MANU/GJ/0607/2018

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

Letters Patent Appeal No. 409 of 2017 in Special Civil Application No. 7684 of 2002 and
Letters Patent Appeal No. 1520 of 2017 in Special Civil Application No. 7684 of 2002
Decided On: 03.05.2018
Appellants: State of Gujarat
Vs.
Respondent: Chandubhai Chhotabhai Patel
Hon'ble Judges/Coram:
Anant S. Dave and Biren Vaishnav, JJ.
Counsels:
For Appellant/Petitioner/Plaintiff: Dhawan Jayswal, A.G.P.
For Respondents/Defendant: Bipin I. Mehta
JUDGMENT
Biren Vaishnav, J.
1. Year 2018 has almost half gone and we are still called upon to decide and sit over and re-
appreciate what has been finally set at rest in the judgment of the Supreme Court rendered in
1983 in the case of State of Gujarat and Raman Lal Keshav Lal Soni (MANU/SC/0346/1983 :
AIR 1984 SC 161). The opening words of the author of the judgment rendered then, still sound
so true and therefore it will be in the fitness of things to reproduce the same to begin our
analysis of the facts and the judgment that we render:--
"The attitude of the State of Gujarat in these cases has indeed left us puzzled and
wondering. On the one hand, there are lakhs of employees working under various
Panchayat Institutions, call them Government servants or no, to whom the benefits of
the recommendations of the two Pay Commissions, the Sarela and the Desai
Commissions, have been extended while on the other hand, there is a microscopic
number (comparatively) of about six thousand employees of the lowest category, also
working under Panchayat Institutions, who are denied the benefits of those
recommendations, on the sole ground of a birth-mark, if we may so call it, since they
are denied the benefits because before they came to work under the Panchayat
Institutions, they were employed in Municipalities while the others were Government
servants to start with. The unfairness and the injustice of the distinction is patent,
whatever legal justification may be put forward. Surely, the State, dedicated as it is to
socialism, equality and economic justice and enjoined by the Directive Principles to
secure the right to work, a living wage, equal pay for equal work and so on cannot
make such a distinction. But the distinction has been made; it is sought to be
sustained by those making it and we are constrained to examine whether there is any
Constitutional or other legal sustenance for the distinction. We did request the Counsel
for the State of Gujarat to communicate with his clients to find out if the benefits
cannot gracefully be extended to the erstwhile employees of Municipalities presently
working under Panchayat Institutions also. We are told that the answer of the State of
Gujarat is in the negative."
2. The facts in brief that give rise to the present appeals are as under:--
2.1 These appeals arise at the hands of the State of Gujarat and the Panchayat Authorities who
yet again want to deprive a Panchayat servant of his pensionary dues, on the ground that the
employee concerned was a part of the non-converted Gram Panchayat and his appointment

