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Tuesday, July 5, 2016

the pensionary benefits and gratuity. = the appellant - 55 per cent physically handicapped, was appointed as Typist-cum-Clerk on 13.10.1969 and retired from service in the year 2001. It is true that his appointment was after the Gujarat Panchayat Service (Appointing Authorities) Rules, 1967 and other set of Rules came into force. But nothing has been placed on record indicating any prevalent procedure which was allegedly infracted or any reason why his appointment could be termed as illegal or invalid. All through his service till he retired, he was paid all the emoluments and salary like any regular employee. We see no reason why the appellant could be denied the pensionary benefits and gratuity. We allow this appeal and direct the respondent to pay to the appellant family pension and the amount of gratuity with simple interest at the rate of 9% per annum within two months from the date of this Judgment.

                                                              Non-Reportable

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 5441 OF 2016
                 (Arising out of S.L.P. (C) No.2324 of 2010)

Harijan Paniben Dudabhai                           …… Appellant

                                   Versus

State of Gujarat and others                        …… Respondents

                                    With

                       CIVIL APPEAL NO. 5442  OF 2016
                 (Arising out of S.L.P. (C) No.8896 of 2010)

                        CIVIL APPEAL NO. 5443 OF 2016
                 (Arising out of S.L.P. (C) No.1305 of 2011)

                                     and
                        CIVIL APPEAL NO. 5444 OF 2016
                (Arising out of S.L.P. (C) No. 9756 of 2011)

                                  JUDGMENT

Uday Umesh Lalit, J.


      Leave granted.

2.    These appeals challenge common judgment of the High Court  of  Gujarat
dated 02.07.2009.  As Letters  Patent Appeal No.1522 of 2004 was  considered
 as lead  matter by the High Court,  the appeal arising  therefrom  is  also
considered as lead matter by us.   The facts giving rise to Letters   Patent
Appeal No.1522 of 2004 are dealt with in detail hereafter.

3.    In terms of Gujarat Government Gazette dated 01.07.1961,     the  then
Okha  District  Municipality  got  converted  into  Okha  Gram   and   Nagar
Panchayat on and w.e.f.  02.02.1962.  Upon  such  conversion,  the  existing
staff of municipality was allocated to Gram Panchayat and  treated  as  part
of Panchayat Service. Gujarat Panchayats Act, 1961 (hereinafter referred  to
as the “Act”) deals with Panchayat Service and various sets of Rules  framed
pursuant to the power conferred under the Act, deal with  matters  including
classification of Panchayat Service and conditions  of  service  as  regards
Panchayat Service.

4.    Section 203 of the Act is to the following effect:
“203. Panchayat Service to be regulated by rules – (1) For this  purpose  of
bringing about uniform scales of  pay  uniform  conditions  of  service  for
persons employed in the discharge of functions  and  duties  of  panchayats,
there shall be constituted  a  Panchayat  Service  in  connection  with  the
affairs of panchayats.  Such  service  shall  be  distinct  from  the  State
service.

(2)   The Panchayat Service shall consist of such classes, cadres and  posts
and the initials strength of officers and servants in each  such  class  and
cadre shall be such, as the State Government may by order from time to  time
determine:

      Provided that nothing in this sub-section  shall  prevent  a  district
panchayat  from  altering,  with  the  previous  approval   of   the   State
Government, any class, cadre or number of posts so determined by  the  State
Government.

(2A)  (a)   The cadres  referred  to  in  sub-section  (2)  may  consist  of
district cadres, taluka cadres and local cadres.

      (b)   A servant belonging to a district cadre shall be  liable  to  be
posted, whether by promotion or transfer to any post in any  gram  or  nagar
in the same taluka.

      (c)   A servant belonging to a taluka cadre  shall  be  liable  to  be
posted, whether by promotion or transfer to any post in any  gram  or  nagar
in the same taluka.

      (d)   A servant belonging to a local  cadre  shall  be  liable  to  be
posted whether by promotion or transfer to any post in the same gram or,  as
the case may be, nagar.

