IHI v. Thi State of Bihar

were 1nadc part of the salary or rrrnuneration. By an a1ncnd ment made in the Rules in 1926 the passage benefits, for pur· poses of administrative convenience ceased to be a part of the salary and Lecame allowances or privileges. They were aepa· ra1ely credited to the account of members of the Indian Civil Sci vice and debited as and when they were availed of out of the general revenues of the State. The conditions of sc1·vice to which members of the Indian Civil Service were entitled under the Government of India Act, 1919, were guaranteed 10 them by s.247(1) of the Goverrunent of India Act, 1935, and this guarantee was confirmed by 1. 10(2) of the Indian Independence Act, 1947. By Art. 314 of the Constitution of India penons who were appointed by the Secretary of State lo a civil service of the Crown in India anrl continued on and <after the: co1nmcnccn1cnt of the C'~nstitutiJn to serve under the Go,·ei urnent of India or of a Stale were to receive from the GO\crnmenl of India and the Government of the State which they ,,·rrc from time to time serving, the saine <..:onditions of sc1,·ice as respects ren1uneration, leave and pension ""·hich they were enti!led to immediately before such commencement.

On F<Lruarr 5, 1957, the Government of India framed, in exer cise of the powers conferred by the All India Services Act, 1951, the All India Services (Overseas Pay, Passage and Leave Salary) Rules, 1957, by r. 3 of which the passage benefits pro vide<l by the Rules of 1924, as amended in 1926, ceased, with re1rospec1ive effect from July 12, I 95G, to apply lo the members of the Iudian Civil Service. 1'he respondent \vho was ac.hnit tcd to the Indian Civil Service in 1924 and continucd to set vc in tlte State of l!ihar after independence challenged the 'ali d1ty of the rule. /Jeld, that r. 3 of the All India Services Overseas l'ay, l'as~agc and Leave Salary Rules, 1957, \\as ultra virc.!. The right to passage benefits was a part of the remune ration earned by the mcn1bcrs of the ln<lian Civil Service, and as the conditions of service as to rcn1uneration had been gua ranteed by Art. 314 of the Constitution of India, the Central Government in exercise of its ntlc making power could not dcstory or cancel a constitutional guarantee.

The word 11 rc1nuncration" in Art. 314 of the Con~titu .. tiun explained. R. v. Po1tma.sltr Gtn<ral, (1876) I Q.l!.D. 658, relied on. CIVIL APPELLATE JURI8DICTIO!!I Civil Appeal No. 704 of 1957. )961 The Accounta11t General, Bi11a1 v. N. Bakshi Sita/. J. (1) S.C.R. SUPREME COURT ItEPOR'IB 501 Appeal from the judgment and order dated March l l, 1957, of the Patna High Court, in Misc. Judi~ial Case No. 40 of 1957. M. C. 8etali-ad, Attorney-General for India, H. Ganapathy Iyer R.H. Dhebar and '1'. Jlf. Sen, for the appellants. S. P. Venna, for the respondent. 1961. November 21. The Judgment of the Court was delivered by SHAH, J.-This is an appeal against the judg ment of the High Court of Judicature :it Patna from an order commanding the Accountant General of Bihar, Ranchi, to pay certain passage allowance due under the Superior Civil Services (Revision of Pay and Pension) Rules, 1924, to the wife and tho children of the respondent.

After passing the competitive examination held in London in August, 1924 the respondent N. Bakshi was admitted in November, l\~24 to the Indian Civil Service a.nd was, after his arrival in India, posted the Province of Bihar. He continued to serve in the State of Bihar after indep endence. On February 3, 1956, the respondent enquired of the Accountant General of Bihar about the num ber of passages to which he and the members of his family were entitled under the Superior Civil Services (Revision of Pay and Pension) Rules, 1924-hereinafter called the Statutory Rules. The The Accountant General, by letter dated March 6, 1956, stated that £284-6 s. stood in the respondent's credit £ 341-3-5d. stood in the account of his wife and £ 138 stood credited in the · separate accounts of ea.ch of hia four children. The respondent then arranged to travel to the United Kingdom and on June 20, 1956, obtained "passage certificates" from the Accountnnt General, Bihar.

