# GUJARAT v. RAMANLAL

- **Citation:** [1981] 1 S.C.R. 144
- **Court:** Supreme Court of India
- **Decided:** 1981
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/gujarat-v-ramanlal-8065
- **Pages:** 24

## Headnote

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144
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1 :
STATE OF GUJARAT &:ORS ETC.
v.
RAMAN LAL KESHA V LAL & ORS. ETC.
Words & Phrases-'Civil Services'-'Civil Post'-Meaning of.
The Gu]arat Panchayat Act, 1961 (Gujarat Act No. VI of 1962) came into
force on June 15, 1962 in the State of Gujarat except in Kutch area and the
district of Dangs. By an order made by the State Government on March 4,
1963, the areas which . were within the jurisdiction of the several municipalities
constituted under the Bombay Municipal Act, 1901 were declared to be gram
or nagar, as the case may be.
On April 1, 1963, sections 203 to 205 of the
Panchayats Act were brought into operation.
On March 26, 1963, the State
Government entrusted some of its functions relating to recovery of land revenue
etc. to the nagar and gram panchayats with effect from April 15, 1963.
On
August 1, .1963 by a notification issued under section 149 of the Panchayats
Act, the State Government delegated some of its powers under the Land Revenue .Code and rules made thereunder to the gram and nagar panchayats. Service
rules like the Gujarat Panchayat Service (Conduct) Rules, 1964, the Gujarat
Service (Discipline & Appeal) Rules, 1964, Gujarat Panchayat Service (Absorp·
tion Seniority, Pay & Allowances) Rules, the Gujarat Panchayat Service (Trans·
fer of Servants) Rules, 1968, Gujarat Panchayat Service (Promotion to Cadres
in State Service) Rules, 1974, Gujarat Panchayat Service (Pension) Rules, i976
were promulgated and iSsued by the State Government.
On Ja~uary 2, 1967,
the State Government passed an order under sub-section (2) of section 203
of the Panchayats Act directing that the Panchayat Service shall consist of
district cadre, taluka cadre and local cadre and specified the posts which
. iwere to belong to each of such cadres in the Schedule appended to the said
order. 'In Part III of the Schedule to that Order, the posts belonging to the
local cadre were !)Pecified.
Although the above steps were taken by the State for the constitution of
the Panchayat Service, the State Government did not make any order regarding
the equation of posts of the staff in the local cadre and fixation of . the.ir
pay scale till 1975 notwithstanding repeated representations made by the ex·
municipal employees and others who were included in the local cadre. The
. 'stat~ G~vemnii:nt also did not make any rules prescribing the promotional
GUJARAT V. RAMANLAL
145
avenues for the staff borne _on the local cadre of the Panchayat Service, nor
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extended the benefit of revisions of pay scales and other allowances which
were made on the basis of the recommendations of the First Pay Commission
(Sarela Commission) and of the Second Pay Commission (Desai Commission).
The Respondent Nos. 1 to 5 in the appeal filed a writ application in a
representative capacity for and on behalf of themselves and other officers ~nd
servants who were originally in the employment of several municipalities which
B
had been constituted under the Bombay District Municipal Act, 1901 and
who were working as employees under gram panchayats or nagar panchayats
which were established in the place of municipalities under the provisions of
the Gujarat Panchayats Act, 1961 for a Writ, order or direction to the AppelJant (State of Gujarat) and others who had been impleaded as respondents
directing them : (i) to pass orders regarding appointment in equivalent posts
in the Panchayat Service of the State Government, fixation of seniority, pay
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scales and allowances in the equivalent posts with retrospective effect and payment of ·the difference in salary and allowances, (ii) to frame rules providing
for promotional avenues in the Panchayat Service as also in the State Service,
and (iii) to extend the benefits flowing from pay revisions ordered by the
State Government on the basis of the recommendations of the First Pay Commission (Sarela Commission) and the Second Pay Commission (Desai Commission) retrospectively. It was contended that the Panchayat Service was as

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144
"
1 :
STATE OF GUJARAT &:ORS ETC.
v.
RAMAN LAL KESHA V LAL & ORS. ETC.
Words & Phrases-'Civil Services'-'Civil Post'-Meaning of.
The Gu]arat Panchayat Act, 1961 (Gujarat Act No. VI of 1962) came into
force on June 15, 1962 in the State of Gujarat except in Kutch area and the
district of Dangs. By an order made by the State Government on March 4,
1963, the areas which . were within the jurisdiction of the several municipalities
constituted under the Bombay Municipal Act, 1901 were declared to be gram
or nagar, as the case may be.
On April 1, 1963, sections 203 to 205 of the
Panchayats Act were brought into operation.
On March 26, 1963, the State
Government entrusted some of its functions relating to recovery of land revenue
etc. to the nagar and gram panchayats with effect from April 15, 1963.
