MAHARASHTRA RAJYA PADVIDHAR PRATHAMIK SHIKSHAK VA KENDRA PRAMUKH SABHA vs. PUNE MUNICIPAL CORPORATION

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 1765 OF 2023 [ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 18911 OF 2021] Maharashtra Rajya Padvidhar Prathamik  Shikshak Va Kendra Pramukh Sabha          .…Appellant VERSUS Pune Municipal Corporation and Ors.              .…Respondents JUDGMENT Surya Kant, J.   Leave granted.  2. The issue that requires our consideration in this case is whether the services rendered by primary teachers while in the Signature Not Verified service   of   the   Zilla   Parishad   (hereinafter   “ZP”)   deserves   to   be Digitally signed by VISHAL ANAND Date: 2023.03.21 10:06:57 IST Reason: counted towards their seniority after the transfer and merger of Page|1 their services into the Pune Municipal Corporation (hereinafter “PMC”)?  FACTS :  3. The State of Maharashtra is vested with the power to specify a `larger urban area’ of a municipal corporation under Section 3(1)   of   the   Maharashtra   Municipal   Corporation   Act,   1949   (in short,   “MMC   Act”).   Such   an   area   can   further   be   altered   by issuing a Notification under Section 3(3).  The expression, “larger urban area” is defined under Article 243Q(2) of the Constitution, which says that:­

4. State of Maharashtra in exercise of its powers under Section 3(1) of MMC Act decided to expand the territorial limits of the PMC   and,   consequently,   the   geographical   area   of   38   villages which were part of the Pune ZP were merged into the PMC with effect from 01.11.1999. Post the merger, primary teachers as well Page|2 as employees from other departments who were serving in those villages were given the option to have themselves transferred and absorbed into the services of PMC. In this context, Sections 3(1) & 3(3) of the MMC Act being 5. relevant are reproduced below: ­ “3.   Specification   of   larger   urban   areas   and   [(1) The Corporation for constitution of Corporations. every City constituted under this Act existing on the date of   coming   into   force   of   the   Maharashtra   Municipal Corporations and Municipal Councils (Amendment) Act, 1994, specified as a larger urban area in the notification issued in respect thereof under clause (2) of Article 243­Q of the Constitution of India, shall be deemed to be a duly constituted Municipal Corporation for the larger urban area so specified forming a City, known by the name "The Municipal Corporation of the City of...."; xxx xxx xxx (3) [(a)Subject to the provisions of sub­section (2), the State   Government] may   also   from   time   to   time   after consultation with the Corporation by notification in the Official Gazette , alter the limits specified for any larger urban area under sub­section (1) or sub­section (2) so as to include therein, or to exclude therefrom, such area as is specified in the notification. (b)   Where   any   area   is   included   within   the   limits   of the [larger   urban   area] under   clause   (a),   any appointments,   notifications,   notices,   taxes,   orders, schemes, licences, permissions, rules, bye­laws or forms made, issued, imposed or granted under this Act or any other   law,   which   are   for   the   time   being   in   force   in the [larger   urban   area] shall,   notwithstanding   anything contained in any other law for the time being in force but save as otherwise provided in section 129A or any other provision  of this Act, apply  to and be in force in the additional area also from the date that area is included in the City. xxx xxx xxx ” Page|3 6. Respondent Nos. 5 to 79 were working as Primary Teachers in the Pune ZP. They were appointed on different dates prior to 01.11.1999. They too were given option for their merger in the PMC. They opted to accede to the absorption and joined the PMC. It may be relevant to mention at this stage that with a view to regulate the conditions of service of employees who are merged from the Zilla Parishad to Municipalities, the State Government had passed a Resolution (hereinafter “GR”) dated 13.08.1990, the relevant part whereof reads as follows: ­  “xxx xxx xxx government was considering whether to consider service provided for Zilla Parishad by said teachers should be considered  for  pay  fixing,  seniority,  retirement   benefit, etc.in   Municipal   Council/Municipal   Corporation education department. Government is passing order now regarding same that, service in Zilla Parishad of primary teachers should be considered for pay fixing, seniority, retirement benefit, etc. in Municipal Council/Municipal Corporation service, who are transferred under rule in concerned   Municipal   Corporation/Municipal   Council education   board   from   concerned   Zilla   Parishad   for reasons mentioned above. but concerned Zilla Parishad should accept liability of service prior to classification of concerned primary teachers. government grant shall be passed for. Zilla Parishad at the rate fixed thereon. 