Civil Appeal Nos
1584 1588 of 1973
Appeals by Special Leave from the Judgment and Order dated 6th August 1973 of the Madras High Court in Writ Appeal Nos
13 to 17 of 1973
AND 158 Writ Petition Nos
357 of 1979 and 4367 of 1978
Under Article 32 of the Constitution K Parasaran Soli
General N Nettar and Miss A Subhashini for the Appellants in all appeals
TS Krishnamurthy Iyer H B Dattar A KSrivastava and T P Sunderarajan for the Petitioners in WPs
4367 of 1978  357 of 1979
TS Krishnamurthy Iyer Vineet Kumar and AK Srivastava for the Respondents
The Judgment of the Court was delivered by PATHAK J
These appeals by special leave raise the question whether the respondents are entitled to claim fixation of their seniority in the Subordinate Accounts Service after taking into account their length of service as Upper Division Clerks
The respondents entered service in the Office of the Accountant General Tamil Nadu as Upper Division Clerks
They appeared in the Subordinate Accounts Service Examination but it was only after a number of attempts that they succeeded in passing
They passed the examination held in November 1969 and were promoted shortly thereafter
They claimed seniority on the basis that their length of service in the inferior post should be taken into account and rested their claim on paragraph 143 of the Manual of Standing Orders issued by the Comptroller and Auditor General as it stood before its amendment by a correction slip of 27th July 1956
The correction slip removed the factor of weightage on the basis of length of service in the determination of seniority
The claim was rejected by the Comptroller and Auditor General
A writ petition filed by them in the High Court of Madras was allowed by a learned Single Judge and his judgment was affirmed by an appellate Bench of the High Court
Against the judgment of the appellate Bench the Accountant General Tamil Nadu and the Comptroller and Auditor General have appealed to this Court and those appeals are pending as Civil Appeals Nos 1584 to 1588 of 1973
During the pendency of those appeals the President enacted the Indian Audit and Accounts Department Subordinate Accounts Service  Subordinate Railway Audit Service Service Rules 1974 referred to hereinafter as the Rules of 1974
The Rules of 1974 purport to give statutory recognition to the amendment of paragraph 143 by the Comptroller and Auditor General
The validity of the Rules of 1974 and the amendment made in paragraph 143 are assailed by the respondents in the instant appeals
159 The Rules of 1974 have been enacted by the President
They are deemed to have come into force on 27th July 1956 which has been defined for the purposes of the Rules as the appointed day
The Subordinate Accounts Service the Service includes members appointed to it before the appointed day as well as persons recruited to it in or before that day
Rule 5 provides that recruitment shall be made by direct recruitment in accordance with the orders or directions issued by the Comptroller and Auditor General from time to time and also by promotion
Rule 6 provides 6
Appointments Appointments to the Service shall be made from the list prepared in accordance with the orders and instructions issued by the Comptroller and Auditor General from time to time and applicable at the time of appointment to the Service
 Rule 7 deals with seniority and declares 7
Seniority 1 The seniority inter se of the persons appointed to the service before the appointed day shall be regulated by the orders or instructions issued by the Comptroller and Auditor General as were in force at the relevant time before such day
2 The seniority inter se of the persons appointed to the Service on or after the appointed day shall be in the order in which the appointments are made to the service in accordance with rule 6
Provided that a direct recruit shall on appointment to the Service rank senior to all officiating persons in the service excluding a direct recruit passing in the same departmental examination or subsequent departmental examinations
Provided further that the seniority of a person who had declined the appointment to the Service but who is subsequently appointed to the Service shall be determined with reference to the date on which he assumed charge of the post in the cadre
 By virtue of Rule 9 in matters not specifically provided for in the Rules every person appointed to the Service is governed by the rules regulations orders or instructions made or issued in respect of the Central Civil Services as applicable to the Indian Audit and Accounts 160 Department
Rule 10 empowers the Comptroller and Auditor General to issue from time to time such general or special instructions or orders as he may consider necessary or expedient for the purpose of giving effect to the Rules
The respondents have raised two contentions
The first is that the Rules are invalid as clause 5 of article 148 to which alone it is said they must be ascribed does not permit the retrospective enactment of rules made thereunder
The other contention is that the specific rules affecting the seniority of the respondents are in valid be cause in entrusting power to the Comptroller and Auditor General to issue orders and instructions in his discretion the doctrine against excessive delegation of legislative power has been violated Taking the first contention first it may be noted that the Rules of 1974 purport according to the recital in the Notification dated 4th November 1974 publishing them to have been made by the President in exercise of the powers conferred by the proviso to article 309 and clause 5 of article 148 of the Constitution and after consultation with the Comptroller and Auditor General of India
