The State Of Madhya Pradesh vs G. C. Mandawar

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 2 of 1954

Decision Date: 13 May 1954

Coram: Mehar Chand Mahajan, B.K. Mukherjea, Vivian Bose, Natwarlal H. Bhagwati

In this case the Supreme Court of India delivered its judgment on 13 May 1954. The petition was filed by the State of Madhya Pradesh against G C Mandawar, who was a servant of the State government. The bench that heard the matter comprised Justices Mehar Chand Mahajan, B K Mukherjea, Vivian Bose, Natwarlal H Bhagwati, and Justice T L Venkatarama Ayyar, who acted as the chief justice. The case was reported in the 1954 All India Reporter at page 493 and also in the 1955 Supreme Court Reporter at page 158, with subsequent citations in several later reports. The factual dispute arose from a resolution passed in 1948 by the Government of the Central Provinces and Berar, which is now the State of Madhya Pradesh. That resolution fixed a scale of dearness allowance for its servants. For salaries exceeding Rs 400 per month the allowance scale was practically the same as the scale fixed by the Central Government, but for salaries of Rs 400 per month or less the allowance prescribed by the State was lower than the Central amount. The petitioner, a State government employee, challenged the validity of this order on the ground that his fundamental right to equality under Article 14 of the Constitution had been violated because he claimed he should be treated on an equal footing with similarly situated Central Government servants.

The Court examined whether the State’s power to grant dearness allowance was a discretionary matter or a matter of right, and whether Article 14 could be invoked to strike down the State’s allowance scale. The Court held that Rule 44 of the Fundamental Rules gave the local Government a discretion to decide whether to grant dearness allowance to any servant and, if it chose to do so, to determine the amount. The rule did not impose any duty on the State to grant such allowance. Consequently, the Court found that no writ of mandamus or any other writ under Article 226 could be issued to compel the State to pay the allowance because the servant possessed no enforceable right. Further, the Court explained that Article 14 does not empower a court to invalidate a law of one State merely because a law of another State on the same subject appears discriminatory. The Constitution also does not allow a comparative assessment of statutes from the Centre and a State to declare either unconstitutional. Since the two statutes were based on different sources of authority, Article 14 could not be applied. Accordingly, the Court concluded that the dearness-allowance scale fixed by the Central Government could not be used as a basis to hold the State’s allowance scheme repugnant to Article 14. The State Government was therefore entitled to fix one rate for a higher salary slab and a different rate for the lower-salary slab.

The matter before the Court concerned an appeal filed under article 132 (1) of the Constitution of India, challenging a judgment and order dated 10 September 1953 of the High Court of Judicature at Nagpur in Miscellaneous Petition No. 123 of 1953. The appeal, numbered Civil Appeal No. 2 of 1954, was presented by the Attorney-General for India, assisted by counsel, on behalf of the appellant, while counsel for the respondent and for the intervening State of West Bengal also appeared. The judgment was delivered on 13 May 1954 by Justice Venkatarama Ayyar. The central issue for determination was whether a resolution of the Government of Central Provinces and Berar—now the State of Madhya Pradesh—dated 16 September 1948, which fixed a scale of dearness allowance payable to its servants, violated article 14 of the Constitution. The background leading to that resolution was briefly outlined. During the war, the prices of foodstuffs and other essential commodities rose dramatically, causing severe hardship for government employees. As a relief measure, both Central and Provincial Governments had earlier granted grain allowances under various resolutions issued in 1940. The Central Government’s scheme intended that its employees serving in different provinces would receive the same benefit as the employees of the respective provincial governments. However, this approach proved unsuitable for central employees because the allowances granted by the provinces were not uniform. Consequently, on 10 May 1946, the Central Government constituted a Central Pay Commission, hereinafter referred to as the Commission, to examine the conditions of service of its employees, focusing particularly on the structure of pay scales and remuneration standards, with the aim of achieving rationalisation, simplification and the greatest possible uniformity. The Commission, presided over by Sir S. Varadachariar, issued its report on 3 May 1947 and recommended the grant of dearness allowance on a specified scale. Following that, on 27 May 1947, the Government of Central Provinces and Berar formed a Pay Committee, hereinafter referred to as the Committee, to consider the Commission’s recommendations and to determine the extent and manner of their adoption by the Provincial Government for servants under its administrative control. The Committee’s report, dated 22 June 1948, advised granting dearness allowance on a scale that was practically identical to the Commission’s scale for salaries above Rs. 400 per month, but lower for salaries of Rs. 400 per month or less. These recommendations were accepted by the Government through its resolution dated 16 September 1948.

