Full Judgment Text
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PETITIONER:
ACCOUNTANT GENERAL & ANR. ETC. ETC.
Vs.
RESPONDENT:
S. DORAISWAMY & ORS. ETC. ETC.
DATE OF JUDGMENT13/11/1980
BENCH:
PATHAK, R.S.
BENCH:
PATHAK, R.S.
KRISHNAIYER, V.R.
REDDY, O. CHINNAPPA (J)
CITATION:
1981 AIR 783 1981 SCR (2) 155
1981 SCC (4) 93
CITATOR INFO :
C&F 1989 SC1233 (4)
ACT:
Constitution of India 1950, Articles 148(5) and 309-
Scope of.
Comptroller and Auditor-General-Functions of-Head of
Indian Audit and Accounts Department-persons serving in the
department-Whether holding office exclusively in connection
with the affairs of the Union-Regulation of their
recruitment and conditions of service-Whether within the
domain of the President under Article 309 Proviso
Indian Audit & Accounts Department (Subordinate
Accounts Service & Subordinate Railway Audit service)
Service Rules 1974, Rules 1(2) and 10-Whether can have
retrospective operation-Rule 1(2) whether ultra vires-Power
conferred on Comptroller & Auditor-General under Rule 10-
Whether violates the doctrine against excessive delegation.
Comptroller & Auditor-General’s Manual of Standing
Orders para 143-whether could be amended by departmental
instructions.
HEADNOTE:
In 1921 the Auditor-General, as the administrative head
of the Indian Audit Department, inserted Article 1666A by a
circular No. 1757-E/1129 dated 18th April 1921 giving weight
to the length of service as Upper Division Clerks in the
fixation of seniority in the Subordinate Accounts Service.
In the Audit Code prepared subsequently, Article 1666A
appeared as Article 52. Thereafter, in the Manual of
Standing Orders issued by the Auditor-General in 1938,
Article 52 found expression as paragraph 143. By a
correction slip dated 27th July, 1956, the Comptroller and
Auditor-General removed the factor of weightage on the basis
of length of service in the determination of seniority.
The respondents in the appeals, who had entered service
in the Office of the Accountant General, as Upper Division
Clerks, appeared in the Subordinate Accounts Service
Examination and passed the examination held in November
1969, and were promoted shortly thereafter. They claimed
seniority on the basis that their length of service in the
inferior post should be taken into account, and rested their
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claim on paragraph 143 of the Manual of Standing Orders as
it stood prior to its amendment by the correction slip of
27th July 1956. The claim was rejected by the Comptroller
and Auditor-General
A writ petition filed by them in the High Court was
allowed by a Single Judge and the judgment was affirmed by
the Appellate Bench of the High Court.
The Accountant-General and the Comptroller and Auditor-
General appealed to this Court. During the pendency of the
appeals, the President enacted
156
the Indian Audit and Accounts Department (Subordinate
Accounts Service & Subordinate Railway Audit Service)
Service Rules, 1974. They were deemed to have come into
force on 27th July, 1956. These rules purported to give
statutory recognition to the amendment of paragraph 143 by
the Comptroller and Auditor-General. Rule 6 provided for
appointments to the service and Rule 7 dealt with seniority.
Rule 9 provided that in matters not specifically provided
for the rules, regulations, orders or instructions of the
Central Civil Services as applicable to the Indian Audit and
Accounts Department would be applicable. Rule 10 empowered
the Comptroller and Auditor-General to issue general or
special instructions for giving effect to the Rules.
In the appeals, the respondents assailed the validity
of the Rules of 1974 and the amendment made in paragraph
143, contending that the Rules are invalid as clause (5) of
Article 148 does not permit the retrospective enactment of
rules made thereunder, that the specific rules affecting the
seniority of the respondents are invalid because in
entrusting power to the Comptroller and Auditor-General to
issue orders and instructions in his discretion the doctrine
against excessive delegation of legislative power has been
violated, and that paragraph 143 possesses the status of a
statutory rule and, therefore, the amendment attempted by
the correction slip has no legal effect upon it.