The respondents say that the only provision of the Constitution under which those Rules could be made is clause 5 of article 148 and we should ignore reference to the proviso to article 309
If that is done they urge there will be no justification for holding that the Rules of 1974 can be given retrospective operation
Unlike the proviso to article 309 it is pointed out clause 5 of article 148 does not permit the enactment of retrospectively operating rules
We think that the respondents are right
Article 309 provides for legislation by the appropriate Legislature to regulate the recruitment and conditions of service of persons appointed to public services and posts in connection with the affairs of the Union or of any State and the proviso to article 309 declares that until such legislation is enacted by the appropriate Legislature the President is empowered in the case of services and posts in connection with the affairs of the Union and the Governor of a State in the case of services and posts in connection with the affairs of a State to make rules regulating the recruitment and the conditions of service of persons appointed to such services and posts
There is a clear dichotomy in the power conferred by article 309 a division of power between the Parliament or President as the case may be on the one side and the State Legislature or Governor on the other
The division is marked by the circumstance that under Art 309 services and posts in connection with the affairs of the Union are dealt with by a separate authority from the services and 161 posts in connection with the affairs of a State
That dichotomy it seems is not possible in the power employed for appointing persons in the Indian Audit and Accounts Department and for prescribing their conditions of service
The Comptroller and Auditor General of India who is the head of that department is a constitutional functionary holding a special position under the Constitution
Under article 149 he performs duties and exercises powers in relation to the accounts of the Union and also of the States
Clause 1 of article 151 requires him to submit a report relating to the accounts of the Union to the President who causes them to be laid before each House of Parliament
Likewise clause 2 of article 151 requires him to submit a report relating to the accounts of a State to the Governor of the State who causes them to be laid before the Legislature of the State
It cannot be said in the circumstances that the persons serving in the Indian Audit and Accounts Department are holding office in connection with the affairs of the Union exclusively
It may be pointed out that when the Constitutional Adviser prepared the Draft Constitution for consideration by the Constituent Assembly the document contained separate provisions for the appointment of the Auditor General of the Federation and Auditors General for the Provinces
The Auditor General for the Federation was to be appointed by the President and his functions extended to the accounts of the Federation as well as of the Provinces
But it was open to a Provincial Legislature to provide by law for the appointment of an Auditor General for the Province and the appointment to that office was to be made by the Governor
The Expert Committee on the financial provisions of the Union Constitution favoured the continuance of a single Auditor General for the Government of India as well as for the Provincial Governments and hoped that the Provincial Governments would refrain from using their power of appointing separate Auditors General of their own
When the matter came before the Drafting Committee it decided that the persons performing the functions of the Auditor General in a State should be designated Auditor in Chief in order to distinguish him from the Auditor General of India and that the salaries and allowances of the staff of these officers should be fixed by the Auditor General of India and the Auditor in Chief in consultation with the President and the Governor respectively
Thereafter the Drafting Committee reconsidered the desirability of permitting a multiplicity of audit authorities one for the Union and one for each State
On 1st August 1949 Shri TT Krishnamachari moved an amendment deleting the draft articles enabling the State Legislatures to create their own Auditors in Chief
He pointed out that since the Constituent Assembly had already adopted articles whereby the auditing and accounting would become one institution so to say under the authority of the 162 Comptroller and Auditor General it was not necessary to have separate provision for the States
Accordingly he proposed the addition of a new article now clause 2 of article 151 about the Comptroller and Auditor General requiring him to submit the reports of the accounts of a State to the Governor for being laid before the State Legislature
These amendments were adopted by the Constituent Assembly
It is evident that the authority vested in the Comptroller and Auditor General ranges over functions associated with the affairs of the Union as well as over functions associated with the affairs of the States
