State of Madras & ANR Vs. K.M.
Rajagopalan [1955] INSC 43 (27 September 1955)
JAGANNADHADAS, B.
BOSE, VIVIAN BHAGWATI, NATWARLAL H.
SINHA, BHUVNESHWAR P.
IMAM, SYED JAFFER
CITATION: 1955 AIR 817 1955 SCR (2) 541
ACT:
Indian Independence Act, 1947 (10 and 11 Geo.
VI, C. 30)s. 10(2)(a)-The India (Provisional Constitution) Order, 1947--Article
7(1)-Independence, Conferral of-Automatic and legal termination of
service-Persons holding civil posts in India-Previous to Independence-Whether
deemed to have been appointed and continue in service after IndependenceGovernment
of India Act, 1935, ss. 240 (2) and 247.
HEADNOTE:
The respondent was recruited to the Indian
Civil Service by open competition in 1936 and joined duty in the Province of Madras in October 1937. Since then he was serving under the Government of
Madras in various capacities, his last office being Sub-Collector of Dindigal.
He went on leave in June 1947. While on leave he received a letter from the
Government of India asking him whether he was willing to continue in the
service of the Government after the then contemplated transfer of power from
the British Government to the Dominion of India on the 16th August, 1947. He
sent a reply expressing his willingness to continue in service.
On 9th August, 1947 'he received a letter
from the Government of Madras dated 7th August, 1947 signed by the Chief
Secretary thereof stating that it was decided not to retain his services from
and after the 15th August, 1947, and that his services would be terminated with
effect from the afternoon of the 14th August, 1947.
The respondent filed a suit against the State
of Madras and the Union of India for a declaration that the order issued by the
Chief Secretary to the Government of Madras on the 7th August, 1947 purporting to terminate his services was null, void and inoperative and that he should
be deemed to continue in service. The High Court granted the declaration prayed
for accepting the respondent's contention that the order terminating his
service was in violation of the statutory guarantee relating to his service
under s. 240 of the Government of India Act, 1935 which remained in force till
the midnight of the 14th August, 1947, Held, 1. The conferral of Independence on India, brought about an automatic and legal termination of service on the
date of Independence.
Reilly v. The King ([1934] A.C. 176) and
Nokes v. Doncaster Amalgamated Collieries Lid., ([1940] A.C. 1014), followed.
2. But all persons previously holding civil
posts in India are deemed to have been appointed and hence to continue in
service, except those governed by "general or special orders or
arrangements' affecting their respective cases: vide Article 7(1) of the India
(Provisional Constitution) Order, 1947 read with section 10(2)(a) of the Indian
Independence Act and sections 240(2) and 247 of the Government of India Act as
adapted.
3. The guarantee about prior conditions of
service and the previous statutory safeguards relating to disciplinary action
continue to apply to those who are thus deemed to continue in service but not
to others.
4. Those previously holding civil posts in
India bad the right, and were in fact given the option, of declining to
"continue in service" under the now regime and in the event of their
exercising that option they ceased to serve on and from the date of the passing
of the Constitution.
5. Equally the new Government had the right
to refuse to continue them in service and intimation of this fact given to
persons ahead of time came into operation and had legal effect from the moment
the new Government assumed office on 16-8-1947.
6. As the petitioner was informed that his
services would not be required after 14-8-1947 his services terminated on that
date because this was a special order within the meaning of Article 7(1) of the
India (Provisional Constitution) Order, 1947. Accordingly there was no
continuance of service in his case after 14-8-1947 under the deeming provisions of that Order.
Lall's case (1948) F.C.R 44, West Band
Central Gold Mining Co. Ltd. v. The King (1905) 2 K.B. 391, Virendra Singh v. The
State of Uttar Pradesh (1955) 1 S.C.R. 415, Baj Bajendra Malojirao Shitole v.
The State of Madhya Bharat (1954) S.C.R. 748, Ladore v. Bennett (1939) A.C. 468
and Govindan Sellappah Nayar Kodakan Pillai v. Punchi Banda Mudanayake (1953)
A.C. 514, referred to.
CIVIL APPELLATE JUrISDICTION: Civil Appeal
NO.203 of 1954.
On appeal from the Judgment and Order dated
the 30th March 1954 of the Madras High Court in C. S. No. 216 of 1952.
543 M. C. Setalvad, Attorney-General of
India, V.K. T. Chari Advocate-General of Madras (R. Ganapathy Iyer, Porus A. Mehta
and P. G. Gokhale, with them), for the appellant.
M. K. Nambiar (C. V. L. Narayan, with him),
for the respondent.
1955. September 27. The Judgment of the Court
was delivered by JAGANNADHADAS J.-This is an appeal by the State of Madras and
the Union of India against the judgment and decree of the High Court on a
certificate granted by that Court under article 133 of the Constitution. The
appeal arises out of a suit filed by the respondent herein, who was a member of
the Indian Civil Service,, for a declaration that the order issued by the Chief
Secretary to the Government of Madras on the 7th August, 1947, purporting to
terminate his services as from the afternoon of the 14th August, 1947, is null,
void and inoperative and that he must be deemed to continue in the Indian Civil
Service as a Member thereof. The suit was filed on the original side of the
High Court of Madras and after having been partly tried by a Single Judge who
recorded the evidence, was thereafter heard by a Bench of two Judges in view of
the important constitutional question that arose for consideration in the case.
The Bench found in favour of the plaintiff and decreed the suit and hence the
appeal by the State to this Court.