In the connected writ petitions, the petitioners who
had passed the Subordinate Accounts Service Examination were
promoted to the Service after 1956 some before the enactment
of the Rules of 1974 and some thereafter. It was contended
on their behalf that the fixation of seniority having been
made by Rule 7(2) to depend on the order in which
appointments to the service were made under Rule 6 depends
on an arbitrary power conferred on the Comptroller and
Auditor-General to pass orders and instructions.
On the question whether the respondents are entitled to
claim fixation of their seniority in the Subordinate
Accounts Service after taking into account their length of
service as Upper Division Clerks.
Allowing the appeals and dismissing the writ petitions,
^
HELD: 1. There is nothing in the language of clause (5)
of Article 148, to indicate that the rules framed therein
were intended to serve until Parliamentary legislation was
enacted. All that the clause says is that the rules framed
would be subject to the provisions of the Constitution and
of any law made by Parliament. Clause (5) of Article 148
confers power on the President to frame rules operating
prospectively only. The rules of 1974 cannot have
retrospective operation. Sub-rule (2) of rule 1, which
declares that they will be deemed to have come into force on
27th July, 1956 is therefore ultra vires. [163B-C]
B.S. Vadera v. Union of India & Ors. [1968] 3 S.C.R.
575 referred to.
2. The Comptroller and Auditor-General is a high
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ranking constitutional authority, and can be expected to act
according to the needs of the service and without
arbitrariness. He is the constitutional head of one of the
most important departments of the State, and is expected to
know what the depart-
157
ment requires and how best to fulfil those requirements. The
power conferred on him under the Rules does not violate the
principle against excessive delegation. [165C-D]
3. Paragraph 143 in the Manual of Standing Orders
remained throughout a departmental instruction and,
therefore, could be amended by the departmental instruction
contained in the correction slip issued by the Comptroller
and Auditor-General in 1956. [164F]
4. There is a clear dichotomy in the power conferred by
Article 309, a division of power between the Parliament or
President, as the case may be, on the one side and the State
Legislature or Governor on the other. The division is marked
by the circumstance that under Article 309 services and
posts in connection with the affairs of the Union are dealt
with by a separate authority from the services and posts in
connection with the affairs of a State. That dichotomy is
not possible in the power employed for appointing persons in
the Indian Audit and Accounts Department and for prescribing
their conditions of service. [160H-161A]
5. The authority vested in the Comptroller and Auditor-
General ranges over functions associated with the affairs of
the States. It is a single office, and the Indian Audit and
Accounts Department, which it heads, is a single department.
They cannot be said to be concerned with the affairs of the
Union exclusively. Consequently, the regulation of the
recruitment and conditions of service of persons serving in
the Indian Audit and Accounts Department cannot be regarded
as a matter falling within the domain of the President
within the terms of the proviso to Article 309. [162 C]
B. Shiva Rao, "The Framing of India’s Constitution: A
Study" [1968] Chap. 12, pp. 414-417 referred to.
6. It cannot be said that persons serving in the Indian
Audit and Accounts Department are holding office in
connection with the affairs of the Union exclusively. [161
C]
7. The power contained in clause (5) of Article 148 is
not related to the power under the proviso to Article 309.
The two powers are separate and distinct from each other and
are not complementary to one another. The reference to the
proviso under Article 309 in the recital of the Notification
publishing the Rules of 1974 is meaningless and must be
ignored. [162D-E]
8. Having regard to the provision determining the
fixation of seniority under the Rules of 1974 and the
position obtaining thereafter, none of the petitioners in
the writ petitions can claim the benefit of weightage on the
basis of length of service. [165A]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1584-
1588 of 1973.
Appeals by Special Leave from the Judgment and Order
dated 6th August, 1973 of the Madras High Court in Writ
Appeal Nos. 13 to 17 of 1973.
AND
158
Writ Petition Nos. 357 of 1979 and 4367 of 1978.
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(Under Article 32 of the Constitution)
K. Parasaran, Soli. General, N. Nettar and Miss A.
Subhashini for the Appellants in all appeals.
T.S. Krishnamurthy Iyer, H. B. Dattar, A. K.Srivastava
and T. P. Sunderarajan for the Petitioners in WPs. Nos. 4367
of 1978 & 357 of 1979.