On
August 1, .1963 by a notification issued under section 149 of the Panchayats
Act, the State Government delegated some of its powers under the Land Revenue .Code and rules made thereunder to the gram and nagar panchayats. Service
rules like the Gujarat Panchayat Service (Conduct) Rules, 1964, the Gujarat
Service (Discipline & Appeal) Rules, 1964, Gujarat Panchayat Service (Absorp·
tion Seniority, Pay & Allowances) Rules, the Gujarat Panchayat Service (Trans·
fer of Servants) Rules, 1968, Gujarat Panchayat Service (Promotion to Cadres
in State Service) Rules, 1974, Gujarat Panchayat Service (Pension) Rules, i976
were promulgated and iSsued by the State Government.
On Ja~uary 2, 1967,
the State Government passed an order under sub-section (2) of section 203
of the Panchayats Act directing that the Panchayat Service shall consist of
district cadre, taluka cadre and local cadre and specified the posts which
. iwere to belong to each of such cadres in the Schedule appended to the said
order. 'In Part III of the Schedule to that Order, the posts belonging to the
local cadre were !)Pecified.
Although the above steps were taken by the State for the constitution of
the Panchayat Service, the State Government did not make any order regarding
the equation of posts of the staff in the local cadre and fixation of . the.ir
pay scale till 1975 notwithstanding repeated representations made by the ex·
municipal employees and others who were included in the local cadre. The
. 'stat~ G~vemnii:nt also did not make any rules prescribing the promotional
GUJARAT V. RAMANLAL
145
avenues for the staff borne _on the local cadre of the Panchayat Service, nor
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extended the benefit of revisions of pay scales and other allowances which
were made on the basis of the recommendations of the First Pay Commission
(Sarela Commission) and of the Second Pay Commission (Desai Commission).
The Respondent Nos. 1 to 5 in the appeal filed a writ application in a
representative capacity for and on behalf of themselves and other officers ~nd
servants who were originally in the employment of several municipalities which
B
had been constituted under the Bombay District Municipal Act, 1901 and
who were working as employees under gram panchayats or nagar panchayats
which were established in the place of municipalities under the provisions of
the Gujarat Panchayats Act, 1961 for a Writ, order or direction to the AppelJant (State of Gujarat) and others who had been impleaded as respondents
directing them : (i) to pass orders regarding appointment in equivalent posts
in the Panchayat Service of the State Government, fixation of seniority, pay
C
scales and allowances in the equivalent posts with retrospective effect and payment of ·the difference in salary and allowances, (ii) to frame rules providing
for promotional avenues in the Panchayat Service as also in the State Service,
and (iii) to extend the benefits flowing from pay revisions ordered by the
State Government on the basis of the recommendations of the First Pay Commission (Sarela Commission) and the Second Pay Commission (Desai Commission) retrospectively. It was contended that the Panchayat Service was as
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much a service under the State as any other Civil Service, that the State
'Government had faiied to discharge its statutory duties in relation to the
members of the staff included in the local cadre of the Panchayat Service
and that the denial of benefits similar to those extended to other members
of the State Civil Service on the basis of the reports of the two Pay Commissions amounted to hostile discrimination. Tiie State G~vemment contested
the application alleging that the members of the Panchayat Service were not
government >ervants.
Following its earlier decision in G. L. Shukla & ano•ther v. The State of
Gujarat & Ors. 8 GLR 833 the High Court held tha( the respondents who
belonged to the local cadre were government servants and allowed the application.
During the pendency of the appeal to this Court, the Gujarat Panchayats
(Amendment) Ordinance 1978 was promulgated by the Governor amending some
of the provisions of the Panchayats Act and the said Ordinance was repealed
and replaced by the Gujarat Panchayats (Third Amendment) Act, 1978.
As
the Ordinance and the Amending Act adversely affected the interests of thr.
employees, writ petitions were filed questioning the validity of the Amending
Act.
In the appeal and writ petitions to this Court on the questions :
(I) Whether the Panchayat Service was a Civil Service of the State, and
(2) Whether under the unamended Act, there was a common Centralizerl
Panchayat Service.
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HELD :
1. (i) The Panchayat Service constituted under section 203 of
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the Panchayats. Act has all the characteristics 'of a Civil Service of the State.
This also appears to, have been the view of the State Government when it -
constituted the Second Pay Commission (Desai Commission) to examine the
146
SUPREME COURT REPORTS
[1981] 1 S.C.R.
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general conditions of service applicable to Government employees other than
officers of the all-India services but including employees in the Panchayat
Service. [!65H-!66B]
(ii) It is a question of fact to be decided· in ·the circumstances of each
'case whether every employee of a Panchayat should be treated as a member
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of the State Civil Service. [!66H-167A]
2. The provisious contained in sect.ion 206 of the Panchayats Act and the
provisions iu sub-sections (2), (2A), (3) and (4) of section 2Q3 clearly establish
that the Panchayat service c;onstituted under section 203 can only be a centralized service and recruitment of candidatls to be made under section 210 of
the Panchayats Act by the Gujarat Panchayat Service Selection Hoard can only
be to that centralised service.