(2B)  In addition to the posts in the  cadres  referred  to  in  sub-section
(2A),  a panchayat may have such other posts of such classes  as  the  State
Government may, by general or special order determine.  Such posts shall  be
called “deputation posts”  and  shall  be  filled  in  accordance  with  the
provisions of Section 207.

(3)   Subject to the provisions of this Act, the State Government  may  make
rules regulating the mode of recruitment either by holding  examinations  or
otherwise and conditions of service of persons appointed  to  the  panchayat
service and the powers in respect of appointments, transfers and  promotions
of officers and servants in the panchayats service and  disciplinary  action
against any such officers or servants.

(4)   Rules made under sub-section(3) shall in particular contain –

a provision entitling servants of such cadres in the  Panchayat  Service  to
promotion to such cadres in the State Service as may be prescribed.

A provision specifying the  clauses of posts recruitment to which  shall  be
made  through the District Panchayat Service  Selection  Committee  and  the
class of  posts,  recruitment   to  which  shall  be  made  by  the  Gujarat
Panchayat Service Selection Board, and


A provision regarding the percentage of vacancies to  be  reserved  for  the
members of Scheduled Castes, Scheduled Tribes and other backward classes  in
the Panchayat Service.

(5)      Such rules may provide for inter  district  transfers  of  servants
belonging to the Panchayat Service and the circumstances in  which  and  the
conditions subject to which such transfers may be made .

(6)         The promotion of a servant in a cadre in the  Panchayat  Service
to a cadre in the State service in accordance  with  the  rules  made  under
clause (a) of the sub-section (4) shall not affect-

  any obligation or liability incurred or default committed by such  servant
during the period of his service in a cadre in the Panchayat  Service  while
acting or purporting to act in the discharge of his duties as such  servant,
or

   any investigation, disciplinary action  or  remedy  in  respect  of  such
obligation, liability or default and any  such  investigation,  disciplinary
action or remedy may be instituted,  continued  or  enforced  in  accordance
with the law applicable thereto during the said period of  service  by  such
authority as the State Government may, by general or special  order  specify
in this behalf.”


5.    In State of  Gujarat  and  another  v.  Ramanlal  Keshavlal  Soni  and
others[1] a Constitution Bench of this Court  held  that  Panchayat  Service
constituted under aforesaid Section 203 of the Act is  a  Civil  Service  of
the State and the members of the Service are government servants.

6.    Coming to the facts of the lead  matter,  one  Vela  Keshav,  deceased
husband of the appellant was appointed  by  Okha  Gram  Panchayat  as  Safai
Kamdar on 04.02.1964.  After having put in 33 years of service, he  died  in
harness on 06.02.1997. The record indicates that monetary benefits  such  as
Rs.14525.50 towards leave encashment, Rs.26,042/-  towards  Group  Insurance
and Rs.54,221/- towards General Provident Fund were paid  to  the  appellant
as legal representative of the deceased.   The  appellant  represented  that
the family of Vela Keshav was also entitled to family pension  and  gratuity
which claim having not been accepted, the appellant moved the High Court  by
filing Special Civil Application No. 354 of 2004.

7.    Affidavits in opposition were filed  by  Deputy  District  Development
Officer, District Panchayat, Jamnagar as respondent no.3 and by Sarpanch  of
Okha Gram Panchayat as respondent No.5.   It  was  submitted  by  them  that
since the deceased was not recruited by the  Gram  Panchayat  in  accordance
with the Statutory Rules, the appellant was not  entitled  to  claim  family
pension.  The matter came up before a Single Judge of the High Court who  by
her order dated 15.07.2004 dismissed the  Special  Civil  Application.   The
submission advanced on behalf of the respondents  that  since  the  deceased
was not appointed by the  District  Panchayat  Service  Selection  Committee
constituted under Section 2(11)  of  the  Act,  was  not  a  member  of  the
Panchayat Service as envisaged by Section 203 of the Act  and  as  such  the
appellant was not entitled to claim any  family  pension  or  gratuity,  was
accepted by the Single Judge.

