15 5 ACCOUNTANT GENERAL & ANR. Ere. ETC. v. S. DORAISWAMY & ORS. ETC. ETC. November 13, 1980 [V. R. KRISHNA IYER, R. S. PATHAK & 0. CHINNAPPA RLDDY, JJ.] Constitution of India 1950, Articles 148(5) and 309–Scope of. Conlptroller and Auditor-General-FunctiPns of-Head of Indian Audit
and Accounts Departme·nt-Persons serving in the tkpartn1ent-Whether hold- ,,…- ing office exclusively in connection with the affairs. af the Union-Regulation of their recruitn1ent and conditions of service-Whether within the domain
of the President under Article 309 prpviso. Indian Audit t"' Accounts Depart1nent (Subordinate Accounts ServicP. & Subordinate Railway Audit S.ei!Vice) Service Rules 1974, Rules 1(2) and
HJ-Whether can have retrospective operation-Rule 1(2) whether ultra vires- Power conferred on Co1nptroller & Auditor-Gelleral under Rul2 10-Whether violates the doctrine against excessive delegation.
Co1nptrpller & Auditor-General's Manual of Standing Orders para 143- Wh.et!zer could be amended by departmental instructions. In 1921 the Auditor-General, as the administrative head of the Indian
Audit Department, inserted Article 1666A by a circular No. 1757-E/1129 dated 18th April 1921 giving weight to the length of service as Upper Divi- sion Clerks in the fixation of seniority in the Subordinate Accounts Service. In the
Audit Code prepared subsequently, Article 1666A appeared as Article 52. Thereafter, in the Manual of Standing Orders issued by the Auditor- General in 1938, Article 52 found expression as paragraph 143. By a correc- tion
slip dated 27th July, 1956, the Comptroller and Auditor-General removed the factor of weightage on the basis of length of service in the determination of seniority. – The respondents in the appeals, who had entered service in the
Office of the Accountant General, as Upper Division Clerks, appeared in the Subor- dinate Accounts. Service Examination and passed the examination held in November 1969, and were promoted
shortly thereafter. They claimed seniority on the basis that their length of service in the inferior post should be taken into account, and rested their claim on paragraph 143 of the Manual of
Standing Orders as it stood prior to its amendment by the correction slip of 27th July 1956. The claim was rejected by the Comp- troller and Auditor-Genera]. A writ petition filed by them in the High Court was allowed 1.Jy a Single Judge and the judgment ·was affirmed by the
Appellate Bench of the High Court. The Accountant-General and the Comptrolier and Auditor-General appealed to this Court. During the pendency of the appeals, the President enacted
l l-1281 SCl/80 —~·—~. —·~~~—-~"• 6 IM !VllM c the lndian Audit and Accounts Department (Subordinate Accounts Service & Subordinate Railway Audit Service) Service Rules, 1974.
They were deen1- ed to have come into force on 27th July, 1956. These rules purported to give statutory recognition to the amendment of paragraph 143 by the Comp- troller and Auditor-General. Rule 6
provided for appointments to the Service and Rule 7 dealt with seniority. Rule 9 provided that in matters not specifically provided for the rules, regulations, orders or instructions of the Central Civil Services as applicable to the Indian Audit and Accounts Depart- ment
would be applicable. Rule 10 empowered the Comptroller and .1\uditor-General to issue general or special instructions for giving effect to the Rules. In the appeals, the respondents assailed the validity of the Rules
of 1974 and the amendment made in paragraph 143, contending that the Rules are invalid as clause (5) of Article 148 does not permit the retrospective enactment of rules made thereunder, that the specific
rules affecting the seniority of the respondents are iµvalid because in entrusting power to the Con1ptroller and Auditor-General to issue orders and instructions in his discreti&n the doctrine against excessive delegation of legislative power bas
been violated, and that paragraph 143 possesses the status of a stntutory role and, therefore, the amendment attempted by the correction slip has no legal effect upon it. In the connected writ petitions, the petitioners who had passed the Suber~ dinate Accounts Service Examination were promoted to the Service after 1956 some before the enactment of the Rules
of and some thereafter. It was contended on their behalf that the fixation of seniority having been made by Rule 7(2) to depend on the order in which appointments to the service were made under Rule 6 depends on an arbitrary power conferred on the Comptroller and Auditor-General to pass orders and instructions. On the question whether the respondents are entitled to claim fixation of their seniority in the Subordinate Accounts Service after taking into account their length of service as Upper Division Clerks.
