1. Dispute over cancellation of passage allowance for family members of a civil servant — conflict between All India Services Rules, 1957 and constitutional guarantees regarding remuneration. (Para 1 , 2 , 3 , 4 , 8 )
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1961 Supreme(SC) 371
SUPREME COURT OF INDIA
21st November, 1961.
B.P. SINHA, C.J.I., J.L. KAPUR, M. HIDAYATULLAH, J.C. SHAH AND J.R. MUDHOLKAR, JJ.
Accountant General, Bihar and another, Appellants
Versus
N. Bakshi, Respondent.
Civil Appeal No. 704 of 1957.
Advocates appeared
Mr. M. C. Setalvad, Attorney General for India (M/s. R. Ganapathy Iyer, R. H. Dhebar and T. M. Sen, Advocates, with him), for Appellants; Mr. S. P. Varma, Advocate, for Respondent,
Advocates:
M.C.SETALVAD, R.Ganapathy Iyer, R.H.Dhebar, S.P.Varma, T.M.SEN
M.C.SETALVAD, R.Ganapathy Iyer, R.H.Dhebar, S.P.Varma, T.M.SEN
Constitutional guarantees protecting conditions of service, specifically remuneration (including allowances and privileges in kind), cannot be cancelled or overridden by subsequent administrative rule-making powers.
Headnote:(A) Constitution of India - Article 314 - All India Services Act, 1951 - Section 3 and 8 - Indian Independence Act, 1947 - Section 10(2) and 19(4) - Government of India Act, 1935 - Section 247(1) - Conditions of service - Remuneration - Passage allowance - Retrospective cancellation of benefits - Whether a rule framed under a statute can override a constitutional guarantee regarding remuneration - Passage benefits, originally part of salary and later treated as an allowance or privilege, fall within the definition of remuneration - Such benefits are protected under the constitutional guarantee of conditions of service - Rule cancelling such benefits retrospectively is ultra vires. (Paras 9, 12, 13 and 14)
(B) Remuneration - Interpretation - The term remuneration in its ordinary connotation means reward, recompense, pay, wages or salary for service rendered and includes any kind of payment which would not be actual money payment, such as privileges or facilities provided in kind. (Para 13)
Facts of the case:
A member of a civil service appointed under a previous regime was entitled to passage benefits for himself and his family under statutory rules. The government subsequently decided to cease these benefits for officers of certain domicile and framed rules retrospectively cancelling the benefits. While the benefit was waived for the officer, it was denied to the spouse and children. A writ of mandamus was sought to compel payment of the passage money.
Findings of Court:
The court found that the passage benefits were part of the remuneration of the officer. Since the conditions of service regarding remuneration were guaranteed by the Indian Independence Act and the Constitution, the government could not cancel these benefits through rule-making power.
Issues: Whether the retrospective cancellation of passage benefits via rules framed under the All India Services Act, 1951, was valid given the guarantee of conditions of service under Article 314 of the Constitution.
Ratio Decidendi: The right to passage benefits was a statutory right and part of the remuneration, which includes allowances and privileges in kind. Constitutional guarantees protecting conditions of service as respects remuneration cannot be destroyed or cancelled by the exercise of rule-making power. Therefore, the rule cancelling such benefits is ultra vires.
Result: Appeal dismissed.
Legal Category Hierarchy
Table of Contents
2. Whether the retrospective cancellation of passage benefits under the All India Services Rules, 1957 is valid despite the constitutional guarantee of conditions of service and remuneration. (Para 4 , 10 )
3. Passage benefits, whether as salary or allowance, constitute remuneration; the 1926 amendment was for administrative convenience and did not alter the benefit's character as remuneration. (Para 5 , 6 , 9 , 11 , 12 , 13 )
4. Rule-making power cannot be exercised to cancel or destroy a constitutional guarantee regarding conditions of service and remuneration provided under Article 314 of the Constitution. (Para 14 , 15 )
5. Appeal dismissed; Rule 3 of the All India Services (Overseas Pay, Passage and Leave Salary) Rules, 1957 held ultra vires. (Para 15 , 16 )