On July 12,1956, the re1pondent waa informed that the Govt. of India. were , IHI Tht.~t G,,.,,al, Biluu v. H. Bokslai 508 SUPREME OOURT REPORTS (1982] SUPP. of the opinion that the paese.ge benefits admissible to officers of Indian domicile under the sai<l Statutory Rules, were inconsistent with the existing circums tances and it was decided, with effect from the date of issue of the order that the benefits shall cease and the passa&e accounts of Indian Officer11 of the former Secretary of State Servioos shall be closed and "passage credit" left over will lapse to the Government. On February 5, 1957, the Government of India framed, in exercise of the powers conferred by sub-s. ( 1) of s. 3 of the All India Services Act, 61of1951, the All India Servioee (Overseas Pay, Passage and Leave Salary) Rules, 1957. By cl. 3 of the Rules passage benefits providP<l by the statutory Hules ceased with retrospeoti»e effect from July 12, 1956, to apply to the members of the Indian Civil Service.

The appellant protested against the cancellation of the passage benefits for himself and the members of his family. The Government of India waived the original order of July 12, 1956, in favour of th3 respondent and ordered that he be granted pa.aea.ge benefit for him self but declined to relax the order in favour of the wife and children of the respondent. The respondent accompanied by his wife and children proceeded to the United Kingdom a.s originally arranged and on his return filed a. petition under Art. 226 of the Constitution for a. writ in the nature of mandamw against the Accountant Genera.I, Biha.r, oo=anding him to pay the prescribed passage money in respect of the respondent's wife and children out of the amounts which stood to their credit in the Genera.I Passage Fund Aooount and to i.eaue appropriate direction, order or writ in '.rhis petition wa.e granted by the that behalf. High Court and a writ of flllJndamus a.e prayed wa.e i.eaued.

The Accountant General and the Union of India have appealed to this Court againat the order with certificate of fl.tne88 granted by the High Court. (l) S.C.R. SUPREME OOURT REPORTS 509 To appreciate the grounds on which the impu. gned order was made it is necessary to ref~r to the Statutory Rules for pa~sage benefit framed in 1924 by the Secretary of State in Council and the amend ments thereof in the light of constitutional develop ment sinee that date. The Statutory Rules were framed by the Secretary of State India-in-Council under s. 96B(2) and (3) of the Government of India Act, 1919, on December 9, 1924. Rule 12 of the Statu tory Rules provides : IHI Tiu ifccou'ltarJt G1ntral, Bihar v. N. B«kshi BW.J. "12. In ad"lition to the pay prescribed by these Rules passage pay shall be irranted at the rates and subject to the conditions set out in Schedule IV, to the members of the services and holders of appointment' enume· rated in Appendix A to th.1tt Schedule.

" Schedule IV appended to the Regulations set out an elaborate scheme for maintaining accounts of the passage pay and for disbursement thereof. Regulations 3, 5, 6( 1), 8, 9 and 14, which itre the material regulations stood as follows :- to every 'L'here shall be payable officer with effect from the Ist day of April, 1924 passage pay at the rate of Rs. 50 per mensem or such different rate as the Govemor General in Council may by order declare to be nece888.ry or sufficient for the purpose of the provision of the benefits conferred by these regiilations. " "3. "5. A sum equal to the amount received by an officer as pa11aage pay shall be deducted monthly from the officer's pay or leave salary, as the case may be, and shaIJ be credited to a General .Passage Fund to be administered by the Governor-General.in. Council. " "6 (I) The maximum benefits to which ofticer sllall be entitled shall be passages of a 510 SUPREME OOURT REPORTS (1962] SUPP. -· T1w Accou11t11nt Oennol.

Bihar Y, N. Bakihi Shah J. total value equal to the oost of the number of passage.~ between Bombay and London by P. & 0., lat Class B, Rhown below :- • • • "8. A separate account shall be opened in 11terling in the case of each officer, and, if such officer is married, for his wife, and, if he has children, for ea.ch chili!. Th<'se accounts 11ha.IJ he credited reRpcctively with the cost of the piis~ageR to which the offioor, his wife and i>nt.itlerl unrfor R.f'gnla.tion r. chililrrn &r<' * * *" "14. No person whosoever shall h&Vfl any claim on th" Genera.I Passage Fund beyond the provi11ion of the benefits, if any, conferrr:'d on him by these rcgulation11 and anv balance remaining at the crC'dit of any person after such pe!"lon bas ceaB<'d to be eligible for any such benefits shall lapse to the Fund. " Passage benefit providerl under Rule 12 was clearly part of the salary to be paid out of a fund called the General Pa.RSagc Fund which was formed out of the paslll\ge pay.

