 309 of the Constitution came into force on August 4, 1973.
Rule 2 provides that the rules shall apply to Government servants serving in the Sales Tax Department including those of the former States of Bombay, Madhya Pradesh and Hyderabad who were allocated for service to the State of Bombay and subsequently to the State of Maharashtra.
Rule 4 deals with direct recruits as well as promotees and makes the condition for passing of the departmental examination within two years from the date of promotion or two years from the date of promulgation of the Rules and by r. 4 (c) it is provided that in the event of failure to pass the examination in the prescribed time, they shall be liable to reversion to the posts held by them prior to their promotion.
Looking to the lapse of time in framing the Rules, r. 8 provides that STOs who have already attained the age of 48 years on the date of promulgation of these rules shall be exempted from passing the Departmental Examination under the rules.
It is necessary here to mention that the Maharashtra (Bombay Area) Sales Tax officers (Grade II and Grade III) Recruitment Rules, 1969 framed by the State Government under the Proviso to article 309 of the Constitution were struck down by the High Court as ultra vires being per se discriminatory and thus violative of article 14 of the Constitution.
That was because r. 2 provided that nothing therein shall govern the ASTOs from Madhya Pradesh and Hyderabad.
There is no need for us to enter into the question as to the validity or otherwise of the said Rules.
since the Maharashtra Sales Tax officers ' Rules, 1973 now hold the field.
The two questions canvassed in this appeal are: (l) whether the State Government could by an executive order without framing a rule under the Proviso to article 309 of the Constitution, alter the rules relating to departmental promotion of ASTOs from Madhya Pradesh and Hyderabad which constituted their conditions of service to the prejudice of the STIs of Bombay without the prior approval of the Central Government under the Provision to sub section (7) of section 115 of the Act, and (2) Whether the State Government while integrating the services could unilaterally alter the seniority list of the allocated ASTOs and STIs and place the ASTOs from Madhya Pradesh and Hyderabad in an isolated category over the STIs from Bombay while determining their inter se seniority.
678 Prior to the reoganisation of the States, a Conference of the Chief Secretaries of the States that were to be affected by the reorganisation was held at Delhi on May 18 and 19, 1956 for the purpose of the formulation of the principles upon which integration of services was to be effected.
The Government of India by their letter dated April 3, 1957 informed the State Government that the work of integration of services should be dealt with by them in the light of the general principles already settled at the Chief Secretaries Conference.
This has been construed to be a valid delegation of powers to prepare the preliminary and final gradation lists under the direction and with the sanction of the Central Government.
The Government of India by its Circular dated May 11, 1957 to all the State Governments stated inter alia that it agreed with the views expressed on behalf of the States ' representatives that it would not be appropriate to provide any protection in the matter of departmental promotion.
This Circular has been interpreted as a prior approval of the Central Government in terms of the proviso to sub section
(7) of section 115 of the Act in the matter of change in the conditions of service relating to departmental promotions.
The following principles had been formulated for being observed as far as may be, in the integration of Government servants Allotted to the services of the new States: "In the matter of equation of posts: (i) Where there were regularly constituted similar cadres in the different integrating units the cadres will ordinarily be integrated on that basis; but (ii) Where, however, there were no such similar cadres the following factors will be taken into consideration in determining the equation of posts: (a) nature and duties of a post; (b) powers exercised by the officers holding a post, the extent of territorial or other charge held or responsibilities discharged; (c) the minimum qualifications, if any, prescribed for recruitment to the post.
(d) the salary of the post.
679 It is well settled that these principles have a statutory force.
There is a long line of decisions of this Court starting from the Union of India and Anr.
vs P.K Roy and Ors.
(l) laying down that the Central Government has been constituted to be the final authority in the matter of integration of services under sub section
(S) of section 115 of the Act.
The matter of equation of posts is purely an administrative function.
It has been left entirely to the Central Government as to how it has to deal with these questions.
The Central Government had established an Advisory Committee for the purpose of assisting in the proper consideration of the representations made to it.
There is nothing in sections 115 to 117 of the Act prohibiting the Central Government in any way from taking the aid and assistance of the State Govt, in the matter of effecting the integration of services.
As observed by this Court in Roy 's case the usual procedure followed by the Central Government in the matter of integration of services generally, is in order.
It is not open to the Court to consider whether the equation of posts made by the Central Government is right or wrong.
This was a matter exclusively within the province of the Central Government.
Perhaps, the only question the Court can enquire into is whether the four principles agreed upon at the Chief Secretaries Conference had been properly taken into account.
This is the narrow and limited field within which the supervisory jurisdiction of the Court can operate.
But where, as here, in the matter of equation of posts, the Central Government had properly taken into account all the four principles decided upon at the Chief Secretaries Conference, the decision cannot be assailed at all.
In the present case, not only the Central Government had laid down the principles for integration, but also considered the representations and passed the final orders and the provisional gradation lists were prepared and published by the State Government under the direction and with the sanction of the Central Government.
In accordance with the principles settled at the Chief Secretaries Conference, the Government of India, in consolation with the Central Advisory Committee, directed that the posts of ASTOs in the former States of Madhya Pradesh and Hyderabad should be continued in an isolated category, there being no corresponding post in the successor State of Bombay with which they could be equated.
There were 19 ASTOs in the pay scale of Rs. l50 10 200 680 EB 15 250 from Madhya Pradesh and 23 ASTOs in the pay scale of Rs. 170 8 1/2 225 EB 13 320 from Hyderabad allocated to the new State of Bombay.
In the former State of Bombay there was no similarly constituted cadre of ASTOs, but there were posts of STIs in the pay scale of Rs. 120 8 144 EB 8 200 10/2 250.
It would have been inequitable and unfair to equate ASTOs from Madhya Pradesh and Hyderabad with STIs from Bombay, looking to the nature of their posts, the powers and responsibilities and the pay scales attached to the same.
The ASTOs from Madhya Pradesh and Hyderabad were, in the first instance, superior to STIs in their respective States and the post of ASTO in those States was a promotion post.
In addition, ASTOs in those States were assessing authorities and they enjoyed statutory powers of their own to assess tax and levy penalties, whereas the STIs in Bombay had no such powers to assess tax or levy penalty but had merely to scrutinise returns and generally act in a subordinate capacity to STOs.
Evidently, the State Government was wrong in directing by its Resolution dated November 16, 1957 that the seniority of ASTOs from Madhya 1) Pradesh and Hyderabad and STIs from Bombay be fixed in the cadre of Ss in the reorganised State of Bombay on the basis of continuous service including that in the lower grade.
The principle adopted by the State Government for determining their relative inter se seniority was obviously wrong, being contrary to the principles settled at the Chief Secretaries Conference.
As already stated, the Government of India, on representation by the affected ASTOs from Madhya Pradesh and Hyderabad, in consultation with the Central Advisory Committee, directed that the inter se seniority should be fixed taking into account continuous service in the equated grade only subject to the inter se seniority of the officers coming from the several integrating regions.
Upon that basis, the State Government by its Resolution dated September 10, 1960, rightly modified Notes 3 and 6 of its 1957 Resolution and directed that the seniority as on November l, 1966 of ASTOs from Madhya Pradesh and Hyderabad be fixed above the persons in the cadre of STIs and that the inter se seniority of ASTOs from Madhya Pradesh and Hyderabad be fixed on the basis of their continuous service as ASTOs in their respective States.
