Lal Sazawal & Ors Vs. State of J
& K & Ors  Insc 95 (27 February 2002)
Babu & Ruma Pal Ruma Pal, J.
appellants in this appeal have sought to assert their status as employees of
the State Government of Jammu and Kashmir with the same rights, privileges and benefits available to other State
employees. The High Court has denied the appellants' claims on the ground that
they had voluntarily surrendered their status as Government servants in 1963
under Article 207 of the Jammu
and Kashmir Civil
Service Regulations, 1956 (referred to hereafter as the Regulations) and that
in any event their claim was barred by delay and laches.
not in dispute that each of the appellants had been appointed prior to 1963 as
permanent Government servants under the Jammu and Kashmir Civil Services
(Classification, Control and Appeal) Rules, 1956 (hereafter referred to as 'the
Rules') and were serving in different capacities in industrial units which were
being run by the Department of Commerce and Industries of the State Government.
1963, the State Government formed a Board of Directors for the administration
of these industrial units by its order No. 189/C of 1963 dated 10th August 1963. The Board of Directors was
Prime Minister - Chairman
Singh, - Vice-Chairman Hon. Advisory to Govt. for Planning and Industries
- Managing Director
Amar Singh, IAS Member (Ex-officio) Director of Industries
Qadir,IAS - do- Registrar Cooperatives
Ghulam Ahmad - do- Financial Controller
order also provided for the the re-designation of the officers Incharge of the
industrial concerns as Managers in the respective concerns. All Managers were
placed under the overall control of the Managing Director and the Board of
On 3rd October 1963, the Jammu and Kashmir Industries
Ltd., the respondent No. 2 herein (hereinafter referred to as the company) was
incorporated as a private limited company under the provisions of the Companies
Act, 1977. The main object of the company as mentioned in Clause III (a) of its
Memorandum of Association was :
run, manage, administer the State Industrial Undertakings as may be notified by
the Governor in a manner as would ensure their economic working" .
On 8th October 1963, the Governor issued instructions
by which some industrial undertakings of the State Government including the
three in which the appellants had been appointed were "notified to be
entrusted to the company in pursuance of clause III (a) of the Memorandum of
Association of the Company". The effect of this 'entrustment' of the
Industrial undertakings to the Company will be discussed after completing the
narration of facts. It only needs to be noted at this stage that even after
this "entrustment" the appellants continued working in the industrial
undertakings in which they were initially appointed and continued to enjoy the
same benefits of service with regard to emoluments, leave and pension as other
1966, a notification was issued by the Governor introducing Note 6 which
amended Rule 52 of the Rules and sought to provide that thenceforward the
employees of the erstwhile Sericulture Department who were entitled to pensionary
and other benefits as government servants were to be treated as employees of
was challenged in 1968 by some of the employees of the Sericulture Department
who had, like the appellants herein, been permanently appointed to industrial
units under the State Government before formation of the Company. The main
submission of the petitioners in that case was that their services had only
been entrusted to the Company and that they continued to enjoy the same status
as other Government servants. The challenge was upheld by a Division Bench of
the High Court of Jammu and Kashmir in
Sheik Ghulam Quadir & Ors. v. State of Jammu & Kashmir & Others .
It was held that "the conditions of service of a Government servant could
not be terminated altogether except under and in accordance with Article 126 of
the Jammu and Kashmir Constitution nor could the nature of his service be
converted from one form to another resulting in a complete transformation of
the character of the service. It was said:
In the instant case if the petitioners are to be treated as employees of the
company the character and nature of their service is completely changed and
they would cease to enjoy the immunity and protection given to them by S.126 of
the State Constitution; and if a Government servant who is entitled to
protection under section 126 is suddenly deprived of this protection without
any notice then such an action cannot but be held to be either as a termination
of his service or a reduction in rank." The Court also rejected the
arguments of the respondents based on Article 207 of the Regulations that
consequent upon the formation of the Company the Sericulture Department was
abolished and that the services of the Government employees had been
transferred to the Company. The Court found that there was nothing on record to
show that the petitioners had in fact been discharged from Government service
nor was any notice given to them in this regard nor were they given any option
to take compensation or to opt to be appointed under the Company. The procedure
under Article 207 of the Regulations not having been followed, the impugned
notification could not be sustained. The amending note was accordingly struck
down and a writ of mandamus was issued directing the respondents to place the
petitioners in the same position as they were before the impugned amendment was
made. The decision of the High Court was rendered in 1969.
