Ramanlal Keshavlal Soni and others vs State of Gujarat and others

D.P. Desai, J.—The petitioners were at one point of time employed in the different Municipalities constituted under the Bombay District Municipal Act, 1901 (hereinafter referred to as "the Municipal Act"). The local areas in which such Municipalities were functioning were declared to be grams or nagars, as the case may be, under the provisions of the Gujarat Panchayats Act, 1961 (hereinafter referred to as ''the Act'') after its enactment and thereupon such Municipalities ceased to exist and certain other consequences also ensued, One of the consequences was that interim gram or nagar panchayats, as the case may be, came into existence in such local areas and all officers and servants in the employment of the extinct municipalities became officers and servants of the interim panchayats so constituted under the Act. In due course, the interim panchayats were constituted into gram or nagar panchayats, as the case may be, and the petitioners were allocated to the Panchayat Service constituted under the Act and they are since then working in different gram and nagar panchayats as members of such service.

The present petition has been instituted by the petitioners, with the permission of the Court, in a representative capacity for and on behalf of themselves and other officers and servants who were originally in the employment of the extinct municipalities and were subsequently allocated to the Panchayat Service and who are since then working in the newly constituted gram or nagar panchayats as the case may be, in the State of Gujarat.

The respondents to the petition are the State of Gujarat and the Development Commissioner (the first and second respondents respectively), Kheda Nagar Panchayat, Dakore Nagar Panchayat, Dhari Gram Panchayat and Vaso Nagar Panchayat (the third, fourth, fifth and sixth respondents respectively). The last mentioned four respondents have been impleaded as parties, with the permission of the Court, for and on behalf of themselves and other gram and nagar panchayats which have come into existence under the Act on conversion of former municipal districts into local areas under the Act.

The petitioners have, in substance, prayed for an appropriate writ, order or direction against the respondents commanding them:--- (1) to make orders relating to the appointment of the petitioners and persons whom they represent in equivalent posts in the Panchayat Service, fixation of their seniority and pay scales and allowances in the equivalent posts with retrospective effect and payment to them of the difference in salary and allowances on such account; (2) to quash the orders placing the petitioners and the persons whom they represent in the local cadre of the Panchayat Service; (3) to frame rules providing for promotional avenues to the petitioners and the persons whom they represent in the Panchayat Service as also in the State Service; (4) to extend to the petitioners and the persons whom they represent the benefit of pay revision as per the recommendations of the first Pay Commission (Sarela Commission) and the second Pay Commission (Desai Commission) retrospectively and also to extend to them the benefit of the interim relief which was granted as per the recommendation of the Desai Commission; and (5) to extend to the petitioners and the persons whom they represent the benefit of dearness allowance, house rent allowance, compensatory local allowance, travelling allowance, leave benefits, medical allowance, gratuity, pension and other service benefits which are available to other panchayat servants.

In order to have a proper appraisal of the questions raised for our decision in this case, it would be necessary to refer to certain factual and legal back-ground. Until the Act was enacted, the functions of the Local-Self Government were performed in the State of Gujarat by several bodies constituted under different legislative enactments. There were District Municipalities and Borough Municipalities under the Municipal Act and Bombay Municipal Boroughs Act, 1925 respectively. Then there were gram panchayats constituted under the Bombay Village Panchayats Act, 1958, There were also District Local Boards constituted under the Bombay Local Boards Act, 1932 and District School Boards constituted under the Bombay Primary Education Act, 1947 or the Saurashtra Primary Education Act, 1956, as the case may be. We have not referred to the Municipal Corporations constituted under the Bombay Provincial Municipal Corporation Act, 1949 because we are not concerned with these Corporations in the present petition.

The Act, as its preamble shows, was enacted to consolidate and amend the law relating to village panchayats and district local boards in the State of Gujarat 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. It brought into existence u/s 11 a new Panchayat Organisation consisting of the gram panchayats, nagar panchayats, taluka panchayats, district panchayats, gramsabhas, Nyaya Panchayats and conciliation panchas and vested in the State Government the control over such panchayats either directly or through such officer or officers as it may by general or special order appoint for such purpose. u/s 3, there was to be a gram panchayat, nagar panchayat, taluka panchayat and district panchayat for each gram, nagar, taluka and district respectively constituted under the Act u/s 7, each of such panchayats was to be a body corporate with a perpetual succession and common seal. Under Sec. 8, a gram panchayat was made subordinate to the taluka and district panchayats and a nagar panchayat or taluka panchayat was made subordinate to the district panchayat, subject, of course, to the overall control of the State Government and the competent authority. Under the same section, it was provided that each of such panchayats shall exercise such powers, perform such functions and duties and shall have such responsibilities and authority as are provided by or under the Act or any other law for the time being in force. These various sections were brought into force on June 15, 1962 in all the Districts of the State except Kutch and Dangs.

To give effect to the provisions of the Act, the Bombay Village Panchayats Act, 1958 was repealed by Section 325 and the said section came into force on and with effect from March 2, 1963 in all the districts except Dangs District and in Dangs District on February 15, 1972. Likewise, u/s 326 it was provided that on and with effect from such date as the State Government may, by notification in the Official Gazette appoint, the Bombay Local Boards Act, 1932 shall stand repealed. The said section came into force in all districts except Kutch and Dangs on April 1, 1963 and in the Kutch district on April 15, 1963 and in Dangs District on June 1, 1972. By a notification issued under the said section, the State Government appointed April 1, 1963 as the date for the repeal of the Bombay Local Boards Act, 1932 for all districts except Dangs and Kutch. With regard to the districts of Kutch and Dangs, the appointed dates were 15-4-63 and 1-6-1972 respectively. Section 307 provides for the cessation of the municipalities functioning in local areas which were formerly declared as municipal districts or municipal boroughs, as the case may be, and were subsequently declared as grams or nagars under the Act and the said section was brought into force on and with effect from June 15, 1962 in all the districts except Dangs and Kutch. In Kutch district, the said section was brought into force with effect from February 7, 1963. By two different notifications issued on March 4, 1963, several municipal districts or municipal boroughs were declared to be grams, or nagars, as the case may be, by the competent authority under the Act and in relation to such grams or nagars, as the case may be, interim panchayats came into existence. u/s 155 the State Government was authorised, by a notification in the Official Gazette, to appoint a date and on and with effect from such date, every District School Board constituted under the Bombay Primary Education Act, 1947 or the Saurashtra Primary Education Act, 1956, as the case may be, was to stand dissolved. The said section came into force in all districts except Dangs on March 21, 1963 and in Dangs district with effect from July 29, 1971. The State Government under the said section, appointed April 1, 1963 as the relevant date in respect of all districts except Kutch and Dangs. So far as Kutch district is concerned, the appointed date was April 15, 1963.

As a consequence of this group of sections coming into force and the issuance of various notifications and orders thereunder, the functions, powers and duties of the dissolved bodies were vested in the corresponding panchayats constituted under the Act and the service personnel of the dissolved bodies also stood transferred to such panchayats. Certain transitory provisions were made in that behalf in the first instance in the relevant sections of the Act. u/s 325 (2) (x), the secretaries and employees of the old village panchayats became the officers and servants of the new gram panchayats constituted under the Act until other provision was made in accordance with the provisions of the Act. u/s 326 (k), all officers and servants in the employment of the dissolved Local Boards were deemed to have been transferred to the service of the successor panchayat, subject to the provisions of the Act. u/s 307 (g), all officers and servants in the employ of the extinct municipalities became the officers and servants of the interim panchayats constituted under the Act until other provision was made in accordance with the provisions of the Act u/s 155 (1) (e), the employees of the dissolved School Boards stood transferred to the taluka panchayats and the district panchayat in accordance with the distribution made in that behalf and on such terms and conditions as may be provided in the order made by the State Government.

In addition to the transfer of functions, powers and duties of the various local authorities, provision was made under Sections 149, 157 and 158 for transfer of certain powers, functions and duties of the State Government to the panchayats constituted under the Act by notifications or orders to be issued by the State Government. Sections 149 and 157 came into force in all districts except Dangs District on March 21, 1963. By a notification dated March 26, 1963 issued under S. 149 the State Government entrusted some of its functions relating to recovery of land revenue, etc. to the nagar and gram panchayats on and with effect from April 1, 1963 in all districts except Kutch and Dangs and on and with effect from April 15, 1963 in the Kutch District. So far as transfer of functions under Sections 157 and 158 is concerned, several orders were issued from time to time transferring other powers, functions and duties of the State Government to the district panchayats with a further power to delegate those functions to the taluka panchayats. In respect of such transferred functions, powers and duties the State Government was required to allot to the concerned panchayats such personnel as may be necessary to carry out such functions, powers and duties and provision, therefore, was made in Sections 157 and 158.

It would appear from the foregoing discussion that service personnel drawn from different sources stood allotted or transferred to the different panchayats constituted under the Act. In the very nature of things, persons with widely differing scales of pay and conditions of service came into the fold of the Panchayat Organisation and started serving the respective panchayats. The legislature, conscious as it was of the fact that it would not be conducive to healthy and efficient administration of the Panchayat Organisation to allow such vastly differing scales of pay and conditions of service to obtain in respect of such officers and servants drawn from different sources and with a view to integrating such officers and servants into a single service, provided for the constitution of a distinct Panchayat Service composed of persons employed in the discharge of functions and duties in different panchayats with uniform scales of pay and uniform conditions of service. With this end in view, Chapter XI was enacted for making provisions relating to Services.