T.S. Krishnamurthy Iyer, Vineet Kumar and A.K.
Srivastava for the Respondents.
The Judgment of the Court was delivered by
PATHAK, J.-These appeals, by special leave, raise the
question whether the respondents are entitled to claim
fixation of their seniority in the Subordinate Accounts
Service after taking into account their length of service as
Upper Division Clerks. The respondents entered service in
the Office of the Accountant General, Tamil Nadu as Upper
Division Clerks. They appeared in the Subordinate Accounts
Service Examination but it was only after a number of
attempts that they succeeded in passing. They passed the
examination held in November, 1969 and were promoted shortly
thereafter. They claimed seniority on the basis that their
length of service in the inferior post should be taken into
account, and rested their claim on paragraph 143 of the
Manual of Standing Orders issued by the Comptroller and
Auditor-General as it stood before its amendment by a
correction slip of 27th July, 1956. The correction slip
removed the factor of weightage on the basis of length of
service in the determination of seniority. The claim was
rejected by the Comptroller and Auditor-General. A writ
petition filed by them in the High Court of Madras was
allowed by a learned Single Judge, and his judgment was
affirmed by an appellate Bench, of the High Court. Against
the judgment of the appellate Bench, the Accountant General,
Tamil Nadu and the Comptroller and Auditor-General have
appealed to this Court, and those appeals are pending as
Civil Appeals Nos. 1584 to 1588 of 1973. During the pendency
of those appeals the President enacted the Indian Audit and
Accounts Department (Subordinate Accounts Service &
Subordinate Railway Audit Service) Service Rules, 1974
(referred to hereinafter as "the Rules of 1974"). The Rules
of 1974 purport to give statutory recognition to the
amendment of paragraph 143 by the Comptroller and Auditor-
General. The validity of the Rules of 1974 and the amendment
made in paragraph 143 are assailed by the respondents in the
instant appeals.
159
The Rules of 1974 have been enacted by the President.
They are deemed to have come into force on 27th July, 1956,
which has been defined, for the purposes of the Rules as the
"appointed day". The Subordinate Accounts Service (the
"Service") includes members appointed to it before the
appointed day as well as persons recruited to it in or
before that day. Rule 5 provides that recruitment shall be
made by direct recruitment in accordance with, the orders or
directions issued by the Comptroller and Auditor-General
from time to time and also by promotion. Rule 6 provides:
"6. Appointments:-
Appointments to the Service shall be made from the list
prepared in accordance with the orders and instructions
issued by the Comptroller and Auditor-General from time
to time and applicable at the time of appointment to
the Service."
Rule 7 deals with seniority, and declares:
"7. Seniority:-
(1) The seniority inter-se of the persons appointed to
the service before the appointed day shall be regulated
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by the orders or instructions issued by the Comptroller
and Auditor-General as were in force at the relevant
time before such day.
(2) The seniority-inter-se of the persons appointed to
the Service on or after the appointed day shall be in
the order in which the appointments are made to the
service in accordance with rule 6.
Provided that a direct recruit shall on appointment to
the Service rank senior to all officiating persons in
the service (excluding a direct recruit) passing in the
same departmental examination or subsequent
departmental examinations.
Provided further that the seniority of a person who had
declined the appointment to the Service but who is
subsequently appointed to the Service shall be
determined with reference to the date on which he
assumed charge of the post in the cadre."
By virtue of Rule 9, in matters not specifically
provided for in the Rules, every person appointed to the
Service is governed by the rules, regulations, orders or
instructions made or issued in respect of the Central Civil
Services as applicable to the Indian Audit and Accounts
160
Department. Rule 10 empowers the Comptroller and Auditor-
General to issue, from time to time, such general or special
instructions or orders as he may consider necessary or
expedient for the purpose of giving, effect to the Rules.
The respondents have raised two contentions. The first
is that the Rules are invalid as clause (5) of Art. 148 to
which alone, it is said, they must be ascribed, does not
permit the retrospective enactment of rules made thereunder.
