UNION OF INDIA

GURBA.KSH SINGH & ANOTIIER

February 5, 1975

[K. K. MATHEW, P. N. BHAGWATI,

AND N. L. UNTWALIA, JJ]

Displaced Pcrsoris (.Compe11sa1ion a11d Rlwbilitai/on) A.ct, 1954 and Ge11ernl Clause& Act (IO of 1891) S. 16, and Const/1111/on of India 1950, Art. 310(1)- l'ost of Asstt. Commissioner tmder 195-4 Act-Whether services of lnwmlm1: cordd b~ tmn/11atd by State Goi•ernmmt.

Under s. 3( l) of lhe Di11placed Persons (Compensation and Rehabilitation) Act, 195,, tho post of Assistant. Settlement Commissioner i~ a post und,1:r th~

Union of India to which the appointment is to be made by the Central G1ivern nwnt.

In exercise of this power the Central Government appointed the first rc1; ponJcnt ro the po3t by order dated 3rd September, 1955. Since the post was emailed

by tho President of India only for a period of 6 months the santion for lh1~ po•I came to llll end on 29th February 1956. The first respondent, however, continued to function on the basis of sanction to il~ continuance given by th~ Siak Government. Thereafter, by an order dated 17th April, 1956, the State Government purported to terminate the services of the first respondent with immediate effect. After some correspondence, on February 18, 1959, the Central Government issued a memorandum that on the expiry of the period of one month given in the earlier memorandum of January 18, 1959 his services stood krmcnated with effect from February 18, 1959. The respondent filed a suit against the Central and the State Governmeal' contending that both their orders terminating bis serviceR were illegal and invalid and for recovery of arrears o[ salary and allowances. The trial con:t dismissed the suit. Iu appeal to the High Court, he contended that his se.n•ice was validly terminated only by the memorandum dated !8th January 1959, is:<ued by the Central Government, am! th .. 1 he was therefore entitled to arrears of salary and allowances upto 18th Fcbn1 ary, 1959. This contention was accepted by the High Court.

Dismissing the appeal to this Court.

HELD : The Central Government alone could terminate the appointment both as the appointing authority us :1lso under Art. 310( I) of the Constitution.

[451 HJ

(a) Tho Stat'~ Government had no power to make the appointment t1.l Ilic F ria&t unles.q such power wa~ conferred upon it by virtue of a direction given by the Central Government under s. 34, but there W!!S no such direction in the present case. The Central Government ool:i empowered the State Government to nominat" the persoti to be npoointed 'to th~ post bat the appoinlme1:t of th~ rierson so nomi.nated could only be made and, in fact, was made by th~ C(ntn1l Government by its order dated 3rd fieptcmber, 195S. [450 D•Fl

(b) Tho State Government's order date<! !st December, 1955 purporting to appoint tho first t'C!IPOndcnt was roely a forn1al nppolntmeut letter pursuunit to (; tho suggestion of the Central Government.

It had no legal consequence r.incc hy that ti.roe the first rpondent was already appointed to the post. (450 Gl

(c) Moreover. the post was sanctioned by the President of India and cm1tecl

h) the Central Government and the whole of the expenditure in connection with it was to be borne out of funds allocated by the Central Government.

Th~ State Government's order pnrporting to acoord sanction to the creation of ; he post was only for the purpose of reg'Jfarising its mm accounlq procednre in di, bursing the amount allocated by the C.cntral Government. [450 H-451 BJ H

(d) When the questiocr regarding the issne of pay slip in favour of the li.fst respondent for the pc•riod subsequent to 29th February, 195fi, arose, th~ ;\ccountant General of !~ State pointed out that the sanction to the continuance

?f the post aiven by the State Government was. meaningless and ineffective and ii could not be acted upon until receipt ot sanction to its continuancy from the Central Government. [451 C-D)

Therefore, the Central Government, which was the appointing authority could terminate the service of the first respondent under s. 16 General Clause~ Act, 1897. [451 G] - ' '

(e) There is no provision under which the State Government could hve the power to determine the appointment as Assistant Settlement Commlss10ner made by the Central Government under s. 3. The person appointed would hold the post durina the pleasure of the President and only the Central Government would lie entitled to terminate it. [451 GHJ

The High Court was, therefore, ril!ht in taking the view that the order of tho State Government dated April 17, 1956, was ineffectual and invalid and that the service of the first respondent was validly terminated only on Feoruary 18, 1959, by the Central Government. [452 A-BJ

S. R. Tiwari v. Dr. Board, .-4:ra [1964] 3 S.C.R. 55, referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 11 of 1968.

