vil Appeal Nos
3490 91 of 1987
From the Judgment and Order dated 53
1986 and 141986 of the Andhra Pradesh Administrative Tribunal Hyderabad in RP Nos
1595 of 1983 and 788 of 1984
PA Choudhary TVSN Chari Ch
Badrinath and Mrs Sumitha Rao for the Appellants
C Seetharammayya B Parthasarthi and A Subba Rao for the Respondents
The Judgment of the Court was delivered by NATARAJAN J
These appeals by the State of Andhra Pradesh are directed against the judgments of the Andhra Pradesh Administrative Tribunal Hyderabad in RP Nos 1595 and 788 of 1984
Originally the Government of Andhra Pradesh in purported exercise of its powers under Clause 5 of Article 371 D of the Constitution passed an order GO Ms No 215 dated 1471986 to annul the two judgments of the Tribunal
On 20121986 this Court negatived the powers of annulment assumed by the State Government by striking down Clause 5 of Article 371 D and the proviso thereto as being opposed to the basic structure of the Constitution
Thereafter the State haspreferred these appeals by special leave against the judgments of the Administrative Tribunal
What falls for consideration in these appeals is whether amended Rule 3 of the Andhra Pradesh Treasury and Accounts Subordinate Service Rules 1963 hereinafter referred to as the Rules is violative of the Andhra Pradesh Public Employ ment Organisation of Local Cadres and Regulation of Direct Recruitment Order 1975 hereinafter referred to as the Presidential Order issued on 18101975 by the President of India under clauses 1 and 2 of Article 371 D of the Consti tution
The validity of the amended Rule was questioned in the context of certain Assistant Section Officers in the Finance Department of the Government of Andhra Pradesh hereinafter referred to as the 346 Secretariat Officers borne on zone VII being appointed to the post of Sub Treasury Officers borne on the Subordinate Offices under the Directorate of Treasuries and Accounts hereinafter referred to as the Local Cadre borne on zones I to IV
For a proper appreciation of the matter it is necessary that Rule 3 before and after amendment and the Presidential Order are set out
Under Rule 3 of the Rules the posts of Head Accountants and Sub Treasury Officers could be filled up by any of the following methods i By direct recruitment ii By promotion from category 3 4 or 5 of Branch II or from category 3 of Branch I III IV VI or category 2 of Branch VIi and iii By transfer from among the UD Clerks now called Assistant Section Officers in the Finance Department of the Secretariat
Rule 3 thus made provision for the posts of Head Accountants and Sub Treasury Officers being filled inter alia by Promotion of Upper Division Clerks of the Directorate of Treasuries and Accounts  Transfer from among the Assistant Section Officers in the Finance Department of the Secretari at
However as per other Rules only 4 Assistant Section Offi cers at any given time were eligible for being recruited as Sub Treasury Officers
On 18101975 the Presidential Order came to be passed
Para 3 of the Order which enjoins the State Government to organise the posts under the State into different local cadres reads as follows 3
Organisation of Local Cadres 1 The State Government shall within a period of twelve months from the commence ment of this Order organise classes of posts in the civil services of and classes of civil posts under the State into different local cadres for different parts of the state to the extent and in the manner hereinafter provided 347 Para 5 which deals with local cadres and transfers of per sons consists of 2 sub paras
The para reads as follows 5
Local Cadres and transfers of persons 1 Each part of the State for which a local cadre has been organised in respect of any category of posts shall be a separate unit for purposes of recruitment appointment discharge seniority promotion and transfer and such other matters as may be specified by the State Government in respect of that category of post
2 Nothing in this Order shall prevent the State Government from making provision for a the transfer of a person from any local cadre to any Office or Establishment to which this Order does not apply or vice versa b the transfer of a person from a local cadre comprising posts in any Office or Establishment exercising territorial jurisdiction over a part of the State to any other local cadre comprising posts in such part or vice versa and c the transfer of a person from one local cadre to another local cadre where no qualified or suitable person is avail able in the latter cadre or where such transfer is otherwise considered necessary on the public interest
A fourth clause was subsequently inserted as per GO Ms No 34 GAD SPF dated 24181 and it reads as follows d the transfer of a person from one local cadre to another local as reciprocal condition subject to the condition that the persons so transferred shall be assigned seniority in the latter cadre with reference to the date of his transfer to that cadre
 Thereafter the Government of Andhra Pradesh by GOP No 728 General Administration SPWA Department dated 1111975 issued various instructions in relation to the aforesaid Presidential Order including para 5 regarding inter cadre transfers
348 Seven persons belonging to category 5 of Branch II of the AP Treasury and Accounts Subordinate Service presented a representation petition No 706 of 78 before the AP Administrative Tribunal for declaring Rule 3 of the Rules ultra vires in so far as it made provision for promotion of Clerks of the Directorate of Treasuries and Accounts and Assistants of the Finance Department of the Secretariat to the posts of Head Accountants and Sub Treasury Officers in violation of para 51 of the Presidential Order