11-12 x x x x x

Under sub-section (2) of Section 203, the State Government made an order on January 2, 1967 directing that the Panchayat Service shall consist of District Cadres, Taluka Cadres and Local Cadres and it specified the posts which were to belong to each of such cadres in a Schedule appended to the said order. The relevant part of the Schedule with which we are concerned in the present case is part III which specifies the posts belonging to the Local Cadre. Under Part III the post of Secretary of a Nagar Panchayat and other named posts under the nagar or, as the case may be, gram panchayat, about 19 in number, were designated as posts borne on the Local Cadre. Besides, the, posts belonging to the inferior Panchayat Service under the gram Panchayat or nagar panchayat, as the case may be, and all other technical and non-technical posts under the gram or nagar panchayat, as the case may be, were also directed to be borne on the Local Cadre.

14.....18 X X X X X X X

At this stage, it would be pertinent to take note of the dates of allocation to the Panchayat Service of the officers and servants of the dissolved municipalities as well as of the dissolved District Local Boards and District School Boards. The orders in this behalf were made by the State Government, so far as the ex-District Local Boards and School Boards staff is concerned, on February 28, 1966 and, so far as the ex-municipal staff is concerned on February 11, 1969. The question whether in the eye of law the order of allocation in each case took effect on and with effect from the date on which the order was made or it took effect retrospectively on and with effect from the date on which the services of such staff stood transferred to the concerned panchayats under the transitory provisions of the Act was debated for some time before us. Ultimately, however, it was stated on behalf of the petitioners that for the purposes of this case, they were prepared to proceed on the footing that they and the persons whom they represent stood allocated to the Panchayat Service on and with effect from February 11, 1969, irrespective of what the true position in law might be. We are, therefore, not called upon to decide the said question in the light of the relevant statutory provisions.

20.....22 x x x x x x x x

From the facts set out above, it would appear that the benefit of pay revision pursuant to the Sarela Commission Report was extended to all sections of the Panchayat Service except the staff borne on the Local Cadre. The officers and servants who held posts created to man the transferred functions, the officers and servants belonging to the Ex-Local Board Staff and the officers and servants belonging to the Ex-School Board Staff were all given such benefits, although the question of their pay revision did not fall within the purview of the Sarela Commission. Be it noted also at this stage that this was done in spite of the fact that the State Government had not to bear the additional expenditure on account of such pay revision in case of all such officers and servants and that such burden was to be borne in some cases to a large extent by the panchayats concerned.

X X X X X X

It would appear from what has preceded that the employees of the Ex-Municipalities like the petitioners and the persons whom they represent were thus denied the benefit of pay revision and other cognate benefits even when a general revision of pay scales of all Government staff and other sections of the Panchayat Service took place in 1973, pursuant to Desai Commission report. It is not in dispute that even since the transfer of this class of servants to the interim panchayats constituted under the Act and their subsequent allocation to the Panchayat Service, there has not been any general revision of pay scales of this class of servants of the Panchayat Service. All that has happened is that about 60 gram or nagar panchayats out of about 12000 gram panchayats and 95 nagar panchayats have voluntarily revised the pay scales of their employees in this class with the sanction of the State Government and brought them in line with the pay scales prescribed in the similar cadre in the State Service and the staff of such panchayats alone got the benefit of pay revision. A large section of the employees in the Local Cadre of the other panchayats are still stagnating at more or less the same pay scales and are governed by the same conditions of service which were prevailing before the new Panchayat Organisation was brought into existence under the Act. It might be stated that similarly, some of the panchayats have revised the dearness allowance payable to the staff borne on the Local Cadre. However, such revision of dearness allowance has been effected on the basis of the old pay scales, for, the new or revised pay scales have not been made applicable to the Local Cadre in such panchayats.

At this stage it would be pertinent to note that by the Gujarat Panchayat Service (Pension) Rules, 1976 which were enacted on January 9, 1976, the pension, gratuity and other retirement benefits have been extended to such of the panchayat servants who belong to the Superior Panchayat Service or, as the case may be, the Inferior Panchayat Service and also to the district cadre or, as the case may be, the taluka cadre (other than those specifically mentioned in Rule 3) on and with effect from April 1, 1963 in cases of all districts except Kutch and Dangs and on and with effect from April 15, 1963 and from June 1, 1972 in the case of Kutch and Dangs districts respectively. These benefits are to be regulated inter alia in accordance with the Revised Pension Rules, 1950 as amended from time to time. The contention of the State Government however, is that these Rules do not apply to the staff borne on the Local Cadre of the Panchayat Service and that, therefore, those benefits cannot be claimed by ex-municipal employees such as the petitioners.

One more fact may also be taken note of at this very stage and it is that it is an undisputed position that so far as the staff borne on the Local Cadre is concerned, the Government has not exercised its powers in relation to the equation of posts of such staff and fixation of their pay scales in the equivalent posts in the Panchayat service. In spite of the statutory mandate contained in Section 203 and the enactment of the Gujarat Panchayats Service (Absorption, Seniority, Pay and Allowances) Rules, 1965, the State Government has failed to make suitable orders with regard to the equation of posts, appointment of incumbents to such equivalent posts, fixation of seniority and pay scales and allowances of the allocated employees in the equivalent posts, so far as the staff borne on the Local Cadre is concerned. It is this situation resulting into a stalemate on all the fronts that prompted some of the petitioners to seek redress of their grievances from the Government.

X X X X X X

Though several points are raised and different reliefs are claimed in the petition, the petitioners confined their challenge only to the following three grounds at the hearing of the petition:--

(1) The failure of the State Government to appoint the petitioners and the persons whom they represent to equivalent posts and the consequential omission to fix the seniority and pay scales and allowances in the cadre of the equivalent posts has resulted in an unjust discrimination violative of the Mandate contained in Article 16 of the Constitution and the legislative fiat contained in Sec. 208 of the Act and the provisions contained in the Gujarat Panchayats Service (Absorption, Seniority, Pay and Allowances) Rules 1965.

(2) The decision of the State Government not to extend to the staff borne on the Local Cadre the benefit of revision of pay scales pursuant to the accepted recommendations of the two Pay Commissions as also of revised dearness allowance and such other allowances as house rent allowance, compensatory local allowance, leave benefits, etc, and retirement benefits such as pension and gratuity is discriminatory in as much as such benefits have been extended as a result of general revision of emoluments to all other Government servants and also to all other cadres of the Panchayat Service; such arbitrary and unjust decision of the State Government is violative of the guarantee contained in Article 16 of the Constitution as also the statutory fiat contained in Section 203 of the Act.

(3) The failure on the part of the State Government to prescribe promotional avenues for the staff borne on the Local Cadre has resulted in an unjust discrimination between the officers and servants borne on such cadre and the Taluka and District Cadres of the Panchayat Service; and the same is violative of the mandate contained in Article 16 of the Constitution and the mandatory provisions of Section 203 of the Act.

X X X X X X

We are unable to sustain even the third preliminary objection based on the ground of delay, laches and acquiescence. A few of the material dates necessary to determine this question may be recapitulated The Sarela Commission made its Report on April 11, 1968. The employees of the ex-municipalities were allocated to the Panchayat Service on February 11, 1969 and the petitioners have confined, their claim to pay revision, etc. only on and with effect from the said date. The State Government extended the benefit of pay revision and other service benefits as per the accepted recommendations of the Sarela Commission to the staff allocated to the Panchayat Service as well as to the staff recruited in the Panchayat Service for the purpose of performing the transferred functions by its Resolution dated December 22, 1969. Similar benefit was given to the ex-District Local Board staff transferred to the District Panchayats by the Resolution of the State Government dated October 5, 1970. To the ex-School Board staff such benefit was extended by the Government resolution dated November 9, 1970, The petitioners were justified in waiting till the benefits of accepted recommendations of Sarela Commission were extended to all the other classes of the Panchayat Service and also for a reasonable time thereafter in the legitimate hope and expectation that similar treatment would be meted out to them. Having found that the State Government was not inclined to take any action on those lines, the Mehmadabad Nagar Panchayat Karmachari Mandal amongst whose members were included the petitioners or some of them made a representation to the Chief Minister of the State of Gujarat on November 17, 1972. In the course of the said representation, they also alluded to the fact that the second Pay Commission was about to be appointed and that their demand for revision of pay scales, etc. should be referred to such Commission. Though the aforesaid representation made by the said Mandal was not replied to immediately, the Desai Commission came to be appointed soon thereafter on November 20, 1972. The terms of reference of the Desai Commission were wide enough to embrace all employees in the Panchayat Service. The petitioners and the persons whom they represent might, therefore, have legitimately presumed that since the second pay Commission was to go into the question of revision of pay scales of all employees in the Panchayat Service, they would not be excluded from its benefits and that the State Government may even be considering then-demand for extending to them the benefits of the accepted recommendations of the Sarela Commission. Even then the Mandal did not keep quiet and having failed to receive any reply to their representation to the Chief Minister, it made a fresh representation to the Chief Minister and the Minister for Pan-chayats on October 8, 1973. It is only by the communication dated February 14, 1974 that the Mandal was informed by the Development Commissioner that its request for pay revision, etc. could not be entertained by the State Government for the reasons stated in the said communication. The petitioners thereupon made a further representation to the Governor of Gujarat on July 12, 1974 requesting that the whole issue may be reexamined and the said representation was turned down in August, 1974. Thereupon, the petitioners filed the present petition on December 20, 1974.