The High Court, in dealing with the question of equation of posts, observed: On merits, if the duties of Assistant Sales Tax officers of those two States and those of Inspectors are compared 681 in the light of the minutes contained in Ex.2 (Memorandum of the Government of Maharashtra, Finance Department.
dated November 21, 1964) the difference is not much.
We enquired about the nature of work they are doing today and we are told on instructions by the State 's counsel that they are doing the work that the Sales Tax Inspectors are doing.
(emphasis added) All that we need say is that the High Court, if we may say so, without meaning any disrespect, has viewed the question from a wrong perspective.
The remaining question whether the State Government by its Resolution dated June 13, 1964 and Memorandum dated November 21, 1964, effected a change of recruitment rules by an executive order, in the conditions of service of the ASTOs from Madhya Pradesh and Hyderabad, contrary to the Proviso to sub section
(5) of section 115 of the Act; and if so, whether such a change in the conditions of service could be brought about without framing a rule under the Proviso to article 309 of the Constitution.
In our opinion, the question does not really arise.
There can be no dispute with the proposition that a rule framed under the Proviso to article 309 of the Constitution cannot be modified by an executive order.
But the question is whether that principle is attracted to the facts and circumstances of the present case.
The Resolution and the Memorandum referred to above, undoubtedly do not have the status of a rule framed under the Proviso to article 309 of the Constitution.
They merely conveyed the decision of the State Government that the allocated ASTOs from Madhya Pradesh and Hyderabad should be considered eligible for promotion to the post of STO, Gr.
IlI without passing the departmental examination for STO, Gr.
The State Government had not by its Resolution dated June 13, 1964, or by its Memorandum dated Nov. 21, 1964, brought about a change in the conditions of service by an executive order.
All that was done was to rectify a mistake that had been committed in the past in subjecting the ASTOs from Madhya Pradesh and Hyderabad to the Departmental Examination Rules framed by the former State Government of Bombay i.e. to a rule which did not form part of conditions of their service and, therefore, was not applicable to them.
We find no infirmity in these two documents.
The decisions reached by the Government on the representations made by ASTos from Madhya Pradesh and 682 Hyderabad were strictly in conformity with the recruitment rules framed by the former State of Madhya Pradesh and Hyderabad under the Proviso to article 309 of the Constitution.
It is quite obvious that STIs from Bombay were not entitled to the above concession, as the passing of the STOs examination had been made a condition precedent for their promotion as STO Gr.
There was a marked distinction between the recruitment rules framed by the former State Governments of Bombay and Madhya Pradesh and Hyderabad for appointment as STOs.
In the former State of Bombay, eligibility for the promotion of STIs to the post of STO Gr.
III depended upon their passing the departmental examination for the non gazetted staff of the Sales Tax Department under r. 1(b) (ii) of the Recruitment Rules for the S.T.Os.
Under r. 3, preference was to be given to an Inspector who had passed the departmental examination prescribed for STOs over those who had not.
By the amendment of January 20, 1961 made by the State Government, the words "and also the departmental examination for STOs ' were added after the words "time for promotion".
The effect of this amendment was to make the passing of the STO examination a condition precedent for promotion of STIs as STO Gr.
Further, the amendment deleted r. 3 which laid down a rule of preference.
In the former States of Madhya Pradesh and Hyderabad, neither such condition nor any rule of preference was there.
Under r. 1 of the Rules for Departmental Examination framed by the former State Government of Madhya Pradesh, ASTOs who were promoted as STOs were required to pass the departmental examination within two years from the date of such promotion.
Rule 4 provided that they would not be confirmed till they pass the said examination and on their failure to do so, they would be reverted to the substantive post of ASTOs.
Similarly, under r. 2(c) of the Rules framed by the former Hyderabad State, ASTOs who were prompted as STOs were required to pass the departmental examination within three years from the date of commencement of the rules failing which their grade increment was to be withheld till they pass such examination.
Rule 2 (d) provided that STOs Cl. 1 and II who had not been confirmed in their respective posts, were required to pass the said examination within the said period failing which they were to be reverted to their substantive posts.
According to the general Circular issued by the State Government of the reorganised State of Bombay dated April 29, 1960, pending unification of the recruitment rules framed by the State Government of Bombay, Madhya Pradesh and Hyderabad, the 683 recruitment to the various posts and services was to be regulated A according to the rules framed by the State Governments and not according to the Bombay Civil Service (Classification and Recruitment) Rules.
It is not disputed that the Departmental Examination Rules framed by the former State Governments of Madhya Pradesh and Hyderabad for promotion to the post of STOs formed part of the conditions of service of ASTOs from Madhya Pradesh and Hyderabad.
Mere chances of promotion are not conditions of service and the fact that there was reduction in the chances of promotion did not tantamount to a change in the conditions of service.
A right to be considered for promotion is a term of service, but mere chances of promotion are not.
Under the Departmental Examination Rules for STOs, 1954, framed by the former State Government of Madhya Pradesh.
as amended on January 20, 1960, mere passing of the departmental examination conferred no right on the STIs of Bombay, to promotion.
By passing the examination, they merely became eligible for promotion.
They had to be brought on to a select list not merely on the length of service, but on the basis of merit cum seniority principle.
It was, therefore, nothing but a mere chance of promotion.
In consequence of the impugned orders of reversion, all that happened is that some of the STIs who had wrongly been promoted as STOs Gr.
III had to be reverted and thereby lost a few places.
In contrast, the conditions of service of ASTOs from Madhya Pradesh and Hyderabad, at least so far as one stage of promotion above the one held by them before the reorganisation of States, could not be altered without the previous sanction of the Central Government as laid down in the Proviso to sub section
(7) of section 115 of the Act.
We are unable to agree with the High Court in its opinion that ASTOs from Madhya Pradesh and Hyderabad on their allocation to the new State of Bombay, who had wrongly been put at par with STIs from Bombay, had to pass the departmental examination prescribed by the former State Government of Bombay, for promotion to the post of STO Gr.
III before they could be actually so promoted.
It is an incontrovertible fact that the departmental examination prescribed by the former State Governments of Madhya Pradesh and Hyderabad had not been held after August 8, 1960 i.e. for the last 20 years.
Merely because the C.P. and Berar Sales Tax Act, 1947 684 and the Hyderabad General Sales Tax Act, 1950 stood repealed with effect from January 1, 1960, that hardly furnished a ground for not holding the examination.
The State Government, in their affidavit before the High Court, tried to justify their action that the subjects under the ex Madhya Pradesh and Hyderabad Rules had become obsolete and, therefore, it was felt that no useful purpose would be served in holding these examinations.
This was no justification at all, for even after the Bombay Sales Tax Act, 1959 had been extended throughout the State with effect from January 1, 1960, all pending assessments pertaining to the Vidarbha and Marathwada regions of the former States of Madhya Pradesh and Hyderabad had to be completed in accordance with the repealed Acts.
In this context, the High Court observed that it examined the subjects prescribed for the three departmental examinations of Bombay, Madhya Pradesh and Hyderabad and found that "there was not much difference".
It went on to say that "it could hardly be suggested by any one that prescribing a subject more or less for an examination would adversely affect conditions of service.
