Judgment:
A.K. Mathur, J.
1. All these batches of petitions mentioned in the schedule annexed herewith shall stand disposed of by this common opinion.
2. A reference has been made by the Chief Justice of this Court to this Full Bench to answer the question that 'whether the law laid down in the case of Dr. Vasant v. State of M.P., 1986 MPLJ 295 = 1986 JLJ 115 is correct law or not. In Misc Petition No. 1801/89, it was prayed that section 58(5) and (6) of the Madhya Pradesh Municipal Corporation Act, 1956, as amended by the Madhya Pradesh Municipal Corporation (Amendment) Act, 1982 (Act No. 5 of 1982) and the Madhya Pradesh Municipal Laws (Amendment) Act, 1988 (Act No. 7 of 1988) may be declared ultra vires of Articles 14 and 15 of the Constitution of India.
3. The petitioner-Indore Nagar Nigam Karamchari Congress a registered representative body, has challenged the validity of the aforesaid provisions that an employee of the Municipal Corporation cannot be transferred from one to another Municipal Corporation, therefore, a validity of the aforesaid provision of M.P. Municipal Corporation Act, 1956 (hereinafter referred to as the ACT'), has been challenged.
4. In order to appreciate the controversy it would be relevant to mention the relevant provisions of the Municipal Corporation Act. Sub-sections (5) and (6) of section 58 of the M.P. Municipal Corporation (Amendment) Act, 1982, read as under:-
'Sub-section (5) - Notwithstanding anything contained in this Act or any rules or bye-laws made thereunder, the State Government may, subject to the conditions specified in sub-section (6), transfer on deputation any officer or servant or a Municipal Corporation carrying a maximum scale of pay exceeding Rs. 400/- to any other Municipal Corporation and it shall not be necessary for the State Government to consult either the Corporation or the officer or servant concerned before passing an order of transfer on deputation under this sub-section.'
'Sub-section (6) - The Officer or servant transferred under sub-section (5) shall -
(a) has his lien on the post held in the parent Corporation.
(b) not be put to disadvantageous position in respect of any and allowance which he would have been entitled to, had he continued in the parent Corporation,
(c) be entitled to deputation allowance at such rate as the State Government may by general order specify, and
(d) be governed by such other terms and conditions including disciplinary control as the State Government may, by general or special order, specify.'
Thereafter, it was further amended by the Municipal Corporation Act, 1988. Sub-sections (5) and (6) of section 58 of the Act, 1988, which reads as under:-
'Section 58 Appointment and salary of Corporation Officers and Servants. -
(1) XXX XXX XXX(2) XXX XXX XXX(3) XXX XXX XXX(4) XXX XXX XXX(5) Notwithstanding anything contained in this Act or any rules of bye-laws made thereunder, the State Government may, subject to the conditions specified in sub-section (6), transfer on deputation any officer or servant of a Municipal Corporation to any other Municipal Corporation and it shall not be necessary for the State Government to consult either the Corporation or the officer or servant concerned before passing an order of transfer on deputation under this sub-section.
(6) The Officer or servant transferred under sub-section (5) shall -
(a) have his lien on the post held in the parent Corporation;
(b) not be put to disadvantageous position in respect of and allowances which he would have been entitled to, had he continued in the parent Corporation;
(c) be entitled to deputation allowance at such rate as the State Government may by general order specify; and
(d) be governed by such other terms and conditions including disciplinary control as the State Government may, by general or special order specify.'