In Ramchandra Shankar Deodhar and Others Vs. The State of Maharashtra and Others, the question as to what were the relevant considerations in determining whether delay or laches could defeat a petition under Article 32 fell for consideration of the Supreme Court It was there pointed out that the relevant considerations which should be borne in mind were, (1) that the rule which says that a Court may not inquire into belated or stale claims is not a rule of law but a rule of practice based on sound and proper exercise of discretion, and there is no inviolable rule that whenever there is delay the Court must necessarily refuse to entertain the petition and that each case must depend on its own facts; (2) that when the challenge based on violation of the equal opportunity clause is not directed against a thing of the past, but is a vital issue still affecting the petitioners, it is but desirable that the challenge should be examined and adjudged when the matter has come before the Court at the instance of the parties properly aggrieved; (3) that the principle on which the Court proceeds in refusing relief to the petitioner on the ground of laches or delay is that the rights which have accrued to others by reason of the delay in filing the petition should not be allowed to be disturbed unless there is reasonable explanation for the delay, for, the action of courts cannot harm innocent parties if their rights emerge by reason of delay on the part of the person moving the Court; and (4) that the claim for enforcement of the fundamental right of equal opportunity is itself a fundamental right and that in such a case, the Court cannot easily allow itself to be persuaded to refuse relief solely on the jejune ground of laches, delay or the like.

If the preliminary objection advanced in this case on the ground of delay, laches and the like is examined bearing in mind the aforesaid principles which are equally applicable to a petition under Article 226 and in the context of the facts and circumstances of the present case, it would appear that there is no substance in the same. In the first place, there is really no delay or acquiescence. The chronology of events set out above shows that the petitioners or a section of them have been agitating their cause ever since they were brought into the main stream of the Panchayat Service and that at no stage they could be accused of having allowed time to lapse in such a manner as to defeat their legitimate claim. It cannot be said therefore that their claim is belated or stale and, in any event, it would not be a legitimate and proper exercise of discretion, in the facts and circumstances of the present case, to throw out the petition on the ground of delay and the like. In the second place, the challenge of the petitioners is not directed against a transitory thing of the past. The question of the initial fixation and revision of their pay scales is as much vital today as it was at the material point of time, for, the denial of the revision of pay scales in the past will undoubtedly project itself into any future revision of pay scales and, quite apart from this, it affects their monthly emoluments received by them even today. In the third place, this is not a case where on account of the delay, if any, rights which have accrued to others will be disturbed and innocent parties will be harmed, if relief is granted to the petitioners. To accept this argument urged by the first and second respondents would be to put a premium on the default of the said respondents to give just relief to the petitioners in time and to penalize the petitioners, even though they are ultimately found to have been done wrong and for the redress of which wrong they have been knocking the doors of the concerned respondents. In the last place, the claim in the present petition is founded on the enforcement of the fundamental right of equal opportunity under Article 16 and we cannot allow ourselves to be easily persuaded to refuse relief on the ground of laches, etc. when we find, as ultimately we are inclined to do, that the claim is well-founded. In our opinion, having regard to the circumstances aforesaid, this is not a fit and proper case in which we should exercise our discretion to throw out the petition on the ground of delay and laches.

x x x

We may now proceed to examine the merits of the contentions raised by the petitioners. Before we do so, however, it would be convenient to refer to two decisions of this Court which have some bearing on the decision of the petition on merits. In G. L. Shukla v. State (1967) 8 Guj LR 833, the question of the validity of certain provisions of the Act, namely, Sections 205, 206, 206A and 209, fell for consideration before a Division Bench of this Court. The said Sections were challenged as violative of Articles 310 and 311 (2) as also Article 14 of the Constitution of India and as repugnant to the Industrial Disputes Act, 1947. The petition was brought by certain Class III and IV servants employed in the Public Works Department of the State Government some of the functions of which stood transferred to the District Panchayats by an order made u/s 157 of the Act. The petitioners who apprehended that they would consequently be allocated to the Panchayat Service filed the petition challenging the relevant sections. The Division Bench considered the scheme of the Act and the effect of the operation of the relevant sections thereof'' constituting the Panchayat Service and transferring and allocating to it the servants drawn from different sources and other cognate provisions and speaking through Bhagwati, J. (as he then was) observed as under at page 848:--

The only reasonable way of looking at the matter seems to be and that conclusion is inevitable on the language of these provisions, that the panchayat service is a civil service of State like the State service and since both the services are civil services of the State with the State as the master, an officer or servant can be allocated from the State service to the Panchayat service and re-allocated from the Panchayat service to the State service........ The conclusion which emerges from this discussion is that the panchayat service is a distinct and separate service set up for serving the Panchayat Organization of the State and it is as much a civil service of the State as the State service. The State can have many services such as State service, police service, engineering service, etc. and panchayat service is one of them. In the panchayat service, as in the State service, the State is the master and every officer or servant employed in the panchayat service is the servant of the State and not of the panchayat under which he may be serving for the time being. The panchayat service is one single service with the State as the master" (underlining supplied). It would thus appear that the view which was taken in the said decision was that the Panchayat Service constituted u/s 203 (1) is a Civil Service of the State like the State Service and that in the Panchayat Service, as in the State Service, the State is the master and every officer or servant employed in such service is the servant of the State and not of the panchayat under which he may be serving for the time being. It may be noted that this decision was delivered on March 13, 1967.

The correctness of this decision was challenged before a Full Bench in Shamji Karshan Vs. The State of Gujarat, . The matter went before the Full Bench by way of Reference made by a Division Bench which was seized of a criminal matter in which the sanction to prosecute the appellant who was convicted by the lower Court was given by the District Development Officer and it was challenged on the ground that the said officer was not the appointing authority of the appellant. The appellant in that case was originally appointed as a Talari but at the material time, he was working as a Talati-cum-Mantri of a panchayat and was allocated to the Panchayat Service under the Act, It is under those circumstances that the sanction to prosecute was accorded by the District Development Officer and the contention was that since he was not the appointing authority, he was also not competent to remove him from service and he could not have granted the sanction to prosecute The Full Bench examined the scheme of the Act in detail and also referred to the decision in G. L. Shukla''s case ( 1967 8 Guj LR 833) and observed that the Panchayat Service was a Civil service of the State and that employees of the Panchayat Service are holders of civil posts under the State; that once a person is finally allocated or appointed or transferred to the Panchayat Service-either by operation of Section 206 or Section 206-A, sub-section (2), the appointing authority in his case would be the District Development Officer because he is the head of that department in cases of all posts not specifically referred to in the Gujarat Panchayat Service (Appointing Authorities) Rules, 1967 and that so long as such appointing authority was not subordinate to the authority who originally appointed the person in service, prior to his transfer to Panchayat Service, such authority would be competent to remove such a member of the Panchayat Service after his final allocation to such service. It is important to note that in the course of its decision, the Full Bench in terms rejected the contention that the decision in G. L. Shukla''s case was not correct or that it must be taken to have been overruled by any subsequent decision of the Supreme Court. The Full Bench approved the decision of the Division Bench in G. L. Shukla''s case and even independently reached the same conclusion. The decision of the Full Bench, be it noted, was rendered on May 2, 1974.

It would thus appear that so far as this Court is concerned, it is now finally settled that the Panchayat Service is a Civil Service of the State and that the State is the master of each and every officer or servant employed in such service and that such officer and servant is not the employee of the Panchayat whom he may be serving for the time being. Panchayat Service is one single service with the State as the master.

This well-settled legal position has a great bearing on the decision of this petition, for its effect is to put the panchayat servants on an even level with the Government servants by treating them as members of a Civil Service of the State with the State as their master. Besides, its further effect is that each and every officer or servant employed in such service is to be treated as a member of a single service which has been brought into existence with the end in view of integrating into a single service personnel allocated or transferred under various sections of the Act for the purpose of bringing about uniform scales of pay and uniform conditions of service and efficient administration of the Panchayat Organisation. Any discriminatory treatment meted out to the members of such service as compared to the members of the regular State service or inter se amongst the members of such service must, therefore, stand the test of Article 16 and unless a reasonable classification having a nexus with the object sought to be achieved is made out, such discriminatory treatment would be hit by the provisions of the equality clause.

Having realized this difficulty in his way, the learned Government Pleader who appeared on behalf of the first and second respondents urged, (1) that it must be held that the decision in G. L. Shukla''s case (1967 8 Guj LR 833) stood impliedly overruled by the unreported decision of the Supreme Court in Civil Appeals Nos. 24 and 25 of 1968 (Jalgaon Zilla Parishad v. Duman Govind, etc) decided on December 20, 1968; (2) that, in the alternative, the decision in G. L. Shukla''s case as affirmed by the decision in Shamji Karshan Vs. The State of Gujarat, required reconsideration; (3) that in any case, the class of panchayat servants falling in the category of Local Cadre was not governed by the ratio of the decision in G. L. Shukla''s case as approved in Shamji Karsan''s Case. We are unable to accede to any of the aforesaid three contentions.