The purpose of examination is to prepare the officer to be able to cope up with different kinds of problems that would confront him with reasonable efficiency.
" To say the least, the observations made by the High Court are unwarranted.
Be that as it may, the fact remains that the condition regarding the passing of the departmental examination became incapable of compliance in the case of ASTOs from Madhya Pradesh and Hyderabad who had been promoted as STOs Gr.
They were entitled to such promotion without passing such examination.
Under the relevant rules which regulated their conditions of service, there was only a possibility of reversion in the eventuality of their not passing the examination within the stipulated time.
Since no examinations admittedly have been held, there is no question of their reversion as ASTOs.
If the decision of the High Court were to be upheld, it would imply that many of the ASTO from Madhya Pradesh and Hyderabad who had been promoted as STOs Gr III and during the past 20 years have reached the higher echelons of service, would now have to be put back as ASTOs, for no fault of their own.
Many of them either have retired or are on the verge of retirement.
There was thus no alternative for the State Government but to suspend the operation of the amendment made on January 20, 1961 to r. 1(b) (ii) of the recruitment rules, by its order dated October 1, 685 1965, which made the passing of the STO examination a condition A precedent for promotion of STIs to STO Gr.
There can be no doubt that the State Government 's Resolution dated June 13, 1964 and its Memorandum of November 21, 1964, clarifying that the ASTOs from Madhya Pradesh and Hyderabad were entitled for promotion to the post of STO Gr.
III without passing the departmental examination, placed STIs from Bombay at a disadvantage.
To ensure 'fair and equitable treatment ', the State Government rightly dispensed with the requirement of passing the departmental examination in the case of STIs from the former State of Bombay.
In the end, reverting back to the main question.
On an overall view of things, we are satisfied that the State Government acted with the best of intentions.
It endeavoured to strike a balance between the competing claims to relative seniority.
When sub section
(5) of section 115 of the Act speaks of "fair and equitable treatment", obviously it envisages a decision which is fair and equitable to all.
The result, therefore, is that the appeal succeeds.
The judgment of the High Court of Bombay is set aside and the writ petition filed by Respondents 1 to 5 is dismissed.
There shall be no order as to costs in the facts and circumstances of the case.
N.V.K. Appeal allowed.

summary/full:
Assistant Sales Tax Officers serving in connection with the affairs of the former States of Madhya Pradesh and Hyderabad, on the appointed date, were allocated to the new State of Bombay under section 115 of the (Act No. XXXVII) with effect from November 1, 1956.
The Assistant Sales Tax officers from the former States of Madhya Pradesh and Hyderabad were superior to the Sales Tax Inspectors in their respective States and the posts of Assistant Sales Tax officer in those States was a promotion post.
In the former State of Bombay, there was no similarly constituted cadre of Assistant Sales Tax officers, but there were posts of Sales Tax Inspectors.
On November 16,1957, the State Government by its resolution directed that the ASTOs from Madhya Pradesh and Hyderabad should continue in their respective pay scales until such of them were not appointed as STOs Grade III, and Notes 3 and 6 appended to the Resolution provided that for purposes of promotion their inter se seniority be Fixed on the basis of their service as STOs and ASTOs.
On February 3, 1960, the State Government substantially modified rule 7 of the Allocated Government Servants (Absorption, Seniority, Pay and Allowances) Rules, 1957 and a new rule 7 was substituted which provided that the seniority of an allocated Government servant in the post or cadre of absorption shall, as on November 1, 1956 be determined by the length of continuous service etc.
Since 666 there were no comparable posts of ASTos in the former State of Bombay, the Central Government directed that the ASTos from Madhya Pradesh and Hyderabad should not be equated with the post of STIs but should be continued in an isolated category and their seniority should be fixed above the persons in the next lower grade.
The State Government by its resolution dated September 10, 1960 modified Notes 3 and 6 and directed that the seniority as on November 1, 1956 of ASTOs from Madhya Pradesh and Hyderabad be fixed above all persons absorbed as STIs and that the inter se seniority of STOs from Madhya Pradesh and Hyderabad be fixed on the basis of their continuous service as ASTOs, and that the service rendered by the ASTOs from Madhya Pradesh as Excise Inspec tors or Assistant District Excise Officers in the Excise Department be counted as equivalent service.
On August 17,1962, the State Government prepared a fresh provisional gradation list of ASTOs and STIs and invited objections.
None of the respondents raised any objection.
Upto and until August 8, 1960, departmental examinations for promotion to the post of STOs were conducted under the three different sets of rules applicable to the former States of Bombay, Madhya Pradesh and Hyderabad.
The Departmental Examination Rules for Sales Tax officers 1954 framed by the former State Government of Bombay were made applicable to the Assistant Sales Tax officers allocated from Madhya Pradesh and Hyderabad from August 8,1960, as the provisions of the Bombay Sales Tax Act, 1959 were extended to the whole of the State, the CP and Berar Sales Tax Act 1947 and the Hyderabad General Sales Tax 1950 having been repealed.
The ASTOs from Vidarbha and Marathwada regions of Madhya Pradesh and Hyderabad were called upon to appear at the examinations prescribed from the STOs of the old Bombay region, and some of the ASTOs from Madhya Pradesh and Hyderabad who had been promoted as STos Grade Ill were reverted to the post of ASTOs due to their failure to pass the said examination.
The Government by its Resolution dated June 13, 1964 directed that the ex Hyderabad ASTOs even though they had not passed the prescribed depart mental examination should be confirmed on the basis of confidential records, efficiency and seniority: and by its Memorandum dated November 21,1964 order ed that all the ASTOs and STIs who had been allocated from the old M.P. and Hyderabad States should be considered eligible for promotion without passing the STos examination if they are otherwise fit for promotion.
On representation made by the ASTos from Madhya Pradesh and Hyderabad, the Government of India, by its letter dated March 9, 1965 to the State Government directed that the Bombay Departmental Examination Rules, 1954, could not be made applicable to the allocated ASTOs from Madhya Pradesh and Hyderabad as it would amount to changing their conditions of service to their disadvantage.
It accordingly directed that all the ASTOs from Madhya Pradesh and Hyderabad who were compelled to appear for the said examination and who had failed to pass the same be reinstated as STOs.
This directive resulted in Respondents I and 2 who had been promoted to officiate as STO, Grade 111 being reverted as STIs.
The State Government in view of this change reviewed the cases of all the ASTOs, and STIs from the three regions and those who were otherwise found 667 suitable were according to their seniority promoted to the post of STO, Gr.
III even though they had not passed the STOs examination.
On January 6,1966 the State Government published a revised gradation list of ASTOs and STIs and invited objections.
Only Respondent 4 filed objections which was considered by the Government and rejected.
The writ petition filed by Respondents 1 to S who were STIs in the State of Bombay and had passed the prescribed departmental examination for promotion as STOs Gr.
III was allowed by the High Court which struck down the various resolutions and orders passed by the State Government from time to time relating to integration of service under sub section (7) of section 115 of the Act.
In the appeals by the State to this Court on the questions whether (I) the State Government could by an executive order without framing a rule under the Proviso to article 303 of the Constitution alter the rules relating to departmental promotion of ASTOs from Madhya Pradesh and Hyderabad which constituted their conditions of service to the prejudice of the STIs of Bombay without the prior approval of the Central Government under the proviso to sub section (7) of section 115 of the Act, and (2) the State Government while integrating the services could unilaterally alter the seniority list of the allocated ASTOs and place the ASTOs from Madhya Pradesh and Hyderabad in an isolated category over the STIs from Bombay while determining their inter se seniority.