The case for the plaintiff is short and
simple. He was recruited to the Indian Civil Service by open competitive
examination in 1936 and joined duty in the then Province of Madras in October,
1937. Since then he was serving under the Government of Madras in various
situations. The last office he held was as Sub-Collector and Joint Magistrate
at Dindigal. On the 2nd June, 1947, he went on leave. While on leave, he
received a letter from the Government of India dated the 19th June, 1947,
wherein he was asked whether he was willing to continue in the service of 69
544 the Government after the then contemplated transfer of power from the
British Government to the Dominion of India on the 15th August, 1947. The
plaintiff sent a reply expressing his willingness. On the 9th August, 1947,
however, he received a communication from the Government of Madras dated the
7th August, 1947, and signed by the Chief Secretary thereof, stating that it
was decided not to retain him in service from and after the 15th August, 1947,
and that his services would therefore be terminated as on the afternoon of the
14th August, 1947. He was directed, therefore to apply for extension of leave
for which he was then eligible so as to avail himself of the full period of
leave which was to his credit. On receiving the order of termination of his
services, he made attempts to get it cancelled, by interviewing the Chief
Secretary and the Chief Minister of the Madras State at the time. But the
attempts proved futile. In the course of these interviews, he says he was given
the impression that the order of termination., though issued under the
signature of the Chief Secretary to the Government of Madras was in fact so
issued under the sanction of the Secretary of State for India, which, according
to him, subsequently turned out not to be a fact.
Being then under that mistaken impression, he
reconciled himself to the situation and availed himself of the full period of
leave and accepted the compensation which was awarded for premature termination
of services and also began drawing his pension. Later on he came to know from
one Shri Seshadri, another young Civilian, who was in a similar plight and who
had also filed a similar suit that certain documents produced in the course of
that suit showed that these orders were passed without the sanction of the
Secretary of State for India. He accordingly brought these matters again to the
notice of the Government and made further attempts to get the order in his case
reversed.
These again proved futile. He thereupon filed
an application for a writ in the High Court on the 7th November, 1951, to quash
this alleged illegal order against him. But the High Court rejected it on the
ground of there having been 545 long delay since the passing of the orders
sought to be quashed. The plaintiff thereafter gave the requisite notice to the
Government under section 80 of the Civil Procedure Code and filed this suit on
the 15th July, 1952. In the plaint he made the offer to refund the amount of
compensation paid to him after making such adjustments as may be called for
towards his claim for salary for the intervening period.
The plaintiff's claim is based on the
contention that the termination of his services by the order dated the 7th
August, 1947, is in violation of the statutory guarantee relating to his
service under section 240 of the Government of India Act 1935, which continued
to be operative till the midnight of the 14th August, 1947, and he relies on
Lall's case (1). To this suit both the State of Madras and the Union of India
were impleaded as defendants and their defence was substantially the same. It
is to be found in paragraph 6 of the written statement filed by the State of
Madras which is as follows:
"This defendant states that on the
transfer of power to the newly constituted Dominion of India in pursuance of
the Indian Independence Act as and from the appointed day, viz., 15th August,
1947, the tenure of the service of the plaintiff came to an end and he had no
legal claim to continue in service thereafter.
The plaintiff was holding office only during
His Majesty's pleasure. When His Majesty's Government decided to transfer its
power to the Dominion of India as and from the 15th day of August, 1947, the
career of the plaintiff under covenant with the Secretary of State came to a
legal termination as and from the 15th day of August, 1947. It is, therefore,
not correct to state that there was any termination by the Government of Madras
and that there has been utter lack of legality in the order passed by the said
Government. It is further submitted that the alleged termination of the
plaintiff's services was only from the 15th August, 1947, and that on such date
the (1) [1948] F.C.R. 44.
546 Province of Madras acting under the
instructions from the Government of India were competent to decline to accept
the offer to continue in service made by the plaintiff".
There were other minor pleas such as
estoppel, etc. which, it is unnecessary to notice at this stage. The High Court
negatived the defence of the State and accepted the contention of the plaintiff
and granted him the declaration prayed for.
The main contention of the learned Attorney General
before us appearing for the State is that the plaintiff has misconceived the
legal position, that what happened in this case was not a wilful order of
termination of the services of the plaintiff which fell within the scope of
section 240 of the Government of India Act, 1935, and whose validity was liable
to be tested with reference thereto. According to him the political changes
which came into force from the 15th August, 1947, operated in law to terminate
the services of all persons in the position of the plaintiff as and from the
15th August, 1947, that in that situation it was open to the new Dominion
Government of India or the Governments of the various Provinces, either to
invite such persons to continue to be in their respective services or to
intimate that they were no longer required, and that it was in the exercise of
this option that the Government of Madras communicated to the plaintiff an
advance intimation on the 7th August, 1947, that he would not be retained in
service as and from the 15th August, 1947. The substantial question, therefore,
for our decision is whether this contention put forward by the learned
Attorney-General is correct. It may be mentioned that, as appears from their
judgments, the learned Judges of the High Court appear to have been under the
impression that this defence of automatic termination of the services was
abandoned during the course of the arguments before them by the learned
Advocate-General of Madras. This impression seems to be erroneous. In any case
there is nothing to preclude the question which is purely one of law being
reopened before us with our leave in view of its being 547 one of considerable
importance. The learned Attorney-General has based his contention as regards
automatic termination of such services on three grounds:
(1)The political change which came into
operation on the 15th August, 1947, resulted in creating a new Sovereign State
of India and on the creation of such Sovereign State, the pre-existing
contracts of service under the previous Government became automatically
terminated.
(2)The contract between the Secretary of
State for India and the plaintiff being one of service became terminated on the
Secretary of State ceasing to have control in respect of the services
contemplated under the contract.
(3)The statutory changes which came into
operation as from the 15th August, 1947, by themselves brought about a
termination of such services and the protection of section 240 of the
Government of India Act) 1935, was no longer available to a, person in the
situation of the respondent.
For the purpose of appreciating the above
arguments, it is necessary to notice the various events that lead up to the
political changes, and the statutory provisions by which they were brought
about, in so far as they relate to the class of services with which we are
concerned in this case.