It is a single office and the Indian Audit and Accounts Department which it heads is a single department
They cannot be said to be concerned with the affairs of the Union exclusively
Consequently the regulation of the recruitment and conditions of service of persons serving in the Indian Audit and Accounts Department cannot be regarded as a matter falling with the domain of the President within the terms of the proviso to article 309
A special provision was necessary to entrust the President with that power and that provision is clause 5 of Art 148
The power contained in clause 5 of article 148 is not related to the power under the proviso to article 309
The two powers are separate and distinct from each other and are not complementary to one another
In our opinion the reference to the proviso under article 309 in the recital of the Notification publishing the Rules of 1974 is meaningless and must be ignored
The next question is whether clause 5 of article 148 permits the enactment of rules having retrospective operation
It is settled law that unless a statute conferring the power to make rules provides for the making of rules with retrospective operation the rules made pursuant to that power can have prospective operation only
An exception however is the proviso to article 309
In B section Vadera vs Union of India  Ors
this Court held that the rules framed under the proviso to article 309 of the Constitution could have retrospective operation
The conclusion followed from the circumstance that the power conferred under the porviso to article 309 was intended to fill a hiatus that is to say until Parliament or a State Legislature enacted a law on the subject matter of article 309
The rules framed under the proviso to article 309 were transient in character and were to do duty only until legislation was enacted
As interim substitutes for such legislation it was clearly intended that the rules should have the same range of operation as an Act 163 of Parliament or of the State Legislature
The intent was reinforced by the declaration in the proviso to article 309 that any rules so made shall have effect subject to the provisions of any such Act
Those features are absent in clause 5 of article 148
There is nothing in the language of that clause to indicate that the rules framed therein were intended to serve until Parliamentary legislation was enacted
All that the clause says is that the rules framed would be subject to the provisions of the Constitution and of any law made by Parliament
We are satisfied that clause 5 of article 148 confers power on the President to frame rules operating prospectively only
Clearly then
the rules of 1974 cannot have retrospective operation and therefore sub rule 2 of rule 1 which declares that they will be deemed to have come into force on 27th July 1956 must be held ultra vires
If the Rules of 1974 do not cover the case of the respondents then admittedly the only question which remains in regard to them is whether the amendment intended by the Comptroller and Auditor General in 1956 to paragraph 143 of the Manual of Standing Orders results in amending that paragraph
The amendment is in the form of a correction slip which it is not disputed possesses the status of an administrative instruction
The contention on behalf of the respondents is that paragraph 143 possesses the status of a statutory rule and therefore the amendment attempted by the correction slip has no legal effect on it
The High Court held that paragraph 143 was a statutory rule and it proceeded to hold so on the basis of affidavits filed before it
But the matter has been more carefully researched since and the relevant material is now set out in the special leave petition which has given rise to this appeal
It appears that in 1921 the Auditor General as the administrative head of the Indian Audit Department inserted article 1666A by a circular No 1757 E1129 dated 18th April 1921 giving weight to the length of service in the fixation of seniority
In the Audit Code prepared subsequently Art 1666A appeared as article 52
Thereafter in the Manual of Standing Orders issued by the Auditor General in 1938 article 52 found expression as paragraph 143
The provision never acquired statutory force under the Government of India Act 1919
Learned counsel for the respondents urges that it acquired statutory force under sub section
2 of section 252
Government of India Act 1935
Sub sections
1 and 2 of section 252 provide 252
1 All persons who immediately before the commencement of Part III of this Act were members of the staff of the High Commissioner for India or members of the staff of the Auditor of the accounts of the Secretary 164 of State in Council shall continue to be or shall become members of the staff of the High Commissioner for India or as the case may be of the Auditor of Indian Home Accounts
2 All such persons aforesaid shall hold their offices or posts subject to like conditions of service as to remuneration pensions or otherwise as therefore or not less favourable conditions and shall be entitled to reckon for purposes of pension any service which they would have been entitled to reckon if this Act had not been passed
     Sub section
2 of section 252 does not help the respondents
