IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA CWP No. 180 of 2001 alongwith other connected matters Reserved on: 17.05.2012 Decided on: 31.05.2012 CWP No. 180 of 2001 1. The State of H.P. through Secretary (HPPWD), Government of H.P. 2. The Superintending Engineer, 11th Circle, HPPWD, Rampur Bushahr, (H.P.) …Petitioners. Versus 1. Ram Lal, 2. Pitamber Dass, Both sons of Sh. Sarab Dayal; 3. Bal Dassi, 4. Shanti Devi, 5. Asha Kumari, All daughters of Sh. Sarab Dayal; 6. Pushpa Devi, Daughter-in-law of Sh. Sarab Dayal; 7. Marshal, 8. Diyanash, Both Grand Sons of Sh. Sarab Dayal, All residents of village Karsoli, P.O. Narian, Tehsil Rampur Bushahr, District Shimla, H.P. …Respondents. Civil Writ Petition under Article 226/227 of the Constitution of India. Coram The Hon’ble Mr. Justice Deepak Gupta, J. The Hon’ble Mr. Justice V.K. Ahuja, J. Whether approved for reporting?1 Yes. 1 Whether the reporters of local papers may be allowed to see the Judgment? Yes. -: 2 :- For the petitioner(s): Mr. R.K. Bawa, Advocate General, with Mr. Vivek Singh Thakur, Additional Advocate General and Mr. Rajesh Mandhotra, Deputy Advocate General. For the respondent(s): Mr. A.K. Gupta, Mr. Bhuvnesh Sharma, Mr. Ramakant Sharma, Mr. K.K. Verma and Mr. Dheeraj K. Verma, Advocates. Deepak Gupta, J. By this judgment we are dealing with and deciding common questions of law which have arisen in hundreds of cases. Arguments in all these cases were heard altogether, but the judgment is being delivered in CWP No. 180 of 2001, but shall govern the decision in the other connected matters. A copy of this judgment shall be placed on the record of all the connected matters. 2. The following common question of law arises in these petitions: “Whether the services rendered on daily waged basis by the employees before their regularization/grant of work charged status are to be taken into consideration for the purpose of counting their qualifying service for grant of pension under the Central Civil Services (Pension) Rules, 1972, and if so, to what extent.” The Background: 3. It would be pertinent to mention that earlier vide our judgment dated 19.07.2007, we had held as follows: “We are, therefore, of the considered view that 50% of the continuous service rendered by the employees on daily rated basis followed by work charge/ regular employment should be taken into account while calculating the qualifying service for purposes of entitlement to and the amount of pension to be paid to them.” The State filed Special Leave Petition before the Apex Court raising new questions before the Apex Court and, therefore, all the matters were again remanded to us. The Apex Court held as follows: -: 3 :- “We have perused the records and heard the learned counsel for the parties. We are of the considered view that an entirely new case has been weaved out before this Court. There are no pleadings to that effect. In this view of the matter, we are constrained to set aside the impugned judgment of the High Court and remit the matters to the High Court for fresh adjudication. To avoid any confusion, we direct the State to file a comprehensive amended writ petition in the High Court within eight weeks and reply of the same be filed within eight weeks thereafter and rejoinder, if any, within four weeks thereafter.” Consequent to the directions of the Apex Court, a consolidated comprehensive writ petition was filed and, thereafter, we heard all the learned counsel for the parties. 4. The employees in most of these cases were initially employed as daily rated workmen in the Public Works Department (PWD) or the Irrigation and Public Health (IPH) Departments of the State of Himachal Pradesh. Services of most of the employees were regularized in terms of the scheme framed by the Government and approved by the Apex Court in Mool Raj Upadhyaya versus State of H.P. and others, 1994 Supp. (2) SCC 316, relevant portion of which reads as follows:- “(1) Daily-wage/muster-roll workers, whether skilled or unskilled, who have completed 10 years or more of continuous service with a minimum of 240 days in a calendar year on 31.12.1993, shall be appointed as work-charged employees with effect from 1.1.1994 and shall be put in the time-scale of pay applicable to the corresponding lowest grade in the Government; (2) daily wage/muster-roll workers, whether skilled or unskilled who have not completed 10 years of continuous service with a minimum of 240 days in a calendar year on 31.12.1993, shall be appointed as workcharged employees with effect from the date they complete the said period of 10 years of service and on such appointment they shall be put in the time-scale of pay applicable to the lowest grade in the Government; (3) daily-wage / muster-roll workers, whether skilled