# ' •' ' - \. STATE OF GUJARAT & ANOTHER v. RAMAN LAL KESHA V LAL SONI & OTHERS - **Citation:** [1983] 2 S.C.R. 287 - **Court:** Supreme Court of India - **Decided:** 1983-01-27 - **Case number:** ; Civil Appeal No. 359 of 1978 - **Bench:** Y.V. Chandrachud, S. Murtaza Fazal Ali, V.D. Tulzapurkar, 0. Ch!Nnappa Reddy, A. Varadarajan - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-gujarat-another-v-raman-lal-kesha-v-lal-soni-others-8819 - **Pages:** 35 ## Headnote 287 Gujarat Panchayat Act, 1961-As amended by the Gujarat Panchayat (Third Amendment) Act, 1978-0fficers and servants of the panchayats-Whether Government servants. Mast~r and servant relations-Tests for the determination of. Constitution of India, 1950, Articles 14 and 311-Status of Government servant-If could be determind retrospectively. Interpretation-Legislature, if has power to take away or impair a consti· tutional right retrospectively. The Gujarat Panchayats Act, 1961 was enacted to consolidate and amend the law relating to village panchayats and district local boards with a view to reorganise the administration pertaining to local G.overnment in furtherance of the object of democratic decentralisation of powers in faVour of different classes of panchayats. It was provided that the state Government should exercise control over panchayats either directly or thrvugh such officer or officers as it may appoint for that purpose. The Panchayat Organisation consisted of Gram Panchayats, Taluqa Panchayats and District Panchayats which are bodies corporate with perpetual succession and common seal. Notwithstanding that they were separate bodies corporate, the panchayats formed part of the panchayat organisation set up for secudng a greater measure of participation by tlie people in the-local governmental functions. They were enjoined to perform :functions and duties assigned by or under the Act so• as to ~confonn to the State :plans, National plans and the State policy in general. The State Government was empowered to cause inspection to be made and to call for and examine the 'record of the proceedings of any panchayat. On the enactment of the 1961 Act, 1the District Local Boards, village panchayats and municipalities constituted under earlier Acts stood transformed as District Panchayats, gram or nagar pancbayats, depending on population. Officers and servants of the District Local Boards were deemed to be transferred to the service of the district panchayats, Secretaries, officers and servants in the employ of the old village panchayats became Secretaries, officers and servants of the new gram panchayats and officers and servants in the em,pior of municipalities became oflicers al\d servan.t' of .the interim p1nchayats, ~'·---~ A B c D E (1 G b c D E F G 288 SUPllBME COURT llBPOllTS (1983) 2 s.c.R. The gram pancbayats were entrusted with the work of looking -after sanitation and health, public works, community development, agriculture, preservation of forests and a number of other subjects. They were entrusted with the work of collection of land revenue and do any or all the functions and duties of village Accountant or Patel or other similar functions of any other person in relation to the collection of land revenue and dues recoverable as , arrears of land revenue. Provision had been made in the Act for the transfer to the District Pancb!}yats of such powers, functions and duties relating to any matters as are exercised or perform.,d by the State Government or ao)I officer of the Government under any enactment which the 'State Legislature is competent to enact or otherwise in the executive power of the Seate. The Act also provided that any functions and duties relating to any of the matters specified in the paochayat functions list, previously being performed by the State Government, shall be transferred to the District Paachayats togetlicr with the funds provided and the staff employed tberefo:r. On such transfer, the District Panchayat may delegate, with the approval of the Government, to any panchayat subordinate to it any of the functions and duties so transferred. A fund called the Gram Fund or Nagar Fund was created and the proceeds of any tax or fee imposed by or assigned to the Pancbayat under the Act, sums contributed to the fund by the State Governmt:nt and all other sums received by the Panchayat were to be credited in the fund. The Act provided for appointment of a Secretary and such other ser~ vants as may b ## Text _Characters 0–39,999 of 91,687. This is a partial read: ask again with offset=39999 for what follows._ ' •' ' - \. STATE OF GUJARAT & ANOTHER v. RAMAN LAL KESHA V LAL SONI & OTHERS January 27, 1983 [Y.V. CHANDRACHUD, CJ, S. MURTAZA FAZAL ALI, V.D. TULZAPURKAR, 0. CH!NNAPPA REDDY AND A. VARADARAJAN, JJ.] 287 Gujarat Panchayat Act, 1961-As amended by the Gujarat Panchayat (Third Amendment) Act, 1978-0fficers and servants of the panchayats-Whether Government servants. Mast~r and servant relations-Tests for the determination of. Constitution of India, 1950, Articles 14 and 311-Status of Government servant-If could be determind retrospectively. Interpretation-Legislature, if