IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD THURSDAY, THE TENTH DAY OF FEBRUARY TWO THOUSAND AND FIVE PRESENT THE HON'BLE MR JUSTICE G. BIKSHAPATHY and THE HON'BLE MR JUSTICE P.S.NARAYANA WRIT APPEAL NO : 1900 of 2004 (Writ Appeal under Clause 15 of the Letters Patent against the Order dated 17/09/2004 in WP NO : 5151 OF 1997 on the file of the High Court.) Between: B. Narsing Rao, S/o Late B. Rangaiah, R/o Flat No. 103, Vishnu Sadan Apartments, 76, Shanthinagar, Hyderabad. ..... APPELLANT AND 1 A.P.Khadi & Village Industries board, rep. by the Chief Executive Officer, Masab Tank, Hyderabad - 500 028. 2 State of Andhra Pradesh, rep. by the Secretary to Government, Small Scale Industries & Khadi & Village Industries Road, A.P. Secretariat, Hyderabad. .....RESPONDENTS Counsel for the Appellant:MR.VL.N.G.KMURTHY Counsel for the Respondent No.1 : Ms.Prasoona, Standing Counsel Counsel for the Respondent No.2 : GP for Services-I The Court made the following : ORDER: (per P.S.Narayana.,J) Heard the Counsel on record at length at the stage of admission of this Writ Appeal. This Writ Appeal is preferred by the unsuccessful writ petitioner Sri B.Narsing Rao, aggrieved by the order dated 17-9-2004 made in W.P.No.5151/97. Sri V.L.N.G.K. Murthy, the learned Counsel representing the appellant/writ petitioner had taken this Court through the respective pleadings of the parties and also the order which had been challenged in the present Writ Appeal and had pointed out that the 1st respondent resolved on 2-11-1994 and 2-3-1995 to request the Government to permit A.P. Khadi and Village Industries Board, hereinafter in short referred to as “Board” for the purpose of convenience, to pay regular scales to the in-charge Functional Managers and the Government did not respond. The Counsel would maintain that in view of the fact that the Government had been shown as the 2nd respondent, separate counter affidavit should have been filed in view of the divergent stands taken by the respective parties. The learned Counsel pointed out that two counter affidavits substantially of the same nature were filed only by the Chief Executive Officer of the 1st respondent and hence there are no proper pleadings at all denying the allegations made in the affidavit filed in support of the Writ Petition. The Counsel also pointed out that the Chief Executive Officer is only an authority to implement the resolution of the Board. The learned Counsel also pointed out that the stand taken that as in-charge Functional Manager the appellant/writ petitioner was not discharging any additional duties is not a sustainable stand and the same is factually incorrect too. The Counsel pointed out that the resolutions passed by the Board requesting the Government to accord permission to fill up the vacancies of Functional Managers on in-charge basis would go to show that the appellant/writ petitioner is entitled to the said scales during the period in which he worked as in-charge Functional Manager. The Counsel also pointed out that the very fact that the Board requested the Government to permit payment of regular scales of pay itself would go to show that the appellant/writ petitioner was discharging the duties and responsibilities of a Functional Manager. The learned Counsel made certain submissions in elaboration relating to the principle of equal pay for equal work and also had pointed out to the relevant portions of the order which had been questioned in the present Writ Appeal. Per contra, the learned Government Pleader for Services-I, Sri K.Janakiram Reddy and Ms.Prasoona had taken this Court through the order made by the learned Single Judge and also had pointed out to the A.P. Khadi and Village Industries Board Employees (Recruitment and Service Conditions) Regulations, G.O.Ms.No.26, Industries & Commerce, dated 5-2-1996 which are hereinafter referred to as “Regulations” in short, made in exercise of the powers under Section 29 of the A.P. Khadi & Village Industries Board Act, 1958 (Act 4 of 1959) in short referred to as “Act” for the purpose of convenience, and had pointed out that these Regulations came into force subsequent to the retirement of the appellant/writ petitioner. The Counsel representing the respondents also had taken this Court through Sections 10, 14 and 29 of the Act and the relevant Regulations and had pointed out that in the light of the findings recorded by the learned Judge that the appellant/writ petitioner had not discharged any additional duties, responsibilities or functions and inasmuch as he was only an in-charge Functional Manager at the relevant time, and also in view of G.O.Ms.No.141, dated 6-3-1981, it cannot be said that the appellant/writ petitioner is entitled to any additional scale in view of the fact that he had functioned as in- charge Functional Manager for some time. The learned Counsel also had pointed out to the additional counter affidavit and also the counter affidavit where substantially the same stand had been taken by the Chief Executive Officer. The appellant/writ petitioner filed W.P.No.5151/97 praying for a writ, order or direction one in the nature of mandamus directing respondents to pay arrears of salary as per scale of pay attached to Functional Managers, Grade-II, from the date of his taking charge as Functional Manager and all consequential benefits with regard to leave salary, pension and gratuity, etc., and pass such other suitable orders. The learned Judge by order dated 17-9-12004 after considering the respective pleadings of the parties ultimately arrived at the conclusion that there are no merits in the Writ Petition and accordingly dismissed the same without costs. Aggrieved by the same, the present Writ Petition had been filed. The learned Single Judge had recorded certain findings at para-9 as hereunder : “It is a fact that the Government sanctioned eleven additional posts of Functional Managers. In fact, the affidavit of the petitioner itself shows that these Additional posts are Development Officers to work as Functional Managers, may be with higher scale of pay. But, as long as the petitioner was not regularly promoted, he cannot claim the scale attached to the said post. Further, it is the contention of the respondents that the petitioner was not entrusted with any additional duties and responsibilities even after he was given in-charge of the Functional Manager post and he was discharging the same functions, which he was discharging as Development Officer. When once there is no change in the duties and responsibilities which the petitioner was discharging prior to the in-charge arrangement, he cannot contract any benefit. In fact, the matter came up for hearing on earlier occasion and it was adjourned after hearing in order to ascertain whether the benefit of higher scale of pay was extended with reference to the other similarly placed persons, who are subsequently regularly promoted after framing of the Rules. On ascertainment, the learned Counsel for the petitioner reported that the scale of pay was not extended to those persons for the period for which they were holding the posts as in-charges. Therefore, there is no merit in the contention of the petitioner that he was discriminated. No doubt, some other persons, who were regularly promoted as Functional Managers might have been paid the scale of pay attached to those posts, but, the petitioner and others during the interregnum petitioner till the Rules are approved by the Government, were asked to hold the posts as In-charges. None of them were paid with the scale of pay attached to the said posts for that period. Therefore, there is no merit in the contention of the petitioner that he was discriminated when such benefit of higher scale of pay was not extended to any other person, who also held the post by way of in-charge. The petitioner was treated on par with others. Merely, because the petitioner retired immediately after the approval of the Rules and he could not get the benefit of regular promotion because of his retirement, he cannot claim that he was discriminated”. The Board was constituted under the Act. Section 29 of the Act dealing with Power to make Regulations reads as hereunder : 1 . The Board may, with the previous sanction of the Government, by notification, make regulations, not inconsistent with this Act and the rules made thereunder, for enabling the Board to discharge its functions under this Act. 2 . In particular and without prejudice to the generality of the foregoing power, such regulations may provide for all or any of the following matters, namely:- a. the terms and conditions of appointment and service and the scales of pay of the Chief Executive Officer and other Officers and servants of the Board, including payment of traveling and daily allowance in respect of journeys undertaken by such officers and servants for the purpose of this Act; b. the time and place of meetings of the Board, the procedure to be followed in regard to transaction of business at such meetings and the quorum necessary for the transaction of such business as at a meeting; c. the delegation of powers and duties of the Board to the standing finance committee, the Chief Executive Officer or any employee of the Board. d. the maintenance of minutes of meetings of the Board and the transmission of copies thereof to the Government. e. the persons by whom and the manner in which payment, deposits and investments may be made on behalf of the Board. f. the custody or moneys required for the current expenditure of the Board and the investment of moneys not so required. g. the form in which and the scale of fees to be revised for granting the certificates of genuinness of khadi and Products of Village Industries may be granted by the Board and the procedure for the grant of such certificates. h. the Government may, by notification, modify or rescind any regulation made and thereupon the regulation shall stand modified accordingly or shall cease to have effect, as the case may be. SPECIAL PROVISION: Notwithstanding anything in the Principal Act the members of the Board holding offices at the commencement of this Act shall continue to hold their offices until new members are appointed under the provisions of Section 3 of the Principal Act, as amended by this Act, and enter upon their offices. Section 10 dealing with Officers and servants of the Board reads as hereunder : 1. The Government shall appoint the Chief Executive Officer, the Financial Adviser and Chief Accounts Officer and Chief Executive Officer and other persons to fill the posts carrying equivalent scales of pay to those aforesaid either on deputation or otherwise. 