Supreme Court Upholds State's Retrospective Amendment to Service Rule While Preserving Employee's Relief. Rule 244(2) of Rajasthan Service Rules, 1951 Amended Retrospectively by Notification Dated March 11, 1976, Validated Under Article 309.

Case Note & Summary

The Supreme Court of India addressed an appeal by the State of Rajasthan against the judgment of the Rajasthan High Court which had declared invalid an amendment to Rule 244(2) of the Rajasthan Service Rules, 1951. The respondent, Mangilal Pindwal, was employed as an Upper Division Clerk with the Government of Rajasthan. After completing 25 years of qualifying service, he was compulsorily retired by order of the Collector, Ajmer dated March 31, 1973, under sub-rule (2) of Rule 244, with payment of three months' pay and allowances in lieu of notice. Along with the retirement order, a bank draft for Rs. 1,494 was sent to the respondent. The respondent challenged the compulsory retirement by writ petition in the Rajasthan High Court. The learned Single Judge allowed the writ petition on January 17, 1978, on the ground that the amount paid towards three months' pay and allowances was short by Rs. 120, thus non-compliant with the rule. On January 28, 1978, a notification dated March 11, 1976 was published in the Rajasthan Gazette, substituting sub-rule (2) of Rule 244 with retrospective effect from August 19, 1972 to September 1, 1975. The amended provision dispensed with the requirement of payment of three months' pay and allowances at the time of compulsory retirement and instead provided that the Government servant would be entitled to claim three months' pay and allowances on retirement. In the special appeal filed by the State against the Single Judge's order, reliance was placed on this amendment. The Division Bench of the High Court dismissed the special appeal by judgment dated April 15, 1980, holding that the amendment was invalid because, after substitution by notifications dated September 2, 1975 and November 26, 1975, the old sub-rule (2) had ceased to exist and could not be amended in 1976. The State appealed to the Supreme Court, which granted special leave on April 14, 1981, with the condition that whatever be the decision, it shall not affect the respondent and the High Court's decision in his favour shall remain undisturbed. The core legal issue before the Supreme Court was whether a rule made under Article 309 of the Constitution can have retroactive operation and whether a provision that has been substituted can later be amended retrospectively for the period during which it was operative. The Court reasoned that the process of substitution of a statutory provision consists of two steps: first, the old rule ceases to exist, and next, the new rule is brought into existence. This amounts to repeal of the earlier provision and its replacement. However, the effect of repeal is not to obliterate the statute for all purposes; it continues to operate in respect of transactions past and closed and for the period during which it was in force. The old sub-rule (2) introduced on August 19, 1972 was operative from August 19, 1972 to September 1, 1975. Since it was operative during that period, it could be amended under Article 309 to operate during that period. The notification dated March 11, 1976, by substituting sub-rule (2), repealed the provision operative during August 19, 1972 to September 1, 1975 and replaced it with another provision to be operative during that same period. Therefore, the amendment could not be held invalid on the ground that it sought to amend a non-existing provision. The Court distinguished the general statement that a repealed law cannot be amended, holding it inapplicable when the amendment is retrospective and concerns a period when the law was in force. Accordingly, the Supreme Court set aside the High Court judgment insofar as it held the amendment invalid, but due to the special leave condition, the decision in favor of the respondent remained undisturbed. The appeal was disposed of with no order as to costs.

Headnote

Issue of Consideration

Final Decision

Appeal disposed of by setting aside the High Court judgment insofar as it held the amendment invalid; however, the setting aside shall not affect the respondent and the decision of the High Court in his favour shall remain undisturbed; no order as to costs.

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