Civil Appeal No 491 of 1985 From the Judgment and Order dated 26th July 1984 of the Allahabad High Court in WP No 4899 of 1983
81 Pankaj Kalra for the Appellant
Rameshwar Dial and Sarv Mitter for the Respondents
291983 reverting the appellant from the post of Commercial Officer to that of Superintendent
The appellant joined service in Kisan Sahkari Chini Mills Ltd Bisalpur District Pilibhit a sugar factory run and managed by the Uttar Pradesh Co operative Mills Federation
While the appellant was working as Office Surperintendent he was selected for promotion to the post of Commercial Officer and by Order dt
August 29 1980 appointed on probation for one year against a regular vacancy with a condition that his probationary period may be extended further and during the period of probation he could be reverted to the post of Office Superintendent without any notice
On 271981 the appellant was transferred from Bisalpur to Majohla Sugar Factory where he continued to work as Commercial Officer
By an Order dt
2101981 the appellant s probationary period was extended for one year till 491982 the period so extended expired on 4982 but no further order either extending the probationary period or confirming him on the post was issued and the appellant continued to work as Commercial Officer
The Managing Director of the UP Co operative Sugar Mill Federation Ltd a Co operative society registered under the UP
Co operative Societies Act 1965 which runs and manages a number of sugar factories in the State of Uttar Pradesh issued order on 2983 reverting the appellant to the post of Office Superintendent
The appellant challenged the validity of the reversion order before the High Court on the sole ground that on the expiry of the probationary period he stood confirmed and he could not be reverted treating him on probation
The High Court held that on the expiry of the probationary period the appellant could not be deemed to be confirmed as there was no rule prohibiting the extension of probationary period
The UP Co operative Institutional Service Board constituted by the State of Uttar Pradesh in accordance with sub sec
2 of sec
122 of the UP Co operative Societies Act 1965 has framed the UP 82 Co operative Societies Employees Service Regulations 1975 which regulate the condition of service of employees of all the co operative societies placed under the purview of the Institutional Service Board by the Government Notification No 366 CXIIC 3 36 71 dt
March 4 1972
These regulations contain provisions for recruitment probation confirmation seniority and disciplinary control
Regulation 17 provides for probation it lays down that all persons on appointment against regular vacancies shall be placed on probation for a period of one year
Proviso to the Regulation lays down that the appointing authority may in individual cases extend the period of probation in writing for further period not exceeding one year as it may deem fit
Clause ii of the Regulation provides that if at any time during or at the end of the period of probation or the extended period of probation it appears to the appointing authority that the employee placed on probation has not made sufficient use of the opportunity offered to him or has otherwise failed to give satisfaction he may be discharged from service or reverted to the post held by him substantively if any immediately before such appointment
Regulation 18 provides for confirmation of an employee on the satisfactory completion of the probationary period
Regulation 17 and 18 read together provide that appointment against a regular vacancy is to be made on probation for a period of one year this probationary period can be extended for a period of one year more
The proviso to Regulation 17 restricts the power of the appointing authority in extending period of probation beyond the period of one year
An employee appointed against a regular vacancy cannot be placed on probation for a period more than two years and if during the period of probation the appointing authority is of the opinion that the employee has not made use of opportunity afforded to him he may discharage him from service or revert him to his substantive post but he has no power to extend the period of probation beyond the period of two years
Regulation 18 stipulates confirmation of an employee by an express order on the completion of the probationary period
The regulations do not expressly lay down as to what would be the status of an employee on the expiry of maximum period of probation where no order of confirmation is issued and the employee is allowed to continue in service
Since Regulation 17 does not permit continuation of an employee on probation for a period more than two years the necessary result would follow that after the expiry of two years probationary period the employee stands confirmed by implication
This is implicit in the scheme of Regulation 17 and 18
In State of Punjab vs Dharam Singh   a Constitution Bench of this Court held 83 Where as in the present case the service rules fix a certain period of time beyond which the probationary period cannot be extended and an employee appointed or promoted to a post on probation is allowed to continue in that post after completion of the maximum period of probation without an express order of confirmation he cannot be deemed to continue in that post as a probationer by implication
The reason is that such an implication is negatived by the service rule forbidding extension of the probationary period beyond the maximum period fixed by it
In scuh a case it is permissible to draw the inference that the employee allowed to continue in the post on completion of the maximum period of probation has been confirmed in the post by implication