From the judgment and order dated the January 16, 1967 of the Punjab & Haryana Hih Court in Civil Regular Firsi Appeal No. 324 of 1961.

R. N. Sachthry, for the appellant.

Harbans Singh, !or respondent No. 1.

The JudiltJ.ent of the Court was delivered by

BHAGWATI, J.

TLe questio~ that arises for determination in this appeal is as to which authority was entitled to terminate the service of the first respondent-tho Central Government or the Government of Punjab.

The firs• respondent was, prior to his appointment as an Assistant Settlement Commissioner, holdin1 the post of Deputy Registrar, Land Record in a temporary capacity under the State ot Punjab. The first respondent had no lien on any permanent post and was a _temporary servant of tho Punjab Government. On the coming into force of the Displaced Persons (Compensation and Rehabilitation) Act, 1954

(hereiniaft.er refeired to as the Act) it became necessary to appoint officers and staff in tho Stato of Punjab for the purpose of carrying out various functions and duties under the Act. One of such fl!nctions

and duties was grant of proprietory rights to quasi permanent allottees of agricultural land ar4d houses in the rural areas in the State of

Punjab. The President of India, therefore, sanctioned the creation of certain posts-which included two .posts of Assistant Dirctor to be designated as Assistant Settlement C'.onunissioner under the Actfor a period of six months from the date of promulgation of the Rules framed under the Act "for the work connected with the conversion of quasi-permanent allotee,, into permanent ones" and the Central Government, by its Jetter dated 18th April, 1955 conveyed this sanction to the State Go•ernment. This letter contained a direction that tho O'fer-all oxpenditurc in connection with these posts

14-423SCI\75

sanctioned by the President of India should not exceed Rs. 6.50 lacs and it would be shared between the Central Government and the State Government in the ratio of 50-50. It was also suggested in this letter that the names of officers appointed as Assistant Directors and Naib Tehsildars should be intimated in due course for issue of necessary notifications under the provisionf of the Act. The State Government, by its letter dated 3rd July, 1955, pointed out to the Central Goverament that having regard to the large magnitude of the work involved, it would be necessary to have two whole-time officers exclusively devoted to this work and suggested that two posts should, therefore, be permitted to be created, one of a Deputy Secretary "who would have administrative control over all the mana,1iing officers and settlement officers and the staff appointed in connc.o::tion with the conferment of permanent rights" and the other of an A1~is

tant Settlement Commissioner. It appears that the Central Gov1:r .... ment in the mean1ime reconsidered its earlier decision that the expenditure on the posts in connection with the grant of proprietory rights to quasi-permanent allottees should be borne 50-50 between the Central Government and the S•ate Government and by 'ts letter dated 20th July, 1955 intimated to the State Government that the C'.-enfral Government would bear the entire expenditure on the staff appointed to these pots on condition that "the staff in question will be engaged for a period of six months only". The Central Gove:rnment thereafter, by its fotter dated 23rd July, 1955 conveyed the sanction of the President of India to the creation of one post of Additional Settlement Commissioner and one post of Assistant Settlement C{llllimissioner "for a period of six months for the work connected \vith

the conversion of quasi-permanent allotments into permanent ones on the scale of pay noted against each plus usual allowances admissible to the State Government employees of their status". We are corn-· cerned in this appeal with the J'OSt of Assistan't Set'lement Commissioner sanctioned by the President of . India as mentioned in this letter dated 23rd July, 1955.

Though the order of appointment of the first respondent to the post of Assistant Settlement Commissioner was not yet passed, the first respondent relinquished charge of his post of Deputy Registrar, Land Record and assumed charge of the post of Assistant Settlement Commissioner on the forenoon of 1st August, 1955 as appears from the certificate dated 1st August, 1955 (E'x. D-1). The Central Government thereafter, in exercise of the powers conferred by sub section ( 1) of section 3 of the Act, issued a notification dated 3rd September, 1955 appointin, g the first respondent to the post of Assist3nt Settlement Commissioner "for the purpose of performing the

functions assigned to an Assistant Settlement Commissio•er by or under the Act". The Ontral Government also issued another notification of the same date in exercise of the powers conferred by sub-section ( 1) of sedtion 3 of the Act directing inter alia that the first respon• dent: who has been a'ppoint~. under that sub-section to the post of

Ass1stan;. Settlement Comm1ss1oner, shall perform the functions assigned to an Assimnt Settlement Commissioner by or under the