has power to take away or impair a consti· tutional right retrospectively. The Gujarat Panchayats Act, 1961 was enacted to consolidate and amend the law relating to village panchayats and district local boards with a view to reorganise the administration pertaining to local G.overnment in furtherance of the object of democratic decentralisation of powers in faVour of different classes of panchayats. It was provided that the state Government should exercise control over panchayats either directly or thrvugh such officer or officers as it may appoint for that purpose. The Panchayat Organisation consisted of Gram Panchayats, Taluqa Panchayats and District Panchayats which are bodies corporate with perpetual succession and common seal. Notwithstanding that they were separate bodies corporate, the panchayats formed part of the panchayat organisation set up for secudng a greater measure of participation by tlie people in the-local governmental functions. They were enjoined to perform :functions and duties assigned by or under the Act so• as to ~confonn to the State :plans, National plans and the State policy in general. The State Government was empowered to cause inspection to be made and to call for and examine the 'record of the proceedings of any panchayat. On the enactment of the 1961 Act, 1the District Local Boards, village panchayats and municipalities constituted under earlier Acts stood transformed as District Panchayats, gram or nagar pancbayats, depending on population. Officers and servants of the District Local Boards were deemed to be transferred to the service of the district panchayats, Secretaries, officers and servants in the employ of the old village panchayats became Secretaries, officers and servants of the new gram panchayats and officers and servants in the em,pior of municipalities became oflicers al\d servan.t' of .the interim p1nchayats, ~'·---~ A B c D E (1 G b c D E F G 288 SUPllBME COURT llBPOllTS (1983) 2 s.c.R. The gram pancbayats were entrusted with the work of looking -after sanitation and health, public works, community development, agriculture, preservation of forests and a number of other subjects. They were entrusted with the work of collection of land revenue and do any or all the functions and duties of village Accountant or Patel or other similar functions of any other person in relation to the collection of land revenue and dues recoverable as , arrears of land revenue. Provision had been made in the Act for the transfer to the District Pancb!}yats of such powers, functions and duties relating to any matters as are exercised or perform.,d by the State Government or ao)I officer of the Government under any enactment which the 'State Legislature is competent to enact or otherwise in the executive power of the Seate. The Act also provided that any functions and duties relating to any of the matters specified in the paochayat functions list, previously being performed by the State Government, shall be transferred to the District Paachayats togetlicr with the funds provided and the staff employed tberefo:r. On such transfer, the District Panchayat may delegate, with the approval of the Government, to any panchayat subordinate to it any of the functions and duties so transferred. A fund called the Gram Fund or Nagar Fund was created and the proceeds of any tax or fee imposed by or assigned to the Pancbayat under the Act, sums contributed to the fund by the State Governmt:nt and all other sums received by the Panchayat were to be credited in the fund. The Act provided for appointment of a Secretary and such other ser~ vants as may be determined for every Gram Panchayat and Nagar Panchayat in ac:ordance with rules prescribed by the Gov~rncnent. Depending on the facts and circumstances of a case, the State GJverament may direct that a group of Pa.nchayats sliall have one Secretary only. The Secretary and other servants were required to do all the administrative functions as may be conferred on them by tho Panchayat. The Act provided that there shall be a Secretary for every Taluqa Pancbayat and that the Taluqa Development Officer who shall be an officer belonging to the State servico and posted under the panchayat, sBall be ex-officio Secretary of the pancbayat. The District Development Officer posted under the District Panchayat was t-0 be. the ex-officio Secretary of the District Panchayat. For the purpose of bringing about uniform scales of pay and uniform con~ dition3 of service for persons employed in the pancbayats, the Act provided for the constitution of a panchayat service which was declared to be distinct from the State service. P1Jwer was given to the State Government to determine from time to time classes, cadres and posts of officers and their strength. A servant belonging to district cadre was liable to be posted, whether by promotion or transfer, to any post in any oth~r cadre as provided in the rules. The State Government was empowered to make rules regulating the mode of recruitment either by holdiog examinatioos or otherwise and their conditions of service. Appointments to posts in the panchayat service were to be made