Prior to this, it was also amended by the Act No. 5/82. Since we are concerned with amending Act of 7/88 by which these two provisions sub-sections (5) and (6) were substituted, therefore, we are not concerned with the Amendment Act No. 5/82. By this, sub-section (5) which state the non-obstant clause has conferred the power to the State Government subject to sub-section (6) to transfer on deputation any officer or servant of a Municipal Corporation to any other Municipal Corporation and it has also been laid down that it shall not be necessary for the State Government to consult either the Corporation or Officer or servant concern before passing such transfer order on deputation. But it has been qualified by sub-section (6) which says that the lien of the incumbent shall be held on the post in the parent department. It further lays down that the servant and officer shall not be put to disadvantage position in respect of the pay and allowances. He will also be entitled to deputation allowance as such rate as may be specified and subject to the disciplinary control the State Government may by order specify. This provision came up for consideration by Division Bench of this Court in the case of Dr. Vasant (supra). This Court examined the validity of the aforesaid provisions and after examining the matter, the Division Bench found that earlier Amendment Act, 1982, it was provided that any officer or servant of the Municipal Corporation who is carrying a maximum scale of pay exceeding Rs. 400/- can be transferred to any other Municipal Corporation and it shall not be necessary for the State to consult either of the Corporation or officers or the servants before passing the order of transfer on deputation. This was substituted by sub-section (5) and the minimum limit of pay scale was done away and there is no ceiling of pay scale. According to the amended provision any officer or servant of the Municipal Corporation can be transferred on deputation to any Corporation subject to the conditions laid down in sub-section (6). This was the only change made in the amending Act of 1988. The earlier sub-sections (5) and (6) of Act of 1982 came up for consideration before the Division Bench of this Court in Dr. Vasant's case (supra) and the Division Bench of this Court examined the validity of these provisions and the Court found that under entry No. 5 of list II of Schedule VII of the Constitution, the State Legislature is competent to enact and pass such law in respect of the Municipal Corporation; therefore, the State Legislature is competent to amend the provisions of the Municipal Corporation Act. Then it examined the validity of this provision vis-a-vis of Articles 14 and 16 of the Constitution and its validity thereof was also affirmed. In Dr. Vasant's case (supra) it was observed in para 12 as under:
'The transfer order of the incumbent is vitiated by Articles 14 and 16 of the Constitution of India. Article 16 gives effect to the doctrine of equality in all matters relating to public employment. The basic principle which enacts both Articles 14 and 16 of the Constitution is equality and inhabitation against discrimination. If the provisions of sub-sections (5) and (6) of section 58 of the Act, are looked into, which empower the State Government to transfer the Corporation employees, then we fail to understand as to how the instant transfer is of discriminative nature and hits the fundamental rights guaranteed under Chapter III of the Constitution to the citizens of India.'
In this connection, the Division Bench also made a reference of earlier judgment of Hon. Supreme Court given in the case of State of Madhya Pradesh v. Shankerlal, AIR 1980 SC 643. In that case, almost identical provisions of the Municipalities Act, 1961 came up for consideration. Section 94(1), (2) and (7) of the Municipalities Act, 1961 were challenged earlier before this Court and this Court set aside the order of transfer issued in purported exercise of the power under section 94(7). In State of M.P. v. Shankerlal (supra) the matter was taken before the Supreme Court by the State and the decision of this Court was reversed. Section 94(1), (2) and (7) which is relevant for our purpose, reads as under:
'Section 94. Appointment of Staff. - (1) Every Council having an annual income of five lakhs of rupees or more shall, subject to rules framed under section 95, appoint a Revenue Officer and an Accounts Officer and may appoint such other Officers and servants as may be necessary and proper for the efficient discharge of its duties.
(2) Every Council not falling under sub-section (1) shall, subject to rules framed under section 95, appoint a Sanitary Inspector, an Overseer, a Revenue Inspector, and an Accountant and may appoint such other Officers and servants as may be necessary and proper for the efficient discharge of its duties:...........(7) The State Government may transfer any Officer or servant of a Council mentioned in sub-sections (1) and (2) and in receipt of total emoluments exceeding one hundred rupees to any other council.'