Allowing the appeal, ^ HELD :1 (i).
The matter of equation of posts is purely an administrative function under section 115 of the States Re organisation Act, 1956.
Under sub section
(5) of section 115 the Central Government is the sole repository of the power to effectuate the integration of services in the new States.
It has been left entirely to the Central Government as to how it has to deal with these questions.
The Central Government established an Advisory Committee for purposes of assisting in proper consideration of the representations made to it for the work of integration of services, the Central Government could take all manner of assistance from the State Government including the preparation of provisional gradation lists, The Central Government exercises general control in regard to the integration of services, and the ultimate integration was done with the sanction and approval of the Central Government.
The provisional gradation lists prepared by the State Government were not, therefore, open to challenge.
[679 A E] Union of India and Anr.
vs P.K. Roy and Ors.
; referred to.
In the instant case, not only had the Central Government laid down the principles for integration but also considered the representation made and passed the final orders thereon.
The provisional gradation lists were prepared by the State Government under the direction and with the sanction of the Central Government.
The Assistant Sales Tax officers from the former States of Madhya Pradesh and Hyderabad allocated to the new State of Bombay, could not be equated with the Sales Tax Inspectors.
In the former State of Bombay, there was no similarly constituted cadre of Assistant Sales Tax officers, but there were 668 posts of Sales Tax Inspectors.
The Assistant Sales Tax officers from Madhya Pradesh and Hyderabad were superior to Sales Tax Inspectors in their respective States and the post of Assistant Sales Tax officer in these State was a promotion post.
It would have been inequitable and unfair to equate Assistant Sales Tax officers from Madhya Pradesh and Hyderabad with Sales Tax Inspectors from Bombay having regard to the nature of their posts, the powers and responsibilities, and the pay scales drawn by them.
In addition, Assistant Sales Tax officers in these States were assessing authorities and they enjoyed statutory powers of their own to assess tax and levy penalties, whereas the Sales Tax Inspectors in Bombay had no such powers to assess tax or levy penalty but had merely to scrutinise returns and generally act in a subordinate capacity to Sales Tax officers.
[679 F 680 C] (ii) The principle adopted by the State Government for determining the relative inter se seniority was obviously wrong, being contrary to the principles settled at the Chief Secretaries Conference.
The Government of India, on re presentation by the affected Assistant Sales Tax Officers from Madhya Pradesh and Hyderabad in consultation with the Central Advisory Committee, directed that the inter se seniority should be fixed taking into account continuous service in the equated grade only subject to the inter se seniority of the Officers, coming from the several integrating regions.
Upon that basis, the State Government by its Resolution dated September 10, 1960 rightly modified Notes 3 and 6 of its 1957 Resolution and directed that the seniority as on November 1, 1956 of ASTOs from Madhya Pradesh and Hyderabad be fixed above the persons in the cadre of STIs and that the inter se seniority of ASTOs from Madhya Pradesh and Hyderabad be fixed on the basis of their continuous service as ASTOS in their respective States.
[680 E.G] 2.
There was a difference between the Departmental Examination Rules framed by the former State Governments of Bombay, Madhya Pradesh and Hyderabad regulating the appointment of STOs.
In the former State of Bombay, eligibility for the promotion of STIs to the post of STO Gr.
Ill depended upon their passing the departmental examination for the non gazetted staff of the Sales Tax Department under rule I (b) (ii) of the Recruitment Rules for the STOs Gr.
III, i. e. it was condition precedent.
In the former States of Madhya Pradesh and Hyderabad there was no such condition attached.
Under the Rules for Departmental examination, the ASTOs who were promoted as STOs were required to pass the departmental examination within two or three years from the date of their promotion i.e. it was a condition subsequent.
The Departmental Examination Rules framed by the former State Governments of Madhya Pradesh and Hyderabad for promotion to the post of STOs formed part of the conditions of service of ASTOs from Madhya Pradesh and Hyderabad and they could not be altered to their disadvantage without the prior approval of the Central Government under section 115 (7) of the Act.
Since no examination admittedly had been held there was no question.
Of their reversion as ASTOs.
[685 B C; E G; 683 B F; 685F] 3(i) The Resolution dated June 13, 1964 and the Memorandum dated November 24,1964 do not have the status of a rule framed under the Proviso to Article 309 of the Constitution.
They merely conveyed the decision of the State Government that the allocated ASTOs from Madhya Pradesh and Hyderabad 669 should be considered eligible for promotion to the post of STO, Gr.
III without passing the departmental examination for STOs Gr.
The State Government had not by its Resolution or Memorandum brought about a change in the conditions of service by an executive order.
All that was done was to rectify a mistake that had been committed in the past in subjecting the ASTOs from Madhya Pradesh and Hyderabad to the Departmental Examination Rules framed by the former State Government of Bombay i.e. to a rule which did not form part of conditions of their service and, therefore, was not applicable to them.
There is, therefore, no infirmity in these two documents.
[681 F H] (ii) Mere chances of promotion are not conditions of service and the fact that there was reduction in the chances of promotion did not tantamount to a change in the conditions of service.
A right to be considered for promotion is a term of service, but mere chances of promotions are not.
[683 C] (iii) The State Government 's Resolution dated June 13, 1964 and its Memorandum of November 21, 1964 clarifying that the ASTOs from Madhya Pradesh and Hyderabad were entitled for promotion to the post of STO Gr.
III without passing the departmental examination.
placed STI from Bombay at a disadvantage.
To ensure 'fair and equitable treatment the State Government rightly dispensed with the requirement of passing the departmental examination in the case of STIs from the former State of Bombay.
The State Government acted with the best of intentions.
It endeavoured to strike a balance between the competing claims to relative seniority.
When sub section (5) of section 115 of the Act speaks of 'fair and equitable treatment ', it envisages a decision which is fair and equitable to all.
[686 A D]


judgement:
Civil Appeal Nos.
1600, 1568 and 1416 of 1970.
From the judgment and order dated the 13th/14th February, 1969 of the Bombay High Court in Special Civil Application Nos. 295 of 1962, 1397166 and 1086 of 1966 respectively.
R.B. Datar, Lalit Bhardwaj and Miss Madhu Moolchandani for the appellant in C.A. No. 1600/70.
Dr. L.M. Singhvi, R.H. Dhebar, S.K Dholakia, R.C. Bhatia, Mrs. Ranjana Anand and L.K Pandey for the appellants in C.A. No. 1568/70.
V.S. Desai and Dr. Y.S. Chitaley Mrs. J. Wad for the respondent in C.A. No. 1600 and 1568.
Mrs. J. Wad for respondent in C.A. No. 1416 of 1970.
The Judgment of the Court was delivered by MISRA, J.
The present appeals by certificate are directed against a common judgment of the Bombay High Court dated 13th of February, 1969.
By the impugned order the High Court dismissed the petitions filed by the appellants under Article 226 of the Constitution challenging the demand of octroi duty by the Municipal Corporation of Poona.
The Bombay Provincial Municipal Corporation Act, 1949 (for short 'the Act ') came into operation in the City of Poona on 15th of February, 1950.