The division of the Panchayat Service into
district cadre, taluka cadre- and local cadre does not affect the integrity of
the Panchayat Service.
It continues to be a single service notwithstanding
such division.
When the Panchayat Service is a Statewise service, ft has necessarily to be a common centralised service. [167B-C]
" Aforucipal Corporations, city municipalities, town municipalities, municipal boroughs, district boards, zilla parishads, taluka development boards, town
pauchayats, village panchayats, sanitary boards and towu area committees were
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some of the different kinds of local bodies whicn were constituted under the
local laws and the management of their. affairs were entrusted subject to the
control of the State Government to elected bodies.
Each one of them was
treated as a body corporate. In the staffing pattern of these bodies there were
at least three classes of persons. Officers holding high administrative posts such
as commissioners of corporations, deputy commissioners of corporations, municipal health officers, municipal educational officers, district development officers
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and chief executive officers of district boards were usually drawn from the
ranks of the provincial or the State Services and they were deputed to the
various bodies to discharge functions · which were either statutory or nonstatutory. Even though they drew their salary and allowances from ·the local
bodies to which they were deputed, they still retained their identity as officers
of the State Civil Service and their services were liable to be withdrawn by
the State Government at any time it pleased. [! 590-E]
4. The expressions 'civil service' or 'civil post' are not formally defined.
Entry 70 of List I of the Seventh Schedule to the Constitution refers to Union
Public Services and All-India Services, and Entry 41 of List II of that Schedule refers to State Pu\Jlic Services.
Part XIV of the Constitution deals with
services under the Union and the States.
In Article 309 of the Constitution,
there is reference to persons appointed to public services and posts in connection with the affairs of the Union or of any State. Article 310 of the Constitution distinguishes the defence service from the civil service when it refers to
members of a 'defence service or of a civil service'. But all persons who are
members of a defence service or of a civil service of the Union or of an allIndia service or persons who hold any post connected with defence or any
civil post under the Union are treated as persons serving the Union and every
'person who is a member of the civil service of a State or holds any civil post
under a State is treated as a person serving a State.
[!60D~F]
5. The true test for determination of ·the question whether a person is
bolding a civil post or is a member of a civil service is the existence of a
relationship of master and servant between the State and the person holding
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GUJARAT v. RAMANLAL ·
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147
:a post under it and that the existence of such relationship is dependent upon
othe right of the State to select and appoint the holder of the post; its ·right
-:to suspend and dismiss him, its right to control the manner atid method of his
-<loing the work and the payment by it of his wages and remuneration. The
'relationship of master and servant may be established by .the presence· of all
-<Jr some of the above factors in conjunction with other circumstaRCes.
(161E-F]
A
State of Assam & Ors. v. Sh.ri Nanak Chandra Dutta, [1967] 1 S.C.:l. 679 :
B
"Superintendent of Post Offices ~re. etc. v. P. K. Rajamma etc. etc. [1977] · 3
·:s.C.R. 678, referred to.
6. Entry 5 of List II of the Seventh Schedule to the Constitution specifi-
·Cally refers to local authorities established for the purpose of local self-Government or village administration as part of local government. The local autho·
. rities are included in the definition of the expression 'State' in Article 12 of
'the Constitution. [1650}
7. The Panchayats exercise many governmental functions which the State
.-,Government can perform.
They are entrusted with the power to levy taxes
.-and to exercise large number of powers whic1' are loosely called as "police
-powers" regulating several aspects of human life. ·Articles 276 and 277 of
the Constitution also take note of the powers of local authorities to levy
•certain taxes. [165E]
8. The Panchayats Act was enacted for the purpose of consolidating and
·amending the law relating to village Panchayats and district local boards in
·the State of Gujarat with a view to reorganising the administration pertaining
·to the local Government in furtherance of the object of democratic decentra·
lisation of powers in favour of different classes of panchayats. It provided
·for the· establishment of Panchayats of different tiers viz.1 a gram panchayat
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for each gram, a nagar panchayat for each nagar, a taluka panchayat for each
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·taluka and a district panchayat for a district. [151C-D]
·9. Section .203 of the Panchayats Act provided for the constitution of a
-Panchayat Service which shall be distinct from the State Service.
The State
·Government was authorised to determine by orders issued from time to time
the several classes, cadres and posts in the Panchayat Service and the initial
strength of the officers and servants in each such class and cadres. The Panchayat Service consisted of district cadres, taluka cadres and local cadres.
A
-servant belonging to a district cadre was liable to be posted either by promotion
or transfer to any post in any taluka in the district, a servant belonging to
a taluka cadre was liable to be posted similarly to any post in any gram or
nagar in the same taluka, and a· servant belonging to a local cadre similarly
·to be posted in the same gram or, as the case may be, nagar. The Panchayat
·Service was also to consist of certain posts designed as deputation posts, which
may be filled in accordance with section 207.
