Full Judgment Text
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PETITIONER:
B.K. MOHAPATRA
Vs.
RESPONDENT:
STATE OF ORlSSA
DATE OF JUDGMENT28/10/1987
BENCH:
VENKATARAMIAH, E.S. (J)
BENCH:
VENKATARAMIAH, E.S. (J)
SINGH, K.N. (J)
CITATION:
1988 AIR 24 1988 SCR (1) 650
1987 SCC Supl. 553 JT 1987 (4) 170
1987 SCALE (2)880
ACT:
Teacher’s service matter-Rationalisation scheme for
integration of services of teachers in different types of
schools-Dispute regarding terms thereof relating to
seniority and contributory Provident Fund. Act of State.
HEADNOTE:
%
A number of the princely States, situated within the
territories of the present State of Orissa, were merged with
effect from January 1, 1948, with the Province of orissa as
it then existed. On such merger, the High Schools within the
said princely States came under the juries diction of the
Province of Orissa. The Schools belonged to two categories-
’A’ type schools which were full-fledged High schools
sending candidates for the Matriculation examination and ‘B’
type schools which were incomplete schools, not sending
candidates for the Matriculation examination. On the said
schools being taken over by the Province of orissa the
teachers of the schools came under the control of the
Government of orissa. The orissa Government issued a letter
dated 5.1.1949 to the Director of Public Instruction in
connection with the subject of regulation of the services of
the teachers.
The appellant was an assistant teacher in one of the
’B’ type schools on June 15, 1q953, after the commencement
of the Constitution of India, and continued to work as such
in the ’B’ type school till August 1, 1964, when the State
Government of Orissa published a rationalisation scheme for
integrating the services of the teachers in the different
types of High Schools in the State. Aggrieved by the terms
of the Scheme relating to (i) the seniority of the teachers
working in the ’B’ type High Schools and (ii). The
contributory Provident Fund, the appellant filed a writ
petition in the High Court. The High Court upheld the
validity of the Scheme and dismissed the Petition, while
recommending, however, to the Government to modify the terms
relating to the Provident Fund Scheme applicable to the
teachers of ’B’ type High Schools. The appellant then moved
this Court by special leave against the decision of the High
Court.
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Disposing of the appeal, the Court,
651
^
HELD: It is true that till the commencement of the
Constitution of India, the position of the ’B’ type High
Schools and the teachers working in them was being regulated
in accordance with the terms contained in the order dated
5.1.1949. But on the commencement of the Constitution of
India, all the territories which immediately before the
commencement of the Constitution were either comprised in
the Province of Orissa or were being administrated as if
they formed part of that Province, became and constituted
the State of Orissa. The State Government was under
obligation to discharge its executive functions with respect
to education in respect of all the schools including ’B’
type High Schools. A High school which once belonged to a
princely state became a Government High School with effect
from the commencement of the Constitution and it could not
be anything else and the teachers working therein became
teachers holding posts under the Government. It is well-
settled that the doctrine of an "act of State" cannot be
pleaded by a State as a defence against its own citizens. An
’act of State’ is an act done in relation to a foreigner by
a Sovereign power of a country. Such an act cannot be
questioned in any court of law, but such a situation would
not arise between the State Government and a citizen like
the appellant who joined service after the commencement of
the Constitution. The High Court was in error in upholding
the plea that the order dated 5.1.1949 could not be
questioned by the appellant who had joined service after the
commencement of the institution. [657A-E. GH; 658A]
There is also no rational basis for refusing to give
the benefit of the service rendered by a teacher working in
a ’B’ type High school after January 26, 1950, either for
purposes of seniority or for purposes of computing the
retirement benefits. It may be open to the State Government,
while integrating the services of teachers working in
different kinds of institutions, to introduce a scheme of
rationalisation which may have the effect of modifying the
conditions of service of different groups of government
servants. But the Government cannot by a stroke of pendeny
the benefit of the entire past service rendered by one group
of such government servants. The effect of the government
scheme was that all the teachers who had been in Government
Schools immediately prior to June 1 1964 the date of
coversion of the High Schools to government schools-became
senior to the teachers working in the ’B’ type High Schools,
Ex-District Board High Schools and Ex-Anchal High Schools.