So far as the decision of the Supreme Court in Jalgaon Zilla Parishad''s case C. A. Nos. 24 and 25 of 1968 D/- 20-12-1968 (SC) is concerned, the attention of the Full Bench which decided Shamji Karshan Vs. The State of Gujarat, was specifically drawn to the said decision. In para. 25 (of Guj LR) = (para. 24 of Cri LJ) of its decision, the Full Bench considered the scope and effect of the said decision and observed that the special features of the Gujarat Act do not appear to have been present in the enactment before the Supreme Court and that the constitution of a separate Panchayat Service, which is the peculiar feature of this Act, does not appear to have been present in the case before the Supreme Court and that the decision of the Supreme Court was given in the light of the special provisions of the Act with which it was concerned and that the said decision can have no bearing on the interpretation of the provisions of the Gujarat Act.

It would thus appear that it was the considered opinion of the Full Bench that the decision in Jalgaon Zilla Parishad''s case C. A. Nos. 24 and 25 of 1968 D/- 20-12-1968 (SC) in no way affected the validity of the decision in G. L. Shukla''s case ( (1967) 8 Guj LR 833). It is not open to us to take a different view of the matter and, in any case, we see no reason to take a different view. The fundamental distinction between the Act before the Supreme Court and the Act before us is that whereas the said Act authorised the State Government to constitute services for each Zilla Parishad, the Act before us provides for the constitution of a single Panchayat Service with a common master and with the liability of serving different panchayats upon transfer. The decision upon which reliance has been placed on behalf of the concerned respondent''s cannot, therefore, help them.

We do not think that the decision in G. L. Shukla''s case (1967 8 Guj LR 833), as affirmed in Shamji Karshan Vs. The State of Gujarat, requires reconsideration. The learned Government Pleader invited our attention to the historical background as also to several provisions of the Act to reinforce his submission that those two decisions failed to notice certain features which had a great bearing on the question under examination and urged that, therefore, a larger Bench should be constituted to reconsider the whole issue. We are unable to persuade ourselves to accept such a course. In the first place, we have already indicated earlier that we are in entire agreement with the view expressed in G. L. Shukla''s case as well as in Shamji Karsan''s case. In the next place, it is well-settled that the binding effect of a decision does not depend upon whether a particular argument was considered therein or not, provided that the point with reference to which an argument was subsequently advanced was actually decided. (See Smt. Somavanti and Others Vs. The State of Punjab and Others, . Besides, merely because in the course of the judgment reference was not made to all the sections to which the learned Government Pleader referred, it cannot be easily presumed that the Court had over-looked those provisions. The decisions in both the said cases reveal that the Court has carefully examined the scheme of the Act in all its relevant perspectives and having given an anxious consideration to the points involved the conclusion was arrived at. In the last place, the decision in G. L. Shukla''s case was rendered as far back as on March 13, 1967. It has been followed in many other decisions rendered by this Court ever since and rights of several persons have been adjudicated upon in the light of the pronouncement made in the said decision. The State Government as well as the different panchayats have acquiesced in the view which this Court expressed in the said decision. The said decision has even been affirmed by a Full Bench on May 2, 1974. Under such circumstances, it would not be proper to allow the State Government to urge at this point of time that a still larger Bench should be constituted to reconsider the whole question. It is well settled that even if certain aspects of a question were not brought to the notice of the Court, it would decline to enter upon re-examination of the question since the decision had been followed in other cases. (See Mohd. Ayub Khan Vs. Commissioner of Police, Madras and Another, and T. Govindaraja Mudaliar Vs. The State of Tamil Nadu and Others, . In Special Civil Applications Nos. 1005 and 1531 of 1965 decided on April 14, 1971 by a Full Bench of this Court, Bhagwati, C. J. (as he then was) speaking for the Court pointed out that though there was considerable force in the argument urged on behalf of the petitioners in that case and that if the point were arising for decision before the Court for the first time, it would have been most certainly inclined to accept the same, still, since a previous decision of the Bombay High Court rendered about fifteen years earlier had taken a contrary view and the point was taken as having been settled and numerous awards were made following the said decision, the doctrine of stare decisis could be fittingly invoked and that it would not, therefore, be proper to disturb the well-settled legal position. It is on this ground alone that the Full Bench rejected the contention of the petitioners in that case to review the matter. It appears to us that this is a consideration which must weigh heavily with us as well and we see no reason, therefore, to refer the question sought to be reagitated by the learned Government pleader to a larger Bench.

It is difficult to comprehend as to how the ratio of the decision in G. L. Shukla''s case, (1967 8 Guj LR 833) as affirmed in Shamji Karshan Vs. The State of Gujarat, will not apply to employees borne on the Local Cadre. It is true that the decision in G. L. Shukla''s case was rendered in a matter where the petitioners were originally Government servants and they were rendering duties in relation to functions which were transferred to the District Panchayats and the occasion for examining the question with regard to the nature and constitution of the Panchayat Service arose in the context of the challenge based on Articles 310 and 311. The Division Bench, however, has examined the question from all the angles and having considered the various provisions of the Act, it reached the conclusion that the Panchayat Service is as much a Civil Service of the State as the State Service and that every officer or servant employed in the Panchayat Service is the servant of the State and not of the Panchayat under which he may be serving for the time being and that the State Service is one single service with the State as the master. It would thus appear that in G. L. Shukla''s case no distinction was made on the basis of the source from which servants were drawn into the Panchayat Service on the cadres into which they were allocated and its ratio, cannot be confined merely to a section of the servants and officers allocated to the Panchayat Service. Merely because the Panchayat Service consists of three cadres, it cannot be said that the ratio of the decision in G. L. Shukla''s case would not apply to one cadre or the other. In fact, the very circumstance that the Local Cadre is a cadre of the Panchayat Service leads to the conclusion that the ratio in G. L. Shukla''s case would apply even to the servants and officers borne on such cadre, for, they are as much the members of the Panchayat Service as other servants and officers borne on any other cadre. It may be that some of the provisions such as inter-district transfer may not apply to the staff borne on the Local Cadre in view of the provisions contained in Sec. 203 (2A) (d) and that, therefore, one of the considerations which weighed with this Court in G. L. Shukla''s case in coming to the conclusion that the Panchayat Service was a Civil Service of the State with the State as its master may not be applicable. Still, however, merely because one of the factors was not relevant, the decision which was arrived at after examination of the whole scheme of the Act cannot be held to be inapplicable to such cadre. In our opinion, the decision in G. L. Shukla''s case cannot, therefore, be distinguished in the manner in which the learned Government Pleader has attempted to do.

This must take us to the consideration of the grounds urged on behalf of the petitioners at the hearing of the petition and we proceed to deal with them seriatim. Re. Ground No. 1.

It is an undisputed position that though the petitioners have been allocated to the Panchayat Service by an order made as far back as February 11, 1969, the State Government has not determined the posts in the Panchayat Service equivalent or corresponding to the posts held by them immediately before their allocation. Consequently, the question of prescription of pay scales for such equivalent posts also could not have arisen for the consideration of the Government nor could the question of appointing the petitioners to the equivalent posts carrying prescribed pay scales and fixing them at an appropriate stage in such pay scales could have arisen for consideration. Likewise, the question of fixation of seniority also could not have engaged the attention of the State Government. It is pertinent to note in this connection that as earlier pointed out, it is the legislative mandate contained in sub-section (1) of Section 203 that the Panchayat Service was constituted as a distinct service from the State Service for the purpose of bringing about uniform scales of pay and uniform conditions of service for persons employed in the discharge of functions and duties of panchayats. Under sub-section (2) of the said section, it is for the State Government to determine by order, from time to time, the classes, cadres and posts of which the Panchayat Service shall consist as also the initial strength of officers and servants in each such class and cadre. Under sub-section (3) of the said section, the State Government has been authorised to make rules regulating, inter alia, conditions of service of persons appointed to the Panchayat Service. It is thus the mandatory duty of the State Government to take all such steps as are necessary for the absorption, seniority, pay and allowances of the allocated Government servants in order to fulfil the legislative mandate of bringing about uniform scales of pay and uniform conditions of service for persons drawn from different sources who, in the very nature of things, would have widely different scales of pay and conditions of service.

53A. The State Government being conscious of this statutory duty promulgated the Gujarat Panchayats Service (Absorption, Seniority, Pay and Allowances) Rules, 1965 on November 11, 1965 (hereinafter referred to as ''the Absorption Rules''). The said Absorption Rules apply to all allocated employees, except those who, immediately before the date on which they became the employees of a panchayat under the provisions of the Act, were serving under an existing local authority or the State Government on contract, part-time or daily rated basis or had been re-employed on superannuation or were paid from out of contingency grants. (See Rule 1 (2)). Under Rule 3, every allocated employee holding a corresponding post immediately before the date of his allocation to the Panchayat Service under the provisions of Section 206 (1) is required to be appointed to the equivalent post, that is to say, a post in the Panchayat Service which the State Government may by order determine to be generally corresponding to a post held by an allocated employee immediately before the date of his allocation, having regard to the pay scale, the minimum educational and other qualifications prescribed for the equivalent post and the corresponding post and the nature and magnitude of duties and responsibilities attached to such posts, (see Rule 2 (e)). Under Rule 5, the entire period of continuous service rendered by an allocated employee before the appointed day under the existing local authority is to be taken into account in calculating the total period of his service in the Panchayat Service. Rule 7 provides for the fixation of seniority inter se of allocated employees in the cadres of the equivalent post to which they are appointed under Rule 3 and the principle applicable is the one of the length of continuous service, whether officiating or permanent, rendered before the date of allocation in the cadres of the corresponding post. There are certain further provisions with regard to the fixation of seniority which may not be noticed in detail at this stage. Rule 8 provides for the pay scale applicable to allocated employees and it confers powers on the State Government to prescribe pay scales of the equivalent posts in the Panchayat Service. Rule 9 provides for fixation of pay of an allocated employee in the pay-scale prescribed for the equivalent post to which he is appointed Rule 12 speaks of allowances payable to allocated employees and it authorises the State Government to frame rules as respects payment of allowances to such employees.

