Judgment

SATYANARAYANA RAJU, J. : This appeal, on certificate granted by the High Court of Punjab, arises out of a suit filed by one Ram Prasad, against the State of Punjab, for a declaration that the order of compulsory retirement passed by the latter against him was invalid.

2. Ram Prasad originally entered service as a Clerk, in the year 1924, in the Patiala Saddar Treasury in what was then the Patiala State. He was subsequently transferred in the same capacity to the Patiala State Bank on February 27, 1984 Bk. and was confirmed in his appointment. On September 1, 1985 Bk., he was promoted to the next higher grade on the establishment of the Patiala State Bank. Thereafter, he was promoted as Manager and posted to the Bhatinda Branch of the Bank on April 1, 1944. On April 1, 1949 he was promoted as Selection Grade Manager by the Board of Directors of the Bank in the grade of Rs. 340-20-500-525-700. On September 23, 1953 he was compulsorily retired from service but was subsequently reinstated by the Government on June 10, 1954 since the order was legally defective. On June 11, 1958 the Board passed an order compulsorily retiring him from service.

3. Ram Prasad challenged the order of compulsory retirement passed by the Board on various grounds, by means of a suit instituted in the Court of the Subordinate Judge, Patiala. He pleaded that the order of compulsory retirement amounted to dismissal or removal from service within the meaning of Art. 311 of the Constitution. He further maintained that R. 27 of the Bank of Patiala (Staff) Rules, 1954, hereinafter termed the Staff rules, under which the order of compulsory retirement was made, was illegal and void. The order was also challenged on the ground that it was mala fide. The substantial relief claimed by him in the suit was a declaration that R. 27 of the Staff Rules was wholly unconstitutional, null and void for the reasons stated by him.

4. The respondent contested the suit contending inter alia that the order of compulsory retirement was passed by the Board of Directors of the Bank under rules which were legal and constitutionally valid and governed the employees of the Bank.

5. The Subordinate Judge, Patiala, framed appropriate issues. He found all but two issues in favour of the appellant and granted a decree substantially allowing the claims made by him. The respondent thereupon filed an appeal in the High Court of Punjab which allowed the appeal and set aside the judgment of the Subordinate Judge. During the pendency of the appeal in the High Court Ram Prasad died and his widow was brought on record as his legal representative. However, it will be convenient to refer to Ram Prasad as the appellant.

6. Before entering into the merits of the appeal, it would be convenient to refer very briefly to the historical background of the legislation. The Patiala State Regulations were first promulgated in the year 1908 and governed the employees of the State in matters relating to pay, allowances, leave, pension and travelling allowances. The Regulations were revised and re-published in the year 1931. Subsequently, they were again revised and re-issued as the Patiala Services Regulations in the year 1947. Meanwhile, in April 1941, these Regulations were made applicable expressly to the Bank staff of the Patiala State Bank by the Maharaja, with the exception of the rules relating to pension. On August 20, 1948, Patiala became a constituent unit of the Patiala and East Punjab States Union (PEPSU). On the formation of the Union, the Patiala Services Regulations were made applicable to the entire territories of the Union by Ordinance No. 1 of 2005 Bk. Therefore the Patiala Services Regulations continued to govern the members of the Patiala State Services even after they became integrated into the PEPSU Services.

7. On March 4, 1953, the President of India assumed the powers of the Government of PEPSU, in exercise of the powers conferred on him by Art. 356 of the Constitution.

8. On Februar