Therefore, the Hon'ble Supreme Court in State of M.P. v. Shankerlal (supra) while reversing the decision of this Court, observed:
'We do not think that the High Court is right in putting this restricted interpretation to sub-section (7) of section 94. Other Officers and servants who can be appointed by the Municipal Councils either under sub-section (1) or under sub-section (2) are also the officers and servants mentioned in these sub-sections for the purposes of sub-section (7). Theoretically, therefore, the power does exist in the State Government to transfer them. We must, however, hasten to add that in case of employees getting small emoluments the power seems to be meant to be sparingly exercised under some compelling exigencies of a particular situation and not as a matter of routine. If it were to be liberally exercised, it will create tremendous problems and difficulties in the way of municipal employees getting small salaries. There may be hardly an employee serving under any municipal council who cannot be theoretically and liberally covered by sub-sections (1) and (2) and subjected to the exercise of power of transfer under sub-section (7).'
5. In the case of Dr. Vasant (supra), the Division Bench of this Court relying on the decision of the case Sate of M.P. v. Shankerlal (supra) held that the provisions of sub-sections (5) and (6) of section 58 of the Amending Act, 1982, is valid. However, subsequently two decisions given by Hon. Supreme Court in one General Officer, Commanding-in-Chief v. Subhash Chandra, AIR 1988 SC 876 in Jawaharlal Nehru University v. K.S. Jawatkar, AIR 1989 SC 1577 this reference is made that how far the law is laid down in the case of Dr. Vasant (supra) hold good.
In Subhash Chandra's case (supra) it was a case in which a transfer of an employee serving in Cantonment Board to another Cantonment Board, was challenged. Dr. Subhash Chandra Yadav was appointed as a sub-charge Cantonment General Hospital, Lucknow and he was transferred to Cantonment General Hospital, Varanasi. This was challenged before the Allahabad High Court by challenging the validity of Rule 5-C of the Cantonment Boards servants Rules, 1937 as ultra vires of the provisions of the Cantonment Act, 1924. Rule 5-C gave a power to Commanding-in-Chief to transfer the employee from one Cantonment Board to another Cantonment Board. But section 280 of the Cantonments Act which confers the power on the Central Government to make rules, did not provide any power to frame the rules for transfer. Prior to the amendment of Clause (c) of section 280 of the Cantonment Act, the provision as stood was as under:-
'Section 280 Power to make rules. - The Central Government may after previous publication, make rules to carry out the purposes and objects of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for. all or any of the following matters, namely:
(a) to (bb).............
(c) the tenure of office, salaries and allowances, provident funds, pensions, gratuities, leave of absence and other conditions service of servants of Boards.'
Therefore, it was observed by their Lordships of the Supreme Court that clause (c) of section 280 of the Cantonments Act, did not confer power on the Central Government to frame rules regarding conditions of service which necessary includes the transfer of employees of the Cantonment Board. It is held that Rule 5-C which was inserted in the Rules by a notification dated November 23, 1972, provided for the transfer of the employees of the Cantonment Boards from one Board to another, was on the face of it contrary to the rule making power of the Central Government and therefore, it was amended in 1983. In these circumstances, their Lordships of the Supreme Court have come to the conclusion that insertion of Rule 5-C was void being contrary to and excess of rule making power of the Central Government as it contained in unamended Clause (c) of sub-section (2) of section 280 of the Cantonments Act. In this background, their Lordships of the Supreme Court observed in para 12 of the judgment as under:
'When Rule 5-C was inserted into the Rules, it was void as being contrary to and in excess of the rule making power of the Central Government as contained in the unamended clause (c) of sub-section (2) of section 280 of the Cantonments Act. It does not become valid merely because of the amendment of clause (c), inter alia, conferring power on the Central Government to frame rules relating to conditions of service.'
Therefore, a close reading of the aforesaid judgment would show that what primary persuaded by their Lordships was that the rule 5-C which enables the authorities to transfer the incumbent from one Cantonment Board to another, was unauthorised as the Act did not provide framing of such rules and ultimately, it was found that Rule 5-C is ultra vires of the Act and the same was struck down, though while striking down, the Lordships made the above observation.