53B. The aforesaid provisions of the Absorption Rules make it clear that the State Government has in fact, taken a step towards fulfilment of its duty of integrating into the Panchayat Service employees drawn from different sources by prescribing the necessary rules However, so far as the petitioners are concerned, though the Absorption Rules are in terms applicable to them because they are also allocated employees, no step has been taken under the said Rules and they have been denied the benefit of complete integration into the Panchayat Service with all its incidental benefits, although with regard to the persons borne in the other two cadres, the Absorption Rules have been indisputably implemented. The consequence is that the petitioners are still governed by the same conditions of service including pay scales which were applicable to them prior to their allocation to the Panchayat Service, with the further result that different employees absorbed in the Panchayat Service from different municipalities are governed by different pay scales, etc., although they are serving in the same cadre and performing more or less the same functions and duties in different panchayats.

The only ground given for not taking steps under the Absorption Rules in relation to the petitioners is to be found in the first affidavit filed by the second respondent and the ground is that since the petitioners became servants in the Local Cadre, they could not be absorbed in the Panchayat Service as it was done in the case of the ex-District Local Board and ex-School Board servants. This ground is obviously misconceived and proceeds upon a total disregard of the mandate contained in sub-section (1) of Section 203 as well as in the provisions contained in the Absorption Rules as also upon ignorance of the true ratio of the decision in G. L. Shukla''s case (1967-8 Guj LR 833). Notwithstanding the fact that the petitioners were allocated to the Local Cadre of the Panchayat Service, they were still in the Panchayat Service in the same manner as the officers and servants borne on the other two cadres and in relation to them also the State Government was bound to take necessary action under the Absorption Rules. In not doing so, the State Government has not only arbitrarily discriminated against the petitioners and denied to them the benefit of full integration into the Panchayat Service and thereby violated the mandate contained in Article 16 but it has also failed to perform its statutory duty cast upon it both u/s 203 (1) and the statutory rules made thereunder.

The petitioners are, therefore, entitled to succeed, so far as this ground is concerned and appropriate directions will have to be given to the State Government as regards the equivalence of posts, fixation of pay scales of such posts, fixation of each petitioner and the persons whom they represent at an appropriate stage in such pay scales and other incidental matters. While implementing these directions due regard will have to be given by the State Government to the fact that while taking action under the Absorption Rules in relation to officers and servants borne on the other two cadres, the State Government has admittedly given effect to its orders from the date of allocation of such servants to the Panchayat Service and accordingly, in the case of the petitioners also similar effect will have to be given.

Re. Ground No. 2:

In the course of the foregoing discussion, we have pointed out that the ex-municipal staff allocated to the Panchayat Service is by and large still stagnating at the same scales of pay and is governed by the same conditions of service as were applicable to it prior to its transfer and allocation to Panchayat Service. In the case of Government servants and other officers and servants of the panchayat service, however, there have been two general pay revisions and also substantial improvements in other conditions of service including retirement benefits. Under this head of challenge, the petitioners complain about such discriminatory treatment meted out to them.

In the first place, the petitioners contend that having regard to the decisions of this Court in G. L. Shukla''s case (1967 8 Guj LR 833) and Shamji Karshan Vs. The State of Gujarat, the Panchayat Service is a Civil Service of the State like the State Service and that every officer or servant employed in such service including the petitioners was as much the servant of the State as any other servant employed in any other State Services and that in denying to the petitioners the benefit of the general pay revisions and other benefits as per the accepted recommendations of the Sarela Commission and Desai Commission, the State Government has arbitrarily discriminated between the petitioners and other State service employees thereby violating the provisions of Article 16. In the next place, the petitioners contend that the decision of the State Government to extend the benefit of pay revisions pursuant to the accepted recommendations of the Sarela Commission and the Desai Commission and to make available other service benefits to all officers and servants in the Panchayat Service other than the ex-municipal staff is also discriminatory and violative of Article 16 inasmuch as the members of the same service have been treated differently without any rational basis in the matter of extension of such benefits. In the last place, the petitioners contend that by meting out such discriminatory treatment to the ex-municipal staff, the State Government has also violated the statutory mandate contained in Section 203 (1) whereunder it was the duty of the State Government not only to constitute a Panchayat service but also to bring about uniform scales of pay and uniform conditions of service for persons employed in the discharge of functions and duties of panchayats, irrespective of the sources from which they were drawn and varying conditions of service governing them prior to their allocation to the Panchayat Service. It is largely on the basis of the aforesaid contentions that the petitioners have sought to support the challenge formulated under this head.

The defence of the first and second respondents, as set out in their various affidavits, has already been set out earlier. To recapitulate briefly, the defence in substance is that there is no violation either of the constitutional or statutory provisions in denying to the ex-municipal staff the benefit of the pay revisions and other service benefits. According to the said respondents, such staff cannot claim such benefits because the employees in other State Services or other officers and servants of the Panchayat Service got such benefits, for, such staff stood in a class by itself. In support of this contention, it was urged that; (1) the State Government has not to bear the expenses in relation to the payment of salaries, etc. to the ex-municipal staff and having regard to the unsatisfactory financial condition of the different gram and nagar panchayats numbering about 12000 and 95 respectively, the benefit of pay revision, etc could not be extended to such staff; and (2) such staff is borne on a distinct cadre, which is not comparable to the other cadres of the Panchayat Service, inasmuch as the staffing pattern and the sphere of work of such employees was limited as compared to the employees in the other two cadres and the source from which such employees were drawn was different and they had distinct rules governing their conditions of service under their previous employers. As regards tile challenge based on the ground of the violation of the mandate contained in Section 203 is concerned, the stand of the said respondents was that the gram and nagar panchayats under whom the ex-municipal staff was serving were independent statutory bodies constituted under the Act and it was within the scope of their power and authority to lay down the conditions of service regarding pay, allowances, gratuity, etc., having regard to their financial resources and other relevant factors; the pay scales of such employees cannot be revised without the concurrence of the local bodies under whom they are serving and it was not possible to lay down any conditions of service in exercise of the powers conferred upon the State Government u/s 203 and other sections of the Act in respect of such employees. This, briefly stated, is the substance of the defence of the first and second respondents.

For the purposes of deciding this petition, we do not wish to enter upon consideration of the question whether there has been any discrimination in the matter of extension of the benefits of pay revisions, etc. as between the ex-municipal staff allocated to the Panchayat Service on the one hand and the officers and servants employed in the other State Services on the other. We also do not wish to express any opinion on the question whether, when the State Government undertakes general pay revision of officers and servants belonging to the State Services, it could leave out of consideration one single service or section thereof and, if so, whether there existed any rational ground in the present case in excluding the ex-municipal staff from extension of such benefit. We will, therefore, desist from examining the first ground of challenge formulated under this head on behalf of the petitioners and confine our attention to only the second and third grounds of challenge urged under this head.

The scope and ambit of Article 16 is too well-known. Article 16 is only an instance or incident of the guarantee of equality enshrined in Article 14. It gives effect to the doctrine of equality in the sphere of public employment The concept of equal opportunity to be found in Article 16 permeates the whole spectrum of an individual''s employment from appointment through promotion and termination to the payment of gratuity and pension and gives expression to the ideal of equality of opportunity which is one of the great socio-economic objectives set out in the Preamble of the Constitution. The constitutional code of equality and equal opportunity, however, does not mean that all employees must be treated alike, irrespective of differences and disparities which exist amongst them. The doctrine of reasonable classification has, therefore, been adopted and it permits the authority to classify the employees, provided the classification is reasonable, that is to say, it is founded on an intelligible differentia which distinguishes certain persons or things that are grouped together from others and such differentia has a rational relation to tile object sought to be achieved. The guideline for the purpose of deciding whether there has been a reasonable classification or not is that there should be no discrimination between one person or thing and another, if as regards the subject-matter of the legislation or the administrative action, as the case may be, their position is substantially the same. (See Mohammad Shujat Ali and Others Vs. Union of India (UOI) and Others, .