Section 127 (2) thereof authorises the Corporation to impose octroi and other taxes.
Section 149 prescribes the procedure to be followed in levying taxes.
Insofar as it is material, it reads: 732 "149 (1) In event of the Corporation deciding to levy any of the taxes specified in sub section (2) of section 127, it shall make detailed provision, in so far as such provision is not made by this Act, in the from of rules, amplifying or adding to the rules at the time in force (2) The rules shall be submitted by the Corporation Government and the provincial Government may either refuse to sanction them or refer them back to the Corporation for further consideration or sanction them either as they stand or with such modification as it thinks fit, not, however, involving an increase in the rate or rates of the levy or the extent thereof.
" It appears that sometime in the year 1957 the Corporation in order to boost industrial development and to encourage the industrialists to establish industries in the city, had decided to give certain concession in the nature of exemption from octroi duty on certain products under certain conditions.
Pursuant to this objective the Corporation made rule 62 B in Chapter VIII to the Schedule of the Raid Act in 1957.
It reads: "62 B. Industrial Estate or Area" means the area which Corporation may from time to time demarcate for the purposes of the rule as the area in which industries can be suitably located in the interest of industrialisation of the city of Poona.
In respect of any raw materials or machinery imported by any industrial manufacturing concern established or to be established in the industrial estate solely for the purpose of manufacturing finished articles in the said industrial estate, the Commissioner shall not, for a period of twelve years only, from the date on which this rule comes into force, levy octroi. " Under this rule no levy of octroi was to be made for a period of twelve years from the date on which the rule came into force.
Later on the Corporation framed extensive new octroi Rules under their resolution dated 7th of August, 1962, which received the sanction of the Government of Maharashtra on 28th of January, 733 1963.
As the entire argument on behalf of the appellants is based on rule 5 (8) of the said rules, it will be appropriate to quote the rule: "5(8).
In respect of any raw materials or machinery belonging to and imported by the industrial, manufacturing, processing or assembling concern established or to be established in the industrial estate or area for the purpose of manufacturing, processing, or assembling finished articles in the said industrial estate or area, the Commissioner shall not levy octroi for a period of 10 years from the date of demarcation of such areas as an industrial estate or area.
Provided that this exemption not be given in respect of any raw materials imported for the purpose of refilling, packing or repacking only.
Provided that no exemption from octroi shall be given or claimable unless the importer produces at the time of 1) import but not afterwards a certificate in the form prescribed in Schedule P signed by the proprietor or the manager of the said industrial concern certifying that the raw materials or machinery that are being imported are the property of the ownership of the said industrial concern and that the said materials or machinery are to be used or are intended to be used by the said industrial concern for the purpose of manufacturing, processing or assembling finished articles in the said industrial estate or area.
For the purpose of this exemption 'Industrial Estate ' or Area shall mean the area which the Corporation may from time to time demarcate for the purposes of this rule as the area in which industries can be suitably located in the interest of industrialisation of the City of Poona.
" The Corporation had been levying octroi on the materials received by the appellants.
They, however, sought to get exemption under rule 5 (8) from octroi.
As the pattern of facts in each of the appeals is similar, we shall deal with the application made by the appellant in appeal No. 1568 of 1970.
The appellant in this case applied on 17th of November, 1964 for exemption from payment of octroi duty under rule 5 (8) of the octroi Rules.
The 734 Superintendent of octroi, Poona Municipal Corporation wrote back on 5th of December, 1964 as follows: ". exemption from payment of octroi duty can only be granted if the area within which the concern is situated is declared as industrial area and is demarcated for the purpose under the Resolution of the Corporation.
As the area in question has not been demarcated as an industrial area, under the resolution of the Municipal Corporation, the question of granting exemption from the payment of octroi duty does not arise.
It is, therefore, regretted that the exemption asked for cannot be granted.
" Similar was the position of the appellants in the other two appeals.
In the circumstances the appellants filed petitions under Article 226 of the Constitution for a mandamus requiring the Municipal Corporation to define and demarcate the area where their factories were situate as industrial area within the meaning of sub rule (8) of rule S and to exempt them from payment of octroi.
It appears that during the pendency of the writ petitions rule 5 (8) of the octroi Rules was repealed by a notification with effect from 1st of September, 1968.
The appellants, therefore, applied for amendment of the petitions.
By these amendments, the appellants sought to take up two more pleas: (I) that the repeal of sub rule (8) of rule 5 was illegal and/or ultra vires and, therefore, rule 5 (8) still continues to be effective, and (2) that in any event the appellants can get the benefit of rule 62 B which has not been repealed.
The High Court repelled both the contentions and held that old rule 62 B and the new rule 5 (8) were repealed and there was no legal flaw.
It, however.
took the view that despite the repeal of rule S (8) the appellants could still get the relief under rule S (8) if other conditions were satisfied, because of the proviso attached to the repealing rule.
On merits, however, the High Court did not accept the case of the appellants.
In its opinion the area in ques was not demarcated as industrial estate or area for the purpose of rule 5 (8).
The High Court further held that in view of rule 5 (8) of the octroi Rules it was solely in the discretion of the Corporation to demarcate an area as industrial estate.
The appellants have 735 now come to challenge the order of the High Court by these A appeals.
Dr. Singhvi appearing for the appellant in one of the appeals, Civil Appeal No. 1568 of 1970, has contended that if certain area has been demarcated as an industrial area under the Bombay Town Planning Act, 1954 the same shall be taken to be an industrial area within the meaning of rule S (8) of the octroi Rules.
The argument proceeded in the first instance on the assumption that the disputed area had already been included in the development plan under Bombay Town Planning Act, 1954 before the promulgation of rule S (8) and had thus automatically become an industrial estate or area for the purposes of that rule.
But the development plan was prepared by the Corporation on 20th of November, 1958 which was sanctioned by the Government on 7th of July, 1966 and it came into fore on 15th of August, 1966.
Therefore, no area had been declared as industrial area under the development plan before 1957 and in fact it was only after the enforcement of the development plan on 15th of August, 1967 that the disputed area became an industrial area under the Bombay Town Planning Act.
Dr. Singhvi 's assumption clearly lacks any factual basis.
Now the question is whether demarcation of a particular area as an industrial estate or area in pursuance of the Bombay Town Planning Act could be taken to be a demarcation within the meaning of rule 5 (8).
On a bare perusal of rule 5 (8) it will be apparent that for the purpose of the exemption from octroi an industrial estate or area means the area which the Corporation may from time to time demarcate for the purpose of this rule as the area in which industries can be suitably located for the interest of industrialisation of the City of Poona.
Obviously, therefore, the demarcation made under the Town Planning Act will not be a demarcation for the purpose of rule S (8) and unless there is a demarcation as contemplated by rule S (8) the appellants cannot claim exemption from octroi.
The view taken by the High Court is fully warranted by rule S (8) of the octroi Rules.
It is next contended for the appellant that the Corporation has refused to grant exemption to the appellant on the arbitrary ground that the concern of the appellant was not a new one.
The learned counsel seeks to support his argument by the following expression used in sub rule (8) of rule 5: 736 ". concern established or to be established in the industrial estate or area.
" The expression obviously includes not only a concern to be established but also one already established.