Firstly the guarantee conferred by it covered those persons who held offices or posts on the staff of the Auditor of the accounts of the Secretary of State in Council and on the staff of the Indian Home Accounts immediately before the commencement of Part III of the Act
The respondents are clearly not such persons
Secondly even if it be assumed that the benefit of sub section
2 can be extended to the respondents sub section
2 merely protects the conditions of service enjoyed by them as they existed before
The sub section does not enlarge or improve on the quality of those conditions of service
If seniority was determined by a departmental instruction sub section
2 did not give that provision the higher status of a statutory rule
It remained what it always was a departmental instruction
We were also referred to article 313 of the Constitution but that provision also does not result in converting a departmental instruction into a statutory rule
Plainly paragraph 143 in the Manual of Standing Orders remained throughout a departmental instruction and therefore could be amended by the departmental instruction contained in the correction slip issued by the Comptroller and Auditor General in 1956
On that conclusion being reached the claim of the respondents must fail
The appeals have to be allowed
In the connected writ petition No 357 of 1979 there are 15 petitioners
The first ten passed the Subordinate Accounts Service Examination and were promoted to the service after 1956 and before the enactment of the Rules of 1974
They will be governed by the legal position enunciated in the aforesaid appeals
The eleventh twelfth and thirteenth petitioners passed the examination immediately before the enactment of the Rules of 1974 but were promoted after the Rules were enacted
The remaining petitioners appeared at the examination and were promoted after the enactment of the Rules
In the case of the last two categories the Rules of 165 1974 will apply
Having regard to the provision determining the fixation of seniority under the Rules of 1974 and the position obtaining thereafter none of the petitioners can claim the benefit of weigtage on the basis of length of service
But these petitioners rely on the second of the two contentions concerning the validity of the Rules of 1974
They assail specifically the validity of Rule 72 which provides for fixation of seniority
The argument is that the fixation of seniority has been made by Rule 72 to depend on the order in which appointments to the service are made under Rule 6 and that it is pointed out depends on an arbitrary power conferred on the Comptroller and Auditor General to pass orders and instructions
We see no force in the contention
The Comptroller and Auditor General is a high ranking constitutional authority and can be expected to act according to the needs of the service and without arbitrariness
He is the constitutional head of one of the most important departments of the State and is expected to know what the department requires and how best to fulfil those requirements
We are unable to hold that the power conferred on him under the Rules violates the principle against excessive delegation
The writ petition No 4367 of 1978 must also be treated on the basis that the petitioners are not in the fixation of their seniority entitled to weightage with reference to their length of service
Both writ petitions must therefore be dismissed
Civil Appeals Nos
1584 1588 of 1973 are allowed the judgment and order of the Madras High Court is set aside and the writ petition is dismissed
Writ Petition Nos
357 of 1979 and 4367 of 1978 are also dismissed
In the circumstances there is no order as to costs
NVK Appeals allowed and Petitions dismissed


Summary:
In 1921 the Auditor General as the administrative head of the Indian Audit Department inserted Article 1666A by a circular No 1757 E1129 dated 18th April 1921 giving weight to the length of service as Upper Division Clerks in the fixation of seniority in the Subordinate Accounts Service
In the Audit Code prepared subsequently Article 1666A appeared as Article 52
Thereafter in the Manual of Standing Orders issued by the Auditor General in 1938 Article 52 found expression as paragraph 143
By a correction slip dated 27th July 1956 the Comptroller and Auditor General removed the factor of weightage on the basis of length of service in the determination of seniority
The respondents in the appeals who had entered service in the Office of the Accountant General as Upper Division Clerks appeared in the Subordinate Accounts Service Examination and passed the examination held in November 1969 and were promoted shortly thereafter
They claimed seniority on the basis that their length of service in the inferior post should be taken into account and rested their claim on paragraph 143 of the Manual of Standing Orders as it stood prior to its amendment by the correction slip of 27th July 1956
The claim was rejected by the Comptroller and Auditor General A writ petition filed by them in the High Court was allowed by a Single Judge and the judgment was affirmed by the Appellate Bench of the High Court
The Accountant General and the Comptroller and Auditor General appealed to this Court
During the pendency of the appeals the President enacted 156 the Indian Audit and Accounts Department Subordinate Accounts Service  Subordinate Railway Audit Service Service Rules 1974
They were deemed to have come into force on 27th July 1956
