TMI Blog1966 (2) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... er and posted to the Bhatinda branch of the Bank on April 1, 1944. On April 1, 1949 he was promoted as Selection Grade Manager by the Board of Directors of the Bank in the grade of ₹ 340-20-500-525-700. On September 23, 1953 he was cc mpulsorily retired from service but was subsequently reinstated by the Government on June 10, 1954 since the order was legally defective. On June 11, 1958 the Board passed an order compulsoriy retiring him from service. Ram Prasad challenged the order of compulsory retirement passed by the Board on various grounds, by means of a suit institiuted in the Court of the Subordittate Judge, Patiala. He pleaded that the order of compulsory retirement amounted to dismissal or removal from service within the meaning of art. 311 of the Constitution. He further maintained that r. 27 of the Bank of Patiala (Staff) Rules, 1954, hereinafter termed the Staff rules, under which the order of compulsory retirement was made, was illegal and void. The order was also challenged on the ground that it was mala fide. The substantial relief claimed by him in the suit was a declaration that r. 27 of th( Staff rules was wholly unconstitutional, null and void for the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Bank. We will have occasion to refer to the material clauses of this Order at a later stage. By virtue of the powers conferred Upon it by cl. 4(i)(iii) of the Regulation Order, the Board of Directors of the Bank framed the Staff rules. Rule 27 of these rules, at the relevant date, was in the following terms : An employee shall retire at fifty five years of age provided that (i) the Bank may, at its discretion and without giving any reasons, retire any employee from the Bank s service after he has completed the age of fifty years or the service of twenty five years whichever happens first and no claim to special compensation on this account will be entertained; (ii) the Bank retains the absolute right to retire any employee after he has completed 10 years of service without giving any reasons and no claim to special compensation on this account will be entertained. This right will not be exercised except when it is the interest of the Bank to dispense with the further services of an employee such as on account of inefficiency, dishonesty, corruption or infamous conduct. Explanation I : The action under proviso (ii) is intended to be taken (a) Against an employee wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he service conditions of Government servants in the State had lapsed and that the delegation by the President to the Board power to frame rules ipso facto came to an end when the Proclamation was revoked, on the principle that the delegate s power comes to an automatic end by reason of the principal s power having lapsed. Mr. Bishan Narain, learned counsel for the respondent-State, countered these arguments and maintained that the Staff Rules were valid. We may initially set out the relevant facts with regard to the Proclamation of Emergency by the President and its revocation. As already stated, by notification dated March 4, 1953, the President, in exercise of the powers conferred by art. 356 of the Constitution, assumed all functions of the government of the State of, PEPSU and all powers vested in or exercisable by the Rajpramukh of the State. The Notification declared that the powers of the legislature of the State shall be erercisable by or under the authority of Parliament. By an order made by the President on the same date, the President issued a direction that all the functions of the Government of the State of PEPSU and all the powers vested and exercisable by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and repeal all. the previous Orders and instructions in so far as they are inconsistent with the provisions of the Regulation Order. By reason of the fact that the Order itself provides for its commencement as the date on which it was made, it is clear that the Order came into operation on February 27, 1954, though it was published at a later date. The Order was therefore made before the date of termination of the President s rule in PEPSU. Now, it is contended by learned counsel for the appellant that the Regulation Order is in effect and substance a legislative act and that its operation could not extend beyond the period specified in art. 357(2). It may be initially stated that this contention was pot raised in the Courts below and there was no pleading or any .Issue covering that contention. Further, there is nothing on record to show that no order was passed during the period of one year provided by art. 357(2) extending the life of the Regulation Order beyond that period. Coming to the contention, the question is whether, on a fair construction of all its provisions and its intendment, the Regulation Order comes within the scope of ,he expression things done occurri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w, pledge or mortgage Government promissory notes and other securities for the purpose of taking overdrafts and demand loans on their security; under sub-cl. (ix) issue instructions for the guidance of the Managing Director and require him to submit to the Board all information regarding the transactions of the. Lastly, under sub-cl. (x) the Board shall delegate to the Managing Director, or subject to the Managing Director s supervision, to any of the other employees of the Bank any of the aforesaid powers. Clause 5 provides that the Board shall comply with such general or special directions as may from time to time be issue by the State Government. Clause 6 provides for the meetings of the Board being held at least once in every three months or at such shorter intervals as the Chairman may decide and cl. 7 specifies the powers of the Managing Director. Clause 8 provides for the conduct of the business of the Bank. Clause 9 provide for the applicability of some of the provisions of the Banking Companies Act to the Bank. Clause 10 provides for the audit of the a :counts of the Bank and cl. II provides that the Board shall, at the end of every calendar year, submit to the State Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Order, including cl. 4(1) (iii), come within the purview of the saving clause occurring in art. 357(2) of the Constitution and that they continue to be in operation after the period specified in that article. On this conclusion it follows that the delegation made by the President in favour of the Board of Directors of the Bank under the Regulation Order did not lapse on the terminatio of the Presidents rule in PEPSU. It is therefore unnecessary to consider the decisions bearing on the question of the extent of the authority or power of a delegates. Learned counsel for the appellant has contended that the Patiala Services Regulations were existing law made by the Maharaja and it was not competent for- the President to make the Regulation Order empowering the Board of Directors of the Bank to supersede those Regulations. The learned Judges of the High Court held that the President was competent to promulgate the Regulation Order under art. 309 read with arts. 330 and 372 of the Constitution. Having regard to the conclusion reached by us, that the Regulation Order was validly made, we consider it unnecessary to go into the larger question whether the Regulation Order had the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , but instead thereof will have the benefit of, a contributory Provident Fund, as already established. (c) The Bank service shall be recognised as State service for the purposes of employment in State service of suitable candidates among the descendants of Bank employees. The Chairman of the Board of Directors put up a note to the Maharaja of Patiala underneath : I respectfully request that the recommendations of the Board of Directors of the Bank, as stated above, may graciously be sanctioned. On this, the Finance Committee recommended as follows The Finance Committee recommends that (1) Requests of the Chairman, Board of Directors, at (c), (e), (f) and (g) may be sanctioned. (2) The request at (a) may be sanctioned adding the following and other State Rules or orders after Patiala State Regulations in the first line. This recommendation was made by the Revenue Minister and the Finance Minister who constituted the members of the Finance Committee. On this the Cabinet supported the recommendations of the Finance Committee and submitted the same to the Maharaja. These recommendations were accepted by the Maharaja on April 8, 1941. It may be noted that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. In so far as this case dealt with the compulsory retirement of a civil servant, it is unnecessary to consider the Rule in question or the facts relating to the compulsory retirement of the civil servant. It is of interest to note that in dealing with the question as to whether compulsory retirement amounted to removal or not, the tests which were applied were in regard to the loss of benefit already accrued and stigma attached to the civil servant. It is, however, significant that in considering the objection based on ,the contravention of Art. 311(2), Venkatarama Aiyar J., took the precaution of adding that questions of the said character could arise only when the rules fix both an age of superannuation and an age for compulsory retirement and the services of a civil servant are terminated between these two points of time. But where there is no rule fixing the age of compulsory retirement, or if there is one and the servant is retired before the age prescribed therein, then that can be regarded only as dismissal or removal within art. 311(2),. It would be noticed that the rule providing for compulsory retirement was upheld on the ground that such compulsory retirement does no ..... 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