The other contention is that the specific rules affecting
the seniority of the respondents are in valid be cause in
entrusting power to the Comptroller and Auditor-General to
issue orders and instructions in his discretion the doctrine
against excessive delegation of legislative power has been
violated
Taking the first contention first, it may be noted that
the Rules of 1974 purport, according to the recital in the
Notification dated 4th November, 1974 publishing them, to
have been made by the President "in exercise of the powers
conferred by the proviso to Art. 309 and clause (5) of Art.
148 of the Constitution and after consultation with the
Comptroller and Auditor-General of India". The respondents
say that the only provision of the Constitution under which
those Rules could be made is clause (5) of Art. 148, and we
should ignore reference to the proviso to Art. 309. If that
is done, they urge, there will be no justification for
holding that the Rules of 1974 can be given retrospective
operation. Unlike the proviso to Art. 309, it is pointed
out, clause (5) of Art. 148 does not permit the enactment of
retrospectively operating rules. We think that the
respondents are right.
Article 309 provides for legislation by the appropriate
Legislature to regulate the recruitment and conditions of
service of persons appointed to public services and posts in
connection with the affairs of the Union or of any State,
and the proviso to Art. 309 declares that until such
legislation is enacted by the appropriate Legislature the
President is empowered in the case of services and posts in
connection with the affairs of the Union, and the Governor
of a State in the case of services and posts in connection
with the affairs of a State, to make rules regulating the
recruitment and the conditions of service of persons
appointed to such services and posts. There is a clear
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dichotomy in the power conferred by Art. 309, a division of
power between the Parliament or President, as the case may
be, on the one side and the State Legislature or Governor on
the other. The division is marked by the circumstance that
under Art 309, services and posts in connection with the
affairs of the Union are dealt with by a separate authority
from the services and
161
posts in connection with the affairs of a State. That
dichotomy it seems, is not possible in the power employed
for appointing persons in the Indian Audit and Accounts
Department and for prescribing their conditions of service.
The Comptroller and Auditor-General of India, who is the
head of that department, is a constitutional functionary
holding a special position under the Constitution. Under
Art. 149, he performs duties and exercises powers in
relation to the accounts of the Union and also of the
States. Clause (1) of Art. 151 requires him to submit a
report relating to the accounts of the Union to the
President, who causes them to be laid before each House of
Parliament. Likewise, clause (2) of Art. 151 requires him to
submit a report relating to the accounts of a State to the
Governor of the State, who causes them to be laid before the
Legislature of the State. It cannot be said, in the
circumstances, that the persons serving in the Indian Audit
and Accounts Department are holding office in connection
with the affairs of the Union exclusively. It may be pointed
out that when the Constitutional Adviser prepared the Draft
Constitution for consideration by the Constituent Assembly
the document contained separate provisions for the
appointment of the Auditor-General of the Federation and
Auditors-General for the Provinces. The Auditor-General for
the Federation was to be appointed by the President and his
functions extended to the accounts of the Federation as well
as of the Provinces. But it was open to a Provincial
Legislature to provide by law for the appointment of an
Auditor-General for the Province and the appointment to that
office was to be made by the Governor. The Expert Committee
on the financial provisions of the Union Constitution
favoured the continuance of a single Auditor-General for the
Government of India as well as for the Provincial
Governments and hoped that the Provincial Governments would
refrain from using their power of appointing separate
Auditors-General of their own. When the matter came before
the Drafting Committee, it decided that the persons
performing the functions of the Auditor-General in a State
should be designated Auditor-in-Chief in order to
distinguish him from the Auditor-General of India, and that
the salaries and allowances of the staff of these officers
should be fixed by the Auditor-General of India and the
Auditor-in-Chief in consultation with the President and the
Governor respectively. Thereafter, the Drafting Committee
reconsidered the desirability of permitting a multiplicity
of audit authorities, one for the Union and one for each
State. On 1st August, 1949 Shri T.T. Krishnamachari moved an
amendment deleting the draft articles enabling the State
Legislatures to create their own Auditors-in-Chief. He
pointed out that since the Constituent Assembly had already
adopted articles whereby the auditing and accounting would
become "one institution, so to say, under the authority of
the
162
Comptroller and Auditor-General", it was not necessary to
have separate provision for the States. Accordingly, he
proposed the addition of a new article now clause (2) of
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Art. 151] about the Comptroller and Auditor-General,
requiring him to submit the reports of the accounts of a
State to the Governor for being laid before the State
Legislature. These amendments were adopted by the
Constituent Assembly. It is evident that the authority
vested in the Comptroller and Auditor General ranges over
functions associated with the affairs of the Union as well
as over functions associated with the affairs of the States.