But even then the appellant cannot get exemption unless he proves that there has been demarcation within the meaning of sub rule (8) of rule 5 of the octroi Rules.
While demarcating an area for the purpose of rule 5(8) the Corporation may have to take into consideration various factors and circumstances different from those which might weigh with it for making out an area as industrial under the Town Planning Act.
The purpose of that Act is to plan the town and thus to keep industrial areas away from the residential or commercial areas and no industries could be set up in an area other than the industrial area declared in pursuance of that Act, while the purpose of demarcation as industrial estate or area under rule 5(8) is the giving of incentive and impetus to industries in a particular area In so doing the Corporation has got to see whether a particular area is or is not suitably located in the interest of industrialisation irrespective of any consideration as to how the town is to be planned.
It was next contended that there has been violation of Article 14 of the Constitution in as much as some industries in similar situation have been granted exemption while the appellants have been deprived of the benefit of rule 5(8).
There is no foundation for this ground.
It has not been alleged, much less proved, that any other unit has been granted exemption even without a demarcation by the Corporation under rule 5(8).
There is absolutely no force in this contention.
For the respondent it was contended that rule 5(8) of the octroi Rules having been deleted the appellant cannot seek exemption under rule S(8).
Dr. Singhvi for the appellant in reply has contended that, for one thing, the appellant can fall back on the old rule 62 B as the same has not been repealed.
The preamble to the new octroi Rules reads: "Whereas it is found necessary to rescind Rules 26, 28 29, 33, 62 and Rules 35 and 49 (in so far as they relate to octroi) contained in Chapter VIII of the Schedule of the Bombay Provincial Municipal Corporations Act, 1949, and all other existing rules and bye laws relating to octroi enacted under the Bombay District Municipal Act, 1901, 737 and the Bombay Municipal Boroughs Act, 1925, and A whereas it is found necessary to make new rules relating to octroi under sub section (I) of section 149 of the Bombay Provincial Municipal Corporations Act, 1949, the Municipal Corporation of the City of Poona under its Resolution No. 78, dated 7.8 1962 in pursuance of the power vesting in it under clause (7) and clause (17) of section 457 read with section 454 of the said Act is pleased to rescind the rules and bye laws aforementioned and to make the new rules as follows.
" It is true that seven rules covering the subject of octroi and contained in chapter VIII of the Schedule to the Bombay Provincial Municipal Corporation Act 1949 have been specifically mentioned in the preamble as being rescinded and rule 62B is conspicuous by its absence therefrom, which fact apparently supports Dr. Singhvi 's contention.
A closer analysis of the preamble under which new rules were framed, however, makes it clear that rule 62B relating to octroi was repealed by implication.
It is noteworthy that chapter VIII above mentioned does not contain any rule relating to octroi, except rule 62B, which did not find a place in the preamble.
All rules relating to octroi and enacted under the 1901 and the 1925 Acts were also repealed without exception.
Another pointer (which is perhaps the most important in this connection) is available in the fact that octroi was made the subject matter of a new and comprehensive set of rules which not only deal with the matters covered by the rules contained in chapter VIII and specifically mentioned in the preamble but also the one covered by rule 62B, namely, the matter of exemption of goods from octroi in areas considered suitable for industralisation.
It does not stand to reason that the rule making authority framed new rules, of which rule 5(8) covers the entire field of the earlier rule 62B, and yet left the latter intact.
It could possibly not have been the intention of that authority to have two rules on the same subject and thus create confusion.
The promulgation of rule 5(8) as a part of an exhaustive set of new rules, in our opinion, has the effect of a repeal of rule 62B by necessary implication, although not in express terms.
Dr. Singhvi, however, as a second string to the bow banks upon the proviso to the resolution of the Corporation seeking to repeal rule 5(8) which is in these words: 738 "Octroi Rule 5(8) is hereby repealed.
Provided that notwithstanding such repeal the exemption already granted shall continue until the expiry of the respective periods of their grants.
" The resolution so passed was sent to the Government and, as held in Municipal Corporation for the City of Poona etc.
vs Bijlee Product (India) Ltd. etc.
,(1) the Government accepted it in full and sanctioned the repeal of rule S(8), as also the proposed proviso.
But then the appellants would not be entitled to any benefit by reason of the proviso because they were never granted any exemption under rule 5(8).
The other contention raised by Dr. Singhvi is that the Corporation while denying the benefit of exemption from octroi has taken into consideration extraneous or irrelevant considerations.
In support of his contention he referred to paragraph 7 of the counter affidavit filed by the Corporation in the writ petition, which is as follows: "7.
The respondents grant exemptions to concerns on certain policies.
The purpose of extending exemption from octroi duty is to attract new industries in the Corporation limits.
This policy is also carried out with a view to develop the city and also to secure employment to citizens and thus to have progress in the economic conditions, commerce and trade for the welfare of the people in general.
Moreover the aim of giving exemptions to new industries is to secure permanent sources of income for the respondents after a certain period, i.e, ten years.
This is the main object in granting exemption in the cases of new industries to be started that help the development of the City and secure permanent sources of income for the respondents after a definite period.
Side by side, there are certain other objects also which are kept in view while determining the question of granting exemptions.
These are whether Defence needs are satisfied, whether in the interest of public health and sanitation the grant of exemptions is beneficial, whether foreign exchange is saved, whether the problem of housing accommodation is solved, to some extent and the like.
The respondents will suffer 739 huge loss in revenue if exemptions are granted to each and every industry falling within the industrial areas under the Town Planning Scheme.
All these considerations are within the full discretion of the respondents while determining the question of grant of exemptions . ' In our opinion the considerations which have weighed with the Corporation cannot be said to be either irrelevant or extraneous.
These considerations are within the ambit of rule 5(8) of the octroi Rules.
A lot of argument was advanced on behalf of the appellant by Dr. Singhvi on the nature of relief to be granted to the appellant.
His contention was that a writ of certiorari may not be of much avail unless the Court grants a writ of mandamus directing the Corporation to demarcate the area in question under rule S(8) of the octroi Rules and grant him the exemption from octroi duty.
A number of authorities were cited that the Court can issue a writ of mandamus in suitable cases even in respect of administrative orders.
We do not think it is necessary to decide this point as in our opinion the appellants have not been able to make out a case for any relief.
In Civil Appeal No. 1600 of 1970 Shri R.B. Datar adopted the arguments advanced by Dr. Singhvi.
In the third appeal, No. 1416 of 1970 also the same questions of fact and law are h involved and, therefore, this judgment will govern the other two appeals.
For the reasons given above these appeals must fail.
They are accordingly dismissed.
The parties, however, shall bear their own costs.
N.K.A. Appeals dismissed.

dataset_name: IN-Abs

summary/full:
The Bombay Provincial Municipal Corporations Act, 1949 came into operation in the city of Poona on 15th of February, 1950.
Section 127(2) thereof authorised the Corporation to impose octroi and other taxes, while section 149 prescribed the procedure to be allowed in levying taxes.
In the year 1957, the Corporation in order to boost industrial development and to encourage the industrialists to establish industries in the city, decided to give certain concession in the nature of exemption from octroi duty.
Pursuant to this objective the Corporation made rule 62 B in Chapter VIII to the Schedule of the said Act in 1957, which envisaged the creation of an "Industrial Estate or Area", by which was meant the area which the Corporation may from time to demarcate as the area in which industries can be suitably located in the interest of industrialisation of the city.