The starting point of these changes was the
announcement of his Majesty's Government dated the 20th February, 1947, that
power would be transferred to Indian hands by His Majesty's Government by June,
1948, in accordance with the Cabinet Mission Plan of May, 1946. Since then the
attention of the Government was engaged in the various steps to be taken to
bring about the transition as smoothly as possible. One of the steps taken in
this direction, in so far as it concerns this case, was the announcement by His
Excellence they Viceroy on the 30th, April, 1947. That announcement purported
to relate to "grant of compensation for premature termination of their
service ill India to Members of Civil Services appointed by the Secretary of
State and to regular officers and British Warrant 548 Officers of the Indian
Naval and Military Forces", and was inter alia as follows:
"1. His Majesty's Government have
announced their intention that the British Government's authority in India will
be finally transferred to Indian hands by June, 1948. It is the aim of His
Majesty's Government that the transfer of power should be effected in an
orderly and regulated manner so that the new authorities may assume their
responsibilities in conditions conducive to the best interests of India and
maintenance of good relations with Great Britain. His Majesty's Government are
confident that during this period of transition the Services and all those who
man them, whether British or Indian will respond to this call.
2. To those serving under covenant or other
-form of agreement with the Secretary of State for India or who hold
commissions from His Majesty the King, the transfer of power will mean
premature termination on that date of a career under the ultimate authority of
His Majesty's Government and the British Parliament; and for many there is
added to the heavy call of present duty the burden of anxiety for their own
future and that of those who depend on them.
3. The Government of India are naturally and
rightly most anxious and His Majesty's Government share their anxiety that the
administration shall not be weakened by the loss of experienced officers. To
this end, Government of India undertake that those members of the Secretary of
State's Services who continue to serve under the Government of India after the
transfer of power shall do so on their present terms as to scales of pay,
leave, pensionary rights, and safeguards in matters of discipline and that
provisions to this effect should be made in the Treaty to deal with matters
arising out of the transfer of power. The Government of India will now propose
to Provincial Governments that they should give similar assurances to members
of the Secretary of State's service who agree to join Provincial services.
4. The Government of India recognise that
some Indian members of the Secretary of State's services 549 may be genuinely
anxious about their prospects under the Provincial administrations where they
are at present employed, and every effort will be made to arrange suitable
transfers in such cases.
5.The Government of India agree that
compensation should be payable to such Indian Officers of these services as(1)are
not invited to continue to serve under the Government of India after transfer
of power; or (2)can satisfy the Governor-General that their actions in the
course of duty during their service prior to the transfer of power have damaged
their prospects, or that the appointments offered to them are such as cannot be
regarded as satisfactory in the altered circumstances; or (3)can show to the
satisfaction of the GovernorGeneral that they have legitimate cause for anxiety
about their future in the Province where they are now serving, and that no
suitable transfer can be arranged.
But the Government of India feel that
sentiments of patriotism will naturally impel Indian Officers to continue to
serve their country and that, in the light of the undertaking that they have
given, and the consideration that in fact Indian members of the Service will
have improved prospects, there is no ground, save in these special cases, for
payment of compensation to Indian officers on account of the transfer of power.
6. His Majesty's Government have been
reviewing the whole position. They have noted the undertaking which the
Government of India have given in regard to officers whom they desire, should
continue to serve under the Government of India. They recognise the force of
the Government of India's arguments, and they agree that to Indian Officers
compensation should not be admissible except in the cases which I have just
mentioned.' Many Indian members of the Secretary of State's services will
however become members of provincial services and in their cases His Majesty's
Government's agreement that they need not be compensated is conditional upon
the Provincial Governments guaranteeing the existing terms of ser550 vice'. If
they are not prepared to do so His Majesty's Government reserve the right to
reconsider the matter.
7. With these reservations I am now
authorised by His Majesty's Government to inform members of the Secretary of
State's services that they accept the obligation to see that they are duly
compensated for the termination of their careers consequent on the transfer of
power............................ " After this announcement was issued,
His Majesty's Government, for various political reasons, decided to advance the
date of transfer of power and made an announcement on the 3rd June, 1947,
detailing various steps which were proposed to be taken to bring about an early
transfer of power. Paragraph 20 of that announcement ran as follows:
"The major political parties have
repeatedly emphasized their desire that there should be the earliest possible
transfer of power in India. With this desire His Majesty's Government are in
full sympathy, and they are willing to anticipate the date of June, 1948, for
the handing over of power by the setting up of an independent Indian Government
or Governments at an even earlier date. Accordingly, as the most expeditious, and
indeed the only practicable way of meeting this desire, His Majesty's
Government propose to introduce legislation during the current session for the
transfer of power this year on a Dominion Status basis to one or two successor
authorities according to the decisions taken as a result of this announcement.
This will be without prejudice to the right of the Indian Constituent
Assemblies to decide in due course whether or not the part of India in respect
of which they have authority will remain within the British Commonwealth".
In pursuance of what was indicated herein,
the Indian Independence Act was passed on the 18th July, 1947. In pursuance of
the power vested in the Governor General there under a number of legislative
orders were passed by him. The relevant provisions of the Indian Independence
Act as well as of some of the legislative orders will be presently noticed. But
it 551 will be convenient at this stage to state the further steps taken by the
Government relating to the services of the kind we are concerned with., in
pursuance of their plan announced on the 3rd June, 1947, to speed up the
transfer of power.
Within about two weeks after the announcement
of His Majesty's Government dated the 3rd June, 1947, a circular letter was
issued, by the Government of India to the Chief Secretaries of all the
Provincial Governments on the 18th June, 1947, which inter alia stated as
follows:
"That in view of the latest announcement
of His Majesty's Government (dated the 3rd June, 1947), it is essential to
ascertain with the least possible delay, the wishes of individual officers to
whom His Excellency the Viceroy's announcement of the 30th April 1947 applies
in regard to continuance in service after the transfer of power. This will
enable Government to decide which officers they should continue to retain in
service after the transfer of power and to make arrangements to replace
officers who desire to quit service, of their own accord or whom Government may
not wish to continue in service".
