JUDGMENT

CHINNAPPA REDDY, J. :— The attitude of the State of Gujarat in these cases has indeed left us puzzled and wondering. On the one hand, there are lakhs of employees working under various Panchayat Institutions, call them Government servants or no, to whom the benefits of the recommendations of the two Pay Commissions, the Sarela and the Desai Commissions, have been extended, while on the other hand, there is a microscopic number (comparatively) of about six thousand employees of the lowest category, also working under Panchayat Institutions, who are denied the benefits of those recommendations, on the sole ground of a birthmark, if we may so call it, since they are denied the benefits because before they came to work under the Panchayat Institutions, they were employed in municipalities while the others were Government servants to start with. The unfairness and the injustice of the distinction is patent, whatever legal justification may be put forward. Surely, the State, dedicated as it is to socialism. equality and economic justice and enjoined by the Directive Principles to secure the right to work, a living wage, equal pay for equal work and so on cannot make such a distinction. But the distinction has been made; it is sought to be sustained by those making it and we are constrained to examine whether there is any constitutional or other legal sustenance for the distinction. We did request the counsel for the State of Gujarat to communicate with his clients to find out if the benefits cannot gracefully be extended to the erstwhile employees of municipalities presently working under Panchayat Institutions also. We are told that the answer of the State of Gujarat is in the negative.

2. The appeal and the Writ Petitions were heard once before by a Constitution Bench consisting of Chandrachud, C. J., Sarkaria, Untwalia, Kailasam and Venkataramiah, JJ. The opinion of the Constitution Bench was pronounced by Venkataramiah, J., on July 13, 1980. (The opinion is reported in (1981) 1 SCR 144. But on the application of the appellants, the opinion was set aside and the appeal and the writ petitions, were directed to be set down for hearing once more by the Constitution Bench. That is how the matters have again come before us.

3. Pursuant to the constitutional mandate in Article 40 that "the State shall take steps to organise village panchayats and endow them with such powers and authority as may be necessary to function as units of self-Government", the State of Gujarat enacted the Gujarat Panchayats Act 1961 (Act No. VI of 1962) 'to consolidate and amend the law relating to village Panchayats, and district local boards with a view to reorganise the administration pertaining to local Government in furtherance of the object of the democratic decentralisation of powers in favour of different classes of panchayats'.

4. The Gujarat Panchayats Act 1961 was substantially amended in 1978 in an attempt, as we shall presently point out, to circumvent the judgment of the Gujarat High Court which is under appeal before us. The Constitutional validity of the Amending Act is in question in the Writ Petitions which are before us.

5. We shall first refer to the provisions of the Gujarat Panchayats Act, as they stood before they were amended in 1978. By Section 11 (1) of the Act, as it originally stood, a Panchayat Organisation was constituted for the State of Gujarat, consisting of Gram Panchayats, Taluqa Panchayats, District Panchayats, Gram Sabhas, Nyaya Panchayats and Conciliation Panchas. It is provided by, Section 11 (2) that the State Government shall exercise control over Panchayats either directly or through such officer or officers at it may appoint for that purpose. Local areas comprising of revenue villages or groups of revenue villages or hamlets forming-parts of revenue villages or other administrative units or parts thereof are to be declared Grams under the Act, if the population of the local areas does not exceed 10,000 and Nagars