2. This government  resolution is passed  under  official approval   of   town   development   department,   village development department and finance department  and under official reference ­ 1045 / number­cr­1045/ 86/ser­4, dated 18.8.1986 of finance department. xxx  xxx xxx”                                        ( sic. ) Page|4 7. The GR reproduced above unambiguously provides that the services   rendered   by   teachers   in   a   ZP   shall   be   taken   into consideration when fixing pay, seniority, retiral benefits etc. on their permanent transfer to Municipalities.  Despite the seeming clarity on this point, there arose a dispute in respect to fixation of inter   se   seniority   between   the   teachers   who   were   initially recruited in the ZP and were later on absorbed into the PMC, as opposed   to   the   primary   teachers   who   had   been   part   of   the services of the PMC from the very beginning. There were a series of   correspondence   on   this   issue   between   the   Chief   Executive Officer of the ZP and the Administrative Officer, Shikshan Mandal of   the   PMC,   including   two   letters   dated   11.10.1999   and 02.07.2011. These communications do not appear to us of any legal consequence given the fact that the GR dated 13.08.1990 has   not   been   rescinded,   modified   or   superseded   by   any subsequent government resolution.  8. The   Appellant   is   an   Association   formed   by   the   primary teachers who were directly recruited by the PMC. Its members have an  inter  se seniority dispute with Respondent Nos. 5 to 79. A draft seniority list was circulated by the PMC which proposed Page|5 to assign seniority to Respondent Nos. 5 to 79 from the dates they joined service in the ZP. The PMC, however, reversed its tentative decision vide letter on 04.02.2017 which stated that Respondent Nos. 5 to 79 would be assigned seniority only from the date of their absorption into PMC. The private respondents raised   objections   against   the   aforementioned   decision,   which resulted in the constitution of a committee of five officers of the PMC   for   consideration   of   those   objections.   On   the recommendations   of   the   Committee   a   final   seniority   list   was eventually   issued   on   20.02.2018   in   which   the   seniority   of Respondent Nos. 5 to 79 was fixed only from the date of their absorption into the PMC. For the sake of specificity, the outcome of   the   Committee’s   recommendations   was   that   the   service rendered by Respondent Nos. 5 to 79 in their roles within the ZP stood excluded from the length of their service. 9. Aggrieved, Respondent Nos. 5 to 79 approached the High Court and a Division Bench vide the impugned judgment dated st 1  October, 2021 has allowed their writ petition in the following terms: ­  “52. A conjoint reading of Section 493 which provides for transitory provisions read with Clause 5 of Appendix IV clearly indicates that the service rendered by the officers Page|6 and   servants   before   in   the   employment   of   the Municipality or the local authority immediately before the appended   date   shall   be   the   officers   and   servants employed by the Corporation under the said Act and the services rendered by such officers and servants before the appointed date shall be deemed to be service rendered in the   service   of   the   Corporation.   The   second   proviso   to Clause 5 of Appendix IV empowers the Corporation to discontinue, the service of any officer or servant who in its   opinion   is   not   necessary   or   suitable   to   the requirements of the municipal service, after giving such officer or servant, such notice as is required to be given by   the   terms   of   his   employment.   Such   discontinued employee   shall   be   entitled   to   such   leave,   pension   or gratuity as he would have been entitled to take or receive on being invalided out of service if this Act had not been passed. 53.   