6. But so far as the present rule is concerned, it only provides to a transfer and it does not change the employer of the incumbent. It only lays down that the State Government has a power to send any officer or servant of the Municipal Corporation to another on deputation, but for all purposes of promotion and other benefits, the incumbent will be treated to be in his parent department/Corporation, that means his lien will be kept with Corporation and he will be entitled to a deputation allowance also. Thus, these conditions amply safe-guard the interest of the incumbent and it would not have the effect of terminating of service of the employee in that parent Corporation. Therefore, the reasoning of the aforesaid Judgment will not be available to the petitioners so as to strike down provisions of sub-sections (5) and (6) of section 58 of the Act, 1988.
7. The next case in the line which has been relied on is Jawaharlal Nehru University (supra) this was a judgment in which Assistant Professors who were serving in Jawaharlal Nehru University, were transferred to Centre of Post Graduate Studies, Imphal established by the University at Manipur. Subsequently, this centre was transferred to Manipur University. Syndicate of the J. N. University provided for transfer of the Centre to the Manipur University and it was resolved that the centre will become a part of Manipur University and it was further resolved that the member of faculty employed by the Jawaharlal Nehru University, Centre of Post Graduate Studies, Imphal, immediately before its merger into the University would on and from that date become members of the staff of the Manipur University. This was challenged and in that context, their Lordships held that as a matter of fact, the contract of service of the incumbent was with the Jawaharlal Nehru University and no law can convert that contract into a contract between the incumbent and the Manipur University without simultaneously making it, either expressly or by implication consent of that incumbent. In that context, their Lordships quashed the services of the employees of Centre Post Graduate studies from Jawaharlal Nehru University to Manipur University. This case is entirely on different footings and here the employer is not sought to be changed. The employees of J. N. University were transferred to Manipur University without their consent by express or by desire, and that is not the case here. Here, it is only a temporary transfer and his lien will on kept with the parent Corporation. Thus, this case also does not help the petitioner.
8. The next case which Shri Vivek Tankha has heavily relied is the decision of this Court in the case of L.P. Sarabhai v. State of M.P., M.P. No. 387 of 79 decided on 4-7-1979. In this case sub-section (5) of section 58 of the Act came up for consideration and was in force and that provision reads as under:-
'Section 58(5) - The State Government may, subject to maintenance of lien on the post held in the parent Corporation, transfer on deputation any Officer or servant of the Corporation carrying a maximum scale of pay exceeding Rs. 400/- to any other Municipal Corporation:
Provided that no such transfer on deputation shall be made except:-
(i) with the prior consultation of the concerned Municipal Corporation;
(ii) on the same post and in the same status;
and the terms and conditions of deputation of the Officer or servant of the Corporation including disciplinary control shall be such as the State Government may, by general or special order, in consultation with the Corporation concerned, specify.'
This provided that the State Government can transfer any person subject to maintain the lien of the incumbent on the post in the parent Corporation of any officer or servant carrying a maximum scale of pay exceeding Rs. 400/- subject to condition that no transfer on deputation shall be made except with the prior consultation of the concerned Corporation and on the same post and same status. It further lays down that the terms and conditions of deputation of the officer or servant of the Corporation including disciplinary control shall be such by general or special order in consultation with the Corporation, may specify. It was observed that deputation means that a person who goes on deputation, goes with his consent and it was further observed that lien means a right to occupy the particular post that is the employee going on deputation, has a right to the post held in the parent Corporation. In this back ground, their Lordships have held that the retention of lien on the post in the parent Corporation signifies that the officer or servant concerned goes on deputation with his consent and back after a period of deputation for which he agreed to go to another Corporation. But without his consent, the order of the State Government is invalid being not in conformity with section 58(5) of the Act. But in that case also, the Court did not strike down the provisions of section 58(5), but it was only held that no person can be sent on deputation without his consent. The validity of this provision was not struck down but the order of transfer was struck down.