Act "only in respect of agricultural land situated in the State of Punjab in rural area as defined in clause (f) of rule 2 of the Displaced Persons (Compensation and Rehabilitation) Rules, 1955, including houses, if any, in any such area allotted along with such lands". A copy of the notification dated 3rd September, 1955 appointing the first respondent to the post of Assistant Settlement Commissiornr was forwarded by the Central Government to the State Government along with its letter dated 3/7th September, 1955. The Central Government also addressed a let'ter dated 21st September 1955 !0 the State Government pointing out that since the 1st Respondent was to work as a whole time Assistant Settlement Commissioner, it was presumed that he had relinquished charge of his previous office and adding that the first respondent having already been notified as an Assistant settlement Commissioner and a copy of the relevant notification having bee~ forwarded to the State Government along with the let'Ler dated 3rd/7th September, 1955, "formal appointment letter" may be issued by the State Government and copies endorsed to this Ministry". ·

It appears that 'the Governor of Punjab also, by an order dated 30th November, 1955, sanctioned the creation of certain posts which included one post of Assistant Settlement Commissioner "for

ix mon'ths. connected with the conferment of permanent ownership rights OI'i quasi-permanent al!ottees of the land in the Rehabilitation Department with effect from forenoon of 1st August, 1955". Thernafter, on 1st December, 11155 the Governor of Punjab issued an order appointing the first respondent as Assistant Settlement Commissioner "against the temporary post created in the Rehabilitation Department for the work connected with the conferment of permanent ownership rights on the quasi-permanent allottees of evacuee lands for ; i period of six months with effect from the 1st of August, 1955".

The State Government, by its letter dated 15th December, 1955 intimated to the Central Government that the first respondent, appointed as Assistant Settlement Commissioner, had been given the scale of pay as sanctioned by the Central Government and confirmed that the first respondent was working as a whole itime Assistant Settle• ment Commissioner.

The first respondent accordingly held the post of Assistant Settle ment Commissioner and carried out the functions and duties attoached to that post.

Since the post of Assistant Settlement Commissioner was created by the President of India only for a period of six months and the first respondent was appointed to that post by the Central ·

Government on September 1955, the sanction for the post obviously came to an end on 20th February, 1956.

The first respondent, however, confamed to function as Assist•ant Settlement Commissioner on the basis of sanction to the continuance of the post given by the Government of Punjab.

The Accountant General, Punjab took the view that the post of Assisstant Settlement Commissioner held by the first respondeat having been created by the Central Government, the sanction to the continuance of the post received from the Punjab

Government was futile and could not be acted upon until receipt or

448 SUPREME CfOURT REPORTS

(1975] 3 S.C.R.

sanction from the Central Govern_roent, and by his letter dated 21st April, 1956, poi'flted out to the State Government that the pay slip in favour of the first respondent for the period from 18th January, 1956 to 29th February, 1956 was being issued, but so far as the) pay for the subsequent period upto 30th April, 1956 was concerned, "the

sanction to the. continuance of the post of Assistant Settlement Commissioner upto 30.4.1956 which has bee~ received in this office from the Assistant Secretary to the Govemmen~ of Punjab, Finance De:part ment will be acted upon on receipt of "Sanction" from the Government of India as the post was created by them" and an attested copy of the same, if received, "may please be sent to enable this office to issue a pay slip to the officer upto 30-4-1956". In the meantime, however, the Government of Punj•ab, by an order dated 17th April, 1956, purported to termi,1ate the service of the first respondent with immediate effect and direded that the first respondent would be paid one month's salary in lieu of notice..

The first respondent thereafter made several representations to the Central Government as well as to the State Government contending inta alia that he Vv'JS an employee 0i. the Central Government and the State Government was not entitled to terminate his service and the order of termination of his service passed by the State Government was, therefore, invalid. There was no res ponse to these representations for a long time.

It was Jnly on 10th January, 1959 that the Central Government issued a memorandum informing the first respondent that "he was not a servant of the Gov~:rtl

ment of India and that, eTen in case he considered himself to be such, this memorandum should be treated as a notice terminating his

service~ "without prejudice to the contention that ho was not the Government of India's servant." The Cent.ml Government also issued another memorandum on 18th February, 1959 intimating to the first respondent that on the el!piry of the period of one month given. in the earlier memorandum dated 10th January, 1959, his service stood terminated with effect from 18th February 1959.

The first respondent thereupon gave notices to the Central Government as well as the State Government under section 80 of the Code of Civil Procedure and filed a suit ai; ainst the Union of India and the State of Punjab in the Court of th.:: Senior Sub-Judge, Jullundur claiming a declaration that the order of the State Government dated 17th Apr!!.