2. The Chief Executive Officer shall be the principal Administrative Officer of the Board and shall exercise such powers and discharge such duties as may be prescribed or as may from time to time, be delegated to him by the Board or by the Chairman and shall be directly responsible for the due fulfillment of the purposes of this Act. 3. Subject to such rules as may be made by the Government in this behalf, the Board may with the prior sanction of the Government, appoint such other officers and servants as it may consider necessary for the efficient performance of its functions. All the officers and servants of the Board shall be subordinate to the Chief Executive Officer. Section 14 of the Act dealing with Power of Government to give directions which may be relevant for the present purpose reads as hereunder: “In the exercise of their powers and in discharge of their functions under this Act, the Board and the Chief Executive Officer shall be bound by such directions as the Government may give to them. Provided that any directions given by the Government to the Chief Executive Officer immediately before the commencement of Andhra Pradesh Khadi and Village Industries Board (Amendment) Act 1981, shall be deemed to have been given under this Section”. The post of Functional Manager is not one of the posts created under the Regulations initially and by G.O.Ms.No.38, Industries & Commerce dated 8-1-1975, a Committee headed by Sri S.R. Ram Murthy was constituted to consider the reorganization of the working of the Board and also to suggest various other measures. The recommendations were examined by a sub-committee of the Government at the Secretariat level and after examining the recommendations made by Sri S.R. Ram Murthy Committee, keeping in view the recommendations made by the sub-committee, the Government in G.O.Ms.No.141, dated 6-3-1981 accepted the recommendations aforesaid and the relevant portion of G.O.Ms.No.141, dated 6-3-1981 reads as hereunder : “In the G.O. first read above, the Government constituted a Committee with Sri S.R. Rama Murthy, I.A.S., the then Secretary to Government, Industries and Commerce Department as Chairman to consider the reorganization of the working of the Andhra Pradesh Khadi and Village Industries Board, Hyderabad and also to suggest various measures necessary to improve its functioning and also to enable it to provide better employment opportunities to the Rural Artisans. The Committee after visiting Tamil Nadu and Maharashtra States and studying the working of the Khadi Boards of these States submitted a report to the Government containing in all 40 recommendations. These recommendations were examined by a Sub-Committee consisting of the then Secretary to Government, Industries and Commerce Department, Joint Secretary to Government, Finance and Planning Department and the Chief Executive Officer, Andhra Pradesh Khadi & Village Industries Board etc. The Sub- Committee had submitted its recommendations keeping in view the recommendations made by the earlier main Committee. 2. The Government have examined the recommendations made by Sri S.R. Rama Murthy Committee and keeping in view the recommendations made by the Sub-Committee have decided to accept them as detailed in the annexure to this order. The Chief Executive Officer, Andhra Pradesh Khadi & Village Industries Board is requested to implement the orders of the Government passed on these recommendations expeditiously. 3. The Government felt that there was definite increase in the developmental activities of the Board, which warrants strengthening of the staff of this organization both at Headquarters and at the field level. Keeping in view the recommendation made by Sri S.R. Rama Murthy Committee and the Sub-Committee referred to above, and the role to be played by the Andhra Pradesh Khadi & Village Industries Board in the rural reconstruction the Government accord sanction to the creation of the following additional posts for the Andhra Pradesh Khadi & Village Industries Board with the scales of pay indicated against each for a period of one year in the first instance from the date of filling up of the posts subject to the conditions laid down thereunder: ---------------------------------------------------------------------------------------- S.No. Name of the post Scale of pay No. of posts Sanctioned ---------------------------------------------------------------------------------------- 1. Development Officer 1050-40-12-50 (to work as Functional 1600-12-50-50-1800 11 Manager) 2. Accountants 700-30-1060-35-1200 22 3. U.D. Clerks 530-15-590-20-800 15 4. Typists 425-10-455-15-650 21 5. Attenders 290-5-345-10-425 17 6. Senior Inspectors 500-15-620-20-800 2 7. Junior Inspectors 450-15-660-20-800 22 8. Tahsildar 800-35-1010-40-1450 1 9. Revenue Inspectors 425-10-455-15-650 3 10.Typists 425-10-455-15-650 3 ---------------------------------------------------------------------------------------- Taking into consideration the developmental activities of the Board for the purpose of strengthening the staff, additional posts were created by the proceedings dated 28-8-1989 of the Board and in para-2 I(1)(a) it was specified relating to Functional Managers, Grades I and II as hereunder : “As suggested by the Government, the qualifications prescribed for the post of Dy.Director/Asst.Director of Industries have been suitably modified and adopted. Since Functional Manager Grade-I is the highest post available for Board’s employees, any person who will be directly recruited to this post will have no further avenues of promotions and consequently his pay will become stagnate and he will become frustrated in course of time. Hence it has been considered that provision for direct recruitment to this post need not be incorporated and the post may be filled up by promotion only. For the post of Functional Manager Grade-II although provision has been made for direct recruitment, no quota for direct recruitment has been fixed since the number of posts in the Functional Manager Grade-II will be only few, the provision for direct recruitment made in the Regulations will be availed only when suitable qualified persons from the feeder categories are not available. Hence no direct recruitment quota for this post also has been made.” The resolution of the Board dated 25-1-1984 and also the letter of the Government dated 17-3-1988 had been referred to. It was specified by the Government in letter No.7551/87-2 on 17-3-1988 not to fill up the posts of Functional Managers in future vacancies till the Regulations for the posts of Functional Managers were finalized. Several other details relating to vacancies also had been narrated. The Board had submitted a draft resolution on 28-8-1989 to the Government which were pending finalisation with the Government and which came into force after the retirement of the appellant/writ petitioner. In the said circumstances, the Board requested the Government to permit the Board to fill up the posts of Functional Managers, Grade-II by making in-charge arrangements from among Senior Graduate Development Officers and the Government by proceedings dated 16-10-1992 after examining the request carefully and to avoid frustration among employees who did not get promotions since 5 or 6 years and also to have efficient Functional Managers Grade-II at the District Level permitted the Board to fill up the posts of Functional Managers Grade-II on in-charge basis only by selecting the senior graduate Development Officers and also to promote the employees as per cycle of promotion following the existing rules and regulations. The Chief Executive Officer in-charge of the Board by proceedings No.Entt/g1/65/92-6, dated 18-1-1993 ordered various promotions, postings and transfers pursuant to Board Resolution dated 2-1-1993 and by virtue of the same, the appellant/writ petitioner was permitted to work as in-charge Functional Manager, Nellore District. It is stated that the appellant/writ petitioner is a double graduate (B.Com., LL.B.), a double Diploma Holder having passed Diploma in Banking and Diploma in French and passed Accounts Tests Part-I and II and stood senior in the cadre of Development Officers having practical experience of about 30 years in the field of Khadi and Village industries. As per the order aforesaid, the appellant/writ petitioner had taken charge as in-charge Functional Manager and worked in the capacity till retirement on 31- 1-1996. The series of correspondence on which reliance was placed would go to show that the Board had been making a very serious attempt in this regard. The proceedings of the Chief Executive Officer of the Board dated 16-3-1995 and 14-9-1995 may be usefully referred to in this regard. The proceedings in D.O.Lr.No.Estt/G1/86/80, dated 16-3-1995 reads as hereunder : “I submit that the Government was requested in the reference 4th cited to promote the Senior Graduate Development Officers of the Board as Functional Managers in the applicable pay scale of Rs.3640/- to Rs.7580/-. I may also mention that the Government was pleased to sanction as far back as in 1981, 11 posts of Functional Managers vide G.O.Ms.No.141, dated 16-10-1981 in the pay of Rs.1,050/- - Rs.1600/-. This scale has been revised by the Government from time to time and at present a scale of pay Rs.3,640/- - Rs.7,580/- is applicable to the post of Functional Manager. All the 11 posts of Functional Managers were filled up by the Board by giving promotion to Senior Graduate Development Officers. Out