Several amendments wore made to these Rules from time to time, but we a.re concerned with the amendments made by Notifications No. F-178/ 11/1/24 dated October Ii, 1921i, and No. F-li-15/26 dated June 16, l!l'.:!6. Rule 12, as a.mended, read11 nR follows:- "12. In addition to the pay prescribed by these Rules, passages shall be· granted, subject to the conditions set out in Schedule IV, to the members of the service11 and holders of appointments enumerated in Appendix A to that Schedule.'' The Regulations under Sch. IV were, after the amedment, ca.lied Revision of Pay, Passage and 1961 Th~ .4.ccoll'11'1">it Oeri1Tol, BihtJr v. N. Bokshi S\ah J. (1) S.C.R. SUPREME COURT REPORTS 511 Pension Regulations. Original regulations 3, 4 and 5 were omitted and regulations 6, 8, 11 and H were amended. The effect of these amendments was that instead of allowing as part of salary, a paRsage pay of Rs. 50/- and carrying over that amount to the credit of the officer concerne9 in the General Passage Fund, by cl.

6 of the Regulations it was directed that a separate "passage account" be open ed for each officer and if he be married for hiR wife and children, if any. Subject to Regulation 8, the accounts were to be credited respectively with the number of passages to which the officer, his wife the new re and children were entitled under gulations. Within the limits of these credits, the officer was entitled for himself, his wife and his children respectively the cost in India and a of a journey between a port the Rules as port outside Asia. Whereas by originally framed in 1924 an additional salary of Rs. 50/- per mensem was awurded to each offiPer as passage pay which was to be credited to the General Passage Fund out of which passage bene fits to Officers were provided, according to the scheme of the Rules as amended in 1926, a separate passage account was to be maintained for. each officer for the maximum benefits prescribed by Rule 3 and the disbursement in respect thereof were to be made of the General Revenue of the State.

By the amendment made in the Rules in 1926, the passage benefit. ceased to be a part of the salary and became an allowance or privilege. to draw The respondent obtained benefit of passages in 1930, 1950-51 anrl 1952-53 for himself and the members of his family. In 1957 he was not granted the passage lienefi.t for his wife and his children, and he has filed this petition under Art. 226 for an order that the Union of India and the Accountant General do carry out their Statutory obligations. ,. 512 SUPREME OOURT REPORTS [1962) SUPP. IHI 7li Acco1111,.., Om11ai Biliar •. N. Bakslri SMA J. The conditions or eervioe to which membe!'ll of the Indian Civil Service were entiled under the Government of India Aot, 1919, were guaranteed to them by s.247(1) of the Government of India Act, 1935. That section provided: "247 (I). The conditions of service of 1 all persons appointed to a civil 11ervice or civil post by the Secretary of State shall :- (a) as respects pay, leave and pension and general rights in regard to medical at tendance, be such as may be prescribed by rules to be made by the Secretary or State; rules, by (b) as respeot.B other matters with res pect to which exprell8 provision is not made by this chapter, be such as may be prescribed by rules to be made by the Secretary of State in 10 far as he thinks fit to make such rules, · is not and, in so far and so long as provision to be made by made, as respeote pel'Bons serving in con nection with the affail'B of the Federation, by the Governor-General or some pel'Bon or persons suthorised by the Governor-General to make rulea.

Jor the purpose and, as respects persons eening in oonnection with the affairs of a Province, by the Governor of the Province or some person or persons authorised by the Governor to make rules for the purpose: ruleB Provided that no rule made under this au b-section shall have effect so as to give to any person appointed to a civil service or civil post by the Secretary of State Iese favour· able terms ae respeot.e remuneration or pension than were given to him by the rules in force on the date on which he waa first appointed to his service or was appointed to hiE rest. " The proviso makes it abundantly olear that the power to make rules cannot be exercised by the (I) S.C.R. SUPREME OOURT R:Ei'OR±S 5i:J Secretary of State so as to give to any officer of the class specified terms less favourable as respects remuneration or pension than were given to him by the rules in force on the date on which he was first appointed to his service or to his post.