by direct recruitment or by promotion or by transfer of a member of the State service to t11e paachayat servic~. The Staie Government was empowered to allocate to the panchyat service the requisite number of officers and servants who _shall be taken over by the panchayat in such cadre and on such tenure, remuneration and other conditions of service as the State Government may determine and the expenditure on account of pay and allowances of officer and servants of thr panchayat wa~ to be met fro!ll the f~nd~ of the p~pcha~at, The Avt enabled - --._- \ < - l . ---, - f' GUJARAT V, RAMAN LAL the State Government to direct the posting of officers of the Indian Administra~ tive Service and of Class-II service9 of the State Government in panchaY,at institutions. Provision was made for the constitution of a Panchayat Service Selection Board and ()istrict Panchayat Service Selection Com1nittces for selection of officers ~nd other 1nembers of staff. After the coming into force of the 1961 Act the State Government made several sets of rules, one of which was the Gujarat Panchayat Service (Absorp· tion, Seniority, Pay and Allowances) Rules, 1965. The Rules provided for the equation of posts, fixation of seniority, scales Qf pay and allowances of "allocated employees". An "allocated employee" meant a person allocated to the panchayats service. Under the rules every allocated employee holding a corresponding post immediately before the appointed day shall be appointed to the_equivalent post. that is, a ·post -in the pancbayat service, which the State Government may, by order. determine to be gen!rally corresponding to a post held by an allocated employee immediately before the appointed day (called corresponding post) having regard to the pay scales, minimum educational and other qualifications prescribed for the equivalent post and the corresponding post and the nature and magnitude of responsibilities aHached to such posts. Therefore, unless equivalence of posts was first detern1ined by order of the State Government, the 1965 Rules could not be applied. The State Government ·did not mnke any order regarding the equation or posts of the staff in the local cadre and the fixation of their scales of pay, although such orders were made in respect of posts of other cadres. The Government did not extend to the staff borne on the local cadre, the benefit of ·revision of scales of pay made on the bash of the recommendations of the two Pay Commissions, though such benefit was cxten· dcd to the District and Taluqa Cadres; nor did the Government mak~ any order providing for promotional avenues to employees of the local cadre. Aggrieved by the inaction of the Government, the employees of the local cadre of the panchayat service filed a writ petition in the High Court seeking various relief&. The Government contended that members of the panchayat service were not Government servants and so were not entitled to claim the reliefs asked for by them. Allowing the petitions the High Court held that the employees belonging to the local cadre were Government servants and directed the State Government to make suitable orders under the 1965 Rules to initially fix the pay scales and other conditions of service, to revise the scales of pay in accordaoce with the recommendations of the Pay Commission. Certain other reliefs were also given. A B c D E F The State Governmeot filed in this Court an appeal against the judgment G of the High Court. In 1he meantime, the Governor promulgated the Gujarat Panchayats Amendment Ordinance, 1978 which later became the Gujarat Panchayats (fbird Amendment) Act, 1978 . The amending Act of 1978 was enacted to get over the effect of the judgment of the High Court. It denied the status of Government servants to certain categories or employees and their anoi;1;1~i99 to t~e pan~harat §ervice was, cancelled with retrospective effect. · ' B c D E F G H 290 SUPREME COURT REPORTS [1983) 2 S.C.R. Jn their writ petitions the employees of the local cadre contended that the provisions of the Amendment Act of 1978 were violative of Article 311 of the Constitution, that tbe Act was discriminatory and that the benefits acquired by them could not be taken away with re.trospcctive effect. In the appeal it was contended that having regard to the various provisions of the Act the members of the panchayat service were Government servants. Dismissing the appeal and allowing the petitions, HELD : The panchayat service constituted under the Act is a civil service of the State and the member~ of the service are Government servants. [309 CJ +- It is not possible to lay down any disti!'lctive test to determine when a person may be said to hold a civil post under the Government. The presence of all or some of the factors such as the rigbt to select for appoint· ment 1 the ·right to appoint, the right to terminate the employment, the right to take disciplinary action or deterinine the service, the source from which wages or salary are paid and a host of such circumstances may have to be considered to determine the existence of the relationship of master and servant. [306 B-D] Gurugobinda Basu