The Chief Secretaries were accordingly asked
to make arrangements "to send immediately to every officer belonging to
any service specified in the schedule, and serving under the Provincial
Government, a copy of the enclosed letter from the Government of India to the
officers concerned, whereby the officer was asked to communicate within ten
days of the receipt of the letter whether he wishes to continue in the service
of the Government or whether he desires to retire from service". The
circular letter of the Government of India to the Chief Secretaries further
asked them that in forwarding the replies received thereto from the individual
officers, they may inform them, in case of persons who have decided to quit
service, the earliest date on which the Government will be in a position to
release the officer and in case of persons who offer to continue in service,
whether for any reason, they would prefer him not to continue in the service,
notwithstanding the officer's desire to remain in the 70 552 service and
pointed out that in the latter case the Provincial Government will be incurring
liability to pay compensation. In pursuance of these instructions the
individual letters to the officers concerned were presumably sent and replies
were obtained, and the necessary orders were passed in respect, at any rate, of
such of the officers whom the various Governments were not prepared to retain
service after the transfer of power. Pausing here, it will be seen that the
announcement of the Viceroy dated the 30th April, 1947, and the circular letter
issued by the Government of India to the Chief Secretaries on the 18th June,
1947, as well as the individual letters issued by and under the authority of
the Government of India to those officers on the same date asking for
information from them as to their desire to continue in service or not, were
all based on the assumptions clearly stated or indicated therein, (1) that
transfer of power brings about an automatic premature termination of the
services, (2) on such termination, it would be open to the servant concerned
either to decline to continue in the service of the new Government or to offer
to continue his services, and (3) that in case the individual servant intimated
his desire to continue in service, it was open to the Government either to,
accept the offer or not.
Thus the continuance of service was
contemplated only in respect of such of the previous servants who intimated
their desire for the continuance of their services and whose offer in this
respect was accepted. While, therefore, discontinuance of service was to be
brought about by the option of either of the parties and on such discontinuance
the servant was to become entitled to compensation, the continuance of the
service was a matter which would depend upon the mutual consent of both, viz.,
the individual servant and the Government concerned. That the position so taken
up must have been perfectly within the knowledge of every one of the persons to
whom these circular letters were sent is virtually admitted by the plaintiff himself
in his evidence and also appears clearly from the fact that a copy of the
Viceroy's announcement dated the 30th April, 553 1947, appears to have been
enclosed with the individual letters dated the 18th June, 1947, sent to each of
the officers by the Government of India. The plaintiff himself in his letter
dated the 2nd July, 1947, to the Chief Secretary to the Government of Madras,
wrote as follows:
"I am in receipt of your Memorandum No.
2738 of 1947-4, Public (Special) Department, dated 5th June, 1947, enclosing
the announcement of His Excellency the Viceroy. I wish to state that I desire
to continue to serve the Madras Government and that I desire no transfer to any
other Province". (The reference to the date 5th June, 1947, is probably a
mistake since it is clearly admitted in the plaint that the plaintiff intimated
his desire to continue in service in reply to the leter dated the 18th June,
1947.) To complete the course of events as regards the individual case of the
plaintiff, the further facts may be stated.
After receiving this reply from the plaintiff
dated the 2nd July, 1947, the Chief Secretary to the Government of Madras wrote
to him a letter dated the 7th August, 1947, as follows:
"I am to say that with reference to your
reply to the letter cited electing to continue in service after the transfer of
power, the Government have decided not to retain you in service after 15th
August, 1947. Your services will be terminated on the afternoon of 14th August
1947 and you may proceed on leave (your present leave will be automatically
converted into leave) preparatory to retirement as from 15th August 1947. You
may therefore apply for the leave (extension of leave) for which you are
eligible direct to Government. The Accountant-General is being asked to certify
the amount of leave for which you are eligible.
A formal communication will issue to you
shortly from the Government of India terminating your services as from 14th
August, 1947 A.N. I am to express regret that the decisions in your case has been
delayed so long".
This is clearly an advance intimation that
the termination of the services of the plaintiff would become 554 operative at
the very moment when the transfer of power comes into force, i.e., on the
midnight of 14th/ 15th August, 1947. The mention of the termination on the
afternoon of the 14th August, 1947, was clearly because of the official
practice that a person who hands over charge of his office in the afternoon of
a particular day, continues in service and draws the salary for that day. (Vide
Audit Instruction (1) at page 163 of the Fundamental Rules, 3rd Edition). A
letter was immediately addressed by the Chief Secretary to the Government of
Madras under date 8th August, 1947, to the Under Secretary of State for India,
India Office, London, and a copy thereof was sent to the plaintiff. The letter
runs thus:
"I am directed to say that Mr. K. M.
Rajagopalan I.C.S. proceeded on three months' leave on the 3rd June, 1947, and
that as he will not continue in the service of Government in India, after the
transfer of power, he will be entitled to compensation or settlement grant, as
the case may be, as from the 15th August, 1947".
On the 8th August, 1947, a formal Government
Order No. 377 was passed which is as follows"Mr. K. M. Rajagopalan I.C.S
proceed on three months' leave on the 3rd June, 1947, and that as he will not
continue in the service of Government of India after the transfer of power, he
will be entitled to compensation or resettlement grant, as the case may be, as
from the 15th August, 1947".
This order was published in the Fort St.
George Gazette dated the 19th August, 1947. Presumably this order (along with
other similar orders) was also intimated to the Government of India and the
Government of India sent a telegram to the Government of Madras on the 14th
August, 1947, as follows:
services of........ Rajagopalan".
On the 29th September, 1947, the Government
of Madras passed a G. 0. sanctioning payment of pound 4,500/as compensation for
the plaintiff and ordered disbursement thereof by the Accountant-General. This
compensation was drawn by the plaintiff in April, 555 1950. In the light of
this background it is now necessary to notice the various statutory provisions
which brought about the political change and particularly those which relate to
the services.
The instrument which brought about the
transfer of power from the British Government to the Dominion Government of
India in accordance with the announcements of His Majesty's Government dated
the 20th February, 1947 and the 3rd June, 1947, is the Indian Independence Act,
1947, (10 & 1.1 Geo.