It is a single office, and the Indian Audit and Accounts
Department, which it heads, is a single department. They
cannot be said to be concerned with the affairs of the Union
exclusively. Consequently, the regulation of the recruitment
and conditions of service of persons serving in the Indian
Audit and Accounts Department cannot be regarded as a matter
falling with the domain of the President within the terms of
the proviso to Art. 309. A special provision was necessary
to entrust the President with that power, and that provision
is clause (5) of Art, 148. The power contained in clause (5)
of Art. 148 is not related to the power under the proviso to
Art. 309. The two powers are separate and distinct from each
other and are not complementary to one another. In our
opinion, the reference to the proviso under Art. 309 in the
recital of the Notification publishing the Rules of 1974 is
meaningless and must be ignored.
The next question is whether clause (5) of Art. 148
permits the enactment of rules having retrospective
operation. It is settled law that unless a statute
conferring the power to make rules provides for the making
of rules with retrospective operation, the rules made
pursuant to that power can have prospective operation only.
An exception, however, is the proviso to Art. 309. In B. S.
Vadera v. Union of India & Ors. this Court held that the
rules framed under the proviso to Art. 309 of the
Constitution could have retrospective operation. The
conclusion followed from the circumstance that the power
conferred under the porviso to Art. 309 was intended to fill
a hiatus that is to say, until Parliament or a State
Legislature enacted a law on the subject matter of Art. 309.
The rules framed under the proviso to Art. 309 were
transient in character and were to do duty only until
legislation was enacted. As interim substitutes for such
legislation it was clearly intended that the rules should
have the same range of operation as an Act
163
of Parliament or of the State Legislature. The intent was
reinforced by the declaration in the proviso to Art. 309
that "any rules so made shall have effect subject to the
provisions of any such Act". Those features are absent in
clause (5) of Art. 148. There is nothing in the language of
that clause to indicate that the rules framed therein were
intended to serve until Parliamentary legislation was
enacted. All that the clause says is that the rules framed
would be subject to the provisions of the Constitution and
of any law made by Parliament. We are satisfied that clause
(5) of Art. 148 confers power on the President to frame
rules operating prospectively only. Clearly then. the rules
of 1974 cannot have retrospective operation, and therefore
sub-rule (2) of rule 1, which declares that they will be
deemed to have come into force on 27th July, 1956 must be
held ultra vires.
If the Rules of 1974 do not cover the case of the
respondents then admittedly the only question which remains
in regard to them is whether the amendment intended by the
Comptroller and Auditor General in 1956 to paragraph 143 of
the Manual of Standing Orders results in amending that
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paragraph. The amendment is in the form of a correction slip
which, it is not disputed, possesses the status of an
administrative instruction. The contention on behalf of the
respondents is that paragraph 143 possesses the status of a
statutory rule and, therefore, the amendment attempted by
the correction slip has no legal effect on it. The High
Court held that paragraph 143 was a statutory rule and it
proceeded to hold so on the basis of affidavits filed before
it. But the matter has been more carefully researched since,
and the relevant material is now set out in the special
leave petition, which has given rise to this appeal. It
appears that in 1921 the Auditor-General, as the
administrative head of the Indian Audit Department, inserted
Art. 1666A by a circular No. 1757-E/1129 dated 18th April,
1921 giving weight to the length of service in the fixation
of seniority. In the Audit Code prepared subsequently, Art,
1666A appeared as Art. 52. Thereafter, in the Manual of
Standing Orders issued by the Auditor-General in 1938, Art.