Under this rule no levy of octroi was to be made for a period of twelve years.
Later on, the Corporation framed extensive new octroi Rules under their resolution dated 7th of August, 1962.
Rule 5(8) of the new Rules provided for exemption in respect of levy of octroi.
The Corporation had been levying octroi on the materials received by the appellants.
The appellants sought exemption under rule S(8).
The Corporation rejected their claim for exemption of octroi on the ground that exemption can only be granted if the area within which the concern was situated was declared as industrial area and demarcated for the purpose.
Being aggrieved, the appellants filed petitions under Article 226 of tho Constitution in the High Court for the issue of a writ of Mandamus requiring the respondent Corporation to define and demarcate the area where their factories were situated as industrial area, within the meaning of rule 5(8), and to exempt them from payment of octroi.
During the pendency of these petitions rule 5(8) was repealed.
The appellants amended the writ petitions and further contended that (1) that the repeal of rule 5(8) was illegal and/or ultra vires and, therefore, rule S(8) still continues to be effective and (2) that in any event they were entitled to get the benefit of rule 62 B which had not been repealed.
The High Court repelled both the contentions and held that old rule 62B and the new rule 730 5(8) were repealed and that there was no legal flaw.
It however took the view that despite the repeal of Rule S(8) the appellant could still get the relief under rule 5(8) because if the proviso attached to the repealing rule the area in question was not demarcated as industrial estate or area for the purpose of rule S(8) and that it was solely in the discretion of the Corporation to demarcate an area as industrial estate.
It consequently dismissed the writ petitions.
In the appeals to this Court it was contended on behalf of the appellants (I) that the disputed area had been included in the development plan under the Bombay Town Planning Act, 1954 before the promulgation of rule S(8) and had thus automatically become an industrial estate or area for the purposes of that rule.
(2) The Corporation had refused to grant exemption to the appellants on the arbitrary ground that the concern of the appellants was not a new one.
(3) There had been violation of Article 14 of the Constitution in as much as some industries in similar situations have been granted exemption while the appellants have been deprived of the benefit of rule S(8) and (4) While denying the benefit of rule S(8) the Corporation had taken into consideration extraneous or irrelevant considerations.
Dismissing the appeals ^ HELD: 1 (i) No area had been declared as industrial area under the Development plan before 1957 and in fact it was only after the enforcement of the development plan on 15th of August, 1966 that the disputed area became an industrial area under the Bombay Town Planning Act.
[735 C D] (ii) A bare perusal of rule 5(8) makes it apparent that for the purpose of the exemption from octroi, an industrial estate or area means the area which the Corporation may from time to time demarcate for the purpose of the rule as the area in which industries can be suitably located for the interest of industrialisation of the City.
Therefore, the demarcation made under the Town Planning Act will not be a demarcation for the purpose of rule S(8) and unless there is a demarcation as contemplated by rule S(8) the appellants cannot claim exemption from octroi.
The view taken by the High Court is fully warranted by rule S(8) of the octroi Rules.
[735 E G] 2.
The purpose of the Town Planning Act is to plan the town and to keep industrial areas away from the residential or commercial areas and that no industries could be set up in an area other than the industrial area declared in pursuance of the Act.
The purpose of demarcation as industrial estate or area under rule S(8) is for the giving of incentive and impetus to industries in a particular area.
[736 B C] 3.
An analysis of the preamble to the new octroi Rules makes it clear that rule 62 B relating to octroi was repealed by implication.
It is noteworthy that chapter VIII does not contain any rule relating to octroi, except rule 62 B which did not find a place in the preamble.
All rules relating to octroi and enacted under the 1901 and the 1925 Acts were also repealed without exemption.
Another pointer is available in the fact that octroi was made the subject matter of a new and comprehensive set of rules which not only dealt with the matters 731 covered by the rules contained in chapter VIII and specifically mentioned in the A preamble but also the one covered by rule 62 B, namely the matter of exemption of goods from octroi in areas considered suitable for industrialisation.
The promulgation of rule 5(8) as a part of an exhaustive set of new rules, has the effect of a repeal of rule 62 B by necessary implication, although not in express terms.
[737 D G] 4.
The considerations which have weighed with the Corporation for denying the benefit of exemption from octroi to the appellants cannot be said to be either irrelevant or extraneous.
These are within the ambit of rule S(8) of the octroi Rules.
[739 B]


judgement:
Special Leave Petition (Civil) Nos.
2081 84 of 1980.
From the judgment and order dated the 23rd November, 1979 of the High Court of Kerala at Ernakulam in W.A. Nos. 149, 167, 169 and 170 of 1979.
A.S. Nambiar and P. Parameswaran for the Petitioner.
k. Sudhakaran Adv.
Gen. of Kerala, V. J. Francis and Mustafakani Rowthor for Respondent No. 2.
M. M. Abdul Khader and K.M.K Nair for Respondent No. 4, Kerala Public Service Commission.
P. Govindan Nair and Mrs. Baby Krishnan for Respondent No. section K. Prabhakaran for the Intervener.
The Judgment of the Court was delivered by BAHARUL ISLAM, J.
In these special leave petitions, the petitioner assails the judgment and order dated 23rd November, 1979 of a Division Bench of the Kerala High Court dismissing a number of writ appeals.
The relevant facts may be stated thus: 2.
The Kerala Public Service Commission thereinafter 'KPSC ') invited applications for filling up 130 expected vacancies in the posts of Junior Engineers in the Public Works Department, as per notification published in the Kerala Gazette dated 16th May, 1978.
The qualifications specified for the posts were B.Sc.
in Civil Engineering or Mechanical Engineering of the Kerala University or its equivalent as prescribed by the special rules of the Kerala Engineering Subordinate Service (General Branch).
The applicants had to appear in the written test conducted by the KPSC and there after in an interview held by it.
There was a common question paper which contained, in category I, questions in Civil Engineering and in Category II, questions in Mechanical Engineering.
Applicants who were qualified in Civil engineering had to answer the 746 questions in Category 1, and those qualified in Mechanical Engineering the questions in Category II.
After the written test and the interview, but before a common rank list was prepared by the KPSC as was intened, 8 Writ Petitions were filed in the Kerala High Court by applicants holding Civil Engineering degrees.
By these Writ Petitions the preparation of a common rank list and also the procedure of the examination and a method of selection were challenged.
It was prayed in the Writ Petitions that the KPSC be directed to effect selection and prepare and publish separate rank lists of selected applicants holding Civil and Mechanical Engineering degrees.
It was contended in the applications that the applicants who had qualified in Civil Engineering question paper and answered the questions in Category I on the one hand and those who had qualified in Mechanical Engineering and answered questions indicated in Category II in the question paper could not rationally be included in a common rank list after the interview.
The learned Single Judge of the Kerala High Court by a common judgment dated 2nd April.
1979 allowed the Writ Petitions and directed the Government of Kerala and the KPSC to prepare "two lists, namely, one for the Civil Bench and the other for the Mechanical Branch on the basis of examination already conducted".
He proceeded: "With respect to it the Service Commission has not yet published the rank list.
On receiving information from the Government on the above lines, the Public Service Commission is directed to prepare the two separate rank lists, one for the Civil Bench and other for the Mechanical Branch.