 In the instant case the order of appointment promoting the appellant on the post of Commercial Officer merely indicated that his probationary period could be extended and he could be reverted to the post of Office Superintendent without any notice
Stipulation for extension of probationary period in the appointment order must be considered in accordance with the proviso to Regulation 171 which means that the probationary period could be extended for a period of one year more
Undisputably on the expiry of the appellant s initial probationary period of one year the appointing authority extended the same for another period of one year which also expired on 4982
During the period of probation appellant s services were neither terminated nor was he reverted to his substantive post instead he was allowed to continue on the post of Commercial Officer
On the expiry of the maximum probationary period of two years the appellant could not be deemed to continue on probation instead he stood confirmed in the post by implication
The appellant acquired the status of a confirmed employee on the post of Commercial Officer and the appointing authority could not legally revert him to the lower post of Superintendent
Learned Counsel appearing for the UP Co operative Sugar Factories Federation urged that the UP Co operative Societies Employees Service Regulations 1975 do not apply to the appellant as he was an employee of the UP Co operative Sugar Factories Federation as the condition of service of the appellant and other employees of the UP Co operative Sugar Factories Federation are regulated by the UP Co operative Sugar Factories Federation Service Rules 1976 84 framed by Cane Commissioner in exercise of his powers under sub sec
1 of sec
121 of the Act published in the UP Gazette dt
September 4 1976
Rule 3 of the UP Co operative Sugar Factories Federation Service Rules 1976 herein after referred to as the Federation Service Rules provides that these Rules shall apply to all the employees of the Federation
Rule 5 provides that every employee shall be appointed on probation for such period as the appointing authority may specify and the period of probation may be extended by the appointing authority from time to time the rule does not prescribe any limit on the extension of the probationary period
Rule 6 provides that upon satisfactory completion of probationary period an employee shall be eligible for confirmation
Placing reliance on rule 5 learned counsel for the respondents urged that since there was no order of confirmation the appellant s probationary period stood extended therefore he could be reverted at any time to his substantive post
It is true that rule 5 of the Federation Service Rules does not place any restriction on the appointing authority s power to extend the probationary period it may extend the probationary period for an unlimited period and in the absence of Confirmation Order the employee shall continue to be on probation for indefinite period
It is well settled that where appointment on promotion is made on probation for a specific period and the employee is allowed to continue in the post after expiry of the probationary period without any specific order of confirmation he would be deemed to continue on probation provided the Rules do not provide contrary to it
If Rule 5 applies to the appellant he could not acquire the status of a confirmed employee in the post of Commercial Officer and he could legally be reverted to his substantive post
There are two set of rules i The UP Co operative Societies Employees Service Regulations 1975 ii the UP Co operative Sugar Factories Federation Employees Service Rules 1976
The question is which of the rules apply to the employees of the Co operative Sugar Factories Federation
While considering this question it is necessary to advert to the relevant provisions of the Act and the Rules framed thereunder and the Notifications issued from time to time
Section 121 of the Act confers power on the Registrar an officer appointed as such by the State Government under sec
3 to frame regulations to regulate the emoluments and conditions of service of employees in a Co operative Society or class of Co operative Societies
Section 32 confers power on the State Government to appoint officers to assist the Registrar and to confer on them all or any of the powers of the Registrar
An officer on whom powers of Re 85 gistrar are conferred by the State Government has authority to frame rules regulating conditions of service under sec
1211 of the Act
Section 1221 confers power on the State Goverment to constitute an authority for the recruitment training and disciplinary control of the employees of the Co operative societies or class of co operative societies and it may further require such authority to frame regulations regarding recuritment emoluments terms and conditions of service including disciplinary control of such employees
Regulations so framed require approval of the State Government under sub sec
Once approval is granted the regulations take effect from the date of publication
The State Government in exercise of its powers under sec
1221 issued a Notification No 366 CXIIC 3 36 71 dt
March 4 1972 constituting the UP Co operative Institutional Service Board as an authority for the recruitment training and disciplinary control of the employees of the Apex Level Societies Central or Primary Societies and it further conferred power on the Institutional Service Board to frame regulations regarding recruitment emoluments terms and conditions of service of the employees of the co operative societies of the Apex Level Societies Central or Primary Societies
In pursuance thereof the Institutional Service Board framed the UP Co operative Societies Employees Service Regulations 1975 regulating the conditions of service of the employee of these Co operative Societies which were placed under the purview of the Institutional Board by the Government Notification No 366 CXII C 3 36 71 dt