The mandate of Article 16 permeates even the sphere of grant of benefit of pay revision if it is shown that the benefit of such revision has not been extended to a person or class of persons similarly situate with those to whom such benefit has been extended. In Purshottam Lal and Others Vs. Union of India (UOI) and Another, , it was held that the Central Government was bound to implement the recommendations of the Second Pay Commission and that if the Government did not implement the report regarding some employees only, there would be a breach of Articles 14 and 16 of the Constitution. In that case, the Second Pay Commission; which was appointed by the Central Government to inquire into the emoluments and conditions of service of the Central Government employees, made its recommendations and the Central Government gave effect to such recommendations with retrospective effect from July 1, 1959. The petitioners in that case were employed in the Forest Research Institute and Colleges, Dehra Dun as Research Assistants. It was their case that they were covered by the recommendations of the Pay Commission and that though their pay scales were revised accordingly, effect was given to such revision only from June 21, 1962. According to the petitioners, the revised pay scales of similar posts in other similar sister institutes under the same Ministry having been revised with effect from July 1, 1959, they were entitled to similar benefit. The contention of the Central Government was that it was for the Government to accept the recommendations of the Pay Commission and while doing so to determine which categories of employees should be taken to have been included in the terms of reference. The Supreme Court did not accept the contention of the Central Government and held that the Government having made reference in respect of all Government employees and having accepted such recommendations, it was bound to implement the recommendations in respect of all Government employees. If the Government did not implement the report regarding some employees only, there would be breach of Articles 14 and 16, and that is what had happened in that case. The Supreme Court accordingly gave a direction to the Central Government to give effect to the revised pay scales of'' the petitioners from July 1, 1959 and to make payment to the petitioners accordingly.

In Special Civil Application No. 210 of 1973 (Guj) decided by J. B. Mehta, J. on July 25, 1973, the petitioners, about 1400 in cumber, who were employees of the Oil and Natural Gas Commission, holding posts equivalent to former Class II category, were not given the benefit of pay revision, although pay scales of all employees in Classes I to II were rationalized by an order made on September 1, 1970. The ground for not revising the pay scales of the petitioners was that under a settlement arrived at on January 20, 1968 under the provisions of the Industrial Disputes Act, 1947, the pay scales of Classes III and IV employees were revised with effect from April 1, 1967 and that the petitioners were amongst the persons who had benefited by such pay revision. According to the Oil and Natural Gas Commission, the said settlement continued to remain in force for a period of three years commencing from January 20, 1968 and, therefore, the pay scales of the petitioners could not be revised, although by virtue of the said settlement they were required to be treated as officers equivalent to former Class II category. The petitioners contended that the Oil and Natural Gas Commission had unfairly discriminated against them thereby violating the constitutional guarantee under Articles 14 and 16. J. B. Mehta, J. observed that the petitioners were treated by the Oil and Natural Gas Commission as holding posts equivalent to Class II posts and they were, therefore, entitled to the same benefits as officers in Class II. Besides, upon such equivalence they ceased to get the protection of the Industrial Law. Under the circumstances, when the Oil and Natural Gas Commission rationalized the pay scales of all Class I and Class II employees, the petitioners ought not to have been denied the benefit of pay revision on the ground that they were covered by the Settlement. An argument advanced on behalf of the Oil and Natural Gas Commission to the effect that there could be no discrimination in such matters as revision of pay scales was negatived by relying upon the decision in Purshottam Lal and Others Vs. Union of India (UOI) and Another, . On merits it was observed that there was, in fact, an unjust discrimination because as a result of rationalized pay scales which were introduced for all Class I and II employees, even a fresh employee in Class II would start in the rationalised scale getting a yearly increment of Rs. 25/-, whereas the petitioners will continue to draw a lower increment. The ultimate conclusion of the Court was recorded in the following words:--

Therefore, a refusal to revise the pay scales of these employees even after a period of 5 years, when during the period all employees of the Commission have their pay scales revised, on such a flimsy ground that they are falling under the terms of the settlement, which even has already expired, could not justify this discriminatory treatment as existing differentials either way so far as these affected employees are concerned has been seriously disturbed. If the Commission had not revised the grades of all the employees or of the Class II employees it was not bound to entertain the claim of these employees. But once it has realised the justice of the claim of all the other Class II employees to have a revised pay scale which is a rationalised scale it could hardly deny equivalent treatment to these officers of Class II merely because their scale No. XVII was fixed by the earlier settlement of 1968.

A writ of mandamus was, therefore, issued directing the Commission to remedy the gross injustice done to the petitioners by that unfair discrimination by properly revising their pay scales and giving them the benefit of rationalised scales within a period of four months.

A Letters Patent Appeal carried against the aforesaid judgment, being Letters Patent'' Appeal No. 25 of 1973, was dismissed on October 15, 1973 by a Division Bench of this Court. An appeal was carried to the Supreme Court against'' the said decision, being Civil Appeal No. 1655 of 1973. The said appeal was heard along with four other appeals and the Supreme Court upheld the writ of mandamus granted by this Court (See Sukhdev Singh, Oil and Natural Gas Commission, Life Insurance Corporation, Industrial Finance Corporation Employees Associations Vs. Bhagat Ram, Association of Clause II. Officers, Shyam Lal, Industrial Finance Corporation, .

It would thus appear that there is ample authority for the proposition that if there has been unfair discrimination between employees similarly situate in respect of the benefit of pay revision as well as the date from which such benefit is extended, the aggrieved employees could justifiably claim the protection of Articles 14 and 16. It is in the light of this well-settled legal position that we must examine the claim of the petitioners based on the constitutional guarantee of equality in the matter of employment.

Under the Scheme of the Act examined earlier in the light of the pronouncements in G. L. Shukla''s case (1967 8 Guj LR 833) and in Shamji Karshan Vs. The State of Gujarat, , it is abundantly clear that the Panchayat Service constituted under the Act is a State Service with the State as the master and each and every officer or servant employed in the Panchayat Service is the servant of the State and not of the panchayat under which he may be serving for the time being. Such a single service has been constituted with the end in view of bringing about uniform scales of pay and uniform conditions of service for persons employed in the discharge of functions and duties of panchayats, irrespective of the different sources from which such persons were drawn and the widely differing scales of pay and conditions of service applicable to them before their allocation to the Panchayat Service. For administrative purposes, such single service may be conveniently divided into classes or cadres and posts with differing scales of pay may be allocated to each class or cadre. However, the division of a single service into several classes or cadres does not make the holders of the posts in each of such class or cadre anytheless members of such single service. When, therefore, a general revision of pay scales and other conditions of service including retirement benefits is undertaken, it would ordinarily militate against the mandate of Article 16 to exclude from such revision a class or cadre of such service.

65-A. The benefit of the recommendation of the Sarela Pay Commission, which was not called upon to go into the question of revision of pay scales and conditions of service of the employees in panchayats, was, from time to time, extended to all employees in the Panchayat Service except ex-municipal staff and such extension was made effective uniformly from the same date, namely, 1st June 1967, In other words, though initially the panchayat employees were not covered by the recommendations of the Sarela Commission, all the sections thereof except the ex-municipal staff were subsequently given their advantage by extending to such staff the benefit thereof.

As far as the Desai Commission is concerned, on a proper construction of its terms of reference, all employees in the Panchayat Service were covered by it. The relevant term of reference stated that the Commission was constituted "to examine the general conditions of service applicable to Government employees............ including employees in the Panchayat Service." The wide terms of reference were thus clear and specific and there is no manner of doubt that it was intended that the Commission should examine the conditions of service of all panchayat employees including ex-municipal staff and that the benefit of its recommendations would be available to all such employees. Still, however, under some misapprehension, the Desai Commission excluded from the scope of its examination the employees belonging to the Local Cadre. The ground given by it was that the Panchayat employees referred in the terms of reference covered only those employees who were serving under the existing three tier system and that, therefore, the employees of Nagar Panchayats stood excluded. With respect, we are unable to see how even adopting the basis of three tier system, the Nagar Panchayat employees (Ex-municipal staff) could have been excluded from its consideration by the Desai Commission, for, at the lowest tier of the system stand not only the gram panchayats but also the nagar panchayats. The nomenclature of these two panchayats is different primarily because the local area over which the two kinds of panchayats have their respective jurisdiction stands named as nagar or gram, as the case may be, according to the population of such local area (see Section 9). But for this distinction in the nomenclature there is no other vital difference in the sphere of activities of both these categories of panchayats, for, so for as the performance of functions and duties is concerned, both the said categories of panchayats are by and large governed by the same provisions (see Section 88 read with Schedule I of the Act). It would thus appear that taking a broad view of the matter, the nagar panchayat employees were covered by the terms of reference of the Desai Commission and that they should have fallen within the purview of its examination. Be that as it may, even if the Desai Commission excluded such employees from the scope of its inquiry, there was no reason for the State Government not to extend to such employees the benefits of the recommendations of the Desai Commission, having regard to its pronounced decision according to which "employees in the Panchayat Service" (irrespective of any distinction based on cadres or classes or the source of recruitment) were intended to be benefited by the revision of conditions of service, It could have set right the omission by acting ex-post facto and done justice to the ex-municipal staff. It would thus appear that even after having initially taken a decision in the matter the State Government has failed to give the benefit of pay revision to the ex-municipal staff in so far as it relates to the recommendations of the Desai Commission.

The matter does not rest merely at that. The interim relief granted by the Desai Commission was also denied to the ex-municipal stiff. The retirement benefits are also not available to such staff. Barring the staff in a few panchayats, numbering about sixty, which have voluntarily implemented the recommendations with the sanction of the State Government, the staff in the remaining panchayats is still denied the benefit made available to all other members of the staff of the Panchayat Service.