The scheme appears to be an irrational one. The High Court
was in error in upholding the terms of the scheme in so far
as the question of the seniority was concerned. The judgment
of the High Court. in so far as the validity of the terms of
the scheme, pertaining to
652
seniority of the teachers in the schools referred to in it,
is concerned, is reversed. the clause in the scheme which
reads: "But for the purpose of reckoning their seniority in
Government service their services will be counted from the
date of conversion of the schools into Government schools"
is void. The State government is directed to treat, on and
after January, 26, 1950, the service of the teachers of the
’B’ type High schools, ex-District Board High Schools and
ex-Anchal High Schools as the service under the State
Government. It is open to the State Government to evolve a
reasonable formula for integrating the cadres of these
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teachers with the cadres of the teachers in the High Schools
which have been under the Government all along. Before
bringing about such an integration, the government may
formulate reasonable principles for equating the posts in
the Government High Schools with the posts in the ’B’ type
High Schools, ex-District Board High Schools and ex-Anchal
High Schools having regard to the minimum qualification for
the posts, pay, responsibilities, etc. In the light of the
said principles, the government shall prepare a seniority
list, whereafter it shall proceed to make promotions of the
teachers to the higher cadre. In view of the stand taken by
counsel for the appellant and other teachers in ’B’ type
High schools, ex-District Board High Schools and the ex-
Anchal High schools, regarding their not insisting upon
promotions with retrospective effect, etc., the State
government shall promote these teachers to the higher posts
as and when the vacancies arise hereafter, on the basis of
their rank in the seniority list, if they are found fit for
such promotion. The government is at liberty, if it finds it
convenient, to treat, as submitted by the teachers’ counsel,
the two groups of teachers as belonging to separate cadres
and reserve certain percentage of posts for being filled up
only by the teachers of ’B’ type High Schools, ex-District
Board High Schools and ex-Anchal High schools, as was the
case in State of Punjab v. Joginder Singh, [1963 (Supp. 2)
SCR 169]. The order of the High Court is modified to the
above extent and the State Government shall prepare the
seniority list and make promotions accordingly within six
months in the light of the above observations. [659C-G;
660C-H; 661A-D]
No opinion is expressed on the question of Contributory
Provident Fund Scheme, the same having been satisfactorily
settled by the state. [661D-E]
Johnstone v. Pedlar, [1921] 2 A.C. 262, referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 661 of
1971.
653
From the Judgment and order dated 28.10.1969 of the
Orissa High Court in O.J.C. No. 165 of 1966.
S.P. Pandey for the Appellant.
G.S. Chatterjee for Respondent No. 1.
R.K. Garg and J.R. Dass for Respondent No. 2.
The Judgment of the Court was delivered by
VENKATARAMIAH, J. With effect from 1.1.1948 a number of
princely States which were situated within the territories
of the present State of Orissa were merged with the Province
of Orissa as it then existed. On such merger the High
Schools within the said princely States also came under the
jurisdiction of the Province of Orissa. The said High
Schools belonged to two categories-namely ’A’ type schools
which were full-fledged High Schools which were actually
sending candidates for the matriculation examination and ’B’
type schools which were incomplete schools not sending
candidates for the matriculation examination. On the said
High Schools being taken over by the Province of Orissa, the
teachers serving in the said High Schools came under the
control of the Government of Orissa. It then became
necessary to make an order to regulate the services of the
said teachers. The Government of Orissa in the Education
Department issued a letter dated 5.1.1949 to the Director of
Public Instruction on the subject. The relevant pertion
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thereof is extracted below:-
"In the States the High Schools other than
those at District Headquarters mentioned above
will be of two types. The complete High Schools
will be ’A’ type High Schools and the incomplete
High Schools ’B’ type High Schools.