8.    The appellant being aggrieved carried the  matter  further  by  filing
Letters Patent Appeal No.1522 of 2004.  At the appellate stage affidavit  in
reply filed by District Development Officer,  District  Panchayat,  Jamnagar
reiterated the earlier stand.   An affidavit  in  reply  on  behalf  of  the
State Government was filed by Deputy Secretary,  Panchayats,  Rural  Housing
and Rule Development Department, Gandhi Nagar which dealt  with  the  matter
in issue in following terms.
“In the present case,  since  appellant  has  not  undergone  any  selection
procedure and he has  obtained  the  employment  only  on  the  strength  of
passing resolution in panchayat,  Okha  Gram  Panchayat  has  not  made  any
proposal to regularize such  unauthorized  recruitment  and  appointment  of
petitioner’s husband.  Therefore, he cannot be treated  as  an  employee  of
local cadre of panchayat service and since he  cannot  be  considered  as  a
member of panchayat service, he is not entitled for any pensionary  benefits
from government treasury.  It is the responsibility of Okha  Gram  Panchayat
to pay pensionary benefit from its own fund as per the terms and  conditions
at the time of petitioner’s husband appointment by Okha Gram Panchayat…….”

However what was the procedure which was  prevalent  in  1964  and  how  the
appointment was bad or illegal, was not specified

9.    The reply filed on behalf of respondent no.5 by the  Administrator  of
Okha Municipal Borough was as under:
“The appointment of deceased Vela Keshav was made by the Gram  Panchayat  by
passing a Resolution and he was holding the post within the  sanctioned  set
up of Safai Kamdars (Sweepers).  The said Resolutions of the Gram  Panchayat
making the appointment  of  the  deceased  are  not  available  at  present.
However, the necessary entry made  in  the  Service  Book  of  the  deceased
employee showing the other details in the Service Record is available.
……..

The deceased  employee  was  appointed  as  a  Full  time  employee  on  the
sanctioned set up of the Gram Panchayat getting regular salary.
…….

The Okha Gram Panchayat appointed him as  Safai  Kamdar  on  the  terms  and
conditions as its own employee where there  were  no  rules.   However,  the
fact remains  that  the  deceased  was  holding  the  post  on  the  set  up
sanctioned by the  Development  Commissioner  and  had  continued  till  his
retirement[2] as a regular full time employee.  Further, it cannot  be  said
that his appointment was not made in accordance with  the  provisions  under
Section 203 of the Panchayat Act because no such rules of  recruitment  were
as such  framed  on  the  date  on  which  the  deceased  was  appointed  on
4.2.1964.”
10.   The Division Bench of the High Court by its judgment and  order  under
appeal dismissed Letters Patent Appeal No.1522 of 2004 and  other  connected
matters.   It was observed that only those employees who had been  appointed
following the procedure laid down in Section 203 of the Act  and  the  rules
framed thereunder, would alone be members of Panchayat Service,  apart  from
the allocated employees from the municipality to the Panchayats at the  time
of formation of  the  Panchayats  or  such  other  employees  who  had  been
recognized as members of Panchayat Service by the State  Government,  or  by
the District Panchayat Selection Committee.  It was  further  observed  that
merely  because  Panchayat  had  paid  salary  and  other  benefits  to  the
deceased, it did not mean that he was member of  Panchayat Service so as  to
get the benefits available to  members  of  Panchayat  Service  like  family
pension and gratuity.

11.   In the present case the deceased was  appointed  as  Safai  Kamdar  on
4.2.1964 by Gram Panchayat by passing  an  appropriate  resolution.   It  is
true that Section 203(3) of the Act empowers the State  Government  to  make
rules regulating mode of recruitment.  Our  attention  in  that  behalf  was
invited to Gujarat Service (Appointing Authorities) Rules, 1967.  Rule 2  of
the said Rules stipulates, inter alia,  that  the  Appointing  Authority  in
respect of posts under the Gram Panchayat, which are included in the  “local
cadre” is Gram Panchayat itself.  The term “local cadre”  finds  elaboration
in Part III of Gujarat Panchayat  Service  (Conditions  of  Service)  Rules,
1977 (hereinafter referred to as “the  1977  Rules).   Part  III   captioned
“Local Cadre” is to the following effect:
“I.   Secretary of a Nagar Panchayat
 II   The following posts under the Nagar  or  as  the  Case  may  be,  Gram
Panchayat, namely –