Allowing the appeals and dismissing the writ petitions, HELD : !. There is nothing in the language of clause (5) of Article 148, to indicate that the rules framed therein were intended to serve until Parlia- -..;
mentary legislation was enacted. All that the clause says is that th'e rules fran1ed would be subject to the provisions of the Constitution and of any law made by Parliament. Clause (5) of Article 148 confers power on the President to frame rules operating prospectively only. The rules of
cannot have retrospective operation. Sub-rule (2) of rule 1, which declares that they will be deemed to have come into force on 27th July, is therefore ultra vires. [163B-C] B. S. Vadera v. Union of India & Ors. [1968] 3 S.C.R. 575 referred to. 2. The Comptroller anJ Auditor-General is a high ranking
constitutional authority, and can be expected to act according to the needs of the service and without arbitrariness. He is the constitutional head of one of the most important departments of the State, and is expected to know what the depart- ACCOUNTANT GENL. V. S. DORAISWAMY
ment requires and how best to fulfil those requirements. Tue power con- ferred on him under the Rules does not violate the principle against excessive delegation. [165C-D] 3. Paragraph 143 in the Manual of Standing Orders remained throughout a departmental instruction and, therefore, could be amended by the depart- mental instruction contained in the correction slip issued by the Comptroller and Auditor-General in 1956.
[164F] 4. There is a clear dichotomy in the power conferred by Article 309, a division of power between the Parliament or President, as the case may be, on the one side and the State Legislature or Governor on the oth'er. The
division is marked by the circumstance that under Article 309 services and posts in connection \vith the affairs. of the Union are dealt with by a separate authority from the services and posts in connection with the affairs of
a State. That dichotomy is not possible in the power employed for appointing persons in the Indian Audit and Accounts Department and for prescribing their c()nditions of service. [160H·161A]
5. The authority vested in the Comptroller and Auditor.General ranges over functions associated with the affairs of the States. It is a single cffice, c and the Indian Audit and Accounts Department, which it heads, is a single department. They cannot be said to be concerned with. the affairs of the
Union exclusively. Consequently, the regulation of the recruitment and condi- tions of service of persons serving in the Indian Audit and Accounts Depart· ment cannot be regarded as a matter falling within the
domain of the President within the terms of the proviso to Article 309. [162 C] B. Shiva Rao, "The Framing of lndia's Constitution: A Study" [1968], Chap. 12. pp. 414-417 referred to.
6. It cannot be said that persons serving in the Indian Audit and Accounts Department are holding office in connection with the affairs of the Union exclusively. [161 CJ · 7. The power contained in clause (5) of Article 148 is not related to the power under the proviso to Article 309. The two
powers are separate and distinct from each other and are not complementary to one another. The reference 'to the proviso under Article 309 in the recital of the Notification publishing the Rules of 1974 is meaningless and must be ignored. [1620-EJ 8. Having regcird to the provision determining the fixation of seniority
under the Rules of 1974 and the position obtaining thereafter, none of the petitioners in the writ petitiOns can claim the benefit of weightage on the basis of length of service. [165A]
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 1584-1588 of 1973. Appeals by Special Leave from the Judgment and Order dated 6th August, 1973 of the Madras High Court in Writ Appeal Nos. 13 to H 17 of 1973.
AND Writ Petition Nos. 357 of 1979 and 4367 of 1978. c (Under Article 32 of the Constitution) K. Parasaran, Soli. General, N. Nettar and Miss A. Subhashmi for the Appellants in all appeals.
T. S. Krishnamurthy Iyer, H .. B. Dattar, A. K. Srivastava and T. P. Sunderarajan for the Petitioners in WPs. Nos. 4367 of 1978 & 357 of 1979. 1'. S. Krish1wmurthy Iyer, Vineet Kumar and A. K. Srivastava for the Respondents.