The State Government was
·empowered to make rules regulating the mode of 'recruitment and conditions
of service of persons appointed to the Panchayat Service, and the powers in
respect of appointments, transfers and promotions of officers and servants in
·the panchayat Service and
disciplinary
action
against
any such officers
·or servants. [154B-E]
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10. Under section 206 of the Panchayats Act, it is open to the State GovH
-ernment to allocate to the Panchayat Service such number· of officers and ser-
·vants out of the staff allotted or transferred to a panchayat under sections 157,
158 and 325 as it may deem fit. [154GJ
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SUPREME COURT REPORTS
[1981] 1 S.C.R.
11. Sections 102, 122 and 142 of the Panchayats Act provide that the gram
panchayat or the nagar panchayat or the taluka panchayat or the district panchayat a:s the case may be, shall have such other officers and servants as may
be determined under section 203 of the Panchayats Act and such officers
and servants shall be appointed by such authority and their conditions of
service shall be such as may be prescribed.
Clause (c) of sub-section (2) of
.section. 143 of the Panchayats Act r.mpowers the. District Development Officer·
·to appoint such class of officers and servants as may be prescribed. [163C, BJ
12. The Panchayat Service contemplated under section 203 is a
single·
service for the whole State and it is not a collection of distinct and separate·
services of each individual panchayat. · That Panchayat .Service is a service
under the State is again emphasized by section 206 which authorises the State
Government to pool together the four classes of persons mentioned therein
who originally belonged to four different sources and to allocate them to the·
Panchayat Service and one class of such persons are th9se who belong to the
State Service: Unless the Panchayat Service is. held to be a State Service, inclusion of officers and servants in the State Service will be uncons~itutional..
[163E-F]
State of Mysore v. H. Papanna Gowda & Anr. etc., [1971] 2 S.C.R. 831,.
referred to.
In the instant case there is no compelling reason to hold that' the Panchayat
Service is not a civil service under the State. Further recruitment cif candidates.
to the Panchayat Service had to be made by the Gujarat Panchayat Service·
Selection Board constituted by the State Government.
[163H]
Jalgaon Zilla Parishad v. Duman Govind & Ors. Civil Appeals Nos. 24 and'
25 of 1968 decided on December 20, 1968 distinguished.
13. Entry 41 of List II of the Seventh Schedule to the Constitution, refers·.
to State Public Services suggesting that there can be more than one State Public·
Service under the State. A number of such services under a State e.g. Police·
Service, educational service, revenue service etc. State Public Services may be
constituted or established either by a law made by the State Legislature or·
by rules made under the proviso to Article 309 of the Constitution or even byan executive order made by the State Govern~ent in exercise ·of its powers
under Article 162 of the Constitution. The recruitment and conditions of ser-·
vice of the officers and servants of the State Governmen~ may also be regulated by statute, rules or executive orders.
[164A-BJ
14. The administration of a service• under a State involves broadly the·
following functions : (I) the organisation of the Civil Service ~nd the deter-·
mination of the remuneration, conditions of service, expenses and allowances.
of persons serving in it; (ii) the manner of admitting persons to civil service;
(iii) exercise of disciplinary control over members of the service and power to·
transfer, suspend, remove or dismiss them in the public interest as and when'
occasion to do so arises. [164C-D]
In the instant case, the Panchayat Service is constituted by the Panchayats·
Act and the State Government is empowered to make orders and rules regard-·
ing its organisation and management. Having regard io the broad features or
the Panchayat Service, the declaration in Section 203 that the Panchayat Service,
H
shall' be distiriet from the State Service, appears to have been made only to -
distinguish the Panchayat Service from other services of the State attached'
ti> . the several departments \\•hich are under the direct contr.ol of the Stat~
Government. [164E]
GUJARAT v.·RAMANLAL (Venkataramiah, J.)
149
,
15, If the members of the Panchayat Service are not to be members of a
Service under the .State Government but are to be the officers and servants
of the panchayat unit to which they .are allotted then sub-sections (2), (2A) and
4(a) of section 203 of the Panchayats Act would to sorrie extent become un-
;workable, as every time there is a transfer of an officer borne on the Panchayat
Service there would be a change of master.
The Legislature could not have
. contended such a bizarre result.
[164F]
16, The reason for treating Panchayat Service as a service distinct from
State Service appears· fo be that the law intended that persons belonging to
the Panchayat Service should be transferable from one post in a panchayat
to another post in a panchayat and unless there was an order of promotion,
such persons could not be transferred to posts outside the Panchayats,
[I 65B]
17, Merely because the Panchayats are declared to be body corporates,
'it cannot be said that any of the persons 1working under them cannot be
considered as members· of a civil service under a State. The panchayats consti-
·tuted under the Panchayats Act derive their authority. from the statute and
are under the control of the State Government. They form part of the local
self-Government organisation which the State Government is under an obligation
to foster under Article 4q of the Constitution.