14-11-2022 (Page 1 of 22) www.manupatra.com P WILSON SENIOR ADVOCATE

was not in accordance with the provisions of the Gujarat Panchayats Act, 1961 and his
appointment was illegal and irregular.
2 . 2 The original petitioner/respondent in this appeal, (hereinafter referred to as "the
petitioner") was appointed as an Octroi Clerk in October 1962 with the Kayavarohan Gram
Panchayat. Pursuant to a notice placed in the Office of the Panchayat in September 1962 for
appointment of Octroi Clerk, the petitioner applied for the said post. The petitioner was
interviewed and thereafter appointed to the said post. The respondent Panchayat passed a
resolution in its meeting held on 19.1.1963 approving the petitioner's appointment. During the
service tenure with the Panchayat, the petitioner was given all the regular benefits of
Pay/Dearness Allowance and Pay-Revisions available to State Government employees
according to the Pay Commissions at the relevant point of time.
2 . 3 After having completed the age of 58 years, the petitioner addressed a letter dated
29.06.2002 to the Sarpanch that since the petitioner was appointed on 1.10.1962 and had
completed 58 years of age he requested for retirement and also prayed that he be paid pension
and gratuity as per Government Rules. On 29.06.2002 itself the Talati-cum-Mantri passed a
Resolution permitting the petitioner to retire with effect from 30.06.2002 with a
recommendation that the benefits of pension and gratuity be paid to the petitioner as per
Government rules. Since the petitioner did not receive his terminal benefits, he approached
this Court by way of the petition stating that he was appointed in the year 1962 before the
Panchayati Raj came into force with effect from 1.4.1963. There were no recruitment rules in
force at the relevant time and his appointment by a Resolution was in accordance with the
rules then prevalent, the petitioner could not have been denied pension in accordance with the
law laid down by the Supreme Court in the case of R.K. Soni (supra). It is the case of the
petitioner that in the interregnum the Administrator and the Talati-cum-Mantri passed a
Resolution on 1.5.2001 holding that the appointment of the petitioner was not in accordance
with the provisions of the Gujarat Panchayat Act and therefore the services ought to be
terminated. However, the petitioner was continued and paid a fixed amount which is a subject-
matter of challenge in another petition. The petitioner therefore prayed for a direction that the
respondents/appellants herein be directed to give retirement benefits which include pension
gratuity etc.
2 .4 The District Development Officer filed an Affidavit-In-Reply to the petition. It was the
stand of the District Panchayat that the petitioner was appointed by the Kayavarohan Gram
Panchayat without following the due procedure of recruitment and as such the appointment
was totally illegal and irregular. The appointment was not on a sanctioned post. No sanction of
the Development Commissioner was obtained. Section 203 of the Gujarat Panchayat Act, 1961
was pressed into service to contend that the Panchayat is consisting of three cadres and there
are rules of recruitment and promotion framed thereunder. The District Development Officer
further contended that the employees of the Gram Panchayat are not employees of the State
and the service regulations and rules of the Gram Panchayat are applicable to them. A further
affidavit was also filed by the Panchayat to contend that the Gram Panchayat had not sought
prior approval from the Authority and the appointment was not on a sanctioned post. The
Kayavarohan Gram Panchayat is not a converted Gram Panchayat and therefore the petitioner
is not entitled to the benefit of pension and other retirement benefits from the respondent
State. Government Resolution dated 17.10.1983 was pressed into service on the issue of
benefits available to employees of the converted Gram Panchayat. The Resolution of 1983
provided that all employees of the converted Gram Panchayat who have retired after 11.2.1969
would be entitled to pensionary benefits. Name of Kayavarohan Gram Panchayat did not figure
in the list of duly converted Gram Panchayats and Municipalities in the Resolution dated
29.9.1992.
2.5 The petitioner filed a Rejoinder to such affidavits stating that he was appointed in 1962
before the Panchayat Act of 1963 came into force. At that time the Panchayat had powers to
appoint an employee by passing a Resolution and that the petitioner was continued till his
retirement and no objection was raised till his retirement and therefore the respondents were