The ’A’ type schools will be similar to
Government High Schools other than those at
District Headquarters. The services of the staff
of such High Schools will be pensionable and
transferable and the teachers will get pay and
dearness allowances at the rates prescribed for
Government servants. Government will bear the
whole of the recurring and non-recurring costs.
’B’ type High Schools will be Government
managed.
654
The staff will get pay and allowances at rates
prescribed for Government servants. The
Headmasters of those schools will be in the upper
division of the S.E.S. The services of those
teachers will not be pensionable. They will have
the benefits of the Contributory Provident Fund to
which Government will contribute at the rate of
Re. 1 in the rupee of the salary. As regards
recurring expenses of those schools Government
will meet the difference between the standard cost
and income from fees and other local
subscriptions. As regards non-recurring
expenditure Government will meet two-thirds of the
cost.
The standard cost for the ’B’ type Government
managed High Schools will consist of the following
items:-
(a)..........................................
(b) The total contribution on Provident Fund
deposited at the rate of Re.-/ 1/- in the rupee,
and
(c)..........................................
The Inspector of Schools will be the managing
agent on behalf of the Government and the
Headmaster will be the correspondent of a ’B’ type
Government managed High School.
The appellant was appointed as an Assistant Teacher on
a pay of Rs.70 per month in the pay scale of Rs.70- 140 plus
admissible dearness allowance in one of the ’B’ type High
Schools by the Inspector of Schools on 15.6.1953 after the
commencement of the Constitution of India. He continued to
work as an Assistant Teacher in one or the other of the ’B’
type High Schools to which he was transferred until August
1, 1964 when the State Government published a
rationalisation scheme for integrating the services of the
teachers in different types of High Schools in the State of
Orissa, namely, Zilla Schools, ’A’ type Government High
Schools, ’B’ type High Schools, Ex-District Board High
Schools and Ex-Anchal High Schools hereinafter collectively
referred to as integrated High Schools. The relevant part of
the scheme reads thus:-"No. 18027-E Government of Orissa
Education Department Resolution
1st Aug., 1964
Sub:-Rationalisation of High
Schools in the State.
655
Government have under their own management
quite a few types of High Schools in which
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conditions of service of the employees vary
category to category. This ununiformity in the
patterns and in the conditions of service has not
only evoked public criticism but also created
certain administrative difficulties and tends to
lowering of standards in the institutions. It is
for these reasons that Government had for some
time past under their consideration the question
of rationalisation of the following different
types of High Schools in the State whose number is
noted against each.
1. Zilla Schools -18
2. ’A’ type Govt. High School. -52
3. ’B’ type High Schools -22
4. Ex-District Board High Schools. -17
5. Ex-Anchal High Schools. - 6
After careful consideration Government have
now decided that the five types of High Schools
mentioned above should be converted into a single
type of Govt. School with effect from 1st June,
1964.
Since the employees of the ’B’ type High
Schools are in receipt of pay and allowances on
the scales applicable to Government servants the
question of fixation of their pay and allowances
does not arise. They will continue to draw their
salary that they are drawing on the date of
conversion.
In respect of the incumbents of ’B’ type High
Schools who are governed by the contributory
provident fund rules, their subscriptions, if any,
in the fund together with the Government
contribution on the date of conversion may either
be refunded to them or be credited to the General
Provident Fund account to be opened afresh
according to their option and all the employees
may be brought under the Orissa General Provident
Fund Rules. After conversion Government shall not
contribute anything towards the Employees’
Contributory Provident Fund. All the employees of
’B’ type High Schools will be brought over to
pensionable service from the date of conversion of
the schools into Government Schools.
..................................................