It   is   not   the   case   of   the   respondent   no.1   or respondent no.3 that service of any of these petitioners were discontinued by the respondent no.1 under second proviso to Clause 5 of Appendix IV on the ground of not being   suitable   to   the   requirements   of   the   municipal service   or   on   the   ground   that   their   services   were   not necessary for the respondent no.1 – Corporation. 54. In our view, the said provision under Section 493 of the Maharashtra Municipal Corporations Act read with Clause S(c) of the Appendix IV would also apply in case of en   bloc   transfer   of   the   property   forming   part   of   such village   which   were   transferred   to   the   Municipal Corporation along with the schools, employees and the students.   In   our   view,   the   seniority   of   each   of   these petitioners thus will have to be counted from their initial date of appointment in the schools run by Zilla Parishad and not from the date of their transfer in the schools run by the respondent no.1 Corporation. The impugned order showing   the   petitioners   below   the   then   existing employees of the respondent no. 1 by considering the date   of   their   transfer   in   the   schools   run   by   the respondent   no.1  as  the  date  of  appointment  is  totally illegal and contrary to Section 493 read with Clause S(c) of Appendix IV thereto.” 10. The   Appellant   Association,   representing   those   primary teachers who have been recruited directly by the PMC and whose Page|7 seniority is adversely affected by the inclusion of the period spent by Respondent Nos. 5 to 79 in ZP towards their seniority after absorption into the PMC, has now filed this appeal. SUBMISSIONS: 11. Mr. Vinay Navare, learned Senior Counsel for the Appellant advanced three submissions:   (i) Firstly, he argued that Respondent Nos. 5 to 79 were given a choice to either seek transfer into the PMC or to continue with their services in the schools run by the ZP. The respondent­teachers consciously made a choice to be assimilated into the PMC. Since this was a case   involving   ‘voluntary   transfer’   rather   than   an ‘administrative transfer’, they cannot claim the benefit of their past service towards fixation of seniority. (ii) Secondly,   it   was   a   case   of   expansion   of   the   `larger urban   area’   belonging   to   the   PMC   and,   hence, conditions of service of Respondent Nos. 5 to 79 shall remain protected only to the extent as provided under Section 3(3)(b) of the MMC Act. The said provision is conspicuously   silent   with   respect   to   protection   and Page|8 consideration of past service. Section 493 of the MMC Act read with Clause 5(c) of Appendix (IV) relied upon by the High Court will be attracted only in a case of newly   constituted   Municipality.   That   being   not   the case here, the High Court gravely erred in relying upon the   said   provision.   Shri   Navare   explained   that   the legislative intent can be discerned from the fact that a provision similar to the first proviso to Clause 5(c) of Appendix IV, has not been added to Section 3(3)(b) of the MMC Act. Reliance was placed on  Union of  India

following was observed:

(iii) Thirdly, Shri Navare argued that the decision of PMC five­Member Committee, which unequivocally held that the date of joining the PMC would be the conclusive determinant for the purpose of  inter­se  seniority, was a quasi­judicial order which Respondent Nos. 5 to 79 did 1   (2003) 4 SCC 695 Page|9 not assail before any forum. Their acquiescence and long silence on the matter estop them from questioning the subsequently published final seniority list which was a step taken to comply with the decision of the Five Member Committee.  12. Learned   counsel   for   Respondent   No.   1,   the   PMC,   also supported the cause of the Appellant and urged that in the event of granting the benefit of past service to Respondent Nos. 5 to 79, a cascading domino effect will be triggered which will lead to other   employees   of   different   departments   who   have   been absorbed into PMC raising  similar  claims,  thus,  spawning  an unending seniority dispute between different cadres. 13. On   the   other   hand,   Mr.   