It was urged by them that with the promulgation of the Presidential Order the posts of Head Accountants and Sub Treasury Offi cers had become zonal posts and as such the zone will be the unit for recruitment appointment discharge seniority promotion and transfer to such a zonal post under paragraph 51 of the Presidential Order
They claimed that the Serv ice rules issued under Article 309 of the Constitution as they existed at the time of the Presidential Order did not conform to the local cadres created under the Presidential Order and hence the State Government had issued GO No 728 for suitable amendments being made to the Service Rules in each service
They further claimed that only the U D
Accountants of the Feeder Sources of the zone alone are eligible for consideration in that particular zone for promotion to the rank of Head Accountant and Sub Treasury Officer and not the personnel from other zones including UD Accountants of the Directorate of Treasuries and Ac counts and Assistants of the Finance Department of the Secretariat
In reply the State of AP while admitting that under the Presidential Order the posts of Head AccountantSub Treasury Officers were organised into zonal posts nevertheless contended that the personnel from differ ent categories mentioned under the Rules are entitled for being considered for promotion to the rank of Head Account antsSub Treasuries Officers by reason of para 52a of the Presidential Order and the detailed instructions con tained in para 10a of GOP No 728 dated 1111975
The relevant portion in GOP No 728 dated 1111975 reads as follows Though posts may be organised into separate local cadres para 52 of the Presidential Order provides that the State Government may make a provision for transfer of persons from and to local cadres under certain circumstances
These are elucidated below a Transfer of a person from any local cadre to any office or establishment to which the order does not apply or vice versa
349 This enables a provision being made for drawing persons on tenure basis from different local cadres to fill equivalent posts in Major Development Projects Special Offices or Establishments etc
There are also cases where provision exists for appointment of persons in mofussil offices by transfer to the offices of Heads of Departments
For in stance a certain proportion of ministerial posts in the offices of Heads of Departments is to be filled by transfer from ministerial categories in the subordinate offices in the districts
A provision of this kind is protected under the Presidential Order
 The full bench of the Tribunal considered the rival conten tions of the parties and came to the view that para 51 of the Presidential Order made it clear that for the purpose of promotion zonal cadre has to be treated as a separate unit and consequently the posts of Head AccountantsSub Treasury Officers which have been declared as zonal posts could be filled up by promotion only on zonal basis and consequently Rule 3 of the Rules which specified various categories of posts without reference to zone as feeder posts for the purpose of promotion to the posts in question are inconsist ent with para 51 of the Presidential Order
The Full Bench therefore held that after the promulgation of Presidential Order the provisions of Rule 3 referred to above would have to be reviewed so as to make them consistent with the provi sions of the Presidential Order
 The Full Bench also con sidered the scope and effect of GO No 728 dated 11175 and held as follows In our opinion once this point is conceded the contents of paragraph 10 of GO P No 728 dated 1111975 cited by the respondents in this respect would be properly understood
What that paragraph clearly suggests is that under paragraph 52 of the Presidential Order it is open to the State Government to authorise transfer of a person from any local cadre to any office or establishment to which the order does not apply or vice versa
It is in this context that the particular paragraph clarifies the types of trans fers which the Government would authorise
The sentence a provision of this kind is protected under the Presidential Order occurring in that paragraph has therefore to be read as conveying that a provision of this kind could be made by the State Government under paragraph 52 of the Presidential Order
Apparently the respondents have mis 350 interpreted this sentence to understand that the provision of Rule 3 of AP Treasuries and Accounts Subordinate Serv ice Rules in question continues to be operative without any specified provision being made in the rules in pursuance of the authority given to the State Government under paragraph 52 of the Presidential Order
This clearly cannot be the correct interpretation as discussed above Emphasis supplied Thus it came about that the Full Bench declared that the various categories of feeder posts including Assistants now named Assistant Section Officers of the Secretariat from which promotion to the posts of Head AccountantsSub Treasury Officers can be made cannot be made operative after the promulgation of the Presidential Order
After the Full Bench of the Tribunal rendered its judg ment holding that Rule 3 ceased to have operative force after the Presidential Order was made the State Government amended Rule 3 and gave retrospective effect to the amended Rule with effect from 18101975
The amendment to the Rule was made in the following terms The amendment hereby made shall be deemed to have come into force on the 18th October 1975