On publication of the two lists the Government can request the Service Commission to advise the candidates for appointment to these branches on the basis of the vacancies available in these two branches.
The Kerala Government and the KPSC accepted the directions given by the learned Single Judge and proceeded to take steps for the implementation thereof.
However, some of the aggrieved respondents in the Writ Petitions filed appeals before the Division Bench of the High Court.
The appeals were ultimately dismissed, in view of the fact that the KPSC had advised 239 candidates according to the separate lists for Civil and Mechanical Engineering prepared on the basis of directions given by the learned Single Judge and that these candidates had already been appointed.
747 6.
One of the respondents, Shri section Gopa Kumar, who held a Mechanical Engineering degree, was one of the Special Leave Petitioners before us.
He challenged the judgment of the Division Bench of the Kerala High Court dated 23rd March, 1979.
This Court by an ex parte order dated 23rd April, 1980 dismissed the Special Leave Petition with the following observations .
"The prejudice that the petitioner complains of is taking care of by the High Court emphasizing the fact that the petitioner is entitled to exercise his option.
It is stated that he has come high in the Common list prepared by the Public Service Commission.
It is open to him to choose which wing, Civil or Mechanical, suits him most.
In that view, we are unable to perceive any prejudice especially because on his option being exercised for the general or mechanical wing, as the case may be, he will be chosen in terms of his willingness.
All SL.Ps dismissed.
" (Emphasis supplied) 7.
It may be mentioned that preparation of no common list was directed either by the Single judge or by the Division Bench of the Kerala High Court.
On the contrary the direction expressiy was for preparation of separate lists for Civil Engineer and Mechanical Engineer candidates as stated above.
It has also been stated above that in pursuance of the directions given by the learned Single Judge in his judgment in effect upheld by the Division Bench of the High Court, the Government and the Public Service Commission of Kerala proceeded to prepare separate lists.
But facing difficulties, in view of the observation of this Court in its order dated 23rd April 1980 quoted above, the State of Kerala filed a petition before this Court for clarifications.
This Court passed the following order dated 11th November, 1980: "We have heard learned Advocate General and Shri A.S. Nambiar on the modification or clarification sought.
The actual position has already been explained in the order by this Court dated 28.4.80.
There it has been stated clearly that the petitioner will be entitled to exercise his option and then take his turn according to his rank in the common list prepared by the Public Service Commission.
748 Therefore the petitioner will be entitled to a post, if he has exercised his option in terms of this Court 's order and he is high enough in the common list for claiming the post.
We have no idea, nor are we concerned, whether such a vacancy has arisen.
If a post has become vacant and the petitioner 's turn comes in the common list he is entitled to claim that post under the orders of this Court .
The above order, as it appears, also refers to a common list although no common list was directed to be prepared or was prepared by the KPSC.
This was obviously an inadvertent mistake.
Since there was no common list and since no option was given to the Special Leave Petitioners before us by the judgment of the Kerala High Court, the KPSC faced difficulties in giving effect to the directions given by the High Court.
The KPSC therefore has made the Misc.
Petition before us for clarifications and directions, particularly praying that the expression "the common list prepared by the Public Service Commission should be deleted.
We have heard learned counsel of the parties and perused the judgments of the Kerala High Court passed by the learned Single Judge and the Division Bench.
This Court by its order dated 28th April, 1980 dismissed all the S.L.Ps.
with observations referred to above.
This order as well as the order dated 11th November, 1980 has been subsequently recalled by this Court by its order dated 7th April, 1981, and we do not find any valid ground to reverse the judgments of the High Court.
But in view of the difficulties faced by the KPSC and the Government of Kerala, it is necessary to clarify the position and give necessary directions.
Clause 4 of the Government order No. G.O.MS.
101/79/PWD&E dated 27th September, 1979 the Government constituted the Kerala Engineering Service (Mechanical Branch) and Kerala Engineering Subordinate Service (Mechanical Branch) with posts prescribed therein.
It reads thus: "Government also order that all those who have submitted unconditional options and who possess the required qualifications prescribed in the rules will be appointed by transfer to the respective service.
In the case of any category for which the number of options is more than the 749 appointment by transfer aud the junior persons will be admitted, to the services as and when vacancies arise.
In case where the number of officers who had submitted options is less than the number of posts, the remaining vacancies will be provided by direct recruitment as provided in rule (9) of the respective special rules.
The Chief Engineer & R will implement the above orders forthwith.
" Clause 4 gave unconditional options to those in the Kerala Engineering Service (General Branch) to remain in the said branch or to choose the newly constituted Kerala Engineering subordinate Service (Mechanical Branch).
As stated earlier the Kerala Government or the KPSC was not directed to prepare a common list.
Common List was referred to in the earlier orders in this Court through certain misapprehensions.
The KPSC has stated in its counter affidavit to the S.L.P. filed by Shri section Gopa Kumar against the judgment of the High Court that there were directions to the KPSC to prepare two separate rank lists one for Civil Engineering graduates and the other for Mechanical Engineering graduate on the basis of examination already conducted.
Accordingly the KPSC prepared the two rank lirts one for Civil Engineering and other for the Mechanical Engineering graduates.
The name of Gopa Kumar appears in the latter list.
The rank list for Engineering (Civil) contains names of 152 candidates and the other (Mechanical) contains 202 candidates.
All the Civil Engineering selected have already been appointed.
Shri Gopa Kumar 's lank was 138 in the rank list of Engineers (Mechanical).
He will be appointed when his turn comes.
We think that the Division Bench of the High Court was right in dismissing the writ appeals, having regard to the developments which have taken place.
Accordingly, the special leave petitions are dismissed.
There is no order as to costs.
P.B.R. Petitions dismissed.

summary/full:
For selection of candidates for the post of junior engineers in the Public Works Department, the State Public Service Commission prescribed a written test in which persons qualified in Civil Engineering could answer questions in category I and those qualified in Mechanical Engineering could answer questions in category II, both of which were contained in the same question paper.
After the test and interview but before the common rank list was prepared some candidates impugned the method of selection alleging that the categories of Civil Engineering branch and Mechanical Engineering branch could not be rationally included in a common rank list.
A single Judge of the High Court directed the Service Commission to prepare separate lists in respect of each of the two branches.
A Division Bench of the High Court dismissed appeals of some of the aggrieved candidates Dismissing the petition for grant of special leave filed by one candidate this Court observed that it was open to the petitioner to choose the Civil or Mechanical Engineering from the "common list" prepared by the Service Commission.
When the State came to this Court for clarification of the earlier order, this Court again said that if the candidate 's turn came in The "common list" he was entitled to claim the post under the earlier orders of this Court.
Seeking clarification and directions, the State Government prayed that the expression 'common list ' prepared by the Public Service Commission be deleted from the earlier orders of this Court so as to enable the Commission to prepare separate lists in conformity with the High Court 's directions.
^ HELD: The words "common list" mentioned in the two earlier orders of this Court were used through inadvertance.
The High Court directed the Public Service Commission to prepare two separate rank lists: one for Civil Engineering Graduates and other for Mechanical Engineering Graduates on the basis of examination already conducted.
The Public Service Commission 745 accordingly prepared two rank lists.
The name of the petitioner herein appeared A in the list of Mechanical Engineering Graduates and he would be appointed when his turn came.
[749 C E]