6, Ch. 30) passed by the British Parliament
and which became law on the 18th July, 1947. The preamble thereto is as
follows:
"An Act to make provision for the
setting up in India of two independent Dominions, to substitute other
provisions for certain provisions of the Government of India Act, 1935, which
apply outside those Dominions, and to provide for other matters consequential
on or connected with the setting up of those Dominions".
By section I of the said Act two independent
Dominions to be known respectively, India and Pakistan, were to be set up in
India as from the 15th day of August, 1947, with territories assigned to each
'of them as indicated in sections 2,3 and 4 thereof. Under section 5, there was
to be a Governor-General for each of the Dominions to be appointed by His
Majesty who was to represent His Majesty for the purposes of the government of
the Dominion. By section 6 it was provided that Legislature of each of the new
Dominions was to have full power to make laws for that Dominion including laws
having extra-territorial operation and laws which would be valid
notwithstanding any repugnancy to the law of England or to the provisions of
any existing or future Act of the Parliament. It was also provided that the
assent to the laws as made by the Legislatures, was to be given by the
Governor-General in the name of His Majesty without any power of disallowance
by His Majesty and without any power of reservation of laws for the
significance of His Majesty's pleasure. By section 7, it was specifically
provided that as from the 15th 556 August, 1947, His Majesty's Government in
the United Kingdom was to have no responsibility as respects the government of
any of the territories which, immediately before that day, were included in
British India. Temporary provisions as to the government of each of the new
Dominions as from the 15th August, 1947, until such time that each of the two
Dominions evolves its own independent Constitution were made by sections 8 and
9. By section 8(1) the respective Constituent Assemblies of India, and Pakistan
which had already come into existence and were functioning for the purpose of
evolving a new Constitution for each of the Dominions, the first by virtue of
the Cabinet Mission Plan of May, 1946, and the second by reason of the
announcement of His Majesty's Government dated the 3rd June, 1947, were
recognised as interim Legislatures for each of the Dominions. By section 8(2)
the pre-existing Government of India Act, 1935, with modifications and
adaptations to be made by the Governor-General and subject to any other
provision or alteration to be made by the Constituent Assembly functioning as
the interim Legislature, was to continue in force. By section 9 of the Act, the
Governor General was given various and extensive powers to make provisions in
order to bring the provisions of the Indian Independence Act into operation and
for removing difficulties arising in connection with the transition of power
from the British Government to the Dominions and to carry on the business of
the Governor-General in Council in the interim period. It was specifically
provided that the Governor-General's power in this behalf was to be
retrospective as from the 3rd June, 1947.
It will be seen that by virtue of the Indian
-Independence Act a completely independent Dominion of India was set up with a
wholly independent Legislature and with a completely independent Government
free from any kind of fetters as regards their functioning, either from the
British Parliament or from the British Government. The Government of the
Dominion, however, was still to be carried on in the 557 name of His Majesty
the King of Great Britain, by the Governor-General of India to be appointed by
His Majesty.
The learned Attorney-General strenuously
contended that these changes resulted in the emergence of India as an
independent Sovereign State and that it followed there from, on well-recognised
principles of international law, that this brought about automatic termination
of the contracts of service between the prior Government and its servants. In
support of this principle of international law, the learned Attorney-General
cited a number of authorities as also the case in West Rand Central Gold Mining
Co. Ltd. v. The King(1), which was quoted by this. Court in Virendra Singh v.
The State of Uttar Pradesh(2). On the other hand, Shri Nambiar for the
respondent stressed the fact that however independent the new Dominion
Government may be as regards the functioning of its Legislature and of its
executive Government, the new Government was still to function in the name of
His Majesty the King of Great Britain and that, therefore, the Dominion is not
on the same footing as an independent sovereign State, which obtains
sovereignty over a new country by virtue of conquest or cession. He urged that
the principle of international law relied upon would not apply to such a case.
In support of his contention he drew our attention to various other provisions
in the Indian Independence Act and to the various legislative orders passed by
the Governor-General by virtue of powers vested in him under section 9 of the
Indian Independence Act as also to adaptations made in respect of various
existing laws.
The question as to whether the Indian
Independence Act brought about a full sovereign State for each and every
purpose is one of considerable importance and is not free from difficulty. We
do not wish to decide that question on the present occasion. It appears to us
that the present case has to be decided with reference to the question as to
what exactly has been brought about by the Indian Independence Act and the
subsidiary legislation which followed thereupon, in so far as they relate (1)
[1905] 2 K. B. 391.
(2) [1955] 1 S.C.R. 415, 427.
558 to the tenure of persons in the position
of the plaintiff.