9. There is one thing to have a power and the another thing to misuse it. So far as conferring of power by the Amendment Act, 1988 is concerned it cannot be possibly said that the Legislature was not competent nor it could be said that it is violative of Articles 14 and 16 of the Constitution of India.
10. So far as the competent of Legislature is concerned, under entry 5, List II, Schedule VII of the Constitution of India provides that the State Legislature is competent to legislate on this item and in purported exercise of power, the State Legislature amend sub-sections (5) and (6) of section 58 of the Act. Now coming to Articles 14 and 16 of the Constitution, simply confirming of this power does not violate the Articles 14 and 16. The only arbitrary exercise of power can render that order being the violative of Articles 14 and 16 of the Constitution of India. Therefore, in purported exercise of this power, if any transfer has been issued which is arbitrary then the same can be struck down. Moreso, in the present case, the lien of the incumbent is retained in his parent post and his benefits have also been safeguarded.
10(a). Moreso, all the Corporations receive sufficient grant from the State Government and State exercise the supervisory control over all Corporations. Part IX, Chapter XXXVI of the Act gives a controlling power to the State Government. As such the Government can exercise this power. This Chapter deals with the control and supervision of the Government. When the Government has an extensive control over the working of the Corporation and it can certainly exercise the power of transfer of incumbent from one Corporation to another. This is a very important feature which was not come up in any of the decision of the Hon'ble Supreme Court cited by Shri Vivek Tankha, learned counsel for the petitioners and this aspect was also not considered in the case of Sarabhai (supra). Once the power has been conferred by the Legislature by enacting the valid law then the law cannot be rendered invalid because of improper exercise of power. Their Lordships of the Hon'ble Supreme Court have also made a distinction between the competence to enact the law and improper exercise of the same. Their Lordships of the Hon. Supreme Court in D. K. Trivedi v. State of Gujarat, AIR 1986 SC 1323, Para 50 observed as under:
'Where a statute confers discretionary powers upon the executive or an administrative authority, the validity or constitutionality of such power cannot be judged on the assumption that the executive or such authority will act in an arbitrary manner in the exercise of the discretion conferred upon it. If the executive or the administrative authority acts in an arbitrary manner, its action would be bad in law and liable to be struck down by the Courts but the possibility of abuse of power or arbitrary exercise of power cannot invalidate the statute conferring the power or the power which has been conferred by it.'
It is clear that simply because a power is capable of being misused or in arbitrary manner by executive is no ground to hold that is liable to be struck down by the courts. Similarly in the case of Mehmood Alam Tariq v. State of Rajasthan, AIR 1988 SC 1451, their Lordships observed as para 11 of the judgment as under:
'It is important to keep in mind that in this case the results of the viva voce examination are not assailed on grounds of mala fides or bias etc. The challenge to the results of the viva voce is purely as a consequence and incident of the challenge to the vires of the rule. It is also necessary to reiterate that a mere possibility of abuse of a provision does not, by itself, justify its invalidation. The validity of a provision must be tested with reference to its operation and efficacy in the generality of cases and not by the freaks or exceptions that is application might in some rare cases possibly produce. The affairs of Government cannot be conducted on principles of distrust. If the selectors had acted mala fide or with oblique motives, there are administrative Law remedies to secure reliefs against such abuse of powers. Abuse vitiates any power.'
11. In this back ground, we are of the view that section 58(5) and (6) of the Act are not ultra vires and it is valid. But this power should be exercised with great caution and while transferring the employee from one Corporation to another, there should be a valid reason. Since the lien of incumbent is kept in the parent Corporation, therefore, tenure or the period of lien should be specified and it should not be for all time to come. The State Government should also exercise this power very sparingly in exceptional case as observed by their Lordships of the Supreme Court in State of M.P. v. Shankerlal (supra) as quoted above.
12. This reference is accordingly answered.