v. Sankari Prasad Ghosal, [1964] 4 SCR 311 ; ,State of Uttar Prod.sh v. Audh Naroin Singh, [1964] 7 SCR 89; State of Assam v. Shri Kamakchandra Dutta, [1967] l SCR 679; Gurushontappa v. Abdul Khuddus, [1969] 3 SCR 425 ; S.L. Aggarwol v. Hindustan Steel Ltd., [1970] 3 SCR 363 ; Jalgaon Zilla Parishad v. Duman Gobind and others, C.A. No. 24 & 25 of 1968 decided on December 20, 1968, referred to. In-the instant case, merobers of the service are required to perform funetions in connection with those affairs of the State entrusted to the panchayats either by the Act itself or by transfer by the Gov-ernment under the Act. It may be that the pay and other allowances of the officers were paid out of the panchayats' own funds but the sums consisted of funds contributed or lent by the State Government and or the proceeds of any tax or fee imposed by or assigned to the panchayats under the Act. This imposition of a tax or fee in the nature of a ·lax is essentially a function of the State. So the salary and allowances of servants and officers are paid out of the funds contributed or Jent by Government or raised by the discharge of an essential governmental function. Officers and staff are to be appointed by an authority prescribed by the Government and their conditions of service shall be as may be prescribed by the Gov 1ernment. The Act contemplates the constitution of a single centralised panchayat service, the classes, cadres and posts of which have to be determined by the Government from time to time. Such other topics like recruitment, conditions of service, transfer, promotions, disciplinary action to be taken against the officers and servants are to be regulated by rules made by the Government, There cannot be any question of a rule providing for promotion from the panchayat service to the State service μnless the panc_hayat service is alsQ a ~eryice ~oder the State. The provisiops -- ' • I ' - .-r· GUJARAT v. RAMAN LAL i91 relating to inter.district transfers of servants of the panchayat service and provisions which provide for promotion and transfer of servants belonging to the different cadres within the District, Taluqa and Gram or Nagar panchayat clearly show that these servants are not the servants of the individual panchayats but belong to a centralised service. The provision· relating to transfer and allocation of members of the ,State service to the pancbayat service necessarily implies that the panchayat service is also a service under the State and such transfers would be impermissible unless the panchayat service is also a service under the 'State. The very idea that there can be an allocation to the Panchayat service from a State service and a reallocation from the panchayat service to the State service is only consistent with the panchayat service also being a service under the State. [306 G-H, 307 A-H, 308 BJ The provision under the Act that the panchayat service shall be distinct from the State service does not indicate a disclaimer by the Legislature th'at the panchayat service is a service under the State; it is a distinct service from the state service because the pancbayat institutions constitute an almost parallel but subsidiary Government. Again Government servants do not cease to be Government servants merely because, for the time being, they'are allocated to different panchayat institutions and are paid out of the funds of institutions Which are declared to be bodies corporate. [308 F-H, 309 B-Cf G.L. Shukla v. Stat~ of Gujarat; 8 G.L.R. 833, approved. The Gujarat Panchayats (Third Amendment) Act, 1978 is unconstitutional as it offends Articles 311 and 14 and is arbitrary and unreasonable. The provisions are so intertwined with ooe another that it is impossible to separate ~he offending sections from the others. [320 E-G] .The object of the 1961 Act was "democratic decentralisation of power and the consequent re·organisation of the administration of local' Government" and even after the 1978 amendment this object continued to be the same. Even so, section 11 (1) which declared that the different panchayats shall constitute a panchayat organisation wa11 omitted. The Statement of objects and reasons stated that the amendments were necessitated to get over the judgment of the High Court that the panchayat service was a State service. Tbat could not be a reason to go against the object of the principal Act and to abandon the constitution of the State panchayat organisation. [312 E·HJ The effect of the amending Act was that non-Talati Secretaries and other officers and servants of lhe Gram and Nagar panchayats were to be deemed to be the servants of the respective panchayats notwithstanding the judgments of courts declaring them to be Government servants. The District pancbayats were barred from transferring their staff to Oram and Nagar panchayats consequent on the delegation of functions, powe~s and duties to Gram and Nagar paochayats. A paochayat service consisting of persons employed in ·connection with the affairs of Taluqa panchayats and District panchayats and of specified servants was constituted notwithstanding anything contained in any