Chief Officer (Nagar Panchayat)
Head Clerk
Senior Clerk
Junior Clerk
Vasulati Clerk
Typist
Octroi clerk
Accountant
Cashier
Tax Inspector
Shop Inspector
Octroi Inspector
Overseer
Power House Manager
Driver
Cleaner
Posts required for schools run by the Panchayat
Posts required for dispensaries run by the Panchayat
Posts required for libraries run by the Panchayat
 Posts required for dispensaries run by the Panchayat

III   All posts belonging to the  inferior  panchayat  Service   under  Gram
Panchayat or Nagar Panchayat.

IV    All other technical and non-technical posts under the  Gram  Panchayat
or Nagar Panchayat.”

12.   Item III of aforementioned Part III  deals  with  “Inferior  Panchayat
Service” under Gram Panchayat or  Nagar  Panchayat  which  term  is  defined
inter alia in Rule 2(h) of the 1977 Rules, as under:
“2(h) “Superior Panchayat Service” and “Inferior  Panchayat  Service”  means
respectively the Superior  Panchayat  Service  and  the  Inferior  Panchayat
Service as constituted respectively by clause (a) and  clause  (d)  of  sub-
rule (2) of Rule 3 of the  Gujarat  Panchayat  Service  (Classification  and
Recruitment) Rules, 1967.”

Sub-rule (2) of Rule 3 of the Gujarat Panchayat Service (Classification  and
Recruitment) Rules, 1967 deals with Panchayat Service  and  stipulates  that
it shall consist of two classes, namely, “Superior  Panchayat  Service”  and
“Inferior Panchayat Service”.

13.   The statutory provisions as mentioned above and  the  clear  assertion
by Respondent No.5 in his affidavit in reply, shows that in  the  year  1964
when deceased Vela  Keshav  came  to  be  appointed,  there  were  no  rules
governing the appointment  in  question.   The  rules  regulating  ‘Superior
Panchayat Service’ and ‘Infereior Panchayat Service’ in  the  form  of  Gram
Panchayat Service (Classification and Recruitment) Rules, 1967 came  on  the
statute book in the year 1967.   Going  by  the  Gujarat  Panchayat  Service
(Appointing Authorities) Rules, 1967,  Gram  Panchayat  is  the  appropriate
authority in respect of posts included in the Local Cadre.  Thus, we do  not
find any infraction in the appointment of Vela  Keshav,  who  was  appointed
pursuant to a resolution passed by Panchayat.  Nothing has been pointed  out
how Gram Panchayat was not competent to make such  appointment  or  that  at
the relevant time in question the power to make appointments was  vested  in
an authority other than Gram  Panchayat  or  that  there  was  any  separate
modality or procedure prescribed for effecting such an appointment.

14.   As detailed in the affidavit in reply on behalf  of  Respondent  No.5,
the deceased Vela Keshav was holding the post within the sanctioned  set  up
of Safai Kamdars and that he  was  a  full  time  employee  getting  regular
salary.  The deceased Vela Keshav had put in 33 years of  service  and  died
in harness.  At no stage, while he was in service any objection  or  even  a
doubt was raised that he was not  validly  appointed.   In  our  view,  Vela
Keshav must be held to be one who was regularly  appointed  and  we  do  not
find any infirmity or illegality in his appointment so as to disentitle  the
family of the benefits of family pension and gratuity.