Abhay   Anil   Anturkar,   learned counsel for Respondent Nos. 5 to 79 strenuously opposed the Appellant’s claim and urged that: (i) First proviso to Clause 5(c) of Appendix IV, which is to be   read   into  Section  493   of   MMC   Act,   categorically provides   that   the   service   rendered   by   Officers   and Servants   before   their   date   of   appointment   shall   be deemed to be service rendered in the service of the Page|10 Municipal Corporation itself. In view of this statutory mandate,   the   High   Court   has   rightly   held   that Respondent  Nos.  5  to 79  are  entitled  to  assign the seniority from the date they were appointed in ZP. (ii) The Government Resolution dated 13.08.1990, in no uncertain terms, provides that on inclusion of the area of a ZP within the limits of Municipal Corporation, the transferred employees shall be entitled to the benefit of their past service towards fixation of pay, seniority and retiral   benefits   etc.   This   Resolution   falls   within   the ambit of Article 162 of the Constitution, and is binding on   all   inferior   authorities   including   the   PMC.   Since Respondent Nos. 5 to 79 were appointed in the ZP, their previous service cannot be ignored. He forcefully denied the Appellant’s contention that it was a case of `voluntary   transfer’   and   maintained   that   private respondents had no choice but to give their consent for absorption in PMC as all the schools where they were working had been transferred to within the municipal limits. Page|11 (iii)   The Appellants have mis­quoted the contents of letter dated 11.10.1999. The true extracts of the letter are as follows: “xxx  xxx  xxx 4. Also,   it   is   hereby   ordered   to   absorb   only those primary teachers who have consented for being   transferred   to   the   Pune   Municipal Corporation   and   it   is   hereby   requested   to accommodate   said   primary   teachers   with Municipal Corporation. xxx  xxx  xxx” (iv) Neither the Appellant nor the PMC     invoked Section 3(3)(b) of MMC Act before the High Court and their reliance upon this provision has been made for the first time before this Court only. (v)  With regard to the claim raised by Appellant regarding acquiescence and estoppel, learned counsel countered by   arguing   that   Respondent   Nos.   5   to   79   were   not obliged   to   challenge   recommendations   of   PMC Committee  specifically,  given that they  consequently objected to the culmination of those recommendations th into the final seniority list dated 20  February, 2018, without any delay. Page|12 ANALYSIS : 14. We have considered the rival submissions made on behalf of the parties and have minutely examined the statutory provisions relied   upon   by   both   the   sides.   In   our   considered   view,   the following   two   questions   need   to   be   determined   to   resolve   the controversy: (I) Whether the  inter se  seniority of the primary teachers who were appointed in the ZP and were later on absorbed into   PMC,   vis­à­vis   those   primary   teachers   who   directly joined PMC, is to be determined in accordance with Section 3(3)(b) of the MMC Act?;  (II) Alternatively,   should   such     seniority   be inter   se determined   in   accordance   with   Section   493   read   with Clause 5I of Appendix IV of the MMC Act? Question No. I: 15. On a cursory look of the legislative scheme behind the MMC Act,  it is   evident  that  Section   3   falls   in  Chapter   1,   which  is captioned   as   ‘PRIMARY’.   Since,   the   MMC   Act  was   enacted   in 1949, it has been suitably amended from time to time, especially Page|13 after the insertion of Part IX­A ‘Municipalities’ in our Constitution with effect from 01.06.1993.  Article 243Q(1)  mandates that,  in every   State,   the   following   would   be   constituted:   (a)   A   nagar panchayat,  for a transitional area, namely, an area in transition from rural to urban area; (b) a municipal council for a smaller urban area; and (c) a municipal corporation for a larger urban area. The obligation was placed on every State under sub­Article (2) of Article 243Q to define ‘transitional area’, ‘a smaller urban area’   or   ‘a   larger   urban   area’.   It   is   in   discharge   of   this Constitutional   obligation   that   the   State   of   Maharashtra   also amended the MMC Act thereby providing under Section 3(1) that a `larger urban area’ shall be specified by way of a Notification to be issued under Article 243Q(2) of the Constitution, and such an area   shall   be   deemed   to   be   a   duly   constituted   Municipal Corporation.   