This guarantee was confirmed by s. IO, sub·s. (2) of the Indian Independence Act, 1947, wherein it was provided, in so far as it is material, that "Every person who- 1911 Tiu A.cc.un.tt1nt Gen6T•l, Bihttr Y, N.Bahhi S"4h J. * (b) ( a) havining been appointed by Secretary of State or Secretary of State in Council, to a civil service of the Crown in India continues on and after the appointed day to 8erve under the Government of either of the new Dominions or of any province or part thereof; or * * shall be entitled to receive from the Govern-· ments of the Dominions and Provinces or parts which he is from time to time serving or, as the case may be same conditions of service as respects remune ration, 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 circum stances may permit, as -that person was entitled to immediately before the appointed day.

" * * * • the Secretary of State The expression "remuneration" was defined :!Jay, s. 19(4) of that Act as incl usive of leaye the cost of any privileges or allowances and facilities provided iu kind. By Art. 314 of the Constitution, persons who were appointed or Secret, ary of State in Council to a civil service of the Crown in India and continued on and after the comme:O:ce ment of the Constitution to serve under the Gov ernment of India or of a State were to receive from the Government of India and the Goverument of to time the State which they were from ti.mo ~ 1 • ' 1961 Tiu Accountant OeNro/1 BiMr v. N, BaJ;shi Shah J, 514 SUPREME COURT REPORTS [1962) SUPP. India Service. By s. 4 it was serving, the same conditions of service as respects remuneration leave and pension which they wc·rc entitled to immediately before such oommmenoe ment. The Parliament of India enacted the All India. Services Act, 61 of 1951, to regulate the recruitment, and the conditions of service of per· sons appointed, to tho all India Services common to the Union and tho States, and bv s.

3 of that Act the Central ·Government was authorised to make rules for the reguhtion of recruitmPnt, and the conditions of service of persons appointed, to the All provided that all rules in force immediately before the com menccment of the Act and applicable to an All India Service were to continue to b9 in force and were t-0 be deemed to be rules made under the Act. On September 8, 1954, the Central Government ·framed rules called the Indian Administrative Ser vices Recruiting Rules and hy Rule 2(d) the mem, hors of the Indian Civil Service who continued to serve on and after the commencement of the Con stitution were to be regarded for the purpose of the rules as members of the Indian Administrative Seryice. On February 15, J9fi7, the All India Ser vices (Overseas Pay, P888age and Leave Salary) Rules, 1957, were promulgated in exercise of the powers conferred by sub-s ( 1) of s.3 of the All India Services Act, 1951, and thereby passage benefits favour of the memtiers of the Indian Administra tive Service, who were originally mt1mbers of the Indian Civ,J Service were cancelled.

The only question which falls to be deter mined in this a ppcal is whether cl. 3 of the All India Services (Overseas Pay, Passage and Lea1•c Salary) Rules, 1957, was competently enacted, hav· ing regard to tho guarantee contained in Art. 314 of the Constitution as to tb.e conditions of service as respects remunoration, leave and Pf'n· sion of the persons appointed by tht Secretary of Seate or Secretary of State for India in Council to a India. the Crown sorvice • ' • I (1) S.C.R. SUPREME OOURT REPORTS 515 Since the All In:lia Services Act was enacted there is manifestly no existing service known as the Iadian Civil Service. The members of the Indian Civil Service who were appointed by the Secretary of State for India became members of the Indian Administrative Service, but their rights in the matter of conditions of service as respects remu· m:ration, leave and pension stood guaranteed by Art.

314. In dealing with the status of the members of the former Indian Civil Service since the Indian Inde· pendenoe Act, 1947, this Court in 8tate of Madras ) held : v. K. M. Rajagop£1lan (1 1961 Tiu Accouirt.mt '.Jenera/, Bihar v. N. Bakshi Shah J. thiit (1) the conferral of independence on India brought about an automatic and legal termination of service on the date of Inde· pendence; (2) 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 arrangements affecting their respecti vo cases; (3) the guarantee about prior conditions of service and the previous statutory safe guards relating to disciplinary action conti nues to apply to those who are thus deemed to continue in st>rvice but not to others; (4) those previously holding civil posts in India had the right, and were in given the option, of declining to "continue in service" under the new 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 . (!) [1955] 2 S. C.R. 54!. • I • r Tht Accounlant Get.tr al, BJtar v.