March 4 1972
This Notification states that the Board shall have authority to frame regulations for the recruitment training and disciplinary control of the employees of the Apex Level Societies Central or Primary Societies
Section 2a 4 which defines Apex Level Societies expressly specifies the UP Co operative Sugar Factories Federation Ltd as an Apex Level Society
Since the Institutional Service Board was conferred power to frame regulations regulating the conditions of service of the employees of Apex Level Societies the regulations framed by the Board apply to the employees of the UP Co operative Sugar Factories Federation Ltd The respondents have failed to place any Notification before the Court to show that the power of the Institutional Service Board to frame regulations regulating the conditions of service of the employees of Apex Level Societies including that of UP Co operative Sugar Factories Federation Ltd was ever with drawn
The UP Co operative Sugar Factories Federation Service Rules 1976 have been framed by the Cane Commissioner under sub sec
1 86 of sec
122 of the Act
These Rules provide that they shall apply to all the employees of the UP Co operative Sugar Factories Federation Ltd but the question is whether rules so framed by the Cane Commissioner would override the Service Regulations 1975
As noted earlier the Institutional Service Board was constituted an authority under sec
1221 of the Act and authorised to frame regulations regulating the conditions of service of employees of the Co operative Societies including those of Apex Level Societies
Sub section 2 of sec
122 provides that on approval of the Regulations by the State Government any rule or regulations framed by the Registrar in exercise of its powers under sec
1211 would stand superseded
Sub section 1 of sec
121 confers power on the Registrar which may include any other sub ordinate officer or authority to frame rules regulating the condition of service of employees of Co operative Societies such rules do not require approval of the State Government
While a regulation framed by an authority constituted under sub sec
1 of sec
122 requires approval of the State Government and on such approval the regulation so framed supersedes any rules made under sec
The scheme of sec
121 and sec
122 postulates that primacy has to be given to regulations framed by the authority under sec
122 of the Act
If there are two sets of rules regulating the conditions of service of employees of Cooperative societies the regulations framed under sec
122 and approved by the State Government shall prevail
In this view the provisions of the UP Co operative Sugar Factories Federation Service Rules 1976 do not override Service Regulations of 1975
It appears that this position was realised by the State Government and for that reason it issued Notification No UO 402IIC I 76 dt
August 6 1977 constituting the Commissioner and Secretary Sugar Industry and Cane Development Department as authority under sub sec
1 of sec
122 for the recruitment training and disciplinary control of employees of the UP Co operative Factories Federation Ltd The learned counsel for the respondent urged that since the Government had constituted the Commissioner and Secretary of the Development Department as the competent authority for framing regulations for the recruitment training and disciplinary control of the employees of the UP Co operative Sugar Factories Federation Ltd 1975 Regulations framed by the Institutional Service Board do not apply
We find no merit in this submission
Firstly the Notification dt
August 6 1977 merely designates the Commissioner and Secretary Sugar Industry and Cane Development Department as the authority for the recruitment training and disciplinary control of the employees of the 87 UP Co operative Sugar Factories Federation it does not confer power on the authority to frame any rule or regulations regulating the conditions of service of the employees of Sugar Factories Federation Ltd But even if any such power can be inferred admittedly no rules or regulations regulating the conditions of service of the employees of the Co operative Sugar Factories Federation have as yet been framed
Learned counsel for the respondents conceded that draft service regulations have been prepared but those have not been approved by the Government as required by sub sec
2 of the Act
In absence of approval of the State Government as required by sub sec
2 of sec
122 regulations if any framed by the Commissioner and Secretary Sugar Industry and Cane Development Department do not acquire any legal force
In this view 1975 Regulations framed by the Institutional Service Board continue to apply to the employees of the UP Co operative Sugar Factories Federation Ltd
In view of the above discussion it is manifestly clear that the appellant s services were regulated by the UP Co operative Societies Employees Service Regulations 1975
Since under those Regulations appellant s probationary period could not be extended beyond the maximum period of two years he stood confirmed on the expiry of maximum probationary period and thereafter he could not be reverted to a lower post treating him on probation
The Order of reversion is illegal
We accordingly allow the Appeal set aside the order of the High Court and quash the order of reversion dt
291983 and direct that the appellant shall be treated in service and paid his wages and other allowances
The appellant is entitled to his costs which is quantified as Rs 1000
SR Appeal allowed


Summary:
In the State of Uttar Pradesh there are two sets of service rules i The UP Cooperative Societies Employees Service Regulations 1975 framed by the UP Cooperative Institutional Authority constituted by the State Government through a Notification dated March 4 1978 as an authority for the recruitment training and disciplinary control of the employees of the Apex Level Societies Central or Primary Societies and 2 the UP Cooperative Sugar Factories Federation Employees  Service Rules 1976 framed by the cane commissioner by virtue of the power vested under section 1221 of the UP Cooperative Societies Act which provided that they shall apply to all the employees of the UP Cooperative Sugar Factories Federation Ltd While the proviso to Regulation 17 restricts the power of the appointing authority in extending the period of probation beyond the period of one year and in case of an employee appointed against a regular vacancy beyond two years Rule 5 of the Federation Service Rules 1976 does not place any such restriction on the appointing authority s power to extend the period of probation and in the absence of a confirmation order the employee shall continue to be a probation for indefinite period
Again while the Regulations framed by the Institutional Service Board require approval of the State 79 Government under sub section 2 of section 122 of the Act the Rules do not provide for an approval
Section 2a 4 which defines Apex Level Societies specifies the UP Cooperative Sugar Factories Federation Ltd as an Apex Level Society
The appellant joined service in Kisan Sahkari Chini Mills Ltd Bisalpur District Pilibhit a Sugar Factory run and managed by the UP Cooperative Mills Federation
While working as an Office Superintendent he was selected for promotion to the post of commercial officer and by an order dated 29880 appointed on probation for a period of one year which was extended by another order dated 21081 till 4982
No further order either extending the period of probationary period or confirming him on the post was issued and while so continuing he was reverted by an order dated 2983 to the post of office Superintendent
The appellant challenged the validity of the reversion order before the High Court of UP Lucknow Bench on the sole ground that on the expiry of the probationary period he stood confirmed and he could not be reverted treating him on probation
The High Court held that on the expiry of the probationary period the appellant could not be deemed to be confirmed as there was no rule prohibiting the extension of the probationary period
Hence the appeal by special leave
Allowing the appeal the Court  HELD 11 Since the appellant s services were regulated by the UP Cooperative Societies Employees Service Regulations 1975 under which his services could not be extended beyond the maximum period of two years he stood confirmed by implication on the expiry of maximum probationary period and thereafter he could not be reverted to a lower post treating him on probation
The order of reversion is illegal
87D E 12 Reading Regulations 17 and 18 together it is clear that an employee appointed against a regular vacancy cannot be placed on probation for a period more than two years and if during the period of probation the appointing authority is of the opinion that the employee has not made use of opportunity afforded to him he may discharge him from service or revert him to his substantive post but he has no power to extend the period of probation beyond the period of two years
Regulation 18 stipulates confirmation of an employee by an express order on the completion of the probationary period
The regulations do not expressly lay down as to what would be the status of an employee on the 80 expiry of maximum period of probation where no order of confirmation is issued and the employee is allowed to continue in service
Since Regulation 17 does not permit continuation of an employee on probation for a period more than two years the necessary result would follow that after the expiry of two years probationary period the employee stands confirmed by implication
This is implicit in the scheme of Regulation 17 and 18
82D H State of Punjab vs Dharam Singh  applied
13 It is well settled that where appointment on promotion is made on probation for a specific period and the employee is allowed to continue in the post after expiry of the probationary period without any specific order of confirmation he would be deemd to continue on probation provided the Rules do not provide contrary to it
In that sense if Rule 5 of the UP Cooperative Federation Service Rules 1976 were to apply the appellant no doubt could not acquire the status of a confirmed employee in the post of commercial officer
But the scheme of sections 121 and 122 of the UP Cooperative Societies Act 1965 postulates that primacy has to be given to Regulations framed by the Authority under section 122 of the Act and if there are two sets of rules regulating the conditions of service of employees of Cooperative Societies the Regulations framed under section 122 and approved by the State Government shall prevail
In this view the provisions of the UP Cooperative Sugar Factories Federation Service Rules do not override Service Regulations 1975 which is further evidenced by Government s Notification dated 681977
Since the Institutional Service was conferred power to frame regulations regulating the conditions of service of the employees of Apex Level Societies the regulations framed by the Board alone will apply to the employees of the UP Cooperative Sugar Factories Federation Ltd so long as such a power has not been withdrawn
Further constituting the commissioner and Secretary of the Cane Development Department as the competent authority for framing regulations for the recruitment training and disciplinary control of the employees of the UP Cooperative Sugar Factories Federation Ltd is of no consequence to the applicability of 1975 Regulations
84D E 86D E 85F 86G