14-11-2022 (Page 2 of 22) www.manupatra.com P WILSON SENIOR ADVOCATE

estopped from making it as an issue. The petitioner stated that it was not open for the
Panchayat to now state that his appointment was illegal and irregular. There were no rules in
existence when the petitioner was appointed and therefore the Panchayat had appointed him
by passing a Resolution which then was a regular and a recognised mode of appointment. That
the procedure as envisaged by the respondent, was not the procedure that could have been
followed as the petitioner was appointed prior to 1963. An additional affidavit was also filed
placing on record various resolutions. In the Letters Patent Appeal also an Affidavit was filed
which in a nutshell stated that the Government had decided to give pension to the employees
working with the Gram/Nagar Panchayats who were appointed from 1.4.1963 to 5.6.1984.
That an amendment was made in 1978 to the Gujarat Panchayat Act and the powers of
appointment were given to the Gram/Nagar Panchayats and during that period several
appointments were made by the Gram/Nagar Panchayats and therefore the State Government
decided to regularise services of those employees who were appointed from 1963 to 1984.
Reference was made to a letter dated 9.9.1996 addressed by the State Government to all the
DDOs that a list of such employees recruited between 1.4.1963 and 6.7.1978 be prepared and
sent with a proposal for getting sanction to such appointments with retrospective effect. The
letter further stated that appointments made by the Gram/Nagar Panchayat made between
10.7.1978 and 5.7.1984 on the posts which were sanctioned were to be treated as valid
appointments.
2.6 The State filed a rejoinder in the appeal affirmed by the Under Secretary of the Panchayats
Rural Housing and Rural Development Department. Extensive reliance was placed on Section
203 of the Gujarat Panchayat Act, 1961 and it was stated that the petitioner's case did not fall
within the purview of the legal provisions and Rules and the said appointment was not in
accordance with the procedure prescribed under the Act. A resolution was passed pursuant to
the judgment in the case of R.K. Soni (supra) on 17.10.1983 whereby it was resolved to grant
pensionary benefits to the regular employees of the converted Panchayats who were in service
as on 11.2.1969 and had retired or passed away thereafter. For appointments made between
1.4.1963 to 9.7.1978 proposals ought to have been made immediately for getting sanction of
the District Development Officer. The State rebutted the claim of the petitioner who placed
reliance in the cases of the Mendarda and Okha Gram Panchayats on the ground that the said
Panchayats were converted Gram Panchayats whose employees were either allocated
employees or were recruited after following due procedure.
2.7 Based on such rival contentions between the parties, the learned Single Judge by his oral
judgment dated 5.08.2016 relying on the decision of the Supreme Court in the case of Harijan
Paniben Dudabhai v. State of Gujarat (Civil Appeal No. 5441 of 2016 arising out of SLP(C) No.
2324 of 2010) held that indisputably the petitioner was appointed in the year 1962 i.e. prior to
the Gram Panchayat Service (Classification & Recruitment) Rules, 1967 and therefore is
covered by the findings in the case of Harijan Paniben (supra). A direction was accordingly
issued to the Panchayat to prepare a fresh proposal and send the same to the Government and
the Government was directed to take an appropriate decision in the case.
2.8 Both the State and the Panchayat Authorities are in appeal before us against the judgment
of the learned Single Judge.
3 . Mr. Dhawan Jayswal, learned Assistant Government Pleader has vehemently assailed the
judgment of the learned Single Judge. Ms. Sejal Mandavia, learned Advocate in the appeal on
behalf of the Panchayat Authorities has supported his submissions.
3.1 Shri Jayswal has contended thus:--
(i) That the Learned Single Judge failed to appreciate that the judgment in the case of
R.K. Soni (supra) was not applicable in the facts of this case. It was applicable in case
of converted Panchayats and the present Panchayat namely Kayavarohan Gram
Panchayat was not a converted Panchayat. According to the Resolutions of the
Government, the pension and terminal benefits could be paid only to such Panchayats