6. Does the term remuneration include allowances or privileges provided in kind?
Yes. Remuneration is interpreted in a wide connotation meaning reward or recompense for service rendered, which includes leave pay, allowances, and the cost of privileges or facilities provided in kind. (Para 9 , 13 )
7. Can the government use rule-making powers to cancel conditions of service guaranteed by the Constitution?
No. The Central Government, in the exercise of its rule-making power, is incompetent to destroy or cancel a constitutional guarantee, such as those protecting remuneration under Article 314. (Para 14 , 15 )
8. Did the 1926 amendment change the nature of passage benefits from remuneration to a mere privilege?
No. While the 1926 amendment changed the funding source from a specific fund to general revenue for administrative convenience, it did not alter the character of the benefit as remuneration. (Para 13 )
Judgment
SHAH, J. : This is an appeal against the judgment of the High Court of Judicature at Patna from an order commanding the Accountant General of Bihar, Ranchi to pay certain passage allowance due under the Superior civil services (Revision of Pay and Pension) Rules, 1924, to the wife and/the children of the respondent.
2. After passing the competitive examination held in London in August 1924 the respondent N. Bakshi was admitted in November, 1924 to the Indian Civil Service and was, after his arrival in India, posted in the Province of Bihar. He continued to serve in the State of Bihar after independence.
3. On February 3, 1956, the respondent enquired of the Accountant General of Bihar about the number of passages to which he and the members of his family were entitled under the Superior Civil Services (Revision of Pay and Pension) Rules, 1924--hereinafter called the Statutory Rules. The Accountant General, by letter dated March 6, 1956, stated that £ 284-6s. stood in the respondent s credit £ 841-3-5d. stood in the account of his wife and £ 138 stood credited in the separate accounts of each of his four children. The respondent then arranged to travel to the United Kingdom and on June 20, 1956 obtained "passage certificates" from the Accountant General, Bihar. On July 12, 1956, the respondent was informed that the Govt. of India were of the opinion that the passage benefits admissible to officers of Indian domicile under the said Statutory Rules, were inconsistent with the existing circumstances and it was decided with effect from the date of issue of the order that the benefits shall cease and the passage accounts of Indian Officers of the former Secretary Of State Services shall be closed and passage credit" left over will lapse to the Government.
4. On February 5, 1957 the Government of India framed, in exercise of the powers conferred by sub-s. (1) of S. 8 of the All India Services Act, 61 of 1951, the All India Services (Overseas Pay, Passage and Leave Salary) Rules, 1957. By cl. 3 of the Rules passage benefits provided by the statutory Rules ceased with retrospective effect from July 12, 1956 to apply to the members of the Indian Civil Service. The appellant protested against the cancellation of the passage benefits for himself and the members of his family. The Government of India waived the original order of July 12, 1956 in favour of the respondent and ordered that he be granted passage benefit for himself but declined to relax the order in favour of the wife and children of the respondent. The respondent accompanied by his wife and children proceeded to the United Kingdom as originally arranged and on his return filed a petition under Art. 226 of the Constitution for a writ in the nature of mandamus against the Accountant General, Bihar commanding him to pay the prescribed passage money in, respect of the respondent s wife and children out of the amounts which stood to their credit in the General Passage Fund Account and to issue appropriate direction, order or writ in that behalf. This petition was granted by the High Court and a writ of mandamus as prayed was issued. The Accountant General and the Union of India have appealed to this court against the order with certificate of fitness granted by the High Court.
5. To appreciate the grounds on which the impugned order was made it is necessary to refer to the Statutory Rules for passage benefit framed in 1924 by the Secretary of State in Council and the amendments thereof in the light of constitutional development since that date.
6. The Statutory Rules were framed by the Secretary of State for India-in-Council under S. 96B (2) and (3) of the Government of India Act, 1919 on December 9, 1924. Rule 12 of the Statutory Rules provides :
"12. In addition to the pay prescribed by these Rules passage pay shall be granted at the rates and subject to the conditions set out in Schedule IV, to the members of the services and holders of appointments enumerated in Appendix A t