judgment, decree or order of any court and such persons and servants were deemed to have always been {the officers cind servants of tho Taluqa panchayats or tho District panchayats for the ostensible reason A B c D E G H 292 SUPll.EME COURT UPORTS 11983) 2 S.C.Q, A· of enabling the respective panchayats to exercise their powers and perform their c D F G functions efficiently. In so doing it omitted the Oram and Nagar pancbayats -which are at the very base of democratic decentralisation and on which the superstructure stands. [314 C·H, 315 E-F) Before the Amending Act of 1978 was passed, ex-municipal emp1oyees who had been allocated to the panchayat service as Secretaries, officers and servants of Gram and Nagar panchayats had achieved the status of Government servants. The amending Act bas done away with their status as members of a service under tbe State without giving them an option. Retrospectivity is given in order that they could not claim that they \Vere ever Government servants. But their status as Government servants could not be extinguished so long as the posts were not abolished and their services were not terminated in accordance with -the provisions of Article 311 of the Constitution nor was it permissible to single them out for differential treatment because that would offend Arlicie 14 of the Constitution. [319 B·D] There is no force in the contention that some of the officers and servants of the Gram and Nagar panchayats were Government servants from 1he beginning while other officers and servants of Oram and Nagar panchayats were not and that a classification on the basis of source of their services was permissible. Once they bad joined the common stream of service and performed the same duties, it is not permissible to make any classification on the basis of their origin. [319 D·E] Undoubtedly, the Legislature is competent to legislate with retrospective effect to take away or i111pair any vested right but since laws are made under a w1itten constitution and have to conform to the do's and don'ts of the constitution neither prospective nor retrospective laws can be made so as to contravene the fundamental rights. A Legislature cannot legislate today with reference to a situation that obtained· 20 years ago and ignore the constitutional. rights accurcd in the course of 20 years.. A Jaw which, if made today, would be plainly invalid as offending constitutional provisions in the context of the existing, :situation cannot become valid by being made retrospective. [319 G-H, 320 B, BJ CIVIL APPELLATE JURISDICTION; Civil Appeal No. 359 of 1978. Appeal by Special leave from ·the Judgment and Order-dated the 28th January, 1977 of the Gujarat High Court in Special Civil Application No. 309 of I 975. AND Writ Petition Nos. 4266-4270 of 1978. (Under Article 32 of the Constitution of India) ')- • • V.M. Tarkunde, D1'ranjan Mehta, P.H. Parekh and Mrs. Manik >-- Tarkunde for the Petitioners in MPs. and R.R. 1-3 and in CA. 359. H D. V. Patel, C. V. Subba Rao, Dy. Govt. Advocate, M. N. Shroff, G. N. Desai and R. N. Poddar for the Appellant in CA. 359 and RR 1 and 2 in Wl's. GUJARAT v. RAMAN LAL ( Chinnappa Reddy, J.) 293 Vimal Dave and Miss Kai/ash Mehta for tbe Intervener in W,P. A Mukul Mudgal for Respondent No. '9 in CA. 359/79 and for Respondent No. 6 in WPs. The Judgment of the Court was delivered by CHINNAPPA REDDY, J. The attitude of the State of Gujarat in these cases has indeed left us puzzled and wondering. On the one hand, there are lakhs of employees working under various Panchayat Institutions, call · them Government servants or no, to whom the benefits of the recommendations of the two Pay Commissions, the Sarela and the Desai Commissions, have been extended, while on the other hand, there is a microscopic number (comparatively) of about six thousand employees of the lowest category, also working under Pancbayat Institutions, who are denied the benefits of those recommendations, on the sole ground of a birth-mark, if we may so call it, since they are denied the benefits because before they came to work under the Panchayat Institutions, they were employed in municipalities while the others were Government servants to start with. The unfairness and the injustice of the distinction is patent, whatever legal justification may be put forward. Surely, the State, dedicated as it is to socialism, equality and economic justice and enjoined by the Directive Principles to secure the right to work, a living wage, equal pay for equal work and so on cannot make such a distinction. But the distinction has been made; it is sought to be sustained by those making it and we are constrained to examine whether there is any Constitutional or other legal sustenance for the distinction. We did request the Counsel for the State of Gujarat to communicate with his clients to find out if the benefits cannot gracefully be extended to the erstwhile employees of municipalities presently working under Panchayat Institutions also. We are told that the answer of the State of Gujarat is in the negative. ' The appeal and the Writ Petitions were heard once before by a Constitution