On 24th July 1972, a second writ petition filed by
some other employees of the Government Silk Weaving Factory: Ghulam Mohamad
& Ors. v. State of J & K & Ors. ( W.P 107/1967)
seeking a declaration that the petitioners continued as Government servants was
disposed of without any reference to the earlier decision in Ghulam Quadir's
case in the following terms:
It is now well settled that a writ for a mere declaration does not lie. It is
also well established that unless there is a demand and refusal a petition for
issue of a writ is not maintainable.
present case there is no allegation that any demand for grant of a right which
is available to the petitioner has been denied by the State.
petitioner not having retired and the occasion for State refusing to treat the
petitioner as a Government employee not having arisen, the present petition is,
in our opinion premature. It is accordingly dismissed.
will not, however, preclude the petitioner from seeking appropriate remedy in
case the right claimed by him is denied by the Government at a later
stage." In the meanwhile the Company framed its own service rules which
were entitled ' J&K Industries Service Regulations' (hereinafter referred
to as the Industries Regulations). Nevertheless the appellants along with other
similarly situated employees continued to be given benefits of revision of
grades and dearness allowance which were paid to the other Government servants
of the State. Thus, when the revision of pay scales of Government employees was
made on the basis of the 1973 Chatterjee Wage Committee Report, the appellant's
salaries were also revised. An attempt to deny the appellants dearness
allowance on par with the civil servants was aborted when instructions were
issued in 1974 granting them the dearness allowance at the same rates as other
Government servants. This state of affairs continued till 1979.
1979 the State Government set up another Committee to examine the wage
structure of employees of Public Sector Corporations. The Committee which came
to be known as the Rajan Committee, submitted its final report in 1980. The
report was accepted by a decision of the Cabinet on 22nd April, 1980. On the basis of this Cabinet decision the Governor issued
an order on 26th April,
1980 pursuant to which
the Company issued two orders both dated 8th May, 1980 one relating to the cost of living
allowance and the second relating to fixation of wages. A third order was
issued by the company on 10th
to lay down that the leave of regular employees of the Company would be allowed
"as per the Factories Act and not as per Leave Rules of the Corporation
which were applicable to them in the past".
three orders in effect denied the employees like the appellants parity of
service conditions with Government employees.
1981 the appellants challenged the orders dated 8th May, 1980 and 10th
November, 1980 under
Article 32 of the Constitution before this Court. According to the appellants
when the matter was heard on 22nd March, 1982,
this Court was of the view that the appellants should approach the High Court
first. As such the appellants withdrew the writ petition under Article 32 and
immediately filed a writ petition under Article 226 before the High Court (SWP
236/82) challenging the order of the Governor dated 26.4.1980 as well as the
orders dated 8.5.80 and 10.11.80 and asking for a direction on the respondents:
treat the petitioners as Government employees and deem the petitioners and
their co-employees governed by Service Rules and Regulations which are
applicable to the State employees and the petitioners be held entitled to the
same salary, emoluments D.As, leave etc. as would be available to the
government servants under the State Government".
other employees, who are not appellants before us, filed a similar writ
petition before the High Court (SWP No. 287/82). Yet a third group of employees
filed a writ petition : Waryam Chand vs. State of J & K - (SWP No. 549/83)
raising the same issues.
Chand's (SWP 549/83) case came to be listed separately and was dismissed by a
Single Judge on 29.6.88. The other two writ petitions (SWP 236/82 and SWP
287/82) were placed before another Learned Judge who referred the issue for
consideration by a larger bench.
1998, the Division Bench dismissed both the writ petitions by the order
impugned before us.
impugned decision directly conflicts with the earlier decision of the same High
Court in Ghulam Quadir's case (supra) on the issue as to the status of
Government employees like the appellants. The decision in Ghulam Quadir has
remained unchallenged by the State respondents till today and was binding on
absence of some distinguishing feature it should have been followed. It was not
even referred to. We could have allowed the appeal before us on this short
ground, but since the issue raised affects a large number of employees, it is
necessary to decide the issue on merits.
merits we may start by reaffirming the statement of the law laid down by this
Court in Roshan Lal Tandon V. Union of India that:
appointed to his post or office the Government servant acquires a status and
his rights and obligations are no longer determined by consent of both parties,
but by statute or statutory rules which may be framed and altered unilaterally
by the Government." No statute or statutory rules have been drawn to our
attention by which the permanent posts held by the appellants were abolished.