For this purpose it is necessary in the first
instance to have a clear idea as to what was the tenure of service of the
plaintiff prior to the 15th August, 1947. Persons in the position of the
plaintiff were recruited directly by the Secretary of State for India by virtue
of the powers conferred on him under section 244(1) of the Government of India
Act, 1935 (or under the corresponding provisions in the prior Government of
India Acts). The persons so recruited, were appointed to the service called the
Indian Civil Service. Each person so recruited had to enter into a covenant by
means of an indenture between himself and the Secretary of State. The indenture
(whose form is to be found as Appendix I of the Indian Civil Service Manual)
recited that the person was appointed by the Secretary of State to serve His
Majesty as a Member of the Civil Service of India and that such service was to
continue during the pleasure of His Majesty, to be signified under the hand of
the Secretary of State for India with liberty for the covenanter to resign the
said service with the previous permission of the Secretary of State or of the
Government under which he was, for the time being, serving. The indenture
incorporated various covenants by the appointee with reference to the exercise
of his functions during the period of his service such as (1) general fidelity,
(2) obedience to orders of general nature, (3) keeping of regular accounts,
preservation and due delivery and production of private accounts, (4) not to
misapply or employ for improper purposes the property entrusted to his care,
(5) not to divulge secrets, (6) not to accept corrupt presents or to make
corrupt bargains, (7) not to trade contrary to law or regulations, (8) not to
quit India without leave and to satisfy all debts due to His Majesty before
departure, and (9) to make prescribed payments towards pension, etc. Apart from
these covenants, his tenure was regulated by a number -of statutory provisions
under the Government of India Act. Section 240, while affirming that the
service was at the pleasure 559 of His Majesty provided that dismissal or
reduction in rank should be preceded by a reasonable opportunity for showing
cause against the action proposed and that dismissal (or removal) from service
could only be by an authority not subordinate to the appointing authority-which
in the present case meant that the appellant could be dismissed or removed only
by the Secretary of State. The Government of India Act contained also a number
of provisions specially applicable to a person recruited by the Secretary of
State. The conditions of his service as regards pay, leave, pension and other
matters were to be such as may be, prescribed by the rules to be made by the
Secretary of State and (in the absence of any specific rules by the Secretary
of State) by the rules to be made by the Governor-General or the Governor of a
Province in accordance as he was in service under the Government of India or
the Provincial Government [section, 247(1)]. In the matter of promotions or
leave exceeding three months or in the matter of an order of suspension, he was
to be directly under the authority of the GovernorGeneral or the Governor, as
the case may be, exercising their respective individual judgments [sections
247(2) and (3)]. No award of pension less than the maximum pension under the
rules could be made except with the consent of the Secretary of, State [section
247(6)]. He had the right to approach the Governor-General or the Governor in
the exercise of their individual judgment if he had any grievance or complaint
in respect of his service and a right of appeal to the Secretary of State as
against the order. of any authority which punished or formally censured him or
interpreted any rule to his disadvantage (section 248). The Secretary of State
had to make rules; specifying the number and character of the civil posts under
the Crown which were to be reserved for and to; be filled by persons belonging
to the Indian Civil Service recruited by him (section 246). If the conditions
of the service were adversely affected by reason of anything done under the Act
or for any other reason which might have appeared to the Secretary of State to justify
payment of compensation, he was entitled 71 560 thereto, the compensation being
such as the Secretary of State might fix. The said sum was payable from the
revenues of the Government of India or the Provincial Government as the case
may be (section 249). It will be seen from the above that the tenure of an
Indian Civil Servant was basically contractual but with conditions and
prospects of such service regulated by statute. A person recruited to such
service was in a very special position, in comparison with persons holding
other civil posts of the Government of India or the Provincial Government. He
enjoyed a number of rights and privileges attached to him by virtue of the fact
that he belonged to a specially recruited service with certain high posts reserved
for him and having the right of appeal to the Secretary of State in respect of
matters relating to his service, by virtue of sections 244,246,247,248 and 249.
Thus the Indian Civil Service was a specially privileged class of service under
the Crown with the essential characteristic of direct and ultimate protection
by the Secretary of State representing His Majesty's Government.
Now it is necessary to notice the fundamental
changes brought about in this behalf by the' Indian Independence Act. In the
first instance the Secretary of State who, as a Member of British Cabinet,
acting in the name of the Crown and responsible to the British Parliament, was
exercising such control as was vested in him in respect of the affairs of India
and in particular as regards these services, completely disappeared. It was
specifically provided by section 7 (1)(a) of the Indian Independence Act, 1947,
that as a consequence of the setting up of the new Dominions as from the
appointed day (15th August, 1947) "His Majesty's Government in the United
Kingdom have no responsibility as respects the government of any of the
territories which, immediately before that day, were included in British
India". There was a further specific provision by way of section 10 in the
Indian Independence Act as regards the Secretary of State services which was as
follows:
"10. Secretary of State's services etc.
561 (1) The provisions of this Act keeping in
force provisions of the Government of India Act, 1935, shall not continue in
force the provisions of that Act relating to appointments to the civil services
of, and civil posts under, the Crown in India by the Secretary of State, or the
provisions of that Act relating to the reservation of posts".
Now the India (Provisional Constitution) Order
of 1947 which was issued by the Governor-General on the 14th August, 1947,
under the power of adaptation vested in him under section 9(1)(c) of the Indian
Independence Act and which was to come into operation simultaneously with it,
gave effect to the above two provisions, viz., section 7(1)(a) and section
10(1) of the Indian Independence Act, by specifically deleting from the
Government of India AcT , 1935 the various sections relating to the Secretary
of State and his services, i.e., sections 244, 246, 248 arid 249 and 278 to
284-A (vide schedule to the India (Provisional Constitution) Order, 1947).
Changes were also made by the same order in sections 240 and 247 relating to
conditions of service which will be noticed presently, whose chief purpose was
to withdraw the responsible of the Secretary of State as regards matters
covered by these sections. The resultant position was clearly this. (1) There
was no further recruitment to a special covenanted service by the Secretary of
State. (2) There was to be no statutory reservation of posts to be made by the
Secretary of State. (3.) The conditions of service as made by the Secretary of
State no longer continued in operation. (4) No right of appeal or approach to
the Secretary of State for redress of any personal grievances relating to such
servants, or right of compensation, etc. for any adverse action to be
determined by the Secretary of State, continued to subsist. True, some of the
conditions of service previously governing these persons were continued by
section 10(2) of the Indian Independence Act and the adaptations made there under
which will be noticed presently.
But apart from the question whether such
continuance is available to all the previous members of the service a matter
which will be 562 dealt with presently-the ultimate -responsibility for the
framing and maintenance of the conditions of service was no longer with the
Secretary of State.. It is also true that in -respect of such of these civil
servants whose services were retained by the new Dominion Government the
service continued to be under the Crown (as shown by the adaptation of section
240 of the Government of India Act). But this was only because in theory the
new Government of India was still to be carried on in the name of His Majesty.