Bench consisting of Chandrachud, CJ, Sarkaria, Untwalia, Kailasam and Venkataramiah, JJ. The opinion of the Constitution Bench was pronounced by Vcnk, taramiah, J., on July 13, 1980. (The opinion is reported in [1981] l SCR 144). But on the application of the appellants, the opinion was set aside and the appeal and the Writ Petitions were directed to be set down for hearing once more by the Constitution Bench. That is how the matters have again come before us. B c D G H A B c D E F G H 294 SUPREME COURT REPORTS [1983] 2 s.c.R. Pursuant to the Constitutional mandate in Art. 40 that "the State shall take steps to organise village panchayats and endow them with such powers and authority as may be necessary to function as units of self-Government", the State of Gujarat enacted the Gujarat Panchayats Act 1961 (Act No. VI of 1962) 'to consolidate and amend the law relating to village Panchayats and district local boards with a view to reorganise the administration pertaining to local Government in furtherance of the object of the democratic decentralisation of powers in favour of different classes of Panchayats'. The Gujarat Panchayats f\ct 1961 was substantially amended in 1978 in an attempt, as .we shall presenily point out, to circumvent the judgment of the Gujarat High Court which is under appeal before us. The Constitutional validity of the Amending Act is in question in the Writ Petitions which are before us. We shall first refer to the provisions of the Gujarat Panchayats Act, as they stood before they were amended in 1978. By s. II (l) of the Act, as it originally stood, a Panchay at Organisation was constituted for the State of Gujarat, consisting of Gram Panchayats, Taluqa Panchayats, District Panchayats, Gram Sabhas, Nyaya Panchayats and Conciliation Panchas. It is provided by Section 11 (2) that the State Government shall exercise control over Panchayats either directly .or through such officer or officers as it may appoint for that purpose. Local areas comprising of revenue villages or groups of revenue villages or hamlets forming parts of revenue villages or other administrative units or parts thereof are to be declared Grams under the Act, if the population of the local areas does not exceed I 0,000 and Nagars if the populatio.n of the local areas exceed 10,000 but does not exceed 20,000. There is to be a Gram Panchayat for each Gram and Nagar Panchayat for each Nagar. There is also to be a Taluqa Panchayat for each taluqa and a District Panchayat for each district, as constituted from time to time under the Land Revenue Code. The Gram Panchayat, the Nagar ·Panchayat, the Taluqa Panchayat and the District Pancbayats are to be bodies corporate with perpetual succession and common seal. Sec. 8 prescribes the hierarchy and provides that, subject to the control of the Government, a Gram Panchayat is to be subordinate to the Taluqa Panchayat and the District Panchayat, while a Nagar Panchayat and Taluqa Panchayat are to be subordinate to the District Paochayat. While the Gram Panchayats, Nagar Panchayats, • ) GUJARAT v. RAMAN LAL (Chinnappa Reddy, J.) 29S Taluqa Panchayats and District Panchayats are to be bodies corporate, Sec. 287 makes it explicit that, notwithstanding that they are separate bodies corporate having distinct territorial jurisdiction and territorial functions to perform, the Gram Panchayats, Nagar Pachayats, Taluqa Panchayats and District Panchayats shall form part of the panchayat organisation, set up for the purpose of securing a greater measure of participaiion by the people of the State in local government functions and shall perform the functions and duties assigned to them by or under the Act so as to conform to the State plans, National plans and the State policy in general, and also so as to give effect to general or special directions as may be issued by the State Government. Sec. 292 (A) aqd Sec. 305 authorise the State Governm~nt to cause inspection to be made and to call for and examine the record of the proceedings of any panchayat. .· At this juncture, we may mention that prior to the enactment of the Gujarat Panchayats Act, 1961, there were in force in the State of Gujarat the Bombay Village Panchayat Act, 1958, the Bombay Local Boards Act, 1923, the Bombay District Municipal Act, 1901 and the Bombay Municipal Boroughs Act, 1925. The Bombay Village Panchayat Act 1958 and the Bombay Local Boards Act, 1923 are repealed by Secs. 325 and 326 of the Gujarat Village Panchayats Act, 1961. A local area declared to be a village under the Bombay Village Panchayats Act, 1958 and a Panchayat constituted under that Act, are deemed to be gram and panchayat under the Gujarat Gram Panchayats Act, 1961. The Secretaries and all officers and servants under the employment of the old village Panchayats are to be Secretaries, Officers and servants of the new gram panchayats. A District Local Board constituted under the Bombay Local Boards Act for a local area is to stand dissolved. All property which stood vested in the district local board immediately before the appointed day is to be deemed transferred to the district panchayat constituted for the