By a resolution dated 16 September 1948 the State Government adopted a dearness-allowance scale that differed from the scale recommended by the Central Pay Commission, creating two separate slabs—one for employees earning a salary above Rs 400 per month and another for those earning Rs 400 or less. This disparity naturally caused considerable dissatisfaction among the affected employees. After unsuccessful attempts to obtain relief through executive channels, the employees, through their representative, the respondent, filed an application under article 226 of the Constitution. In the petition they alleged that the State Government ought to have uniformly applied the Government of India rates of dearness allowance to all its servants and that the two-fold slab, which accepted the Central rates only for those drawing more than Rs 400 while refusing them for those drawing less, was highly discriminatory. They further contended that a State Government servant has a right to be treated equally with a similarly situated Central Government servant, and that every servant possesses fundamental and natural rights, including the right of the petitioner and members of the Ministerial Services Associations to demand dearness allowance at the Government of India rates. Accordingly, they prayed that a writ of mandamus or any other appropriate writ or direction be issued directing the State Government to cancel the discriminatory dearness-allowance rules, to adopt the Government of India rates for all servants without discrimination, or, in any event, to provide an adequate dearness allowance sufficient to ensure reasonable subsistence. The State Government contested the petition on two grounds: first, that the claim for dearness allowance was not justiciable; second, that the difference between the scales adopted by the Commission and by the Committee did not contravene article 14. The learned judges, Sinha C.J. and Bhutt J., held that under the applicable rules dearness allowance was placed on the same footing as pay, rendering the claim justiciable, and that the differentiation between Central and State employees lacked any intelligible and reasonable basis, rendering the 16 September 1948 resolution invalid. They therefore directed the State Government to reconsider the question of dearness allowance payable to the employees concerned. The State Government appealed this judgment on a certificate under article 132(1) of the Constitution, arguing that the grant of dearness allowance is an ex gratia matter not amenable to judicial review, that no writ of mandamus or similar direction could be issued, and that the 16 September 1948 resolution was not violative of article 14. In our opinion, both of these contentions are well founded.

Rule 44 of the Fundamental Rules was quoted in full, stating that, subject to any restrictions that the Secretary of State in Council might impose on the powers of the Governor-General in Council or the Governor in Council, a local government could grant a compensatory allowance to any government servant under its control, provided that the allowance was not intended to be a source of profit to the recipient and that the government could prescribe the amount and the conditions for drawing it. Under this provision, the power to grant dearness allowance rested entirely on the discretion of the local government, and the rule did not obligate the government to grant such allowance at any particular rate. Consequently, the petition for a writ of mandamus was described as fundamentally misguided because mandamus could be granted only when the petitioner possessed a legal right to compel the performance of a duty imposed on the respondent. Rule 44 conferred no enforceable right on government servants to receive dearness allowance, nor did it create any duty on the State to provide it; it merely gave the State a discretionary power to award a compassionate allowance. Since no enforceable right existed, the Court held that no mandamus could be issued to force the exercise of that discretionary power, and likewise, no other writ or direction could be issued because there was nothing in the petitioner's favour that could be protected or enforced.

The High Court judges had relied on certain rules that placed dearness allowance on the same footing as ordinary pay for specific purposes and had invoked the authority of The Punjab Province v. Pandit Tara Chand to declare the claim justiciable. However, the Court clarified that The Punjab Province v. Pandit Tara Chand concerned an action for the recovery of arrears of salary, wherein the Court had held that, under Indian law, arrears of salary constituted a debt due from the Government and could be attached and executed upon under section 60 of the Civil Procedure Code. That decision, reported in [1947] F.C.R. 89, had been reaffirmed recently in State of Bihar v. Abdul Majid, where it was emphasized that salary was not a bounty and that rights recoverable by a petition of right in England could be recovered by an action in India. The present case, however, did not involve any government debt; the petition was not for the recovery of accrued dearness allowance under existing rules but sought to compel the Government to grant dearness allowance at a specified rate. On that basis, the Court concluded that the matter was a matter of grace rather than a matter of right and therefore not justiciable.

In this case, the Court observed that a claim made under Rule 44 of the Fundamental Rules is a matter of grace rather than a matter of right. The Court noted that, similarly, English law does not permit a petition of right for such a claim, and cited Halsbury’s Laws of England, Volume IX, page 688, Note (s), which states that it is erroneous to suppose a petition of right will lie for matters of grace and not of right, referencing De Bode (Baron) v. R. (2). The Court further explained that the same principle applies in this country, where an action serves as a substitute for a petition of right. Consequently, the Court concluded that the issues raised in the petition are not justiciable. The learned counsel for the respondent, Mr Nambiar, did not contest the correctness of this legal position. However, he argued that once the Government passes a resolution fixing a scale of allowance under Rule 44, that resolution becomes law as defined in article 13(3)(a) of the Constitution, and if such law infringes article 14, it may be declared void. The Court identified the real question to be whether the resolution dated 26 September 1948 is invalid because it infringes article 14. The Court then turned to examine the scheme adopted in the impugned resolution.