The Judgment of the Court was delivered by PATHAK, J.-These appeals, by special leave, raise the question whether the respondents arc entitled to claim fixation o( their seniority in the
Subordinate Accounts Service after taking into account their length of service as Upper Division Clerks. The res- pondents entered service in the Office of the Accountant General,
Tamil Nadu as Upper Division Clerks. They appeared in the Sub- ordinate Accounts Service Examination but it was o'nly after a num- ber of attempts that they succeeded in passing. They passed the examination held in November, 1969 and were
promoted shortly thereafter. They claimed seniority on the basis that their length of service in the inferior post should be taken into acoount, and rested their claim o'n paragraph 143 of the Manual of Standing Orders issued by the Comptroller and Auditor-General as it stood before its amendment by a correction slip of 27th July, 1956.
The correction slip removed the factor of weightage. on the basis of length. of service in the determination of seniority. The claim was rejected by the Comptroller and Auditor-General. A writ petition filed by them in the High Court of Madras was allowed by a learned Single Judge, and bis judgment was affirmed by an appellate Bench of the High j Court.
Against the judgment of the appellate Bench, the Accoun· !ant General, Tamil Nadu and the Comptroller and Auditor-General have appeaJ.ed to this Court, and those appeals are pending as Civil Appeals Nos. 1584 to 1588 of 1973.
During the pendency of those appeals the President euacted the Indian Audit and Accounts Depat:t- ment (Subordinate Accounts Service & Subordinate Railway Audit Service) Service Rules, 197 4 (referred to hereinafter as "the Rule~ of 1974"). The Rules of 1974 purport to give statutory recognition to the amendment of paragraph 143 by the Comptroller and Auditor- General.
The validity of the Rules of 1974 and the amendment made in paragraph 143 are assailed by the respondents in the instant appeals. ,…-·· ACCOUNTANT GENL. v. s. DORAISWAMY (Pathak J.)
The Rules of 197 4 have been enacted by the President. They are deemed to have come into force on 27th July, 1956, which has been defined, for the purposes of the Rules as the "appointed day". The Subordinate Accounts Service (the "S.orvice") includes members appointed to it before the appointed day as well as persons recruited to it iu or before that day.
Rule 5 provides that recruitment shall be made by direct recruitment i'n accordance with the orders or <lirections issued by the ComptroJler and Auditor-General from time to time and also by promotion.
Rule 6 provid's : "6. /1ppointJnents :- Appointments to the Service shall be made from the list prepared in accordance with the orders and instructions issued by the Comptro1ler and Auditor-General from time
to time and applicable at the time of appointment to the Service." Rule 7 deals with seniority, and doc:ares : "7. Seniority :- ( 1) The seniority inter-se of the persons appointed to the service before the appointed day shall be regulated by the orders or instructions issued by the Comptroller and Auditor- Gcneral as were i'n force at the relevant limo before such day.
(2) The seniority-inter-Se of the persons appointed to the Service on or after the appointed day shall be in the order in which the appointments are made to the service in accordance· with rule 6.
Provided that a direct recruit shall on appointment to the Service rank senior to all o'fficiating persons in the service (excluding a direct recruit) passing in the same departmental examination or subsequent departmental examinations.
c Provided further tha.t the seniority of a person who had declined fhe appointment to !he Service but who is subse- quently appointed to the Service shall be determined with reference to the date on which he assumed charge of the
post in the cadre." By virtue of Rule 9, in matters not specifically provided for in the Rules, every person appointed to the Service is governed by the rules, regulations, orders or instructions made or issued in respect of the Central Civil Services as applicable to the Indian Audit and Accounts c
Department. Rule 10 empowers the Comptroller and Auditor-General to issue, from time to time, such general or special instructions or orders as he may consider necessary or expedient for the purpose of giving effect to the Rules.
The respondents have raised two contentions. The first is that the Rules are invalid as clause (5) of Art. 148 to which alone, it is said, they must be ascribed, docs not permit tbe retrospective enact- ment of rules made thereunder.