or unskilled who have not completed 10 years of -: 4 :- service with a minimum of 240 days in a calendar year on 31.12.1993, shall be paid daily wages at the rates prescribed by the Government of Himachal Pradesh from time to time for daily-wage employees falling in Class III and Class IV till they are appointed as workcharged employees in accordance with paragraph 2; (4) daily-wage/muster-roll workers shall be regularized in a phased manner on the basis of seniority-cum- suitability including physical fitness. On regularization they shall be put in the minimum of the time-scale payable to the corresponding lowest grade applicable to the Government and would be entitled to all other benefits available to regular government servants of the corresponding grade.” 5. As per the policy framed by the Government, the services of all the daily rated workmen who had completed 10 years uninterrupted services, were to be placed on the work charge establishment. It would be pertinent to mention that the services of a few of the employees were placed on work charge establishment even prior to the judgment in Mool Raj Upadhyaya’s case. The employees after being placed in the work charge establishment were brought on the regular establishment. However, when the employees superannuated from service on attaining the age of superannuation, the benefit of the service rendered by them on daily wages was not given to them. Consequently, the employees filed Original Applications before the erstwhile H. P. State Administrative Tribunal. 6. The learned Tribunal passed three separate types of orders in various cases. In some cases, like the one out of which the present writ petition arises, a direction was given by the learned Tribunal that the employee be regularized from an earlier date so that the employee has ten years of regular service and becomes entitled to grant of pensionary benefits. In some cases, the learned Tribunal directed that the entire service rendered on daily wage service shall be -: 5 :- counted for reckoning the qualifying service. The majority of cases fall in the third category wherein the learned Tribunal relying upon Memorandum No. 2 under Rule 14 of the CCS (Pension) Rules held that the employees were held entitled to the benefit of counting half of the service rendered on daily wage basis and half of their service on daily wage basis was added to their entire service on regular basis to arrive at the qualifying service for the purpose of pension. We had, by our earlier decision, also relied upon the Government of India, Ministry of Finance Office Memorandum dated 14th May, 1968. 7. Before the Apex Court, the stand taken by the State was that the Office Memorandum in question was never adopted by the State of Himachal Pradesh either for the payment of pension or for payment of gratuity. It appears that before the Apex Court, it was stated that this Office Memorandum had never been filed before this Court by any of the parties and was handed over to the Court by the learned counsel for the employees at the time of hearing. 8. There is another category of cases which are being again decided by this judgment. During the pendency of the Special Leave Petition before the Apex Court, various writ petitions were decided by other Benches of this Court wherein the petitions were disposed of, but it was made clear that the parties would abide by the judgment of the Apex Court in appeal arising out of CWP No. 180 of 2001, titled State of H.P. versus Sarab Dayal. Since the rights of the persons in these petitions were also going to be effected, we heard the other writ petitions also. We have also dealt with some writ petitions which have been directly filed in this Court after the decision in Sarab Dayal's case. -: 6 :- 9. At this stage, it would be pertinent to mention that after the case was remanded from the Apex Court, Sarab Dayal died and his legal heirs have been brought on record and thus, the title of the case has changed to State of H.P. versus Ram Lal and others. 10. We are constrained to observe that a senior officer of the rank of Secretary to the Government of Himachal Pradesh filed a totally false affidavit before the Apex Court. In fact, as noted in our earlier judgment also, the learned Tribunal itself had noticed this memorandum and in a large number of cases granted benefit of 50% of the service rendered on daily wages to be counted towards qualifying service for pensionary benefits. In a large number of writ petitions, the State itself had made reference to the Office Memorandum in the main writ petition and had contended that the Office Memorandum applied only to the contingent employees and not to daily waged employees. Reference may be made to the order of the learned Tribunal in