[!65C]
CIVIL APPELLAT.E JURISDICTION: Civil Appeal No. 359 of 1978.
Appeal by special leave from the Judgment and Order· dated
28-1-1977 of the Gujarart High Court in Special Civil Application
No. 309/1975.
WITH
WRIT PETITION NOS. 4266-4270 O!f 1978
(Under Article 32 of the Constitution)
V. M. Tarkunde, Niranjan Mehta, P. H. Parekh, C. B. Singh and
M. Mudgal for the Petitioners in Writ Petitions and Respondents 1-3
and 5 in CA 359 j78.
D. V. Patel, R. H. Dhebar, M. N. Shroff and G. A. Shah for the
Appellants in CA 359 /78 and Respondents 1-2 in Writ Petitions.
Niranjan Mehta, Vimal Dave and Miss Kailash Mehta for the
Applicant intervener in Writ Petition.
The Judgment of the Court was delivered by
VENKATARAMl)AH,. J.
The State olll
Gujarat and the Development Commissioner of the State of Gujarat have filed Civil Appeal
No. 359 of 1978 under Article 136 of the Constitution against the
judgment, dated January 28th, 1977 passed in Special Civil Applicaiion No. 30? of 1975 on the file. of the High Court of Gujarat.
Respondents Nos,. 1 to 5 in the above appeal were the petitioners
in the aforesadd Special
Civil
Applioatibn.
They
had filed the
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· SUPREME COURT REPORTS'
[1981] 1 S.C.R.
I
said application with the leave of the High Court in a representa·
tive capacity for and on behalf of themselves arid other officers
and servants who· were originally in
tire
employment of several
muni'cipalities which had been constituted under the Bombay District
Municipal Act, 1901 (hereinafter referred to as 'the Municipal Act')
and· who were working as
the employees under gram panchayats
or nagar panchayats which were establishled
in the place of the
municipalities referred to above under the provisions of the Gujarat
Panchayats Act, 1961 (Gujarat Act No.
VI of 1962) (hereinafter
refurred to as 'the Panchayats AcC) unde,r Article 226 of the Consti·
tution requesting the High Court to issue an appropriate writ, order
or direction to the State of Gujanat and
others
who had been
impleaded as respondents therein
directing them (i) to pass orders
regarding the appointment of the persons for and on whose behalf
the said appli'cation had
been
filed
in
equivalent posts in the
Panchayat ·Service of the State Government, fixation of their senio·
· rity and pay scales and
allowances
in
the equiV'alient posts with
retrospective effect and payment to th1em of the difference in: salary
and allowances to which they would become entitled on such fixa·
tion bf salary and allowances payable to them, (ii) to frame rules
providi1n.g for promotional avenues to them in the Panchayat Service-
<ts also in the State Seirvice and (iii) to extend to them the benefits
flowing from the pay revisions ordered by the State Government on
the basis of the recommendations
of the first
Pay Commission
(Sarela Commission) and the second Pay Commission (Desai Comission) retrospectively.
They also prayed for certain incidental
reliefs.
Writ Petitions Nos. 4266 to 4270 of 1978 were filed by them
before this Court under Article 32 of Constitution in a representa.-
tive capacity with the leave of this Court
requesting the Court to
declare the Gujarat Panchayats (Amendment) Ordinance,
1978
(blereinafter referred to as 'the Ordinance',) as unconstitutional. void
and of no effect and to grant them such reliefs as may be permissible
consequent upon such declaration.
After the iibove writ petitions
were filed, the Ordinance was repealed and replaced ·by the Gujat'at
Pauchayats (Third Amendment) Act, 1978 (Gujarat Act No. 28 of
-1978) (herein1after refened to as 'the Amending Act'~. Thereafter
.the petitioners prayed for an amendment of the writ petitions request·
.ing the Court to permit them to question the validity of the Amending Act in so far as it adversely affected them. Their prayer was
· accordingly granted. · The. writ petitions are contested by the State
Government.-
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GUJARAT v. RAMANLAL ("I?_enkataramiah, !.)
151
For purposes of convenience, respondents· Nos. 1 to 5 in Civil
A
A~al No. 359 of 1978 who are also petitioners .in the writ petitions
Nos. 4266 to 4270 of 1978 are hereafller referred to as the pefitioners.
Before the Panchayats Act was enacted there existed in the State
of Gujarat a number of municipalities constituted under the Municipal
Act and the petitioners and th:ose whom
they .represent in these
proceedings by virtue of the leave granted to them to prosecute these
proceedings in a
representative
capacity were employees of such
municipalities.