The High Court held that the appellant's status had been determined under
Article 207 of the Regulations . The conclusion is based on an erroneous
interpretation of the Article. To start with the High Court ignored Article
1-(a) of the Regulations which clarifies that these " Regulations are
intended to define the conditions under which Salaries, Leave, Pension, Travelling
or other allowances are earned by Service in the Civil Departments and in what
manner they are calculated. They do not deal otherwise than indirectly and
incidentally with matters relating to recruitment, promotion, official duties,
discipline or the like." (Emphasis supplied) Article 207 is contained in
Chapter XVII of the Regulations which deals with the conditions of grant of
pension. It was, in this context that the Article had been framed. It deals
with pension and its computation. It does not purport to determine status at
all. It reads:
If an officer is selected for discharge owing to the abolition of his permanent
post he shall, unless he is appointed to another post the conditions of which
are deemed to be at least equal to those of his own, have the option
taking any compensation pension or gratuity to which he may be entitled for the
service he has rendered; or
accepting another appointment on such pay as may be offered and continuing to
count his previous service for pension."
clear that the Article does not itself provide for the procedure for abolition
of a permanent post nor the mode of appointment to another post nor for the
manner in which the employee has to exercise the option. It only provides for
the consequences of a permanent post being abolished, the consequence being
that the employee shall have the option of accepting another appointment in
which event he can count his previous service for the purpose of calculating
the qualifying period for pension. Since there was in fact no abolition of the
Government posts under Article 207, there was no question of the appellants
exercising any option or surrendering their status under that Article at all.
The reliance by the High Court on Article 207 to decide the appellants status
was, in the circumstances wholly misplaced.
High Court also proceeded on the erroneous assumption, namely, that as a
consequence of the "order dated 8th October 1963 all the Government industrial
undertakings stood abolished with the formation of the Company". Firstly
what is referred to as an 'order' by the High Court was not an "order"
at all but an "instruction" under Article 89 of the Articles of
Association of the Company. It had no statutory force. Neither the Government
Industrial Undertakings nor the posts of its employees could be abolished by
such an instruction.
Governor could not in exercise of powers under the Articles of Association of
the Company abolish industrial units belonging to the State Government and then
transfer the undertakings to the Company. It would amount to an unilateral
taking over of the industrial units by the Company without any instrument of
transfer being executed by the State Government either in the form of an
agreement or Statute. In fact and in law there was no abolition of the posts
held by the appellants and none was intended.
is nothing in the instructions which could remotely be construed as an order
abolishing the posts held by the appellants. Had the appellants been appointed
as employees of the Company they should have been issued letters of appointment
by the Company. No appointment letter was issued to any of the appellants by
the Company. The irresistible conclusion is that the appellants were and
continue to be servants of the State Government and as permanent residents of
the State of Jammu and
Kashmir are entitled
under Section 10 of the State Constitution to be treated on par with other
Government servants in keeping with Article 14 and 16 of the Constitution of
India. By the impugned orders, the State Government has sought to deny the
appellants such equality. The impugned orders cannot, therefore, be
constitutionally sustained and must consequently be quashed.
should the appellants be denied their right to relief because of the finding of
delay and laches by the High Court? We think not. The narration of facts
clearly show that there was in fact no delay or laches on the part of the
appellants. Till 1972 at least, the High Court in Ghulam Mohamad's case (supra)
found the State had not denied parity of status and the employees were granted
the right to challenge any denial of status if and when it took place. The
appellants were in fact treated on par with other Government employees till the
impugned orders were issued on the basis of the 1980 Wage Committee Report.
These were challenged in 1981 before this Court and in 1982 before the High
Court by the appellants. The fact that the High Court took 16 years to dispose
of the matter cannot operate against the appellants. The dismissal of the writ
petitions on the ground of delay and laches is, in the circumstances, unsustainable.
decision of the High Court is accordingly set aside and the appeal is allowed
by granting relief to the appellants as prayed for in their writ petition.
Costs to be paid by the respondent-State to the appellants jointly assessed at
Rs.15000/-( Rupees fifteen thousand only).