OA (D) No. 26 of 2001, titled Kartar Singh versus State of H.P. and others, which reads as follows: “3. This view of the respondents State is not sustainable in view of the provisions laid down in CCS (Pension) Rule 14 which lays down the condition subject to which service qualifying for grant of pensionary benefits. Under these rules, the Govt. of India vide its O.M. No. 12 (1) E.V./68 dated May 14, 1968 has clearly laid down that in pursuance of the recommendation of the Council, it has been decided that half of the service paid from contingency will be allowed to count towards pension at the time of absorption in regular employment in respect of service paid from contingency involving whole time employment. Admittedly, the applicant was being paid daily wages for the full time work and the applicant was not working on part time basis. Thus the applicant has worked for 10 years on daily wage basis and as such his service for pension @ half will come to five years plus five years and three of these rules he is entitled for pension after ten years of qualifying service. The applicant has been retired on superannuation and in accordance with the provisions of CCS (Pension) Rules, as such he is entitled for grant of pension.” -: 7 :- 11. The averments made by the State in CWP No. 1361 of 2002, titled State of H.P. and others versus Kartar Singh, read as follows: “..................... The Hon'ble Tribunal has gravely erred in holding the respondent entitle for counting of ½ of his daily waged service for pensionary benefits by applying the provision of decision No. II of the Govt. of India below rule 14 contained in OM No. E-12(1)E-V/68 dated 14.5.68 whereas the fact is that this provision of rule will clearly show that only that service is countable for pensionary benefits which has been paid from the contingency funds whereas in the present case, the respondent while working on daily wages workers had been paid from the work concerned. Therefore, this provision of rules is not applicable in the present case. ........................” 12. Thus, it is clear that the Office Memorandum was not produced before this Court only at the time of hearing. Be that as it may, now that the matter has been referred back to us, we are considering the question whether the Office Memorandum is indeed applicable or not. The Historical Background: 13. To appreciate this question, it would be relevant to point out that the State of Himachal Pradesh was initially constituted as a Part-C State in the year 1948. However, with effect from 01.07.1963, Himachal Pradesh became a Union Territory within the meaning of the Government of Union Territories Act, 1963. On 1st November, 1966, after the enactment of the Punjab Reorganization Act of 1966, certain hilly areas of the State of Punjab were merged in the Union Territory of Himachal Pradesh. The Union Territory of Himachal Pradesh became a full fledged State w.e.f. 25th January, 1971 in terms of the State of Himachal Pradesh Act, 1970. It is in this context that we have to understand the applicability of the Office Memorandum issued by the Central Government prior to 25th January, 1971. -: 8 :- 14. As noted above, the stand of the State before the Apex Court was that the State of Himachal Pradesh had never adopted the Office Memorandum referred to above. On 14th May, 1968, the State of Himachal Pradesh was a Union Territory governed by the Government of Union Territories Act, 1963. In terms of this Act, especially proviso to Section 58 (2), the tenure, remuneration and terms and conditions of service of any officer could not be altered to his disadvantage without the previous sanction of the Central Government. The Government of Union Territories Act did not entitle the Union Territory to frame its own rules and in case it framed its own rules, it was required to obtain prior approval of the Central Government. In the Union Territories, the Central Rules were applicable. Therefore, on 4th April, 2012, after taking into consideration all these rules, we had directed the Secretary (Finance) to the Government of Himachal Pradesh to file a fresh affidavit stating whether such notifications or memorandums issued by the Central Government were ipso facto applicable or whether the Union Territory followed the practice of issuing notifications making them applicable in the Union Territory. 