From the foregoing discussion, it would appear that the ex-municipal staff has been denied the benefit of revision of pay scales and other conditions of service including retirement benefits on two occasions although those benefits were extended to all the other servants and officers of the Panchayat Service. Such discrimination between the employees of the same single service having a common master would ordinarily militate against the mandate of Article 16 unless it is shown that there is a reasonable classification founded on intelligible differentia having nexus with the object sought to be achieved by the general revision of the conditions of service, which distinguishes the staff which has been denied such benefits from the rest of the staff to which such benefits have been extended. The question is whether this test has been satisfied in the present case.

The first distinguishing feature between the ex-municipal staff and the rest of the staff in the Panchayat Service, according to the first and second respondents, is that the State Government has not to bear the expenses in relation to payment of salaries, etc, to the ex-municipal staff. According to the said respondents, therefore, the ex-municipal staff stands in a class by itself and in relation to such staff, no revision of conditions of service could have been validly undertaken by the State Government. We are unable to agree. As earlier pointed out, under Sec. 204, subject to the rules which may be made by the State Government in that behalf, it is the statutory obligation of the concerned panchayats to bear the expenditure towards the pay and allowances and other benefits of all officers and servants serving for the time being under them. No rules have been framed u/s 204 by the State Government and, therefore, in relation to all officers and servants the statutory obligation in respect of such expenditure is on the concerned panchayats. It is true that by certain administrative orders the State Government has undertaken liability of fully reimbursing the panchayats in respect of the expenditure incurred in that behalf by the concerned panchayats on the staff transferred and recruited on posts sanctioned for functions transferred to the panchayats by the State Government as also on the ex-School Board staff. However, so far as ex-Local Board and ex-municipal staff are concerned, the State Government, by such administrative arrangement, gives grant only to the extent of 50% on the expenditure incurred by the panchayats on the payment of dearness allowance to such staff. No further grant is made to cover the payment of salaries and other emoluments to such staff. It would thus appear that the ex-Local Board staff and the ex-municipal staff are exactly similarly situate from the point of view of financial burden and that as between the said two categories of staff, no valid classification could be made on the basis of financial liability. The ex-Local Board staff has been admittedly given the benefit of both the pay revisions and it has also been given on both the occasions the benefit of revision of other conditions of service. The retirement benefits have also been retrospectively made available to such staff. If these benefits were given to such staff, which from the financial burden point of view is similarly situate as the ex-municipal staff, there was no valid reason to deny the extension of such benefits to the ex-municipal staff.

The second distinguishing feature upon which reliance has been placed on behalf of the first and second respondents is that the ex-municipal staff is allocated to a distinct cadre, namely, the Local Cadre and that the staff borne on the Local Cadre bore no comparison to the staff borne on the other cadres of the Panchayat Service, having regard to the staffing pattern and the sphere of work of such employees and the source from which such employees were drawn and the distinct rules governing the conditions of service of each of them under the previous employers. In our opinion, though the classification of a single service into different cadres may be valid for administrative purpose, it would not provide a valid basis of classification, so far as the extension of benefits of revision of conditions of service in principle is concerned. The factors upon which the concerned respondents rely may have some bearing on the nature and extent of the revision of conditions of service but they cannot be pressed into service for the purpose of denying altogether such benefits. The object of revision of pay scales and allowances is primarily to meet the erosion in the real wages of employees on account of price rise and to rationalize the pay structure so that very wide disparities in emoluments between persons whose duties and qualifications are easily comparable do not generate discontent and impair standard of efficiency in administration. If this object is borne in mind, any classification based on the distinct cadres in a single service will be found to be lacking in an intelligible differentia having nexus with the said object The problem cannot be viewed divorced from the constitutional and legislative opinion trends in that regard. Article 39 of the Directive Principles of State Policy states that the State shall direct its policy towards securing equal pay for equal work for both men and women. In Hindustan Antibiotics Ltd. Vs. The Workmen and Others, the meaning of this directive was expanded and it was found that it did not restrict its applicability only to equality between men and women. Article 43 of the Directive Principles of State Policy enjoins on the State to endeavour to to secure, by suitable legislation or economic organisation or in any other way, to all workers, agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities. The mandate contained in this directive applies to the State as well. These constitutional directives will certainly be disobeyed if the State attempts to make a distinction between the members of the same service on the ground that they are employed in different classes or cadres of the State Service. These Articles do not countenance the invidious distinction which is now sought to be made on the basis of the division of the service into distinct cadres. The legislative mandate as contained in Section 203 which has been often adverted to earlier is also clear and specific, viz., to bring about uniform scales of pay and uniform conditions of service for persons employed in the discharge of functions and duties of panchayats. It would thus appear that if the job contents are the same and the nature of work is comparable, then even equal pay can be asked for. We are, in the present case, however, not concerned with the quantum of revision but with the question whether or not a revision was called for and it appears to us that it would be wholly illegitimate and invidious to deny the benefit of pay revision and revision of other conditions of service to a section of employees of a common service merely on the ground that such section was comprised in one of the three distinct cadres of such service.

The third distinguishing feature which, according to the first and second respondents, distinguishes the ex-municipal staff from the rest of the staff is that the gram and nagar panchayats in which most of the ex-municipal staff, was employed were autonomous bodies constituted under the Act and they had the power and authority to lay down their conditions of service regarding pay, gratuity, etc., having regard to the financial resources and the nature of services rendered by the employees. This submission, in our opinion, is thoroughly misconceived and no distinction whatsoever could be made between the ex-municipal staff and the rest of the staff in the Panchayat Service on this ground. It is true that the gram and nagar panchayats are autonomous bodies but so are the taluka and district panchayats. The Government has fixed the conditions of service and revised the pay scales and extended the other service benefits to the employees in the district and taluka panchayats, although they are autonomous bodies and it is difficult to appreciate as to how on the said ground such benefits could have been denied to the staff borne on the Local Cadre and employed in the gram and nagar panchayats. Besides, the very postulate that it is for such bodies to determine the conditions of service of the employees is misconceived. The various sections of the Act, namely, Sections 102, 122, 142, 203 and 206 provide in unmistakable terms that it is for the State Government to prescribe the conditions of service of the employees in the Panchayat Service. To plead, in the face of such statutory provisions, that it is within the scope of the power and authority of the panchayats to prescribe the conditions of service regarding, pay, gratuity, etc. of its employees not only tantamounts to ignoring the mandate of the Legislature but also to abnegation of a statutory duty cast upon the State Government by the Legislature. It may be that in prescribing the conditions of service the State Government may have to take into account several factors such as the financial resources of the Panchayats and the differences in the staffing pattern and the sphere of work of the employees in the different cadres of the panchayat service. However, that is a far cry for saying that it is such panchayats and not the State Government which should prescribe the conditions of service.

These were the only three distinguishing features which were pressed into service for the purpose of denying to the ex-municipal staff the benefit of the general pay revision and the revision of other conditions of service. In our opinion, there is no valid basis for classification of the ex-municipal staff on the basis of the factors pressed into service on behalf of the concerned respondents and that, in any event, such classification is not founded on an intelligible differentia having a rational nexus with the object sought to be achieved by the general pay revision and revision in the conditions of service of the panchayat servants.

One more aspect of discrimination which is still more invidious requires to be taken note of, although it was not specifically pleaded on behalf of the petitioners, for, it can be made out on the facts already on the record. As earlier stated, a few of the gram or nagar panchayats employing the ex-municipal staff have revised the pay scales and other conditions of service of such staff with the approval of the Government. In other words, there has been a discrimination in the matter of improvement of emoluments and conditions of service as between the members of the ex-municipal staff itself depending upon the accident of service as to under which panchayat certain members of such staff are serving. Thus, even as between the employees in the Local Cadre of the panchayat Service, the State Government, which is the sole master with the powers to prescribe conditions of service, has allowed an invidious discrimination being made in the matter of revision of emoluments and conditions of service by permitting a few of the panchayats in which such staff was employed to undertake the revision and by not prevailing upon the rest of the panchayats where such staff was employed to fall in line. There could possibly be no defence to such arbitrary discrimination being made by the State Government and its action is wholly indefensible.

In the course of the earlier discussion, we have already covered the point that by meting out such discriminatory treatment to the ex-municipal staff, the State Government has violated even the statutory mandate contained in Section 203 (1). Nothing more needs to be said in that behalf and on that point also the petitioners are entitled to succeed.

As a result of the foregoing discussion, we come to the conclusion that the petitioners are entitled to succeed on the second ground of challenge and that a suitable directive will have to be given to the State Government to extend to the ex-municipal staff the benefit of revision of emoluments as well as of other conditions of service including retirement benefits, as was done in the case of the other employees of the Panchayat Service.

Two other points urged in this context on behalf of the first and second respondents may, however, be dealt with at this stage. It was contended, in the first place, that even if the delay in preferring this writ petition is not held sufficient to deny to the petitioners the relief which they seek, such delay should be taken into account in determining the extent of relief to which the petitioners are entitled and that on that score, the petitioners should be denied the benefit of any retrospective revision of emoluments and other benefits. In the next place, it was urged that the directive, if any, issued by this Court should be clear and specific and the question of exact quantum of pay revision should be left to the discretion of the State Government.