local area, called the successor panchayat. All officers and servants in the employment of the District Local Board are similarly to be deemed transferred to the service of the successor panchayat. Where local areas are declared to be grams or nagars under Sec. 9 of the Gujarat Gram Panchayats Act, 1961 and such areas correspond to the limits of a municipal district or municipal borough under the Bombay District Municipal Act or Bombay Municipal Borough Act, it is provided by Sec. 307 of the Gujarat Panchayats Act that the municipality previously functioning in such local area shall cease to exist and that the councillors of such municipality shall constitute an interim A B c D E F G H A B 0 D fl G 296 SUPREMIB COURT REPORTS (1983] 2 !.C.R. gram panchayat or interim nagar panchayat as the case may be for the gram or nagar. It is also provided that all officers and servants in the employment of the municipality immediately before the date of declaration of the Jocnl ar.,as as gram or nagar, shall be officers and servants of the interim panchayat. Thus broadly, District Local Boards under the Bombay Local Boards Act stand transformed as District Panchayats, village panchayats under the Bombay Village Panchayats Act as gram panchayats and municipalities under the Bombay District Municipal Act and Bombay1 Municipal Boroughs Act as gram or nagar panchayats, depending on the population. Officers and servants in !he employ of the District Local Boards are deemed to be transferred to the service of the district panchayats; Secretaries, officers and servants in the employ of the old village panchayat become Secretaries, officers and servants of new gram panchayats and officers and servants in the employ of municipalities become officers and servants of interim panchayats. To continue our tour of inspection (if one may use such an expression) of the provisions of the Act, Sec. 88 of the Act empowers each gram panchayat to make, in the area within its jurisdiction, and so far as the fund at its disposal will allow, reasonable provi· sion in regard to all or any of the matters specified in Sch. I. Sch. I enumerates a host of matters under the beads 'Sanitation and Health'. 'Public works', 'Education and Culture', Self Defence and Village Defence', 'Planning and Administration', 'Community Development, Agriculture, Preservation of forests and Pasture Lands', 'Animal Husbandry', 'Village Industries' and 'Collection of Land Revenue'. Under each of these beads innumerable subjects are specified. In regard to the collection of land revenue express provision is further made by Sec. 149 that the Government shall, notwithstanding anything contained in Land Revenue Code or any other Jaw, entrust to every Gram Panchayat and every Nagar Panchayat, any or all of the functions and duties of village Accoun' tant or Patel or other similar functions of any other person by whatever name called, in r<:lation to the collection of land revenue and dues recoverable as arrears of land revenue and all other functions and duties of villa1ge Accountant under the Land Revenue H Code. Sec. 150 provides that the panchayat so entrusted under Sec. 149 shall be responsible for the collection of land revenue and other dues of the gram or nagar as the case may be. --- • > • · GUJARAT Y. RAMAN LAL (Chinnappa Ready, J.) 297 Jn addition to the functions enumerated in Sch. I. Sec. 89 imposes certain other duties and functions on the panchayat. A panchayat may, fer example, carry out in the area within the limits of jurisdic.tion, any other work or measure which is likely to promote health, safety, education, comfort, convenience or social or economic or culture well-being of the inhabitants of the area including secondary education. A panchayat is also required to carry out the directions or orders given or issued from time to time by the State Government for the amelioration of the condition of scheduled castes and scheduled tribes, and other backward classes. Taluqa and District Panchayats are required by secs. 117 and 13 7 respectively to make reasonable provision in respect of matters specified in Schedules II and III. In Schedule II, a number of subjects are enumerated under the heads 'Sanitation and Health', 'Commun'tcation', 'Education and Culture', 'Social Education', 'Community Development', 'Agriculture and Irrigation', •Animal Husbandry', 'Village· and Small Scale Industries', 'Corporation'. 