52 found expression as paragraph 143. The provision never
acquired statutory force under the Government of India Act,
1919. Learned counsel for the respondents urges that it
acquired statutory force under sub-s. (2) of s. 252.
Government of India Act, 1935. Sub-ss. (1) and (2) of s. 252
provide:
"252. (1) All persons who immediately before the
commencement of Part III of this Act were members of
the staff of the High Commissioner for India, or
members of the staff of the Auditor of the accounts of
the Secretary
164
of State in Council, shall continue to be, or shall
become, members of the staff of the High Commissioner
for India or, as the case may be, of the Auditor of
Indian Home Accounts.
(2) All such persons aforesaid shall hold their
offices or posts subject to like conditions of service
as to remuneration, pensions or otherwise, as
therefore, or not less favourable conditions, and shall
be entitled to reckon for purposes of pension any
service which they would have been, entitled to reckon
if this Act had not been passed.
*"
Sub-s. (2) of s. 252 does not help the respondents.
Firstly, the guarantee conferred by it covered those persons
who held offices or posts on the staff of the Auditor of the
accounts of the Secretary of State in Council and on the
staff of the Indian Home Accounts immediately before the
commencement of Part III of the Act. The respondents are
clearly not such persons. Secondly, even if it be assumed
that the benefit of sub-s. (2) can be extended to the
respondents, sub-s. (2) merely protects the conditions of
service enjoyed by them as they existed before. The sub-
section does not enlarge or improve on the quality of those
conditions of service. If seniority was determined by a
departmental instruction, sub-s. (2) did not give that
provision the higher status of a statutory rule. It remained
what it always was, a departmental instruction. We were also
referred to Art. 313 of the Constitution, but that provision
also does not result in converting a departmental
instruction into a statutory rule. Plainly, paragraph 143 in
the Manual of Standing Orders remained throughout a
departmental instruction and, therefore, could be amended by
the departmental instruction contained in the correction
slip issued by the Comptroller and Auditor-General in 1956.
On that conclusion being reached, the claim of the
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respondents must fail. The appeals have to be allowed.
In the connected writ petition No. 357 of 1979 there
are 15 petitioners. The first ten passed the Subordinate
Accounts Service Examination and were promoted to the
service after 1956 and before the enactment of the Rules of
1974. They will be governed by the legal position enunciated
in the aforesaid appeals. The eleventh, twelfth and
thirteenth petitioners passed the examination immediately
before the enactment of the Rules of 1974 but were promoted
after the Rules were enacted. The remaining petitioners
appeared at the examination and were promoted after the
enactment of the Rules. In the case of the last two
categories the Rules of
165
1974 will apply. Having regard to the provision determining
the fixation of seniority under the Rules of 1974 and the
position obtaining thereafter, none of the petitioners can
claim the benefit of weigtage on the basis of length of
service. But these petitioners rely on the second of the two
contentions concerning the validity of the Rules of 1974.
They assail specifically the validity of Rule 7(2) which
provides for fixation of seniority. The argument is that the
fixation of seniority has been made by Rule 7(2) to depend
on the order in which appointments to the service are made
under Rule 6, and that, it is pointed out, depends on an
arbitrary power conferred on the Comptroller and Auditor
General to pass orders and instructions. We see no force in
the contention. The Comptroller and Auditor General is a
high ranking constitutional authority, and can be expected
to act according to the needs of the service and without
arbitrariness. He is the constitutional head of one of the
most important departments of the State, and is expected to
know what the department requires and how best to fulfil
those requirements. We are unable to hold that the power
conferred on him under the Rules violates the principle
against excessive delegation.
The writ petition No. 4367 of 1978 must also be treated
on the basis that the petitioners are not, in the fixation
of their seniority, entitled to weightage with reference to
their length of service. Both writ petitions must,
therefore, be dismissed.
Civil Appeals Nos. 1584-1588 of 1973 are allowed, the
judgment and order of the Madras High Court is set aside and
the writ petition is dismissed. Writ Petition Nos. 357 of
1979 and 4367 of 1978 are also dismissed.
In the circumstances, there is no order as to costs.
N.V.K. Appeals allowed and
Petitions dismissed.
166