AMENDMENT In the said rules in the Table under Rule 3 in column 3 against category 2 Head Accountants and Sub Treasury Officers of Branch II for items ii and iii the follow ing items shall be substituted namely ii By promotion from category 3 4 or 5 of Branch II iii By transfer from among the category of Upper Division Accountants Senior Accountants of Branch I Branch III or Branch VI or Upper Division Accountants Senior Accountants of Branch VII iv By transfer from among the category of Assistants Assistant Section Officers of Finance and Planning Fi nance Wing Department of the Secretariat
 Challenging the validity of the amended rule two representa tion 351 petitions viz RP No 1595 of 83 and RP No 788 of 84 came to be filed before the AP Administrative Tribunal
Once again a plea was raised that amended Rule 3 was also violative of the Presidential Order
The State contended that the amended Rule had been issued by the Governor in exercise of the powers conferred on him by the proviso to Article 309 of the Constitution and hence the validity of the Rule cannot be questioned by the petitioners
It was secondly contended that the earlier GO was not violative of the Presidential Order or the provisions of Article 371 D but even so as it was considered by the Tribunal to be inoperative because the special provisions did not explicity state that they had been made in exercise of the authority vested in the State Government under para 52 of the Presi dential Order the Government had set right the lacuna pointed out by the Tribunal by framing the amended rule specifically in exercise of the powers conferred on Govern ment under para 52 of the Presidential Order
The Tribunal held that what was challenged by the peti tioners was not the powers of the Governor to issue the statutory rule but the Government s power to fill a zonal post by the method of transfer by a person who did not belong to the zone in which the vacancy had arisen by refer ring to para 52 of the Presidential Order in the Preamble of the Notification making the amendment
Dealing with this question the Tribunal referred extensively to the judgment rendered by the Full Bench of the Tribunal in the earlier case RP No 708 of 78 and held that the judgment of the Full Bench did not afford scope to the State Government to pass a GO in conflict with para 51 of the Presidential Order and furthermore the impugned GO Ms No 196 did not set out under which sub para viz sub para a b or c in para 52 of the Presidential Order the GO was issued and therefore the amended GO cannot be upheld
It was also held by the Tribunal that there was no justification for transferring a person who does not belong to concerned zone to be inducted into that zone merely because such a practice had existed in the past and moreover the underlying purpose of the Presidential Order would be destroyed if the State Government is allowed to fill up vacancies in zonal posts by a person not belonging to that zone
It is the correctness of the view taken by the Tribunal that is challenged in these appeals
Mr TVSN Chari learned counsel for the State and Mr Seetaramiah learned counsel for the respondents ad vanced arguments in support of their respective contentions in the appeals
352 Before we examine the correctness of the view taken by the Tribunal striking down the amended Rule 3 as being violative of the Presidential Order we may usefully recall the relevant provisions of the Presidential Order which have to be borne in mind
As already stated para 31 enjoins the State Government to organise various classes of posts in the civil services and classes of civil posts under the State into different local cadres for different parts of the State in accordance with the further provisions contained in para 3
For our purposes it is unnecessary to refer to the other provisions of para 3 except to point out that the direction contained in para 31 is not an inexhorable one
Sub para 8 of para 3 makes provision for the Central Government if it is not practicable or expedient to organise local cadres under the paragraph in respect of any non gazetted category of posts in any department to make a declaration to that effect and it is further provided that on such declaration being made the provisions of the para shall not apply to such category of posts
It is however common ground that the posts of Head Accountants and Sub Treasury Officers have been constituted into Zones I to IV and the UD Assistants and Assistant Section Officers in the Finance Department of the Secretariat have been organised for the city of Hydera bad into a separate category falling under Zone VII
The question for consideration is whether the UD Clerks of the Directorate and Assistant Section Officers in the Secretari at falling under Zone VII can be transferred by promotion to the local cadre posts in zones I to IV
The Tribunal has held that such transfers cannot be effected for the follow ing reasons 1
The reasons which weighed with the full Bench for strik ing down the unamended Rule 3 will hold good for striking down of the amended Rule 3 also
The amendment to the Rule cannot be deemed to have been regularly effected by the Government because the Rule does not set out under which relevant clause viz clause a b or c of sub para 2 of para 5 of the Presidential Order the Government has exercised its powers to amend the Rule
The amendment sought to be effected by the Govt
would have the effect of destroying the scheme of constituting separate local cadres and separate zones contained in para 51 of the Presidential Order
There is no convincing reason as to why persons in the Directorate who do not belong to Zones I to IV should be in 353 ducted into those zones and the system cannot be allowed to be continued merely because such a practice was in vogue prior to the issue of the Presidential Order