Sub­Section   (3)   further   provides   that   the   State Government, in consultation with the Corporation, may include or   exclude   an   area   from   within   the   limits   of   the   Municipal Corporation. It is in this context that Clause (b) of sub­section (3) provides that when an area is included within the limits of the `larger   urban   area’,   any   appointments,   notifications,   notices, taxes,   orders,   schemes,   licenses,   permissions,   rules,   by­laws Page|14 issued, imposed or granted, under the MMC Act or any other law which is for the time being in force in the larger urban area shall, notwithstanding anything contained in any other law, apply to and be in force in the additional area, from the date that area in question is included in the city. To simplify, Clause (b) merely states that whatever appointments, notifications, notices, rules or by­laws etc. are already in force in the existing ‘larger urban area’ will   mutatis mutandis   come into force in the “additional area” which is included by issuing a notification under Clause (a) of Section 3(3) of the MMC Act.  16. The purpose of Clause (b) is to ensure that any statutory or administrative decision which has already been enforced by a Municipal Corporation in its existing larger urban area shall stay in force and will become applicable automatically in the newly added   area   also.   The   expression   ‘appointments’   has   to   be understood in this context only.  17. The scope of Clause (b) as a provision is meant to facilitate the inclusion of newly added additional areas and to ensure that such areas do not remain in a vacuum for want of statutory or administrative decisions following the cessation of its status as Page|15 part of the ZP. Clause (b) of Section (3)(3) is not concerned with the protection of conditions of service of the employees of the ZP who   are   absorbed   into   a   Municipal   Corporation.   When   the Legislature never intended to regulate terms and conditions of the employees who are merged in a Municipal Corporation due to expansion of `larger urban area’, no inference in relation thereto can be drawn from the plain wording of Section 3(3)(b) of the MMC  Act.   The   reliance   placed   by   the   Appellants   on  the   said provision   is,   thus,   completely   misplaced   and   is   liable   to   be rejected. Question No. II: 18.  Section 493 of the MMC Act reads as follows: ­ “ 493.   Transitory   provisions.­   The   provisions   of Appendix IV shall apply to the constitution of the Corporation and other matters specified therein.” It may be seen that the provisions of Appendix (IV) shall apply to the constitution of the Corporation and other matters specified   therein.   Clause   (1)   of   Appendix   (IV)   pertains   to ‘construction of reference in other enactments’ whereas Clause 2 provides that all rights of the municipality or any other local authority shall, on the date in question, vest in the Corporation Page|16 constituted for the said area. Clauses (3) and (4) deal with ‘sums due’ and ‘debts, obligations, contracts and pending proceedings’, respectively.   Clause (5) thereafter reads as follows:­ 19. “ APPENDIX IV TRANSITORY PROVISIONS 1. Construction of references in other enactments. …. 2. Transfer of rights.­ … 3. Sums due. ­ …. 4. Debts, obligations, contracts and pending  proceedings. ­ …. 5. Continuation of appointments, taxes, budget  estimates, assessments, etc. –  Save as expressly  provided by the provisions of this Appendix or by a  notification issued under paragraph 22 or order made  under paragraph 23, ­ (a) any  appointment, notification,  notice,  tax,  order, scheme, licence, permission, rule, bye­law or form made, issued, imposed or granted under (the area constituted to be a City immediately, before the appointed day shall, in so far as it is not inconsistent with the provisions of this Act,   continue   in   force   until   it   is   superseded   by   any appointment,   notification,   notice,   tax,   order,   scheme, licence, permission, rule, bye­law, or form made, issued, imposed or granted under this Act or any other law as aforesaid, as the case may be; (b) all   budget   estimates,   assessments,   valuations, measurements,   and   divisions   made   under   (the Maharashtra Municipalities Act, 1965) or any other law in force in any area constituted to be a City immediately before   the   appointed   day   shall   in   so   far   as   they   are consistent with the provisions of this Act, be deemed to have been made under this Act; (c) all officers and servants in the employ of the said municipality   or   local   authority   immediately   before   the Page|17 appointed day shall be officers and servants employed by the   