'Women's Welfare', 'Social Welfare', 'Relief', 'Collection of Statistics', 'Trtitts', 'Forests', 'Rural Housing,' and 'Information'. In Schedule III, similarly, a number of subjects are enumerated under the beads 'Sanitation and Health', 'Public Works', 'Education and Other Cultural Activities', •Administration', 'Community Development', 'Agriculture', •Animal Husbandry', 'Village and Small Scala Industries', 'Social Welfare', 'Relief' and 'Minor Irrigation Projects'. Sec. 155 provides for the transfer of the functions previously performed by District School Boards under the Bombay and Saurashtra Primary Bducation Act to taluqa and district panchayats. , Sec. 156 provides for the delegation to district and taluqa panchayats such powers and functions and duties of the Registrar or any other authority under the Bombay Cooperative Societies Act, as may be specified. Sec. I 51 provides for the transfer to District Panchayats of such powers, functions and duties relating to any matters as are exercised or performed by the State Government or any officer of the Government under any enactment which the State Legislature is competent to enact, or otherwise in the executive power of the State. On the transfer of such functions, the Government is also required to allot to the District Panchayats such funds and personnel -· A B c D G H B c D F G H 298 SUPREME COURT REPORTS (1983] 2 S.C.R. as may be necessary to enable the District Panchayats to exercise the powers and discharge functions and duties so transferred. Sec. 157 (2) mentions the subjects which in particular may be transferred to the District Panchayats. Sec. 157 (3) further provides that on the transfer of powers, functions and duties under sub-Sec. (1) and (2), the District Panchayat shall, if the State Government so directs and may with the previous approval of the Government, delegate to any panchayat subordinate to it any of the functions, powers and duties so transferred and allot to such Panchayats such funds and staff as may be necessary to enable the Panchayat to discharge the functions and duties so delegated. Sec. 158 provides that any function and duties relating to any of the matters specified in the Panchayat functions list, which were previously being performed by the State Government, shall be transferred to the District Panchayats together with the funds provided and the staff employed therefor. On such transfer, the District Panchayat may delegate, subject to the approval of the Government, to any panchayat subordinate to it a11y of the functions and duties so transferred. Sec. 96 of the Act anthorises the State Government to vest in a Panchayat open sites, waste, vacant or grazing lands or public roads, streets, bridges, ditches, dikes and fences, wells, river banks, streams, lakes, nallas, canals, water courses, trees or any other property in the gram or nagar. Sec. 99 provides for the creation of gram and nagar funds. Each gram nnd nagar is to have a fund called the Gram Fund or the Nagar Fund into which ar~ to be paid, inter-alia, the proceeds of any tax or fee imposed by or assigned to the panchayat under the Act, sums contributed to the fund by the State Government or the Taluqa Panchayat or the District Panchayat and all sums received by way of loans from the State Government or the Taluqa Panchayat or the District Panchayat or out of the District Development Fund or otherwise. Sec. 119 vests in the Taluqa Panchayat every road building and other work constructed by the Taluqa Panchayat any land or property transferred to the Taluqa Panchayat by the State Government and any land or property transferred by any other Panchayat. Sec. 139 vests in the District Panchayat every road -- • ) . ,..., GUJARAT v. RAMAN LAL (Chinnappa Reddy, J.) ~9~ building or other work constructed by the Pancbayat, any land or property transferred to a District Panchayat by the State Government and any land or other property transferred to the District Panchayat by any other Panchayat. We may now refer, conveniently, at this stage to the provisions relating to services. Sec. 102 provides that there shall be a Secretary for every gram panchayat and nagar panchayat, who shall be appointed in accordance with the rules. Rules, of course; hav~ to be made by the Government under Sec. 323. Sec. 102 also provides that a gram panchayat . and nagar panchayat may have such other servants as may be determined under Sec. 203, who shall be appointed by such authority and with such conditions of service, as may be prescribed. 'Prescribed' again means 'prescribed by rules' and rules have to be made by the Government. It is further provided that having regard to the population of a gram and its income, the State Government may direct that a group of gram panchayats shall have one Secretary only. The Secretary is required to keep in his custody all records and registers of the panchayats, issue receipts on behalf of the panchayats, prepare all statements and reports required under the Act al)d perform such other functions and duties, as may be prescribed under the Act. Other servants of the panchayat are required to perform such functions and duties and exercise such powers as may be imposed or conferred on them by the Panchayat, subject to any rules which may be made. Sec. 122 provides that there shall be a Secretary for every Taluqa Panchayat and that the Taluqa Development Officer, who shall be an officer belonging to the State service and posted under the panchayat, shall be the ex-officio Secretary of the panchayat. Sec. 122 further provides that the taluqa panchayat shall have such other officers an .. GUJARAT V. RAMAN LAL (Chinnappa Ready, J.) 301 of service of persons appointed to the panchayat "service and powers of appointment, transfer and promotion of officers and servants in the panchayat service and disciplinary action against.