of the 11 Functional Managers, 7 Functional Managers have already retired from service and a few more are in line. It is, therefore, very necessary to fill up all the vacant posts of Functional Managers by qualified Sr.Graduate Development Officers to provide them job satisfaction. In the meantime the Board framed rules for all the categories of staff including the Functional Managers and Development Officers and sent to the Government for approval. These rules are pending approval from the Government for the last 6 years. The Government in their Lr.No.501/KVT/92-1, dated 16-10-1992 directed that promotions be given to staff upto the cadre of Development Officers and for the posts of the Functional Managers, which is the next immediate cadre, need be done with in-charge arrangements without giving the benefit of the scale of pay attached. As most of the Development Officers are on the verge of retirement any action to give promotion to the Senior Graduate Development Officers is a positive decision without involving any additional expenditure to the Board. There will be also no further additional commitment of expenditure to the Government on account of these promotions as these posts were sanctioned in 1981 itself. I also submit that extension of the facility of promotion to the senior Graduate Development Officers as was given to the Feeder Category of the Development Officers by the Government will facilitate better motivation and functional efficiency amongst the staff for achieving the tasks given to the Board. The Board, therefore, in its meeting held on 2-3-1995 resolved to request the Government for extension of this benefit to the Senior Graduate Development Officers as a beneficial measures to enhance the efficiency of the staff. (copy of the resolution is enclosed). I request the Government to issue appropriate early orders in the matter.” The proceedings in D.O.Letter No.Estt/G1/65/92, dated 14-9-1995 of the Chief Executive Officer of Board reads as hereunder : “May I invite your attention to the correspondence cited (copy enclosed). The Government in their letter No.501/KVI/92-1, dated 16-10-1992 was pleased to permit the Board to fill up the post of Functional Manager on Incharge basis by selecting the graduate senior Development Officers basis to promote the employees as per cycle of promotion following the existing Rules & Regulations. Accordingly, the Board has filled up the posts by promoting the employees as per the existing rules, while this is so the Senior Development Officers were posted to work as Functional Manager Incharge only. The Board has already sent the revised Recruitment Regulations to the Government in the year 1989 as per the directions of the Government vide this office Letter No.Estt/86/G1/80 dated 28-8-1989. The approval of the Government is awaited since then. The Functional Manager Incharge have been represented frequently to extend the pay scale of the post of Functional Manager to them. It may be mentioned that these Incharge Functional Managers have been functioning for the last three years in their own pay scale of Development Officers. The Incharge arrangements were made duly going through the normal procedure for regular promotions i.e., placing their cases before appointment and Services Committee and on the recommendations of the Appointment & Services Committee appointments of these Incharge Functional Managers were made. Many of these Incharge Functional Managers will be retiring very shortly. If these Incharge arrangements are not converted into at least adhoc appointments giving pay scales of Functional Manager, many Functional Managers will retire without getting even the retirement benefits. It is, therefore, requested that the service regulations already sent to the Government may kindly be approved so that they can be published. In the meantime, in order to avoid hardships to the Incharge Functional Managers, their Incharge arrangements may be permitted to be converted into at least adhoc appointment as Functional Managers Grade-II duly giving pay scale of Functional Manager Grade-II pending finalisation of the Service Regulations.” In this context strong reliance also was placed on Resolution shown as Item No.10 i.e., “Any other item with the permission of Chair” in the minutes of the Board meeting held on 2-11-1994 of the Board and the said Resolution reads as hereunder : “The Vice-Chairman has raised the subject pertaining to non- providing of a scale of pay of Functional Manager to the Officers who are already working as Functional Manager I/c.The Chief Executive Officer has explained that as per G.O. they were not permitted to appoint as regular Functional Managers the pay scales have not been permitted to be drawn. It was, therefore, resolved to address the Government to permit the Board to pay them in the pay scale of Functional Managers from the date of taking charge irrespective of the rules implemented by the State Government. Sri Karunakaran, Member and the Vice-Chairman had raised the subject of recovery