15.   At this stage, Circular  dated  26.02.2008  issued  by  Government  of
Gujarat,  Panchayat Rural  Housing  and  Rural  Development  on  26.02.2008,
which was placed on record by way of Additional Documents, may  be  adverted
to.  This Circular after considering  cases  of  those  who  were  appointed
between 1.04.1963 and 5.05.1984, stated as under:
      “It is, therefore, informed to all the District  Development  Officers
to initiate proceedings in  accordance  with  the  instructions  given  vide
letters cited  at  preamble  for  regularizing  services  of  the  employees
appointed/recruited under the converted  gram/nagar  panchayats  during  the
period from 1.4.1963 to 10.7.1978 and 10.07.1978 to 5.06.1984 and to  decide
their other service  related  matters  accordingly.   Further,  it  is  also
hereby informed to submit proposal of posts of remaining  employees  as  per
item no.1  of  letter  at  preamble  1  who  have  been  recruited/appointed
promoted during the  period  from  10.07.1978  to  5.06.1984  and  on  other
aspects of the aforesaid letters also,  if  guidance/approval  is  required,
DDO shall have to  submit  proposal  through  Development  Officer’s  office
within six months after examining  service  record  of  each  employee  with
their clear opinion.”

16.   In the totality of circumstances, we find that  the  appellant  cannot
be denied the benefits in question.  We, therefore  allow  this  appeal  and
set aside the judgments and orders rendered by  the  Single  Judge  and  the
Division Bench and allow  Special  Civil  Application  No.354  of  2004.  We
direct  the  respondents  to  pay  to  the  appellant  all  the  arrears  of
pensionary benefits and gratuity with simple interest at the rate of 9%  per
annum within two months from the date of this Judgment.

 17.  In appeal arising out of SLP(C) No.8896 of  2010,  the  appellant  was
appointed as a Peon on 4.4.1964 and in due course of time  was  promoted  to
the post of Sanitary Mukadam and later to the  post  of  Octroi  Clerk.   He
retired in the year 2001 after having put in 37 years  of  service  and  all
through he  was  paid  all  the  benefits  including  those  under  4th  Pay
Commission as a regular employee would receive.    His case was  dealt  with
on the strength of the Judgment in the lead matter by  the  High  Court  and
since we have set aside the view  taken  by  the  High  Court  in  the  lead
matter, this appeal also deserves to be allowed.  While condoning the  delay
and allowing the appeal, the respondents are directed to pay the arrears  of
pensionary benefits and the amount of gratuity to the  appellant  along  and
gratuity with simple interest at the  rate  of   9%  per  annum  within  two
months from the date of this Judgment.

18.   In appeal arising out of SLP(C) No.9756 of 2011, the deceased  husband
of the present appellant was appointed as Sanitary Inspector  by  Okha  Gram
Panchayat on 14.12.1964 and the said  appointment  was  later  confirmed  by
Development Commissioner vide order dated 5.4.1973.  In accordance with  the
view taken by us in the  lead  matter,  this  appeal  also  deserves  to  be
allowed.  Allowing the appeal, we direct  the  respondents  to  pay  to  the
appellant all the arrears of family pension and the amount of gratuity  with
simple interest at the rate of 9% per annum within two months from the  date
of this Judgment.
19.   In appeal arising out of SLP(C) No.1305 of 2011 the appellant, 55  per
cent  physically  handicapped,  was   appointed   as   Typist-cum-Clerk   on
13.10.1969 and retired from service in the year 2001. It is  true  that  his
appointment  was   after   the   Gujarat   Panchayat   Service   (Appointing
Authorities) Rules, 1967 and other set of  Rules  came  into  force.     But
nothing has been placed on record indicating any prevalent  procedure  which
was allegedly infracted or any reason why his appointment  could  be  termed
as illegal or invalid.  All through his service  till  he  retired,  he  was
paid all the emoluments and salary like any regular  employee.   We  see  no
reason why the  appellant  could  be  denied  the  pensionary  benefits  and
gratuity.  We allow this appeal and direct the  respondent  to  pay  to  the
appellant family pension and the amount of gratuity with simple interest  at
the rate of 9% per annum within two months from the date of this Judgment.

20.   All the appeals are allowed in the aforesaid terms without  any  order
as to costs.

                                        ……………………………..J,
                                        (V. Gopala Gowda)


                                        ……………………………..J.
                                        (Uday Umesh Lalit)
New Delhi,
July 1 , 2016
-----------------------
[1]         [2]  (1983) 2 SCC 33

[3]

      [4]   The Affidavit wrongly mentioned that the employee had continued
till he retired.  As a matter of fact, Vela Keshav had died in harness.


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