1956 as also the order of the Central Government dated 10th January, 1959 terminating the services of the first respondent were illegal a.nd invalid ao.id the first respondent continued as an Assistant Settlem1nt Commissioner in the service of the Central Government and praying, for recovery of arrears ol' salary and allowances from 21st April, 1956 being the date on which he was relieved of the office of Assistant Settlement Commissioner. Both the Union of India as well as the State of Punjab resisted the suit.

The commmi defence put forward by them was that the first respondent was a servant of the Government of Punjab and b1ing a te:mporary servant, the Government of Punjab was entitled to terminate his service on giving one month's notice of salary in lieu of notice and his service was, therefore, rightly terminated by the order of the Government of Punjab dated 17th April,

1956. The Trial Court accepted this defence of the Union of India

•.G

and the State of Punjah a'ad dismissed suit of the first respondent with costs.

The first respondent preferred an appeal to the High Court of Punjab and Haryana.

The only contention put forward on behalf of the first respondent at the hearing of the appeal was that the first respondent was servant of the Uaion of India and not of the State of Punjab and the order dated 17th April, 1956 passed by the State of Punjab was, therefore, ineffectual to terminate the service of the first respondent and it was only on 18th February, 1959 that his service was validly terminated by the Central Government by its memorandum dated 10th January, 1959 and he was accordingly entitled to arrears of salary and allowances from 21st April, 1956 to 10th February,

1959. This contention found favour with the High Court and taking the view that the first respondent was a servant of the Union of India oand not of the State of Punjab, the High C'Jurt held that his service was validly terminated only from 10th February, 1959 under the memorandum of the Central Govemmet dated 10th January, 1959 anq accordingly passed a decree in favour of the first respondent against the Union of India for Rs. 22,927.34P. representing >arrears of salary and allowances from 4th August, 1956, beh1g the date three years prior to the institution of the suit upro 10th February, 1959. The Union of India being aggrieved by the decree passed against it preferred the present appeal in the Court on certificate obtain~ under Article 13 3 (1) (a) of the Constitution as it stood at the material time.

As in the High Court, so also Q.efore us the only question debated was as to whether it was the Central Government or the State Government or the State Government which was entitled to terminate the service of the first respondent.

The first respondent did not contend that the termination of his service was by way of penalty and though it was disguised as termination simpliciter, it was in reality and substa'J.ce dismissal and hence violative of Article 311 ( 2) of .the Constitution.

He conceded that if the State Government was entitled to terminate his service, the order dated 17th April, 1956, passed by the Government of Punjab, would be valid.

But his contention was that 'the Central Government alone was competent to terminate his service and he was,,, therefore, cO'ntinued 11s an Assistant Settlement Commissioner until 10 February, 1959 when his service was terminated by the Central Government by the memorandum dated 10th January,

1959. The.Union of India, on the other hoand, contended that the first respondent was a serva1at of the State of Punjab and hence the Government of Punjab was entitled to terminate his service as it did by passing the order dated 17th April, 1956.

Now, if we !00k at the provisions of the ACt, it is clear that it is the Central Government which is constituted the ultimate authority responsible for the administration of the provisions of the Act.

There is a heirarchy of officers constituted under the Act for the puqiose of dischargi 1ag various functions and duties and the final revisional autrority in respect of these functions and duties is vested in the Central Government.

Section 3, sub-section ( 1) confers power on the Central Governmnt to appoint "a Chief Settlement Commissioner, a Joint

SUPRBMB COURT REPORTS

[1975) 3 S.C.R.

Chief Settlement Commissioner, and M many Deputy Chief Settlement Commissioners, Settlement Commissioners, Additional Settlement Commissioners; Assistant Settlement Commissioners, Settlement Offi.· cers, Assisant Settlement Officers and managing officers as may be necessary for the purpose of performing the functions assigned to them "by or under the. Act and the Central Govemment is also given the power by general or special order to provide for the distribution or allocation of work to be performed by them under the Act The post of Assistant Settlement Commissioner--that being the po!; t with which we are concerned in this appeal-is, therefore, clearly a post under the Union of India to which appoi'i1tment is to be made by the Central Government.

It was in exercise of this power conferred by section 3, sub-section (1) that Central Government appointed the first respondent to the post of Assistant Settlement Commissim1er by its order dated 3rd September, 1956. The Government of Punjab had no power to make appointment to the post of Assistant Settlement Commissioner by its order dated 3rd September, 1955.

The Govern ment of Punjab had no power to make appointment to the post of Assista'.at Settlement Commissioner, unless such power was conferred upon it by virtue of a dim; tion given by the Central Government under section 34, but admittedly there was no such direction in the present case. In fact, the Central Government, by its letter dated 18ili April, 1955 requested the State Government to intimate "the •aames of officers appointed as A.ssistant Settlement Commissioner" for issue of necessary notification under the Act.