656
The seniority of the ’B’ type, Ex-District
Board and Ex-Anchal Schools as among themselves
will be determined by their length of continuous
service in their respective cadres in the old
Schools. But for the purpose of reckoning their
seniority in Government service, their services
will be counted from the date of conversion of the
Schools into Government school......... "
(Underlining by
us)
Aggrieved by the terms of the rationalisation scheme
referred to above relating to (i) the Contributory Provident
Fund and (ii) the seniority of teachers who were working in
’B’ type High Schools, the appellant filed a writ petition
in the High Court of Orissa questioning the discriminatory
treatment meted out to him and other teachers in ’B’ type
High Schools. The appellants contended that even though he
had been appointed in a ’B’ type High School he should be
treated as having entered the service under the State
Government on 15.6.1953 when he was appointed as an
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Assistant Teacher in a ’B’ type High School, that the clause
in the scheme of 1964 which provided that for the purpose of
reckoning seniority in Government service the services of
teachers in ’B’ type High Schools would be counted from the
date of conversion of the schools into Government schools
which had the effect of wiping of the previous service put
in by them in the said schools was discriminatory and that
the terms relating to the Contributory Provident Fund were
invalid. The petition was resisted by the State Government
pleading inter alia that the decision of the Government
dated 5.1.1949 being an ’act of State’ its effect could not
be challenged by the appellant even though he had entered
service in the year 1953. The High Court upheld the validity
of the scheme and dismissed the writ petition. It, however,
recommended to the Government to modify the terms relating
to the Provident Fund scheme applicable to the teachers of
’B’ type High Schools. Aggrieved by the judgment of the High
Court, the appellant has filed this appeal by special
It is urged on behalf of the appellant that the State
Government was wrong in treating him as having entered the
service under the State Government only from June 1, 1964
although he had been appointed by the Inspector of Schools
in the year 1953. It is argued that merely because the
appellant was appointed in a ’B’ type High School which once
belonged to a princely State he could not be denied the
benefits available to all other teachers in Government
service. It is further submitted that the case of the
Government that the Government was
657
running ’B’ schools as merely agents was wholly untenable.
It is no doubt true that the ’B’ type High Schools were
formerly in the princely States and that on the merger of
the States the then Government of the Province of Orissa
passed an order on 5.1.1949 stating that the ’B’ type High
Schools would be governed and managed by the Inspector of
Schools on behalf of the Government and the Headmasters
would be the correspondents of ’B’ type Government managed
High Schools. It is also true that till the commencement of
the Constitution of India the position of ’B’ type High
Schools and the teachers working in them were being
regulated in accordance with the terms contained in the
order dated 5.1.1949. But on the commencement of the
Constitution of India all the territories which immediately
before the commencement of the Constitution were either
comprised in the Province of Orissa or were being
administered as if they formed part of that Province became
and constituted the State of Orissa (vide Entry No. 10 in
the First Schedule to the Constitution of India.) The State
Government was under an obligation to discharge its
executive functions with respect to education by virtue of
Entry 11 of the Seventh Schedule to the Constitution as it
then existed in respect of all the schools including ’B’
type schools. A High School which once belonged to the
princely states became a Government High School with effect
from the commencement of the Constitution and it could not
be anything else. The Inspector of Schools could no longer
function as the managing agent on behalf of the State
Government and the ’B’ type High School could no longer be a
’Government managed High School’. The teachers working
therein became teachers holding posts under the Government
since there was no other authority which owned the ’B’ type
High Schools after January 26, 1950 because there were no
territories within the State of Orissa which could be
considered as territories administered by the Government as
if they formed a part of the State which was the case until
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January 26, 1950. Though the princely States were subject to
the paramountcy of the British Crown, they were considered
to be foreign States by the British Indian Provinces. Any
action taken in respect of them or their subjects by the
British Indian Provinces was an act of State but its effect
could not be extended beyond January 26, 1950 because after
that date there was no longer any foreign Government. The
princely States had gone out of existence. It is well-
settled that the doctrine of an ’act of State’ cannot be
pleaded by a State as a defence against its own citizens. An
’act of State’ is an act done in relation to a foreigner by
the sovereign power of a country or its agent either
previously authorised or subsequently ratified. Such an act
cannot be questioned or made the subject of legal
658
proceedings in any Court of law. But such a situation would
not arise A between the State Government and a citizen like
the appellant who joined service after the commencement of
the Constitution.