The Panchayats Act was enacted for the purpose of consolidating and amending the law relating to village panchayats and district
local boards in the State of Gujarat with a view to reorganise the
administration pertaining to the local Government in furtherance of the
object of democratic decentralisation of powers in favour of different
classes of panchayats. It provided for the establishment of panchayats
of different tiers viz. a gram
panchayat for each gram, a nagar
panchayat lfor each nagar, a taluka · panchayat for each taluka and
a district panchayat for a district.
Section1 9 of the Panchayats Act
empowered the Stalte Government to declare any local area comprising a revenue village or a group of revenue vi'lfages or hamlets
forming part of a revenue village or such othen administrative unit
or part thereof to be a nagar, if the population of such local area
exceeded 10,000 but did not exceed 20,000 and to be a gram, if the
population of such local area did not exceed 10,000 by issuing a
notification in the Official Gazette to that effect. Section 307 of the
Panchayats Act provided that where any local area was declared to.
be a gram or nagar under section 9 and, immediately before such
declaration, the local area was
co-extensive with the limits of a
municipal district or a municipal borough or included an area comQris- ·
ing a municipal district or municipal borough as well as any other area,
then with effect from the date on which such local area was ·so declared
to be a gnam or nagar, the consequences mentioned therein would
ensue notwithstanding I anything in the relevant municipal law.
Two
of the consequences which flowed from such a declaration were that the
municipality functionihg in such a local area or part thereof would
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cease to exist and all officers
and servants in the employ of the
municipality immediately before the said date would become officers
and servants of the ikterim panchayait under the Panchayats Act, and
shall until other provision was made in accordance with the provisions tbereofl woljld 'receive salaries and allowances and be subject
to the condition! of 1 service to which they were entitled or subject
on such date.
Section 308
of the Panchayats
Act required the
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SUPREME ~OURT REPORTS
[1981] 1 S.C.R.
A
District Development Officer· to take steps to hold election for a new
gram panchayat or n:agar pancha)lat, as .. the case may be, within a
period not exceeding one year from the date on which the interim
panchayat came into existence.
Chapter XI in which sections 203
to 211 of the Panchayats Act are included sets out provisions relating to services.
Section 203 of the
Panchayats
Act prior to the
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promulgation of the Ordinance read as follows:-
"203. (1) For thle pUipOse
of
bringing
a1bout uniform
scales of pay and uniform
conditions
of service for persons
employed in the discharge of functions and duties of panchayats,
there shall be constituted a
Panchayat Service in . connection
with the affairs of panchayats.
Such servi'oo shall be distinct
from the State Service.
(2) The Panchayat Service
shall consist of such classes,
cadres and posts and the initial strength of officers and servants
in each such class and cadre shall be such, as the State GovernD
ment may by order from time to time determine:
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Provided that nothing in this
sub-secti'on shall prevent a
district panchayat from altering, with the previous approval of
the State Government, any class, cadre or number of posts so
determined by the State Government.
(2A) (a) The cadres referred
to
in sub-section (2) may
consist of· district cadres, taluka cadres and local cadres.
(b) A servant belonging to a
district cadre shall be
liable to be posted whether by promotion or transfer to
any post in any taluka in the district.
(c) A servant belonging to a taluka cadre shall be liable
to be posted, whether
by promotion or transfer . to any
post in any gram or nagar in the same taluka.
\
(d) A servant belonging
to a local cadre shall be
liable to be posted whether by promotion or transfer to any
post in the same gram or, as the case may be, nagar.
(i2B) In addition to the posts in the cadre referred to in
sub-section (2A), a panchayat may haV'e
such other posts of
such classes as the State Government may by general or special
H
order determine.
Such posts shall be called "deputation posts"
and shall be fille9 in accordance with the pro'Visions of section
207.
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(3) Subject to the provisions of this Act, the State G?vemment 'may make rules regulating the mode of recruitment
either by holding examinations or . otherwise and conditions of
service of persons appointed to
the panchayat service and the
powers in resJ)°...ct of appointments, transfers and promotions of
officers and servants in the Panchayat Service and disciplinary
action against any such officers or servants.
(4) Rules made under sub-section (3) shali' in particular
con taffi!--.
(a) a provision entitling servants of such cadres in
the Panchayat Service to promotlion to such cadres in the
State Service as may be prescribed.
(b) a provision specifying ·the classes of posts recruitment to which shall be made through the District Panchayat
Service Se!edtion
Committee
and
thle
classes of posts,
recruitment to which shall be made by the Gujarat Panchayat
Service Selection Board, and
(c) a provision regarding the percentag.e of vacancies
.to be reserved for the members
of Scheduled Castes,
Scheduled Tribes
and · other backward classes
in the
Pa.nchayat Service.
(5). Such rules may provide for
inter-district transfer of
servants belonging to the panchayat service Md the circumstances in which and the conditions
subject
to
which such
transfers may be made.