The other contention is that the specific rules affecti'ng the seniority of the respondents are invalid be>- cause in entrusting power to the Comptroller and Auditor-Genera! to issue orders and instructions in his discretion the doctrine against excessive delegation of legislative power has been violated. Taking the first conte_ntion first, it may be noted that the Rules of 1974 purport, according to the recital in the Notification dated 4th November, 1974 publishing them, to have been made by the President "in exercise of the powers conferred by the proviso to Art. 309 and clause (5) of Art. 148 of the Constitution and after consulta- tion
with the Comptroller and Auditor-General of India". The respondents say that the only provision of the Constitution under which those Rules could be made is clause (5) of Art. 148, and we should ignore refereno~ to the proviso to Art. 309.
If that is done, they urge, there will be no justification for holding that the Rules of 1974 can be given retrospective operation. Unlike the proviso fo Art. 309, it is pointed out, clause (5) of Art. 148 does not permit the enactment of retrospectively operating rules.
We think that the respondents are right. Article 309 provides for legislation by the appropriate Legislature to regulate the recruitment and conditions of service of persons appointed to public services and posts in connection with the affairs of "'"'
the Union or of any State, and the p_roviso to Art. 309 declares that until such legislation is enacted by the appropriate Legislature the President is empowered in the case of services and posts in con- nection with the affairs of the Union, and the Governor of a State i:n the case of services and posts in connection with the affairs of a State, to make rules regulating the recruitment and the conditions of ser- yice of persons appointed to such services and posts.
There is a clear dichotomy in the power conferred by Art. 309, a division of power between the Parliament or President, as the case may be, on th<J one side and the State Legislature o'r Governor on the other. The division is marked by the circumstance that under Art. 309 services and posts in connection with the affairs
of the Union are dealt with by a separate authority from the services and ACCOUNTANT GENL. v .. s. DORAISWAMY (Pathak J.) posts in connection with !he affairs of a State. That dichotomy
it s"ems, is not possible in the power employed for appointing per.;ons in the Indian Audit and Accounts Department and for prescribing their conditions of service. The Comptroller and Auditor-General
of India, ~vho is the head of that department, is a co'nstitutional functionary holding a special position under the Constitution. Under Art. 149, he performs duties and exercises powers in relation to the accounts of the Union and also of the States. Clause ( 1) of Art. 151 requires him to submit a peport relating to the accounts of the Union to the President, who causes them to be laid before each House of Parliament.
Likewise, clause (2) of Art. 151 requires him to submit a report relating to the accounts of a State to the Governor of the State, who causes them to be laid before the Legislature of the State. It cannot be said, in the circumstances, that the persons serv- ing in the Indian Audit and Accounts Department are holding office in connection with the affa~. of the Union exclusively. It may be pointed out that whei1 the Constitutional Adviser prepared the Draft Constitution for consideration by the Constitu~nt Assembly the docu- ment contained separate provisions for the appointment of the Audi- tor-General of the Federation and Auditors-General for the Provinces. The Auditor-General for the Federation was to be appointed by the President and his functions extended to the accounts of the Federation as well as of the Provinces. But it was open to a Provincial Legislature to provide by law for the appointment of an Auditor-General for the Province and the appointment td that office was to be made by the Gov- ernor. The Expert Committee on the financial provisions of the Union Constitution favoured the continuance of a single Auditor-General for the Government of India as well as for the Provincial Governments and hoped that the Provincial Governments would refrain from using their power of appointing separate Auditors-General of their own. When
the matter came refore the Drafting Committee, it decided that the persons performing the functions of the Auditor-General in a State should be designated Auditor-in-Chief in order to distinguish him from the Auditor-General of India, and that the salaries and allo'wanc!"s of the staff of these officers should be fixed by the Auditor-General of India
and. the Auditor-in-Chief in consultation with the President and the Governor respectively. Thereafter, the Drafting Committee reconsidered the desirability of permitting a multiplicity of audit authorities, one for the Union and one for each State. On 1st
August, 1949 Shri T. T. Krishnamachari moved an amendment delet- ing the draft articles enabling the State Legislatures td create their own Auditors-in-Chief. He pointed out that since the Constituent Assem-
bly had already adopted articles whereby the auditing and accounting would become "one institution, so to say, under the authority of the c n c Comptroller and Auditor-Genera!", it was not necessary to have separate pro¥ision for the States. Accordingly, he proposed the addi- tion of a new article [now clause (2) of Art. 151] about the Comp- troller and Auditor-General, requiring him to submit the reports of the accounts of a State to the Governor for being laid before the State Legislature.