The scheme provides that dearness allowance shall be paid to employees on a graded scale according to pay, with different rates for different slabs and a progressive reduction of the rate from the lowest to the highest category (1) [1954] S.C.R. 786. (2) 13 Q. B-364 Ex. Ch. at P-387-of the rate. No party disputed that fixing different rates for different slabs is not objectionable under article 14. Moreover, within any given slab the scheme treats all employees alike, except that a slightly higher rate is fixed for residents of the cities of Nagpur and Jubbulpore in the lowest ranks, a provision that also has not been attacked as discriminatory. Accordingly, the Court found no basis for a claim of discrimination in these features. Mr Nambiar did not argue that the scheme or the resolution itself falls within the prohibition of article 14; his contention was that the committee, whose recommendations the Government accepted, adopted the commission’s rates for servants earning a monthly salary of more than Rs 400, but for those earning Rs 400 or less it discarded the commission’s rates and imposed lower rates, thereby violating article 14. In other words, the Court noted that although the impugned resolution appears valid on its own, it would become void under article 14 if read in conjunction with the commission’s report.

In examining the claim that the dearness-allowance scale prepared by the Committee violates article fourteen, the Court found no support for that assertion. The Constitution distinguishes the Union and the States as separate entities, each possessing its own executive and legislature whose powers are clearly defined. Article twelve describes “the State” as encompassing both the government and the legislature of each State. Article thirteen clause two prohibits the State from enacting any law that takes away or diminishes the rights guaranteed by Part Three of the Constitution, while article fourteen declares that “the State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India.” Accordingly, when a statute is challenged under article thirteen, the Court must determine whether that statute infringes any provision of Part Three. If the Court finds an infringement, it must declare the statute void; if it does not, the statute must be upheld. The authority to invalidate a law under article thirteen is exercised with reference to the particular legislation that is under attack. It is possible that when a single legislature enacts two statutes that, in substance, constitute one piece of legislation, the Court may treat them as a single law and strike them down if, taken together, they cause discrimination. However, that approach does not apply in the present case because the two instruments that are being read together were issued by different governments and different legislatures. Article fourteen does not empower the Court to invalidate a law of one State merely because a law of another State on the same subject appears discriminatory in comparison. Nor does the provision permit a law of the Centre or of a State to be declared unconstitutional by comparing it with the provisions of a law made by another authority. Since the sources of authority for the two statutes are distinct, article fourteen cannot be invoked against either of them. Consequently, the dearness-allowance scale recommended by the Commission and approved by the Central Government cannot be used as a basis to hold that the scale adopted by the Committee and applied by the appellant is inconsistent with article fourteen. Although it may seem harsh that government employees performing similar duties, perhaps even at the same location, receive different allowances, the parties’ rights must be decided on legal grounds, and the resolution in question cannot be declared invalid under article fourteen. The appellant contended that the respondent’s assumption—that the Committee had partially adopted and partially rejected the Commission’s report, thereby violating article fourteen—lacked any foundation. In the view adopted by the Court, this assumption is unfounded.

Regarding the applicability of article fourteen to the present dispute, the matter held no practical significance for the outcome, yet because all material had been placed before the Court, a brief opinion was offered for the record. The Committee, in paragraph eighty of its Report, observed that unlike the Commission, which based its dearness allowance scale on the cost-of-living index, it had used the prevailing level of prices as the basis for fixing the allowance. In paragraph eighty-three the Committee explained that when the scale was fixed on the cost-of-living index, the element of pay was also considered. However, because the basic-pay scale had already been revised, that element was omitted from the dearness-allowance calculation. Paragraph thirty-one recorded that, unlike the Commission, the Committee took into account the State’s financial resources when fixing the dearness-allowance scale. Consequently, the Committee approached the problem from a different angle, applying distinct principles, and any similarity of results between the two schemes was merely coincidental, not evidence of adopting the Commission’s report. Counsel referred to two resolutions of the appellant dated 4 January 1951 and 6 October 1951, which adopted the Commission’s scale for certain other categories. Those resolutions did not affect the inquiry as to whether the Committee, whose recommendations had been approved by the Government, had partially adopted the Commission’s report in a manner that created discrimination. The foregoing facts demonstrated that the Committee examined the issue independently, viewed it from a different standpoint, and formulated its scheme without adopting the Commission’s report, though it had drawn considerable assistance from it. Accordingly, the appeal was allowed and the respondent’s petition dismissed, and the Court ordered that no costs be awarded by either party, either in this proceeding or in the lower court. Therefore, the appeal was allowed, confirming the Court’s determination that the petition lacked merit.