This was no more than a symbol of the continued allegiance to the Crown. The
substance of the matter, however, was that while previously the Secretary of
State's services were under the Crown in the sense that the ultimate authority
and responsibility for these services was in the British Parliament and the
British Government, this responsibility and authority completely vanished from
and after the 15th Au 'gust, 1947, as envisaged in the Viceroy's announcement
of the 30th April, 1947, and as specifically affirmed by section 7 (1) (a) of
the Indian Independence Act. Thus the essential structure of the Secretary of
State services was altered and the basic foundation of the contractual-cum statutory
tenure of the service disappeared. It follows that the contracts as well as the
statutory protection attached thereto came to an automatic and legal
termination as held by the Privy Council and the House of Lords in somewhat
analogous situations in Reilly v. The King(1) and Nokes v. Doncaster
Amalgamated Collieries Ltd.(2).
To repel the above view of the change brought
about by the Indian Independence Act, learned counsel for the respondent relied
on certain other provisions which may now be noticed.
These provisions far from supporting the
contention of the respondent, clearly confirm the above view. The first of
these is section 10(2) of the Indian Independence Act, which is as follows:
"10. (2) Every person who(a) having been
appointed by the Secretary of State, or Secretary of State in Council, to a
civil (1) [1984] A.C. 176.
(2) [1940] A.C. 1014, 563 service of the
Crown-in India continues on and after the appointed day to serve under, the
Government of either of the new Dominions or of any Province or part thereof,
shall be entitled to receive from the Governments of the Dominions and
Provinces or parts which he is from time to time serving the same conditions of
service as respects remuneration, leave and pension, and the same rights as respects
disciplinary matters or, as the case may be, as respects the tenure of his
office or rights as similar thereto as changed circumstances may permit, as
that person was entitled to immediately before the appointed day".
The contention of the learned counsel is that
this provision clearly indicates that persons previously appointed by the
Secretary of State to the Indian Civil Service continue under the new
Government and that they are entitled to similar conditions of service as they
had before. According to him the order of termination of plaintiff's service being
invalid, he must be deemed to continue in service. But, it is to be noticed
that the above provision does not say that all persons previously appointed
shall he continued in service. It is very carefully worded and merely
guarantees the same conditions of service, etc. to persons who "having
been appointed by the Secretary of State continue on and after the appointed
day to serve under the Government This section has nothing to say as to who are
the persons who continue in service and receive the benefit. That was obviously
left to be provided by delegated legislation in the shape of orders of the
Governor General by virtue of section 9(1)(a) of the Indian Independence Act.
The India (Provisional Constitution) Order, 1947, referred to above deals with
this matter in article 7(1) thereof which runs as follows:
"Subject to any general or special
orders or arrangements affecting his case, any person who immediately before
the appointed day is holding any civil post under the Crown in connection with
the 564 affairs of the Governor-General or Governor-General in Councilor of a
Province other than Bengal or the Punjab shall, as from that day, be deemed to
have been duly appointed to the corresponding post under the Crown in
connection with the affairs of the Dominion of India or as the case may be, of
the Province". The Schedule to this Order also shows the adaptations made
in respect of sections 240 and 247 of the Government of India Act to give
effect to section 10(2) of the Indian Independence Act above quoted.
Now section 247 of the Government of India
Act as adapted is as follows:
"The conditions of service of all
persons who, having been appointed by the Secretary of State or the Secretary
of State in Council to a civil service of the Crown in India, continue on and
after the date of the establishment of the Dominion to serve under the
Government of the Dominion or of any Province, shall(a) as respects persons
serving in connection with the affairs of the Dominion, be such as may be
prescribed by rules made by the Governor-General;
(b) as respects persons serving in connection
with the affairs of a Province(i)in regard to their pay, leave, pension,
general rights as medical attendance and any other matter which immediately
before the establishment of the Dominion was regulated by rules made by the
Secretary of State, be such as may be prescribed by rules made by the
Governor-General; and (ii) in regard to any other matter, be such as may be
prescribed by rules made by the Governor of the Province".
Section 240(2) as modified is as follows:
"No such person as aforesaid (referring
to the persons mentioned in section 240(1) which includes persons appointed by
the Secretary of State) who having been appointed by the Secretary of State or
the Secretary of State in Council continues after the establishment of the
Dominion to serve under the Crown in India shall be dismissed from the service
of His Majesty by any authority subordinate to the 565 Governor-General or the
Governor according as that person is serving in connection with the affairs of
the Dominion or of a Province, and no other such person as aforesaid shall be
dismissed from the service of His Majesty by any authority subordinate to that
by which he was appointed".
Taking these various provisions together, it
is clear' that the guarantee of the prior conditions of service and the
previous statatory safeguards relating to the disciplinary action are now
confined to such as continue In service on and after the establishment of the
Dominion to serve under the Crown, i.e., of the Government of the Dominion or
of a Province, as the case may be. Who the persons are who fall within the
category of persons so continuing is clearly indicated by implication in
article 7 (1) of the India (Provisional Constitution) Order, 1947, already
quoted, which says that any person who immediately before the appointed day is
holding any civil post under the Crown in connection, with the affairs of the
Governor General or Governor-General in Councilor of a Province, shall, as from
that day, be deemed to have been duly appointed to the corresponding post under
the Crown in connection with the affairs of the Dominion of India, or, as the
case may be, of the Province. It is clear that the continuance contemplated by
section 10(2) (a) of the Indian Independence Act and by section 240(2) and
section 247 of the Government of India Act as adapted, is the continuance
impliedly brought about by this deeming provision in article 7(1) of the India
(Provisional Constitution) Order. But it has to be noted that this provision is
specifically preceded by the qualifying phrase "subject to any general or
special orders or arrangements affecting his case". Thus all persons who
were previously holding civil posts are deemed to have been appointed and hence
to continue in service, excepting those whose case is governed by "general
or special orders or arrangements affecting his case". Now, omitting
"general orders" which has no application in this case, there can be
no reasonable doubt that the special orders or arrangements contemplated
herein, in so far as the 566 members of the Secretary of State's services are
concerned, are the special orders or arrangements which followed on the
Viceroy's announcement dated the 30th April, 1947, in pursuance of which the
individual civil servants had been circularised and their wishes ascertained,
and the Governments concerned had finally intimated their option not to invite
the continuance of the service of particular individuals as has happened in the
case of the present plaintiff. To repel this conclusion, the learned counsel
for the respondent urges (1) that the "special orders or
arrangements" contemplated by article 7(1) of the India, (Provisional
Constitution) Order, 1947, must be valid orders or bilateral valid arrangements
made by the appropriate authority, amongst which category, according to him,
the order of termination of the service of the plaintiff respondent, issued by
the Chief Secretary to the Government of Madras on the 8th August, 1947, does
not fall, and (2) that the previous history commencing from the announcement by
the Viceroy is not admissible to construe the meaning and effect of the Indian
Independence Act and the legislative orders made by the Governor-General there under.