These amendments were adopted by the Constituent Assembly. (1) It is evident that the authority vested in the Comptroller and Auditor General ranges over functions associated with the affairs of the Union as well as over functions associated with the affairs of the States. It is a single office, and the Indian Audit and Accounts Department, which it heads, is a single department.
They cannot be said to be concerned with the affairs of the Union exclusively. Conse- quently, the regulation of the recruitment and conditions of service of persons serving in the Indian Audit and Accounts Department cannot be regarded as a niatter falling with the domain of the President within the terms of the proviso" to Art. 309.
A speci;il pro- vision was necessary to entrnst the President with that power, and that provision is clanse (5) of Art. 148. The power cont~ined in clause ( 5) of Art. 148 is not related to the power under the proviso to Art. 309. The two powers are separate and distinct from each other and are not complementary to one another.
In our opinion, the refe- rence to the proviso under Art. 309 in the recital of the Notification publishing the Rules of 1974 is meaningless and must be ignored. The next question is whether clause (5) of Art. 148 permits the enactment of rules having retrospective operatiOll..
It is settled law that unless a statute conferring the power to make rules provides for the making of rules with retrospective operation, the rules made pursuant to that power can have prospective operation only. An exception, however, is the proviso
to Art. 309. In B. S. Vadera v. Union of India & Ors.(') this Court held that tho rules framed under the proviso to Art. 309 of the Constitution could have retrospec!ive operation.
The conclusion followed from the circumstance that the power conferred under the porviso lo Art. 309 was intended to fill a hiatus that is to say, until Parliament or a State Legislature enacted a Jaw on the subject matter of Ari. 309. The rules framed under the proviso to Art. 309 wem transient in character and were to do duty only until legislation was
enacted. As interim substitutes for such legislation it was clearly intended that the rules should have the same range of operation as an Act (1) B. Shiva Rao, "The Framin6 of India's Constitution : A Study" [1968], Chap. 12, pp. 414-417.
(2) [1969] 3 S.C.R. 575. ACCOUNTANT GENL. v. s. DORAISWAMY (Pathak J.) -0f Parliament or of the State Legislature. The intent was rein- forced by !he declaration in the proviso to Art. 309 that "any rules so made shall have effect subject to the provisions of
any such Act". Those features are absent in clause (5) of Art. 148. There is nothing in the language of that clause to indicate that the rules framed therein were intended to serve until Parliamentary . legisla- tion was enacted.
All that the clause says is that the rules framed would be subject to the provisions of the Constitution and of any law made by Parliament. We are satisfied that clause (5) of Art. 148 confers power on !he President to frame
rules operating .~ prospectively only. Clearly then, the rules of 1974 cannot have retrospective operation, and therefore sub-rule (2) of rule 1, which declares that they will be deemed to have come into force on 27th July, 1956 mus! be held ultra vires.
lf the Rules of 1974 do not cover the case of the respondents 1hen admittedly the only question which remains in regard to them is whether the amendment intended by the Comptroller and Auditor General in 1956 to paragraph 143 of the Manual of Standing Orders results in amending that paragraph. The amendment
is in the form of a correction slip which, it is not disputed, possesses the -status of an administratiw instruction. The contention on behalf of the respondents is that paragraph 143 possesses the statns of a statu- tory rule and, therefore, the amendment attempted by the correction slip has no legal effect on it.
The High Court held that paragraph 143 was a statutory rule and it proceeded to hold so on the basis -of affidavits filed before it. But the ma!ter has been more carefully researched since, and the relevant. material is now set out in the
special leave petition, which has given rise to this appeal. It appears that in 1921 the Auditor-General, as the administrative head of the Indian Audit Department, inserted Art. 1666A by a circular No. ~ 1757-E/1129 dated 18th April, 1921 giving weight to the length of service in the fixation of seniority.