15. The Principal Secretary (Finance) to the Government of Himachal Pradesh, Shri Shrikant Baldi, has filed an affidavit, relevant portion of which reads as follows: “3. That in this connection it is stated that prior to 1971, the Himachal Pradesh was a Union Territory and the Central Civil Regulations (CSR) as notified by the Govt. of India from time to time were applicable to the employees of the Union Territory including the office memoranda and other notifications issued by the Central Government there under as per para-2 of the Government of India, Ministry of Home Affairs letter No. F.28/59-Him dated 13th July, 1959 (Annexure R-I). Hence, it appears that Notifications and Office Memoranda issued by the Government of India were applicable to Union Territory of Himachal Pradesh.” -: 9 :- Therefore, at this stage, it is not seriously disputed that in 1968 when this Office Memorandum was issued, the same automatically applied in the Union Territory of Himachal Pradesh. 16. As earlier pointed out, the State of Himachal Pradesh was constituted on 25th January, 1971, under the State of Himachal Pradesh Act, 1970. Obviously, the State has the power to make its own rules and, thereafter, the rules of the Centre would not ipso facto be applicable. 17. Having said so, we must make reference to Section 49 of the State of Himachal Pradesh Act, which reads as follows: “49. Continuance of existing las and their adaptation. (1).All laws in force, immediately before the appointed day, in the existing Union territory of Himachal Pradesh shall continue to be in force in the State of Himachal Pradesh until altered, repealed or amended by a competent Legislature or other competent authority. (2).For the purpose of facilitating the application in relation to the State of Himachal Pradesh of any law made before the appointed day, the appropriate Government may, within two years from that day, by order, make such adaptations and modifications of the law, whether by way of repeal or amendment, as may be necessary or expedient, and thereupon every such law shall have effect subject to the adaptations and modifications so made until altered, repealed or amended by a competent Legislature or other competent authority. Explanation. - In this section, the expression “appropriate Government” means, as respects any law relating to a matter enumerated in the Union List in the Seventh Schedule to the Constitution, the Central Government; and as respects any other law, the Government of the State of Himachal Pradesh.” 18. A bare perusal of this Section shows that all laws in force immediately before the appointed day, i.e. 25th January, 1971, would continue to be in force until altered, repealed or amended by the State Legislature. Under Sub-section (2) of Section 49, the State of Himachal Pradesh could make an adaptation and modification of the laws by way -: 10 :- of repeal or amendment in respect of laws which fell within the State list. 19. Here, it would be pertinent to mention that on 20th August, 1971, the H.P. Government issued an Office Memorandum directing the continuance of service rules, regulations and instructions consequent upon Himachal Pradesh becoming a State. In this Office Memorandum, it was stated that the Central Rules would continue to apply. However, there was no specific mention of the Civil Service Regulations or the Pension Chapter thereof. Thereafter, on 1st January, 1972, another Office Memorandum was issued wherein it was stated that the State of Himachal Pradesh had decided in consultation with the Government of India to enforce the Punjab Civil Service Rules in the State of Himachal Pradesh w.e.f. 1st January, 1972. This included the pension chapter of the Civil Service Regulations and the liberalized pension rules. The employees in the State of Himachal Pradesh were held entitled to exercise an option to either retain the existing Central Civil Service Rules or to adopt for the Punjab Civil Service Rules. In case the government servants failed to exercise such option, they would be deemed to have opted for the Punjab Rules. The time for exercising the option was extended from time to time up to 31.03.1973. On 18.01.1973, the State took a totally different decision. It was observed that a majority of State Government employees have not exercised their option for either set of the Rules. It was further directed that the State had decided that the old Rules (Central Rules), as they existed on 31.12.1971, would continue to be in force and would be deemed to be the Rules of the State Government till all the employees had exercised -: 11 :- their option. Finally, on 30.03.1974, the State issued a notification, relevant portion of which reads as follows: “In exercise of the powers conferred by the proviso to Article 309 of the Constitution of India and all other powers enabling him in this behalf, the governor, Himachal Pradesh, is pleased to revoke the earlier decision regarding enforcement of Punjab Civil Service Rules, Volumes I, II and III with effect from 1-1-1972, from the same date. 2. The Governor is also pleased to order that the Central Civil Service Rules, namely: 1. Fundamental