Section 205 of the Panchayats Act states that subject to any
rules made under section 203, appointments to the Panchayat Service
shall be made (i) by direct recruitipent,
(ii) by promotion and
{iii) by transfer of members of the State Service to the Panchayat
Service.
Section 206 of the Panchayats Act before the Amending
Act was passed empowered the State · Government by a general on
special order to allocate to the Pa.nchayat Service (i) such number
of officers and servants out of the staff allotted or transferred to a
panchayat under sections 157, 158 and 325 as it may deem fit,
{ii) all officers and sewants of the municipalities dissolved under
section 307, (iii) all officers and servants in the service of district
local boards and district school boards
i~ediately before their
·dissolution under the Panchayats Act and transferred to the panchayats under sections 155 and 326 and (iv) and other officers and
servants employed in the State service as may be necessary· to enabJe
:the panchayats to discharge
efficiently their functions and duties
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SUPREME COURT REPORTS
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under the Panchayats Act.
Section 210
of the Panchayats Act
provides for the establishment of a Gujarat Panchayat Service
Selection Board for the purpose of recruitment o~ candidates to the
several posts in the Panchayat &rvioe .
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The provisions contained in Chapter XI of the Panchayat Act
may be summarised thus:
Section 203
of the Panchayats Act
provides for the constitutioll! of a Panchayat Service which shall be
distinct from the State Service.
The State Government is authorised
to detennrine by orders issued
from
time to time several classes,
cadres and posts in the Panchayat Service and the initial strength
of the officers and servants in each sucbi class and cadre.
The·
Panchayat Service may consist of district cadres, taluka cadres and'
local cadres.
A servant belonging to a district cadre is liable tobe posted either by promotion or /&aifsfer to any post in ~ny taluka
in the district, a servant belonging to a taluka cadre is liable to be
posted similarly to any post in aily gram or nagar in the same taluka
and a servant belonging to a local cadre may similarly be posted
in the same gram or, as the case may be, na~r.
The Panchayat
Service may also consist of certain posts designated as deputation
posts, which may be filled in accorqance with the provisions of
section 207.
The Sfate Government is empowered to make rules
regulating the mode of recruitment and conditions of service of
of appointments, transfers and promotions of officers and servants
oJ1 appointments, transfers and promotions of officers and servants
in the Panchayat Service and disciplinary action· against any such
officers or servants. Sub-section (4) of section 203 of the Panchayats
Act provides that rules may be made under sub-section (3) thereof
containing provisions
entitling
servants
of such cadres
in the
Panchayat Service to promotion to such cadres in the State Service
as may be prescribed.
We have noticed earlier that under section
206 of the Panchayats Act, it is open to the StJate Government to
allocate to the Panchayat Service such number of officers and servants
out of the staff allotted or transferred to a panchayat under sections
157, 158 and 325 as it may deem fit.
Section 157 of the. Panchayats
Act provides that notwithstanding anything . contained in any law
for the time being in force, the State Governrment may subject to
such condiliions as it may think fit to impose, transfer by an order
published in the Official Gazette to a district panchayat any such
powers, functions and duties relating to any matter ·as are exercised
or performed by the State Government or any officer of Government
under any enactment which the State Legislature is competent to
enact, or otherwise in the executive power of the State, and appear
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GUJARAT v. RAMANLAL (Venkataramiah, ].j
155
to relate to matters arising wi:thin a district and to be of an administrative character and shall
on such transfer. allot to the district
panchayat such fund and personnel as may be necessary to enable
the district panchayat to
exercise the power and
disch~rge tl::e
functions and duties so transferred.
Sub•sectioil.1i (,2) of section 157
sets out some of the departments whose powers, £unctions and duties
that may be transferred under section 157 (1).
SeCtion 158 of the
. Pancbayats Act provides
that any functions and duties relating to
any of the matters specified in the Panchayat Functions List performed
before the commencemen~ of that section by the State Government
through its officers withln a gram,· nagar,
taluka or district shall,
subject to such exceptions as the State Government may by order in
writing specify, be transferred
to
the
district panchayat together
· with the funds p>ovided, and the staff employed therefor.
By
section 325, of the Pianchayats Act, the Bombay Village Panchayats
Act, 1958 was repealed and all officers and servants in the employ
of the old village
panchayats immediately
before
the said date
became the officers and servants of the new gram panchayats established under the Panchayats Act.
We shall now briefly refer to some of the steps taken under
the Panchayats Act after it came into force on June 15, 1962 in the.
Sltate of Gujarat except in Kutch area and. the district of Dangs. ·
On March 4, 1963 by an order made by the State Government, 1he
areas which were within the jurisdiction of the several municipalities
constituted under the Municipal Act were. declared to be. gram or
nagar. as the case may be.
On April 1, 1963, sections 203 to 205
of the Panchayats Act were brought into operalion.
On March
26, 1963, the State Government entrusted some of its functions relating to recovery of land revenue etc. to the nagar and gram panchayats with effect from April
15~ 1963.