The Central Government did empower the State Government tG nominate the peson to be appointed to the post of Assistant Settlement Commissioner but the appointment of the person so nominated could only be made and was in fact made by the Central Government by its order dated 3rd September, 195S.

Once the appointment of the first respondent as Assistant Settlement Commissioner was made by the Central Government by its order dated 3rd September, 1955, there was no question thereafter of the State Government once again appointing him to the same post. The State Government, no doubt, by its order dated lst December, 1955, purpoted to appoint the first respondent as Assistant Settlement Commissioner, but that was merely a formal "appointment letter" persuant to the suggestion contained in the letter of the Central Government dated 21st September, 1955. It was an ineffectual and futile exercise which had no legal consequence since by that time the first respondent was already appointed to the post of Assistant Settlement Commissioner by the Central Government legaUy competent so to appoint and he was already functioning as such Assistant Settlement Commissioner. Moreover. the post of Assistant Settlement Commissioner, to which the first respondent was so appointed, was a post sanctioned by the President of India and created by the Central Government and the whole of the expenditure in connection with that post was to be borne out of the funds allocated by the Central Government, vide the letter of the Central Government dated 23rd July, 1955. It is true that the State Government also, by its order dated 30th November, 1955, purpo; ted to accord sanction to the creation of one post of Assistant Settlement Commissioner, but iliat was obviously for the purpose of regularising its own accounts procedure because ilie amount of Rs. 6.50 lacs for meet-

:·\

ing the expenc!iture in connection with the staff for this work was made available by the Central Government to the State Government and it was the Stiite Government which was to disburse the expe11.diture out of that amoU'at.

The post of Assistant Settlement Commissioner having already been created by the Central Government by the sanction of the President of India as conveyed under the lette~ -<lated 23rd July, 1955, did not need validation from the order of the Government or Punjab dated 30th November, 1955. In fact, when the question arose in regard to issue of pay slip in favour of the first respondent for the period subsequent to 29th February, 1956, when the original sanction of the President of India for the post of Assistant Settlement Commissioner expired, the Account':mt General, Punjab pointed out in his letter dated 21st April, 1956 that the sanction to the continuance of the post given by the Punjab Government was meaningless and ineffective and it could not be acted upon until receipt of sanction to the continuance of the po:; t from the Central Government since "the post was created by them." It would therefore, be seen that the post - of Assistant Settlement Commissioner was created by the Central Government and the expeaditure in connection with it was to be met out of the funds provided by the Central Government and it was the Central Government alone which was competent to make appointment to the post and in fact, the first respO'adent was appointed to the post by the Central Government by its order dated 3rd September, 1956. It this be the correct .position, as it undeniable is, there can be no doubt that the Central Government alone could terminate the service of the first respondent. It is 1,1ow a well settled rule of interpretation that a power to appoint ordinarily implies a power to determine the employment.

That was pointed out by this Court in S. R. Tiwari v. District Board, Agra(!) :

"Power to appoint ordinarily carries with it the power to determine appointment, and a power to terminate may in the absence of restrictions express or implied be exercised, subject to the conditions prescribed in that behalf, by the authority competent to appoint."

This rule is also foU'nd incorporated in section 16 of the General Clauses Act, 1897. It is, therefore, clear that the Central ; Government which is given the power to make appointment to the post of Assistant Settlement Commissioner under section 3, would also have the power to determine the appointment.

The Central Government would also be entitled to terminate the appoi'atrnent, since the post of Assistant Settlement Commissioner is a post under the Union of India and the person appointed to it would hold it during the pleasure of the Presi- dent.

There is no provision under which the Government of Punjab could have the power to determi'i.1e the appointment as Assistant Settlement Commissioner madei by the Central Government under section 3.

The Central Government alone could terminate the appointment, both as the appointing authority as also under Art. 310(1) of the Consti-

(1) [1964] 3 S. C.R. 55.

tution.

The High Court was, therefore, right in taking the view that the order of the Punjab Government dated 17th April, 1956 was ineffectual and invalid and the service of the first respondent as Assistant Settlement Commissioner was validly terminated only on 10th February, 1959 whe'il the Central Government, by its memorandum dated 10th January, 1959, gave notice terminating the service of the first respondent. . There was no dispute before us that if the s1!rvice of the first respondent came to an end on 10th February, 1959, and not earlier on 17th April, 1956, the first respondent would be entitled to a sum of Rs. 22,927.34P. as decreed by the High Court.

The appeal, therefore, fails and is dismissed with costs in favour of the first respondent.

V.P.S.

Appeal dismissed.