As regards the first objection above, there is no reason to think that the
words "special orders or arrangements" indicate either a valid order
or a bilateral and valid arrangement. In view of the history as set out 'above
and the extreme urgency with which all these steps had necessarily to be taken
before the appointed day in order to facilitate a smooth transition, the
legislative authorities concerned must be taken to have proceeded on a
recognition of the factual situation as it then existed. For a similar approach
in a similar situation see for instance Raj Rajendra Malojirao Shitole v. The
State of Madhya Bharat(1) where this Court held that article 385 of the
Constitution proceeded on a recognition of the factual situation, at the time,
relating to the matter involved. Even apart from this answer to the objection,
the objection itself appears to be based on a misapprehension. It is true there
is no clear evidence in the (1) [1954] S.C.R. 748, 757.
567 case that the order of termination of the
service of the plaintiff was one made with the sanction of then Secretary of
State. It may also be that the decision not to retain his services as and from
the 15th August., 1947, was based on his past record as admitted in the
written-statement and works serious hardship in view of his not having had an
opportunity to show cause. But it was an order to come into operation at the
precise moment when the Indian Independence Act came into force. At that moment
the Secretary of State's concern with this matter was at an end. There is no
reason to think that an order of this kind with the sanction of the Central
Government, not purporting to exercise a power of termination of services, but
acting on the assumption implicit in the Viceroy's announcement that the
services would come to an automatic termination and intimating the decision of
the appropriate Government not to retain the services of the plaintiff as and
from the 15th August, 1947, is not within the competence of the very Government
under whose service, the plaintiff wanted to serve. The very nature of the
situation demanded the taking of such anticipatory decisions and the
communication of the same to the person concerned, in order to become operative
at the crucial moment of the transition of power. As regards the second
objection, it appears to us that the contention as regards the in admissibility
of reference to the announcement of the Viceroy and the action taken thereupon
by the Central and the Provincial Governments, both in its general aspect as
also with reference to individual cases like that of the plaintiff, is without,
any substance,. The phrase "special orders or arrangements affecting his
case" in article 7(1) of the India (Provisional Constitution) Order, 1947,
can only refer to this and similar other material culminating in the orders and
arrangements relating to the concerned individuals. That there were any other
kind of special orders or arrangements contemplated by this provision
concerning the Secretary of State's services has not been suggested and it is
clear there were none. That such previous material which led up to the
particular legislative provision is 72 568 admissible in evidence has been so
held in Ladore v. Bennett(1) which was held valid in Govindan Sellappah Nayar
kodakan Pillai v. Punchi Banda Mudanayake(2). As pointed out by Lord Atkin in
the case in Ladore v. Bennett(3) at page 477, such documents indicate the
materials which can be taken to have been before the Governor-General when he
passed the relevant legislative order. This material indicates quite clearly
that while the initial option to continue or not in service was with the
servant concerned, the final option to continue him or not to continue him was
with the appropriate Government and that the special orders or arrangements
contemplated were the action taken in pursuance of that final option.
It was faintly suggested that the Viceroy's
announcement of the 30th April, 1947, was before His Majesty's Government
decided to advance the date of transfer of power by nearly a year and that the
original announcement contemplated a treaty between the British Government and
the future Dominion Government to regulate all these matters and that since no
such treaty has in fact been entered into, the announcement was not admissible
in evidence. The fact that the transition of power took the form of legislation
by the British Parliament and not of a regular treaty between the two
Governments in view of the changed circumstances is not a matter which can in
any way effect the situation so far as it relates to the particular matter with
which we are concerned. It is that very announcement that has been acted upon
after the further announcement of the 3rd June, 1947.
This appears clearly from the fact that the
circular letter of the Government of India to the various provincial Chief
Secretaries referred to this very announcement and from the further fact that
the letter which was sent to each and every individual civil servant was
accompanied by a copy of the said announcement.
It is clear, therefore, from the above
discussion that apart from the fact that the Secretary of State (1) [1939] A.C.
468.
(2) [1953] A.C. 514, 528.
569 and his services disappeared as from the
15th August 1947, section 10(2) of the Indian Independence Act and article 7(1)
of the India (Provisional Constitution) Order proceeded on a clear and
unequivocal recognition of the validity of the various special orders and the
individual arrangements made and amount to an implicit statutory recognition of
the principle of automatic termination of the services brought about by the
political change. In our opinion, therefore, the services of the plaintiff came
to an automatic termination on the emergence of Indian Dominion. The special
order and arrangement affecting his case that ,%,as made in pursuance of the
Viceroy's announcement resulted in his service not being continued from and
after the 15th August, 1947, and the plaintiff is not entitled to the
declaration prayed for.
The learned Judges of the High Court in coming
to the conclusion they did, have, with respect, missed the significance of the
phrase "special orders or arrangements affecting his case" used in
article 7(1) of the India (Provisional Constitution) Order, 1947, and failed to
appreciate that this was to be construed in the light of all the relevant
events that proceeded, commencing from and following upon the announcement of
the Viceroy dated the 30th April, 1947.
The result is that the appeal is allowed, but
in the circumstances without costs.
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