We find ourselves unable to agree with the first submission. We have held, in the earlier part of this judgment, that this is not a case in which the petitioners could be found guilty of delay or laches and that the petition cannot be thrown out on that ground. The same reasoning applies even in the matter of granting to the, petitioners the relief with retrospective effect of the benefits of revision of emoluments and other conditions of service which the State Government will have to undertake in pursuance of our directive. In fact, once it is found that the petitioners were entitled to such benefits as much as the other employees of the Panchayat Service were, it would be incompetent to this Court to restrict the relief so as to make it operative prospectively only, having regard to the ratio of the decision of the Supreme Court in Purshottam Lal and Others Vs. Union of India (UOI) and Another, . One thing may, however, be clarified in this behalf. The petitioners would be entitled to such benefits only with effect from the date that they stood allocated to the Panchayat Service because even though their services stood transferred to the interim panchayats u/s 307 (g), they could not be said to have been integrated into the Panchayat Service until the date of their allocation. The petitioners have conceded that in the facts and circumstances of the case, they must be taken to have been allocated to the Panchayat Service on and with effect from February 11, 1969. Therefore, the retrospective effect will have to be given only from the said date. The recommendations of the Sarela Commission have been implemented in the case of other employees of the Panchayat Service and officers and servants in the other State Services on and with effect from June 1, 1967. It was so done in the case of the other panchayat employees because their dates of allocation were prior to the said date. In the case of the petitioners, however, the effect of the first pay revision will have to be given only with effect from February 11, 1969. As found earlier, the State Government has yet to make orders regarding the equivalence of posts, fixation of pay scales for such posts, fixation of the municipal employees at an appropriate stage in such pay scales, etc. Appropriate directions in that behalf will be issued by us as indicated in the foregoing paragraphs of this judgment. It would be open to the State Government, while undertaking such task, in compliance with our directions, to initially fix the pay scales of the equivalent posts, bearing in mind the recommendations of the, Sarela Commission and to give to the ex-municipal staff the benefit of such recommendations at the stage of the initial fixation of the pay scales of the equivalent posts itself.

So far as the second submission is concerned, it is true that the question of exact quantum of pay revision, etc. must be left to the discretion of the State Government and that this Court cannot perform such function. We do not, therefore, propose to issue any direction to the State Government to revise the pay scales of the ex-municipal staff at a particular rate and place them in a designated scale. This function the State Government will have to perform, bearing in mind the principles and guidelines on the basis of which the two pay Commissions made recommendations for the revision of pay scales, etc. and extended other benefits to the concerned employees. Inasmuch as the ex-municipal staff is similarly situate as regards the said benefits, in the matter of extension of such benefits no other principles or guidelines could possibly be applied.

Re, Ground No. 3.

We have earlier pointed out that in sub-section (4) of Section 203 it has been inter alia provided that Rules made under sub-section (3) shall in particular contain a provision entitling servants of such cadres in the Panchayat Service to promotion to such cadres in the State Service as may be prescribed. Accordingly, the Guajarat Panchayats Service (Promotion to Cadres in State Service) Rules, 1974 have been enacted on September 16, 1974. It is not in dispute that no promotional avenue to the State Service has been provided for the ex-municipal staff under the said Rules. Such promotional avenue does not appear to have been provided in the said Rules even to the officers and servants on some of the other cadres in the Panchayat Service. It is also not in dispute that no promotional avenue has been provided to the ex-municipal staff, under any rules or administrative orders even to the posts borne on the other two cadres of the Panchayat Service, namely, the taluka cadre and the district cadre. It is true that sub-section (4) of Section 203 does not in terms provide that the Rules shall contain a provision entitling servants of the Local Cadre to promotion to the two other cadres in the panchayat Service. However, there is nothing to prevent the State Government from making provision for such promotion in the Rules framed by it in exercise of its general rule making power relating to conditions of service.

It would thus appear that the only promotional avenue available to the ex-municipal staff is in its own cadre. Such promotional avenue is, in the very nature of things, limited and that has occasioned the present grievance.

The contention of the State Government, as set out in its affidavits-in-reply, Is that the ex-municipal staff, which was absorbed in the Local Cadre, is not entitled to claim the benefit of promotion to other cadres in the Panchayat Service or to the State Service because the municipalities which came to be converted into gram or nagar panchayats, as the case may be, had their own staffing pattern and distinct rules governing the conditions of service of their employees and that since such staff was serving independent and separate bodies constituted under the Act, it would not be for the State Government to make rules providing for their promotions. Now, these grounds on the basis of which the State Government has refrained from providing promotional avenue to the ex-municipal staff are thoroughly misconceived and irrelevant and, in fact, they fly in the face of the legislative mandate contained in Section 203 and they are also in contravention of the guarantee of equality contained in Article 16. In the first place, once the ex-municipal staff is absorbed in the Panchayat Service and integrated into a single service, no discrimination could be made thereafter, so far as the chances of promotion of the members of such staff are concerned, on the basis of the source from which they were drawn. The persons drawn from different sources lost their birth-marks on their fusion into a common service and they cannot thereafter be treated differently by reference to the consideration that they were recruited from different sources. Their genetic blemishes disappear once they were integrated into a common class and they cannot be revived so as to make equals unequals once again. (See Roshan Lal Tandon Vs. Union of India (UOI), as explained in The State of Jammu and Kashmir Vs. Shri Triloki Nath Khosa and Others, . Therefore, the fact that the ex-municipal staff was drawn from the municipalities and that each municipality had its own staffing pattern and distinct rules governing the conditions of service of its employees is not a ground on which a valid distinction could be made as between the ex-municipal staff and the staff drawn from other sources. In fact, the mandate of Section 203 is clear and specific, viz., that uniform conditions of service were to be brought about with regard to the staff in the Panchayat Service and, therefore, the State Government cannot refuse even to consider the question of providing promotional avenue to the ex-municipal staff on such grounds. In the next place, the fact that the ex-municipal staff serves institutions which are independent bodies constituted under the Act is again a matter of no consequence, for, the conditions of service are to be prescribed under the Act not by such institutions but by the State Government. In our opinion, therefore, on the two grounds mentioned in the affidavit-in-reply the State Government was not justified in not considering the question of providing promotional avenue to the ex-municipal staff either to any of the posts in the State Service or to the posts borne on the other two cadres in the Panchayat Service. Under the circumstances, appropriate directions will have to be issued to the State Government to consider the question of providing promotional avenue to the ex-municipal staff in the State Service and/or other cadres of the Panchayat Service.

The foregoing discussion would reveal that the petitioners are entitled to Succeed on all the three points urged by them at the hearing of the petition and that the petition will, therefore, have to be allowed.

We accordingly allow the petition and direct that a writ of mandamus shall issue directing the State Government:

(1) To make suitable orders under the Gujarat Panchayats Service (Absorption, Seniority, Pay and Allowances) Rules, 3965 as regards the equivalence of posts, fixation of pay scales for such posts, fixation of the petitioners and the persons whom they represent at an appropriate stage in such pay scales and other incidental matters covered by the said Rules and to give effect to such orders from the date of allocation of the petitioners and the persons whom they represent to the Panchayat Service, that is to say, from February 11, 1969.

(2) To initially fix the pay scales and allowances and other conditions of service, including the grant of house-rent allowance, compensatory local allowance, leave benefits, medical benefits, retirement benefits, etc. of the petitioners and the persons whom they represent in the equivalent posts in the Panchayat Service in accordance with the provisions of the Gujarat Panchayat Service (Absorption, Seniority, Pay and Allowances) Rules, 1965 and simultaneously give to them the benefit of such of the accepted recommendations of the First Pay Commission (Sarela Commission) in the said matters as were extended to the other officers and servants of the Panchayat Service; alternatively, having initially fixed the pay scales, allowances and other conditions of service in the equivalent posts in accordance with the said rules, to revise subsequently such pay scales and other conditions of service as per the accepted recommendations of the First Pay Commission (Sarela Commission) in the said Matters with effect from February 11, 1969.

(3) To further revise the pay scales and allowances and other conditions of service, including the grant of house-rent allowance, compensatory local allowance, leave benefits, medical benefits, retirement benefits etc, of the petitioners and the persons whom they represent as per the accepted recommendations of the Second Pay Commission (Desai Commission) in the said matters and to give effect to such revision on and with effect from January 1, 1973.

(4) To extend to the petitioners and the persons whom they represent the benefit of interim relief in the same manner in which such benefit was extended to the other officers and servants of the Panchayat Service.

(5) To pay to the petitioners and the persons whom they represent the amount payable to them as a consequence of the rationalisation or revision of pay scales and allowances and other conditions of service in pursuance of the directions contained in clauses (1) to (4) hereinabove.

(6) To consider the question of making suitable provision in the Gujarat Panchayats Service (Promotion to Cadres in State Service) Rules, 1974 or by framing appropriate Rules for promotion of the ex-municipal staff of the Panchayat Service to appropriate cadres in the State Service and also to consider the question of providing to such staff, by framing appropriate rules, promotional avenues to the other two cadres in the Panchayat Service, namely, the taluka cadre and the district cadre.

The State Government will implement these directions as expeditiously as possible and, in any case, not later than October 31, 1977.

Rule made absolute in the terms aforesaid. The first respondent will pay the costs of this petition to the petitioners.