14-11-2022 (Page 3 of 22) www.manupatra.com P WILSON SENIOR ADVOCATE

 who were converted Panchayats.
(ii) The case of Harijan Paniben (supra) was a case where the Okha Municipality was a
converted Panchayat and the Supreme Court had on facts found that the appointment
therein was made on a sanctioned post whereas in the facts of the present case,
evident it was from the Affidavit of the Panchayat and the State that the petitioner was
not appointed after following a due procedure in accordance with Section 203 of the
Gujarat Panchayat Act, 1961 and therefore the said judgment would not be applicable.
In support of this submission, the learned Assistant Government Pleader placed
reliance on the judgment of the Division Bench in the case of Dahyabhai Vajesing
Aanjna Patel v. State of Gujarat rendered in Letters Patent Appeal No. 1099 of 2016 on
27/1/2017 wherein the Division Bench observed that in the case of Harijan Paniben
(supra) it was categorically held that the employee was holding the post within the
sanctioned set up. The Division Bench observed that if one is appointed in the post
within the sanctioned set up of the Gram Panchayat, he totally stands on a different
footing than that of a person who is appointed to a post which is not sanctioned by
the Gram Panchayat. The Division Bench affirmed the judgment of the learned Single
Judge by which the petitioner's petition for pensionary benefits was dismissed. Shri
Jayswal in support of such submission also pressed into service a judgment of the
Learned Single Judge in the case of Jagdishbhai Mohanbhai Vidja v. State of Gujarat in
Special Civil Application No. 14889 of 2013. This was a case where a petitioner of a
non-converted Gram Panchayat had approached the Court for pension and the petition
was dismissed on the ground that pensionary benefits are not available to a Panchayat
employee of a non-converted Panchayat.
(iii) It was further contended that the appointment was not in consonance with the
Rules and after following the provisions of Section 203 of the Gujarat Panchayat Act,
1961. The benefit of pension and terminal benefits could not extend to an employee
whose appointment was illegal and was without sanction from the Development
Commissioner. Extensive reliance was placed on the provisions of the Gujarat
Panchayat Act, 1961 which came into force with effect from 1.4.1963 to contend that a
detailed procedure with regard to Panchayat Services was laid out in Section 203 of
the Act and once it was found that there was an infraction in the appointment of the
employee inasmuch as such a procedure was not followed, the employee not being so
appointed in accordance with such rules and not on a sanctioned post could not get
the benefit of the terminal benefits as his appointment itself was void ab-initio.
4. Mr. Bipin Mehta who appeared on behalf of the petitioner-respondent herein supported the
decision of the learned Single Judge. Shri Mehta suggested that it was not open for the State
to undertake a microscopic division of converted v. non-converted Gram Panchayats in view of
the binding decision of the Constitution Bench in the case of R.K. Soni (supra).
4 . 1 Reliance was also placed on a Division Bench judgment rendered in Special Civil
Application No. 1205 of 1978 filed by the Halol Nagar Panchayat. The Nagar Panchayat had
moved the Court for directions to give the Panchayat and its employees the same and uniform
treatment as was bound to be given in view of R.K. Soni's decision and prayed that they be
accorded the benefits of Pay Revision. The stand of the State Government there was that in
view of the Amendment Act of 1978, the Panchayat Service was a separate service. The
Division Bench fell back on the decision in the case of G.L. Shukla v. State of Gujarat reported
in MANU/GJ/0125/1967 : 8 GLR 833 wherein it was held that ex-municipal employees were
entitled to the benefit on coming over to Panchayat service in view of R.K. Soni's decision.
4.2 Mr. Mehta further relied extensively on the rejoinder filed and also on the decision of
Harijan Paniben (supra) to suggest that there was no question of getting into the issue of
illegality/irregularity of appointment as, the Panchayat at the relevant time could make such
appointments by passing resolutions in absence of any Recruitment Rules. The Gram
Panchayat had to act as a body through resolutions and therefore the appointment was in