These rules purported to give statutory recognition to the amendment of paragraph 143 by the Comptroller and Auditor General
Rule 6 provided for appointments to the service and Rule 7 dealt with seniority
Rule 9 provided that in matters not specifically provided for the rules regulations orders or instructions of the Central Civil Services as applicable to the Indian Audit and Accounts Department would be applicable
Rule 10 empowered the Comptroller and Auditor General to issue general or special instructions for giving effect to the Rules
In the appeals the respondents assailed the validity of the Rules of 1974 and the amendment made in paragraph 143 contending that the Rules are invalid as clause 5 of Article 148 does not permit the retrospective enactment of rules made thereunder that the specific rules affecting the seniority of the respondents are invalid because in entrusting power to the Comptroller and Auditor General to issue orders and instructions in his discretion the doctrine against excessive delegation of legislative power has been violated and that paragraph 143 possesses the status of a statutory rule and therefore the amendment attempted by the correction slip has no legal effect upon it
In the connected writ petitions the petitioners who had passed the Subordinate Accounts Service Examination were promoted to the Service after 1956 some before the enactment of the Rules of 1974 and some thereafter
It was contended on their behalf that the fixation of seniority having been made by Rule 72 to depend on the order in which appointments to the service were made under Rule 6 depends on an arbitrary power conferred on the Comptroller and Auditor General to pass orders and instructions
On the question whether the respondents are entitled to claim fixation of their seniority in the Subordinate Accounts Service after taking into account their length of service as Upper Division Clerks
Allowing the appeals and dismissing the writ petitions  HELD 1
There is nothing in the language of clause 5 of Article 148 to indicate that the rules framed therein were intended to serve until Parliamentary legislation was enacted
All that the clause says is that the rules framed would be subject to the provisions of the Constitution and of any law made by Parliament
Clause 5 of Article 148 confers power on the President to frame rules operating prospectively only
The rules of 1974 cannot have retrospective operation
Sub rule 2 of rule 1 which declares that they will be deemed to have come into force on 27th July 1956 is therefore ultra vires
163B C BS Vadera vs Union of India  Ors
1968 3 SCR 575 referred to 2
The Comptroller and Auditor General is a high ranking constitutional authority and can be expected to act according to the needs of the service and without arbitrariness
He is the constitutional head of one of the most important departments of the State and is expected to know what the depart 157 ment requires and how best to fulfil those requirements
The power conferred on him under the Rules does not violate the principle against excessive delegation
165C D 3
Paragraph 143 in the Manual of Standing Orders remained throughout a departmental instruction and therefore could be amended by the departmental instruction contained in the correction slip issued by the Comptroller and Auditor General in 1956
164F 4
There is a clear dichotomy in the power conferred by Article 309 a division of power between the Parliament or President as the case may be on the one side and the State Legislature or Governor on the other
The division is marked by the circumstance that under Article 309 services and posts in connection with the affairs of the Union are dealt with by a separate authority from the services and posts in connection with the affairs of a State
That dichotomy is not possible in the power employed for appointing persons in the Indian Audit and Accounts Department and for prescribing their conditions of service
160H 161A 5
The authority vested in the Comptroller and Auditor General ranges over functions associated with the affairs of the States
It is a single office and the Indian Audit and Accounts Department which it heads is a single department
They cannot be said to be concerned with the affairs of the Union exclusively
Consequently the regulation of the recruitment and conditions of service of persons serving in the Indian Audit and Accounts Department cannot be regarded as a matter falling within the domain of the President within the terms of the proviso to Article 309
162 C B Shiva Rao The Framing of India s Constitution A Study 1968 Chap
12 pp
414 417 referred to
It cannot be said that persons serving in the Indian Audit and Accounts Department are holding office in connection with the affairs of the Union exclusively
161 C 7
The power contained in clause 5 of Article 148 is not related to the power under the proviso to Article 309
The two powers are separate and distinct from each other and are not complementary to one another
The reference to the proviso under Article 309 in the recital of the Notification publishing the Rules of 1974 is meaningless and must be ignored
162D E 8
Having regard to the provision determining the fixation of seniority under the Rules of 1974 and the position obtaining thereafter none of the petitioners in the writ petitions can claim the benefit of weightage on the basis of length of service
165A