Corporation   under   this   Act   and   shall,   until   other provision is made in accordance with the provisions of this Act, receive salaries and allowances and be subject to the conditions of service to which they were entitled to subject on such date: Provided that service rendered by such officers and servants before the appointed day shall be deemed to be service rendered in the service of the Corporation: Provided   further   that   it   shall   be   competent   to   the Corporation to discontinue the services of any officer or servant who, in its opinion, is not necessary or suitable to the requirements of the municipal service, after giving such officer or servant, such notice as is required to be given by the terms of his employment and every officer or servant   whose   services   are   so   discontinued,   shall   be entitled to such leave, pension or gratuity as he would have been entitled to take or receive on being invalided out of service if this Act had not been passed.”   [Emphasis applied]   Clause 5, thus, deals with ‘continuation of appointments’, 20. taxes, budget estimates, assessments etc.’ and its Sub­Clause (C) specifically   says   that   all   officers   and   servants   under   the employment    of   a  municipality  or   local authority  immediately before the appointed day shall be officers and servants employed by the Corporation under this Act and shall, subject to other provisions made in accordance with the provisions of this Act, receive salaries and allowances and be subject to the conditions of service which were operative on such date. The first proviso provides, crucially, that service rendered by such officers and Page|18 servants   before   the   appointment   date   shall   be   deemed   to   be service rendered in the service of the Corporation itself.  21. There   is   no   dispute   regarding   the   fact   that   Clause   5(c), including its first proviso, occupies this field of law till date. The provision explicitly deals with protection of conditions of service of the officers and servants who were earlier employed in a local authority like a ZP, and who have been subsequently absorbed into a Municipal Corporation. It expressly protects their service rendered by them in the local authority before the appointed day and   further   provides   that   it   shall   be   considered   as   service rendered in the Municipal Corporation itself. Given the existence of this unambiguous provision, the only logical conclusion is that the service rendered by Respondent Nos. 5 to 79 in the ZP has to be   treated   as   service   rendered   in   the   PMC.   Such   service, therefore, has to be counted towards the determination of their seniority as well. There is no infirmity in the view taken by the High Court in this regard. 22. Additionally,   Clause   (5)   of   Appendix   IV   starts   with   the expression   ‘continuation’   of   appointments.   The   word ‘continuation’ connotes ‘without interruption’. It is an unbroken Page|19 and consistent state of affairs or operation of something. In other words, the service rendered by Respondent Nos. 5 to 79 in the ZP is consistent and unbroken and it remains in existence even after their   absorption   into   the   PMC   as   a   result   of   the   statutory protection embodied under Clause (5) of Appendix (IV) read with Section 493 of the MMC Act. 23. The   appellant’s   attempt   to   invoke   estoppel   against Respondent Nos. 5 to 79 for their failure to challenge the report of the PMC Committee does not assist its case. Firstly, the PMC Committee   was   not   competent   to   make   any   administrative recommendation   dehors   the   Government   Resolution   dated 13.08.1990.   Secondly,   the   cause   of   action   to   launch   the challenge arose in the first place only when final seniority list was issued on 20.02.2018. Soon thereafter, Respondent Nos. 5 to 79 approached the High Court, thus, dispelling any notion of them having   slept   on   their   rights.   They   cannot   be   said   to   have acquiesced   to   the   adverse   decision   taken   against   them   and neither there is any delay or latches on their part. Appellant’s objection on this ground is untenable and must be rejected.  Page|20 CONCLUSION: 24. For the aforementioned reasons, we do not find any merit in this appeal which is, accordingly, dismissed. All pending applications, if any, stand disposed of. 25. ………………….………..J. (SURYA KANT) ………………….………..J. (J.K. MAHESHWARI) NEW DELHI; MARCH 17, 2023. Page|21