Since the amended Rule is virtually a repetition of the old Rule it cannot be legitimised merely because Government claims to have amended the Rule in purported exercise of its powers under para 52 of the Presidential Order
On a consideration of the matter we find that the Tribunal has clearly erred in everyone of the reasons given by it for striking down the amended Rule 3
In the first place we must point out that the Tribunal has failed to construe para 52 of the Presidential Order in its proper perspective and give full effect to the powers conferred thereunder on the State Government to make provi sions contrary to the scheme of local cadres prescribed under Para 51
The words of sub para 2 of Para 5 viz nothing in this order shall prevent the State Government from making provision for sets out the over riding powers given to the State Government under the sub para
Such over riding powers have been given to the State Government in express terms in recognition of the principle that public interest and administrative exigencies have precedence over the promotional interests of the members belonging to local cadres and zones
Since Para 52 also forms a part of the Presidential Order it forms part of the scheme envisaged for creating local cadres and zones
The Tribunal was therefore in error in taking the view that if the State Government was to exercise its powers under Para 52 and make provision for promotion of UD Assistants in the Direc torate and Assistant Section Officers in the Secretariat to be transferred to posts in Zones I to IV it will be the very negation of the creation of cadres and zones under Para 51 and it will be destructive of the scheme underlying the Presidential Order
In fact the Tribunal has realised the operative force of Para 52 to some extent but it has failed to give full effect to its realisation of the scope of Section52
In Para 12 of its judgment in RP No 1595 of 1983 the Tribunal has stated that since the amended rule refers to Para 52 of the Presidential Order it will no longer be open to the petitioners to attack the amendment as was done in respect of the earlier amendment in the previous RP
The Tribunal has thus noticed that the amended Rule has been brought about by the Government in exercise of its powers under Para 52 but it has failed to draw the logical inference following therefrom
354 As regards the view taken by the Tribunal that the reasons which weighed with the Full Bench for holding that the unamended Rule ceased to have operative force after the Presidential Order was made would have relevance even with reference to the amended Rule the Tribunal cannot be said to have acted correctly
The Full Bench was concerned with the amended Rule 3 which was framed long before the Presi dential Order was passed
In order to make the provisions of the old Rule to have currency even after the Presidential Order was passed the Government issued GO Ms No 728 on 1 11 75
However the Full Bench was of the view that the GO did not conform to the requirements of para 52 of the Presidential Order and therefore the Full Bench held the old Rule cannot have operative force without any specific provision being made in the Rules in pursuance of the au thority given to the State Government under para 52 of the Presidential Order
 It was in acceptance of this position the Government had issued GO Ms No 196 dated 17683 for amending Rule 3 so as to make the Rule conform to the re quirements of para 52 of the Presidential Order
The Tribunal has failed to realise this position and has there fore committed the error of holding that the view taken by the Full Bench with reference to the old Rule will continue to hold good even with reference to the amended Rule
Anoth er patent error which the Tribunal has committed is in holding that GO Ms No 196 is not valid because it does not set out the relevant clause under which the Government was exercising its powers under the Presidential Order
The Tribunal s observation is worded as under In the impugned GO Ms No 196 supra no particular sub paragraph has been invoked
The situation under which each sub sub para will be applicable has been stated
Clearly provisions contained in sub sub para b and c are not attracted much less sub sub para a
We are therefore not convinced that recruitment by the method of transfer could come under any one of the aforesaid provisions
 The observations of the Tribunal is manifestly wrong because GO Ms No 196 clearly sets out that the Notification was being issued by the Government in exercise of its powers under Section 3 of the Andhra Pradesh Ordinance 5 of 83 read with para 52a of the Presidential Order
The Tribunal has completely lost sight of the relevant portion of the GO
We are now only left with the reasoning of the Tribunal that there is no justification for the continuance of the old Rule and for 355 personnel belonging to other zones being transferred on promotion to offices in other zones
In drawing such conclu sions the Tribunal has travelled beyond the limits of its jurisdiction
We need only point out that the mode of re cruitment and the category from which the recruitment to a service should be made are all matters which are exclusively within the domain of the Executive
It is not for judicial bodies to sit in judgment over the wisdom of the Executive in choosing the mode of recruitment or the categories from which the recruitment should be made as they are matters of policy decision falling exclusively within the purview of the Executive