Rules and Supplementary Rules; 2. Pension Chapter of the Civil Service Regulations; 3. Liberalized Pension Rules/Central Civil Services (Pension) Rules, 1972; 4. Family Pension Scheme for Central Government employees, 1964; 5. General Provident Fund (Central Services) Rules, 1960; 6. Civil Pension Commutation Rules; 7. Contributory Provident Fund (India) Rules, 1960; 8. Study Leave Rules, 1962; 9. Revised Leave Rules, 1933/Central Civil Services (Leave) Rules, 1972; 10. Central Civil Services (Temporary Service) Rules, 1965; 11. Central Civil Services (Classification, Control and Appeal) Rules, 1965; 12. Central Civil Services (Conduct) Rules, 1964; and 13. Leave Travel Concession Scheme of the Central Government; will be deemed to have been in force in Himachal Pradesh during this period, and will be deemed to be State Rules in respect of the various matters covered by them. These Rules will remain applicable to Himachal Pradesh Govt. employees. 3. The Governor, Himachal Pradesh, is also pleased to decide that the Government servants who have -: 12 :- already opted for the Punjab Civil Service Rules in pursuance of the earlier decision of the Govt. will be entitled to exercise their options afresh, for being governed by the Central Civil Service Rules listed above. The option will be exercisable within a period of 3 months from the date of issue of this order. Those Govt. servants who have already exercised their options for the Punjab Civil Service Rules in pursuance of earlier decision and desire to be governed by such rules shall be governed by those rules if they do not exercise their options as aforesaid. The cases of employees who have retired or whose cases have been decided before the date of issue of this notification shall not be re-opened and will be deemed to be governed in accordance with the Punjab or Central Civil Service Rules as the case may be for which they have given their options.” 20. At this stage, it would be pertinent to mention that the CCS (Pension) Rules were framed by the Central Government in the year 1972 and enforced w.e.f. 1st June, 1972. However, prior to the issuance of the letter dated 30.03.1974, there is no material on record to show that the State of Himachal Pradesh had made these rules applicable in the State. 21. From the aforesaid facts, it is apparent that the Government of India Notification dated 14th May, 1968 decision under Rule 14 was ipso facto applicable in the Union Territory of Himachal Pradesh. There was no requirement that the State had to pass an order adopting the said notification. The Memorandum automatically applied in the Union Territory. In terms of Section 49 of of the State of Himachal Pradesh Act, referred to above, these rules continued to be in force and, therefore, the Office Memorandum also continued to apply. 22. We are of the considered view that there can be no dispute that the Office Memorandum in question was applicable in the State of Himachal Pradesh till 1st June, 1972 when the Central Civil Service (Pension) Rules were enforced or at best till 30th March, 1974, when the notification, quoted hereinabove, was issued. -: 13 :- 23. The main issue is whether after the State of Himachal Pradesh adopted the Central Civil Service (Pension) Rules, 1972, was the Office Memorandum still applicable or not? The Legal Provisions: 24. To appreciate the aforesaid submissions, it would be relevant to refer to the various legal provisions of the Pension Rules. Rule 2 of the Pension Rules provides that the rules shall apply to all government servants, but shall not apply to : “(a) x x x x x x x x x x x x x x x x x x x x (b) persons in casual and daily-rated employment; (c) persons paid from contingencies.” 25. Relevant portion of Rule 13 reads as follows:- “13. Commencement of qualifying service Subject to the provisions of these rules, qualifying service of a Government servant shall commence from the date he takes charge of the post to which he is first appointed either substantively or in an officiating or temporary capacity: Provided that officiating or temporary service is followed without interruption by substantive appointment in the same or another service or post.” 26. Rule 14 reads thus: “14. Conditions subject to which service qualifies (1) The service of a Government servant shall not qualify unless his duties and pay are regulated by the Government, or under conditions determined by the Government. (2) For the purposes of sub-rule (1), the expression “Service” means service under the Government and paid by that Government from the Consolidated Fund of India or a Local Fund administered by that Government but does not include service in a non-pensionable establishment unless such service is treated as qualifying service by that