N. Bt1kJlii Slu;h J. 510 ~UPRRME O)URT REPORTs (1962] SUPP. l.:11dcr the Statulnry RuleH framed in 1!1:!4 passage benefits granted to persons employed in the Indian Civil Service, their wives am! children wne expressly made part of the sl\lary or rcmu lleration. Cnder the amendment of 19:W, these pas· sage benefits atqnired the eharacter of allowance, privilege or facility of office. By the Act ,,f 1935 (s. 2-li) priviJ.,gcs, iriter al·i<J as to remuneration under the Governrmmt of Indi.'I Act of IHl!J wero expressly guarnt<'cd in favour of the members of the Indiau Ci,·il s,,rvire. By the Indian Ind .. pen dence Act 1947, a similar guurantllc in respcet. of conditions of service as respects remuneration was also conferred and by s. l!l ( 4) of that Act n·munc ration was dt'fincd as indusive of pay, allowam·cs or privileges or facilitil's paynblc in kind. By .<\rt. ill4 of the Constitutio11, the conditions of scr\"ice, prior to llw C1•nstitution as ri:spt•cts rr.m1m1,,·ation, leave and p(•nHion of . the members of the .Indian Civil Service were protected.

I Thero is 11 o dr·fiuit.ion of 'remuneration' in the C1Jnstitution, but that is not a gromul f1Jr hold· iug that the expression ii; used in any limited ~ensP as merely l!lllary. The PXprcssion 'remuneration', in it" ordinary conn<>tation means "reward, recom pense, pay, wages or salary for service rendcrd" In R. v. Po8trrwster General(') Blackhurn, ,J., obser · ved, "I think th" word 'rcmnnreatfon' ...... means a quid pm quo. If a ma.n gives his services; what.over consideration he gets for giving his services scL·ms to lie a rcmuncrat.iun for them. ConH1.•quc11tly, I think if a person wai; iu receipt. of a paym .. nt., receipt of a percentage, or any kin1\ of paym<•nt which would not be actual money payment, the amount. he would receive annually in rcsppct of thi• would he remuneration. " Th11 to have been expression 'r<·mune1 .. •tio11° appears this wide con notation. As already observed, the right to passage the Constitution (I) (187611 Q. B. D. 6SB. (I) S.C.R. SUPREME COURT REPORTS 517 was originally marle a part of the salary, but under the Rules framed in 1926, the provision for setting apart a fixer! sum of money as salary out of the General PaRsagc Funrl was alt<>rcd anrl passages wc·re crNlited to the account of members of Civil Services and debited as and when they were availed of out of the general Revenue of the State.

This alte ration was made merely for administrative conveni ence and did not alter the character of the benefit. Under the Rules of 1924, the provision for passage was part of the remuneration and it continued to he such even after tlw amendment of the Rules in 1926. 1961 The Accountant General, Bihar Y, N. Bakshi' facility The right to passage benefits was statu tory, and was under the Indian Independence Act in the nature of an allowance, or in any event privilege or kind. It was remuneration part of expressly made earned bv the members of the Indian Civil ·The conditionK of service as to remune Service. mtion having been guaranteed, the right to this benefit remained guaranteed to those members of the Indian Civil Serviee who were entitled to it before the Constitution. This guarantee which was continut•d in force even after the commencement of the Constitutiou was for th" first timv by Rules made in June 19.)7 by rotr'ospective amendment of the St.atutory Rules from July 12, 1956 sought to be cancelled.

But the Central Government in exercise of Rule making p0wcr was incompetent to destroy or cancel ii C<>nst.itutiowil guarantee. The High Court was, thcr 3fore, in our judg· ment, right in holding that rule 3 of the All India Services (Overseas Pay, Passage and Leavl! Salary) Rnles, l95i, was ultm vi'.res. In that view of the case thi:< appeal fails al' is dismissed with costs. Appeal dismissed.