As already stated the question of filling up of posts by persons belonging to other local categories or zones is a matter of administrative necessity and exigency
When the Rules provide for such transfers being effected and when the transfers are not assailed on the ground of arbi trariness or discrimination the policy of transfer adopted by the Government cannot be struck down by Tribunals or Court of law
In the light of our discussion we find that the griev ance expressed by the State over the judgment of the Tribu nal is well founded
In so far as Civil Appeal No 3491 of 87 is concerned though there was no direct challenge there in to the validity of the amended Rule 3 the Tribunal has allowed the Representation Petition filed by the petitioners because of the view taken by it in RP No 1595 of 1983
Hence the judgment of the Tribunal in that case also has to be set aside
In the result we set aside the judgments of the Tribu nal and allow both the appeals and declare Rule 3 of the amended Rule to be intra vires of the Presidential Order
There will be no order as to costs
Y Lal Appeals allowed


Summary:
These three Writ Petitions have been filed by three different Private Limited Companies and their share holders challenging the vires of the Jammu  Kashmir Extraction of Resin Act 7 of 1986
The circumstances that led to the filing of these Writ Petitions may be stated thus The State of Jammu  Kashmir with a view to industria lise the under developed State formulated schemes and invit ed outsiders to set up industries in the State and as a stimulus the Government offered land and other facilities
The Petitioner Companies in response to the said invitation went to the State of Jammu  Kashmir and negotiated the arrangements as a result of which each Company had obtained a right to collect resin gum to process the same for indus trial purposes
The Petitioner Company in Writ Petition No 751 of 1986 had obtained under Government order dated 27479 allotment of 10 to 12 lacs of blazes annually for extraction of resin from the forests in Poonch and Rambam Divisions for a period of 10 years
Government order granting rights had been made in favour of the Petitioner Company in WP No 794 of 1986
The Petitioner Company in WP No 798 of 1986 was a proces sor only and had undertaken to work as a tapper
The orders passed in favour of these Companies referred to above were challenged before this Court as being violative of articles 14 and 19 of the Constitution on the ground that grant of forest rights to the Petitioners were arbitrary mala fide and not in public interest
It was contended that State largesse had been created in favour of the Petitioners at the cost of State Exchequer and the grant created monopoly
This Court dismissed the Writ Petitions holding that there was no substance 258 in any of the contentions advanced by the Petitioners
Kasturi Lal Lakshmi Reddy vs State of Jammu  Kashmir  Anr
 The order made in favour of the Petitioner in WP No 794 of 1986 and incorporated in the agreement dated 6111978 was also challenged but this Court rejected the Petition
Brij Bhushan  Ors
vs State of Jammu  Kashmir  Ors
 While the Petitioners were carrying on with the business contracted for Governor s Act of 1986 came into force
The provisions of the said Act particularly sections 3 4 and 5 have been impugned in these Petitions
It is contended on behalf of the Petitioners that Gov ernment orders and contracts under which they have got the right to exploit or utilize the particular forest product amounts to property and they are entitled to protection thereof against expropriation and in case no compensation was provided the provisions of the Act are hit for contra vening the fundamental right guaranteed by article 191g which confers upon them the right to carry on any occupa tion trade or business
On the other hand the case put forward by the State is that the benefits and privileges conferred on the three Petitioners either under contract or under Government orders did not constitute property and by the provisions of the Act no transfer of such property has taken place
Allowing the Writ Petition this Court HELD The statutory scheme of Jammu  Kashmir Extraction of Resin Act 1986 is to extinguish private rights both in respect of Government owned trees as also trees in private ownership and to vest those1 rights in the State Government or the Government Company
271A B The Executive grant or the contract created interest in the Petitioners and there is no room to doubt that by such process in favour of the Petitioners property right had been created
The interests which are in dispute before this Court do constitute property entitled to protection under article 1911 and are covered by article 312
267G 268A B 259 Ramana Dayaram Shetty vs The International Airport Authority of India  Ors  and Kasturi Lal Lakshmi Reddy vs State of Jammu  Kashmir  Anr  The ownership vested in the private persons by opera tion of section 3 of the Act the right to appropriate the usu fruct of the trees is taken away from the private owner and is vested in the State
Sub article
2A of article 31 therefore does not apply
Consequently sub article
2 applies and compensation therefore was payable before the property could be taken over by the State
Provisions of sections 3 and 4 of the Act are ultra vires of the Constitution and since these provisions contain the soul of the Act without them the Act cannot operate the entire Act has to suffer
271C D 272B C Subodh Gopal Bose s case   Dwarkadas Shrinivas of Bombay vs The Sholapur Spinning  Weaving Co Ltd  Ors   RC Cooper vs Union of India   Madan Mohan Pathak vs Union of India  Ors  and Tara Prasad Singh vs Union of India  Ors   referred to