It is appropriate to refer here to the decision of the
House of Lords in Johnstone v. Pedlar, [1921] 2 A.C. 262 in
which the nature of an ’act of State’ arose for
consideration. Lord Atkinson observed at pages 278-279 thus:
"The best definition, I think, of an act of
State, as well as the descriptions of the
consequences flowing from it, is that given in the
judgment of Lord Kingsdown in the case of
Secretary of State for India v. Kamachee Boye
Sahaba. (13 Moo. P.C. 22). In that case, the Rajah
of Tanjore, a native independent sovereign, who
was, by virtue of certain treaties, under the
protection of the East India Company, in exercise
of their sovereign power and in trust for the
British Government, seized the Raj of Tanjore and
the whole property of the deceased Rajah as an
escheat, on the ground that the dignity of the Raj
was extinct for want of a male heir, and that this
property lapsed to the British Government. It was
held first, as it was held in Buron v. Denman
(2Ex. 167), that an act done by an agent of the
Government, though in excess of his authority, on
being ratified and adopted by the Government, was
of the same authority as if it had originally been
directed by the Government, that the effect of the
ratification is, in the language of Parke B. In
Buron v. Denman (Ibid. 188-9), this, that it only
leaves a remedy against the Crown (such as it is),
and exempts from all liability the person who
commits the trespass, and, second, that the
seizure made by the British Government acting as a
sovereign power through its delegate, the East
India Company, was an act of State to inquire into
the propriety of which a municipal Court had no
jurisdiction. Lord Kingsdown, in delivering the
judgement of the Privy Council said (13 Moo. P.C.
77, 86); "Acts done in the execution of these
sovereign powers were not subject to the control
of the municipal courts, either of India or Great
Britain."
In the same decision Lord Phillimore said at page 295
thus;
"The defence set up in the present case is
sometimes
659
called the defence of an act of State. As regards
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this way of looking at it, I cannot put the matter
better or more tersely than as I found it put in
one of the reasons given by the successful
plaintiffs in their case as respondents before the
Privy Council, in Walker v. Baird, [1892- A.C.
491, 494): "Because between Her Majesty and one of
her subjects there can be no such thing as an act
of State." And this proposition was finally
accepted in the case of Walker v. Baird, [ 1892-
A.C. 491, 494)"
The High Court was, therefore, in error in upholding
the plea that the order dated S. 1.1949 could not be
questioned by the appellant who had joined service after the
commencement of the Constitution.
There is also no rational basis for refusing to give
the benefit of the service rendered by a teacher working in
a ’B’ type High School after January 26, 1950 either for
purposes of seniority or for purposes of computing the
retirement benefits. It may be open to the State Government
while integrating the services of teachers working in
different kinds of institutions to introduce a scheme of
rationalisation which may have the effect of modifying the
conditions of service of different groups of Government
servants. It cannot, however, by a stroke of pen deny the
benefit of the entire past service rendered by one group of
such Government servants. The effect of the Government
scheme was that while for purposes of inter se seniority
amongst the teachers of ’B’ type High Schools, Ex-District
Board High Schools and Ex-Anchal High Schools, that is,
integrated High schools the length of continuous service in
their respective cadres in their old schools was to be
counted, for purposes of reckoning seniority vis-a-vis
teachers in Government schools their service was to be
counted, only from the date of conversion of those High
Schools to Government Schools, i.e., from June 1, 1964.
