Judgment

SIKRI, C J.I. :- This appeal by certificate granted by the High Court of Andhra Pradesh is directed against the judgment of the High Court, D/- 18-2-1972, passed in Writ Appeal No. 633 of 1970 = (reported in (1973) 1 Andh LT 1 (FB) ) which arose out of the order of the High Court of Andhra Pradesh, dated July 9, 1969, in Writ Petition No. 2524 of 1967. Before the Division Bench of the High Court the Full Bench judgment of the High Court dated December 9, 1970 (P. L. Rao v. State of Andhra Pradesh, AIR 1971 Andh Pra 118 (FB) ) was cited but as this Full Bench decision was challenged before it and it thought that a reference of the matter to a Full Bench of five Judges is advisable it directed that the papers be laid before the Hon ble the Chief Justice of the High Court for constitution of a larger Bench. The Chief Justice of the High Court accordingly constituted the Full Bench of five Judges. This Full Bench, by majority, held that :

"the mulki rules are not valid and operative after the formation of the State of Andhra Pradesh. In any event, they do not revive and cannot be deemed to be valid and operative in view of the decision of the SC in A. V. S. Narasimha Rao s case, AIR 1970 SC 422. The Full Bench decision in P. Lakshmana Rao s case, AIR 1971 Andh Pra 118 (FB) is thus overruled. W. A. No. 633 of 1970 along with W. A. M. P. Nos. 493 and 494 of 1971 will be posted before the Division Bench for further orders."

2. Receiving this opinion, the Division Bench delivered the following judgment :

"We have already indicated in the order of reference that if a reference to Full Bench is made, and if the decision of the Mulki Rules are not operative, then the appeal has to be allowed. Having regard to the direction previously given by us in the order of reference, and in the light of the decision of the Full Bench, the Writ Appeal has to be allowed. We accordingly allow the Writ Appeal with costs."

3. In this appeal we are thus concerned with the validity of the so-called Mulki Rules. Before dealing with the questions of law which have been debated before us it is necessary to give a few relevant facts. Writ Petition No. 2524 of 1967 out of which the present appeal arises was filed by 12 Extension Officers in the Department of Industries, Government of Andhra Pradesh. They were appointed as Extension Officers in May, 1961, and alter they underwent training, were posted in various districts. The strength of the cadre of Extension Officers was reduced and that led to the retrenchment of some of the personnel including the petitioners, who were absorbed in another cadre, viz., Senior Inspectors. This absorption resulted in diminution in their scale of pay. There grievance was that persons appointed later and juniors to them in service were retained as Extension Officers, whereas they, by an order dated September 28, 1967, were retrenched and that, instead of following the rule last come, first go , the juniors in rank were sought to be retained as Extension Officers by reason of their residence in Telangana area and that such a preferential treatment on the basis of residential qualification is discriminatory and violative of Article 16 of the Constitution.

4. It was admitted in the counter affidavit of the Government that "except the Telengana employees who were posted only in Telangana region, and to which Andhra Personnel cannot be posted", no juniors of the petitioners were allowed to continue in their posts in preference to the rights of the petitioners.

5. The Mulki Rules formed part of the Hyderabad Civil Service Regulations promulgated in obedience to His Exalted Highness the Nizam s Firman dated 25th Ramzan 1337 H. The State of Hyderabad was then a native Indian State which had not acceeded to the Dominion of India after the Indian Independence Act, 1947. Chapter III of the Regulations contained Article 39 which reads as follows :

"39. No person will be appointed in any Superior or Inferior service without the specific sa