In the Audit Code prepared subsequently, Art. 1666A appeared as Art. 52. Thereafter, in the Manual of Standing Orders issued by the Auditor-General in 1938, Art. 52 found expression as paragraph 143. The provision never acquired statutory force under the Government of India Act, 1919. Learned counsel for the respondents urges that it acquired statutory force under snb-s. (2) of s. 252, Government of India Act, 1935. Sub-ss. (1) and (2) of s. 252 provide :
"252. (1) All persons who immediately before the commencement of Part III of this Act were members of the staff of the High Commissioner for India, or members of the staff of the Auditor of the accounts of the Secretary
c (1981] 2 S.C.R. of State in Council, shall continue to be, or shall become, members of the staff of the High Commissioner for India or, as the case may be, of the Auditor of Indian Home
Accounts. (2) All such persons aforesaid shall hold their offices or posts subject to like condilions of service as to remunera- tion, pensions or otherwise, as therefore, or not less
favourable conditions, and shall be entitled to reckon for purposes of pension any service which they would ha\'e been, entitled to reckon if this Act had not been passed . c Sub-s. (2) of s. 252 does not help the respondents.
Firstly, the guarantee conferred by it covered. those persons who held offices or posts on the staff of the Auditor of the accounts of the Secretary of State in Council and 011 the staff of the Indian Home Accounts immediately before the commencement of Part III of the Act. The respondents are clearly not such persons.
Secondly, even if it be assumed that the benefit of sub-s. (2) can be extended to the res- pondents, sub-s. (2) merely protects the conditions of service en- joyed by them as they existed before.
The sub-section does not eularge or improve on the quality of those conditions of service. If seniority was determined by a departmental inslruction, sub-s. (2) did not give that provision the higher status of a statutory rule. It remained what it always was, a departmental instruction.
We were also referred to Art. 313 of the Constitution, but that provision also does not result in converting a departmental instruction into a statutory rule. Plainly, paragraph 143 in the Manual of Standing
Orders rnmained throughout a departmental instruclion and, there- fore, could be amended by the departmental instruction contained in the correction slip issued by the Comptroller and Auditor-Genera\ in 1956.
On that conclusion being reached, the claim of the respondents must fail. The appeals have to be allowed. In the connected writ petition No. 357 of there are 15 petitioners. The first ten passed the Subordinate Accounts Ser-
vice Examination and were promoted to the service after 1956 and before the enactment of the Rules of 1974. They will be governed by the legal position enunciated in the aforesaid
appeals. The eleventh, twelfth and thirteenth petitioners passed the examination immediately before the enactment of the Rules of 1974 but were promoted after the Rules were enacted. The remaining petitioners appeared at the examination and were promoted after the enactment of the Rules. In the case of the last two categories the Rules of ACCOUNTANT GENL. v. s. DORAISWAMY (Pathak J.)
1974 will apply. Having regard to the provision determining the fixation of seniority under the Rules of 1974 and the position obtain- ing thereafter, none of the petitioners can claim
the benefit of weightage on the basis of length of service. But !hese petitioners rely on the second of the two contentions concerning the validity of the Rules of 1974. They assail
specifically the validity of Rule 7 ( 2) which provides for fixation of seniorily. The argument is that the fixation of seniority has been made by Rule 7 (2) to depend on the order in which appointments to the service are made under Rule 6, and that, it is pointed out, depends on an arbitrary _/.. power conferred on the Comptroller and Auditor General to pass
orders and instructions. We see no force in the contention. The Comptroller and Auditor General is a high ranking constilutional authority, and can be expected to act according to the needs of tM service and without arbitrariness.
He is the conslitutional head of one of the most important departments of the State, and is expected to know what the department requires and how best to fulfil those requirements.
We are unable to hold that the power conferred on him under the Rules violates the principle against excessive delegation. The writ petition No. 4367 of 1978 must also be treated on the basis that the petitioners are not, in the fixation of their seniority, entilled to weightage with reference to their length of service. Both c
writ petitions must, therefore, be dismissed. Civil Appeals Nos. 1584-1588 of 1973 are allowed, the judg- ment and order of the Madras High Court is set aside and the writ petition is, dismissed.
Wril Petition Nos. 357 of 1979 and 4367 of 1978 are also dismissed. In the circumstances, there is no order as to costs. N.V.K. Appeals allowed and Petitions dismissed.