Consequently all teachers who had been in Government Schools
immediately prior to June 1, 1964 became seniors to the
teachers working in ’B’ type High Schools, Ex-District Board
High Schools and Ex-Anchal High Schools. The scheme put
forward by the Government appears to us to be an irrational
one. We may at this stage mention that when this case was
heard earlier by a bench of three learned Judges of this
Court consisting of V.R. Krishna Iyer, R.S. Pathak (as he
then was) and o. Chinnappa Reddy, JJ. it was observed by the
learned Judges on January 3 1, 1980 thus:
"We have been taken through the judgment of the
High
660
Court and the relevant facts by Shri Sikri and we
are satisfied that the reasons given by the High
Court are far from satisfactory. On the other
hand, no serious consideration of the ground of
discrimination in ignoring the past service of the
teachers has been given by the High Court."
After making the above order the learned Judges granted
time to the State Government to evolve a fresh scheme for
integration of the services of the teachers in the schools
referred in the scheme of 1964 with the teachers employed in
the High Schools which were Government Schools all along. It
is reported to us that the Government was not willing either
to modify the existing scheme or to formulate a new scheme
in a reasonable way. We respectfully agree with the above
observations made by the three learned Judges. We are of the
view that the High Court was in error in upholding the terms
of the scheme insofar as the question of seniority was
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concerned. We are, therefore, constrained to reverse the
judgment of the High Court insofar as the question relating
to the validity of the terms of the scheme pertaining to the
seniority of the teachers working in the schools referred to
in it is concerned. We hold that the clause in the scheme
which reads: "But for the purpose of reckoning their
seniority in Government service, their services will be
counted from the date of conversion of the schools into
Government schools" is void. We direct the State Government
to treat on and after January 26, 1950 the service of the
teachers of ’B’ type High Schools, Ex-District Board High
Schools and Ex-Anchal High Schools as the service under the
State Government. It is open for the State Government to
evolve a reasonable formula for integrating the cadres of
these teachers with the cadres of teachers in High Schools
which have been under the Government all along. Before
bringing about such integration, the Government may
formulate reasonable principles for equating the posts in
the Government High Schools with the posts in the ’B’ type
High Schools, Ex-District Board High Schools and Ex-Anchal
High Schools having regard to the minimum qualification for
the posts, pay, responsibilities etc. In the light of the
said principles, the Government shall prepare a seniority
list. Thereafter. it shall proceed to make promotions of
teachers to higher cadres. We may at this stage state that
the learned counsel for the appellant and other teachers
working in ’B’ type High Schools, Ex-District Board High
Schools and Ex-Anchal High Schools has submitted that these
teachers do not insist upon promotions being given to them
with retrospective effect even if it is found that they are
entitled to it but they only pray that they may be promoted
to the vacancies which may occur in the higher cadres
hereafter. We express our
661
appreciation of the stand taken by the learned counsel in
this regard. The State Government shall, therefore, promote
these teachers to higher posts as and when vacancies arise
hereafter on the basis of their rank in the seniority list
if they are found fit for such promotion. The learned
counsel has further submitted that if the State Government
finds it difficult to integrate the teachers belonging to
’B’ type High Schools and teachers of other integrated
schools with the teachers working in Government High
Schools, the State Government may at least consider the
question of treating the two groups of teachers as belonging
to separate cadres and reserve certain percentage of posts
for being filled up only by the teachers of ’B’ type High
Schools, Ex-District Board High Schools and Ex-Anchal High
Schools as was the case in State of Punjab v. Joginder
Singh, [ 1963] Supp. 2 S.C.R. 169. The Government is at
liberty to do so if it finds it to be convenient. The order
of the High Court is, therefore, modified to the above
extent and the State Government shall prepare seniority list
and make promotions accordingly within six months from today
in the light of the above observations.
As regards the question of the Contributory Provident
Fund Scheme is concerned, we are informed that it has been
satisfactorily settled by the State Government. We,
therefore, express no opinion on that question.
The appeal is disposed of accordingly.
S.L. Appeal disposed of
662