Judgment

SEN, J. :- In this appeal, by special leave, the question for consideration is whether there was denial of "fair and equitable treatment" within the meaning of sub-sec. (5) of S. 115 of the States Reorganisation Act, 1956 (hereinafter called the Act) in the matter of determination of relative seniority and equation of posts as between the Asstt. Sales Tax officer (abbreviated as ASTOs) from the former States of Madhya Pradesh and Hyderabad and Sales Tax Inspectors (abbreviated as STIs) from the former State of Bombay, who were allocated to the new State of Bombay, and their right to promotion to the posts of Sales Tax officers (abbreviated as STOs) Grade III.

2. The High Court by its judgment, on a writ petition filed by respondents I to 5, who were STIs of the State of Bombay and passed the prescribed departmental examination for promotion as STOs Gr. III, has struck down the various resolutions and orders passed by the State Government from time to time relating to integration of services of these officers under sub-section (7) of S. 115 of the Act, in compliance with the directives of the Central Government issued under sub-section (5) of S. 115 of the Act. The main question in the appeal is whether the High Court was right in doing so.

3. To appreciate the points involved, it is necessary to set out a few facts. On Nov. 16,1957, the State Government by its resolution purported to direct that the ASTOs from Madhya Pradesh and Hyderabad should continue in their respective pay-scales until such of them were not appointed as STOs Gr. III under R. 7 of the Allocated Government Servants (Absorption, Seniority, Pay and Allowances) Rules, 1957. Notes 3 and 6 appended to the said resolution provided that for purposes of promotion, their inter se seniority shall be fixed on the basis of their service as STIs being counted together with their service as ASTOs in Madhya Pradesh and service as Accountants, if any, together with their service as ASTOs in Hyderabad. In accordance therewith, a provisional gradation list of those who were absorbed as STIs as on Nov. 1, 1956 as also of those who continued as ASTOs in their respective posts with effect from that date was prepared and published by the State Government under R. 2 of the said Rules, on Jan. 21, 1960 and objections thereto were invited within two months from the date of its publication. On Feb. 3, 1960, the State Government substantially modified R. 7 and a new R. 7 was substituted which provided that generally the seniority of an allocated Government servant in the post of cadre of absorption shall, as on Nov. 1, 1956, be determined by the length of continuous service etc. On instructions from the Central Government and in further consultation with it, the State Government clarified that the provisional gradation list as published would not be finalised until representations, if any, of the Government servants were decided by the Government of India in consultation with the Advisory Committee. Since there were no comparable posts of ASTOs in the former State of Bombay, the Central Government directed that the ASTOs from Madhya Pradesh and Hyderabad should not be equated with the post of STIs, but should be continued in an isolated category and their seniority should be fixed above the persons in the next lower grade.

4. In accordance with the directive of the Central Government under sub-section (5) of S. 115 of the Act, the State Government by its Resolution dated Sep. 10, 1960, modified Notes 3 and 6 referred to above and directed that the seniority as on November 1, 1956 of ASTOs from Madhya Pradesh and Hyderabad be fixed above all persons absorbed as STIs and that the inter se seniority of ASTOs from Madhya Pradesh and Hyderabad and fixed on the basis of their continuous service as ASTOs. It was further directed that the service rendered by the ASTOs from Madhya Pradesh as Excise Inspectors or Assistant District Excise officers in the Excise Department of that State b