On August I,' 1963 by a
notification issued under sectiOn
149
of the Panchayats Act, the
State Government delegated some
of
its
powers under the Land'
Revenue Code and rules made .thereunder to the· gram and nagar
pancbayats.
On July 13, 1964, :the· Gujarat
Panchayat
Service
(Conduct) Rules, 1964 promulgated under section 203 of the Panchayats
Act came into force.
On, July 16, 1964, the Gujarat Service (Discip-.
line & Appeal) Rules, 1964 came into force.
On November 11, 1965,
the
Gujarat
Panchayat Service
(Absorption, Seniority,
Pay &
Allowances) Rules were
promulgated.
On October 16, 1968, the
Gujarat Panchayat Service (Transfer of Servants) Rules, 1968 were
promulgated.
The Gujarat Panchayat Service (Promotion to cadres
in State Service) Rules, 1974
were issued
on September 16, 1974.
11-64' S.C. Tndia/80
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SUPREME COURT REPORTS
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The Gujarat Panch1\yat Service (Pension) Rules, 1976 were issued on
January 9, 1976.
The State
Government passed an order under
sub-section (2) of sectiOl!l 203 of the Panchayats Act on January 2,
1967 directing that the Panchayat Service shall consist of district
C13icJ.re, taluk:a cadre and local cadre and specified the posts which
were to belong to each of such cadres in the Schedule appended to
the said order.
In Pnrt II:I
of the Schedule to that Orde11, the
posts belonging to the local cadre with which we are concerned in
these cases were specified.
It is stated that by certain administrative
orders the State Government had a)so Ullldertaken the liability of
reimbursing the panchayats, either wholly or in part in respect of
the remuneration paid by them to the specified staff even though uiider
section 204 of the Panchayats Act,
the expenditure towards pay,
allowances etc. of officers and servants in Panchayat Service should
be met out of panchayat funds.
Although 'the abov;e · mentioned and some
other steps were
taken l;ly the State Government under the Panchayats Act prnviding for the constitution of the Panchayat Service, the State Govern- '
ment did not mak!e any order regarding the equation: of posts of
thJe staff in the local cadre and fixation oi.; their pay scale till 1975
notwithstanding the fact that repeated representations were made by
the ex-municipal employees and
others who were included in the
local cadre.
The State Government also failed to extend to the
staff borne on the local cadre of the Panchayat Service the benefit
of revisions of pay scales and other allowances whi'ch were made
on the basis of the recommendations of the first Pay Commission
(Sare!~ C~mission) and of the second Pay Commission (Desai
Commission).
The State Government also did not make any rules
prescribmg the promotional avenue~ for the staff borne on the local
cadre of the Panchayat Service.
The petitioners, therefore, filed the
Special Civil Application No. 309 of 1975 on the file of the High
Cou;rt of Gujarat out of which the above appeal arises under Article
226 of the Constitution for several reliefs, referred to above.
The
said application was r1esisted by the State of Gujarat and the Development Commissioner who had been impleaded as the respondents.
The contentions urged by the petitioners before the High Court
among others were that the Panchayat Service was as much a service
under the State as any
other State Civil
Service; that the State
Government had failed to discharge its statutory duties in relatioru
to the members of the staff included in the local cadre of the
Panchayat Service and that the denial
of benefits similar to those
extended to other members of the State Civil Service on the basis
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GUJARAT v. RAMANLAL (Venkataramiah, /.)
157
Qf the reports of the two Pay Commissions to them amounted to
hostile discrimination.
The principal oonitention urged on behalf of
the State Government was that the members of the Panchayat Service
were not Government servants and, · therefore, could not claim the
reliefs prayed for by them.
I:n
support o~ thie above contention,
reliance was placed by the State Government on section 203 (1) of
the Panchayats Act which
stated that the Panchayat Service was
-distinct from the State Service. · It should be menti'oned here rthat
· the question whether the Panchayat Service constituted under the
Panchayaits Act was a Civil Senvice under the State Government or
not arose for consideration
before
the High Court of Gujarat in
G. L. Shukla & Anr. v. The State of Gujarat & Ors.(1).
That was
a case in which some of the employees of the State Government
working in the Public Wen-ks Department questioned the constitutional validity of a notificationi issued
by
the Sfute Government
transfer.rinig certain functions of the Public Works Department to the
panchayats and transferring some of the officers and servants work1ng in· that department to the Panchayat ·Service.
The petitioners
therein who had been allotted to the Paoohayat Service under that
order contended that the notification was violative of Artic)es 14,
310 and 311 of the Constitution on the ground that by virtue of the
:impugned notification, they had been removed from the servibe of
tl1e State Government against their will ·and ifn, violation of their
Tights under the Constitution.
The High Court dismissed the petition holding that they had not ceased to be Government servants by
reason of the allocation of their services to .the Panchayat Service.
Bhagwati, J.