14-11-2022 (Page 4 of 22) www.manupatra.com P WILSON SENIOR ADVOCATE

accordance with law.
4.3 Resolutions placed on record with the additional affidavit would suggest that what was
laid down in the said Resolutions was with regard to employees recruited in the period from
1.4.1963 to 1978 and post 1984, and in such cases as per letter dated 9.9.1996 proposals had
to be moved for sanction/regularisation of posts. In the case on hand, admittedly, the
appointment was made before the Panchayat Act and the Rules came into force and therefore
there was no illegality or irregularity in the appointment made prior to the Act having come
into force, in accordance with the Resolution of the Government. At the relevant time, the
Panchayat namely the Gram Panchayat could only act though the Resolutions and the
resolution appointing the petitioner is on record suggesting that there was no illegality or
irregularity in appointing the petitioner.
5. Looking to the issues involved in these appeals, neither of the parties dispute that the focal
point of the issue is the decision in the case of R.K. Soni (supra) which governs the case and
only that would settle the issue, whether the petitioner who is an employee of the non-
converted Gram/Nagar Panchayat/Municipality would be entitled to pension.
6 . We would, therefore, embark upon an analysis of the law as discussed by the Supreme
Court in the case of R.K. Soni (supra). In the case of R.K. Soni (supra) employees working
under various Panchayat Institutions were denied benefits of the Sarela and Desai Pay
Commissions on the sole ground that before they came to work under the Panchayat
Institutions they were employed in Municipalities (local bodies) while others were Government
servants, though Panchayat employees in the higher hierarchical ladder were extended such
benefits. The employees succeeded before the Gujarat High Court and an appeal was filed
before the Supreme Court. The Supreme Court, it would be relevant to suggest, referred to the
provisions of the Gujarat Panchayat Act, 1961 and observed that the Gram Panchayat, Nagar
Panchayat, Taluka Panchayat and the District Panchayat are bodies corporate with perpetual
succession and a common seal. Historical perspective of the enactment of the Gujarat
Panchayat Act from the Bombay Acts has been succinctly set out in the "tour of inspection "as
the Court called it of the Panchayat Act. Relevant Paragraphs of the judgment would support
our endeavour to show that the Panchayat is a local-self-Government institution of which the
State is the master. Relevant paras so discussing the structure of the Panchayat system are as
under:--
"6. At this juncture, we may mention that prior to the enactment of the Gujarat
Panchayats Act, 1961, there were in force in the State of Gujarat the Bombay Village
Panchayat Act, 1958, the Bombay Local Boards Act, 1923, the Bombay District
Municipal Act, 1901 and the Bombay Municipal Boroughs Act, 1925. The Bombay
Village Panchayat Act 1958 and the Bombay Local Boards Act, 1923 are repealed by
Secs. 325 and 326 of the Gujarat Village Panchayats Act, 1961. A local area declared
to be a village under the Bombay Village Panchayats Act, 1958 and a Panchayat
constituted under that Act, are deemed to be gram and Panchayat under the Gujarat
Gram Panchayats Act, 1961. The Secretaries and all Officers and servants under the
employment of the old village Panchayats are to be Secretaries, Officers and servants
of the new Gram Panchayats. A District Local Board constituted under the Bombay
Local Boards Act for a local area is to stand dissolved. All property which stood vested
in the district local board P immediately before the appointed day is to be deemed
transferred to the district Panchayat constituted for the local area, called the successor
Panchayat. All Officers and servants in the employment of the District Local Board are
similarly to be deemed transferred to the service of the successor Panchayat. Where
local areas are declared to be Grams or Nagars under Sec. 9 of the Gujarat Gram
Panchayats Act, 1961 and such areas correspond to the limits of a Municipal district or
Municipal borough under the Bombay District Municipal Act or Bombay Municipal
Borough Act, it is provided by Sec. 307 of the Gujarat Panchayats Act that the
Municipality previously functioning in such local area shall cease to exist and that the
councillors of such Municipality shall constitute an interim 296 Gram Panchayat or

14-11-2022 (Page 5 of 22) www.manupatra.com P WILSON SENIOR ADVOCATE

interim Nagar Panchayat as the case may be for the Gram or Nagar. It is also provided
that all Officers and servants in the employment of the Municipality immediately
before the date of declaration of the local areas as Gram or Nagar, shall be Officers
and Servants of the interim Panchayat.
7 . Thus broadly, District Local Boards under the Bombay Local Boards Act stand
transformed as District Panchayats, village Panchayats under the Bombay Village
Panchayats Act as Gram Panchayats and Municipalities under the Bombay District
Municipal Act and Bombay Municipal Boroughs Act as gram or Nagar Panchayats,
depending on the population. Officers and servants in the employ of the District Local
Boards are deemed to be transferred to the service of the district Panchayats;
Secretaries, Officers and servants in the employ of the old village Panchayat become
Secretaries, Officers and servants of new Gram Panchayats and Officers and servants
in the employ of Municipalities become Officers and servants of interim Panchayats.
8 . To continue our tour of inspection (if one may use such an expression) of the
provisions of the Act, Sec. 88 of the Act empowers each Gram Panchayat to make, in
the area within its jurisdiction, and so far as the fund at its disposal will allow,
reasonable provision in regard to all or any of the matters specified in Sch. I. Sch. I
enumerates a host of matters under the heads 'Sanitation and Health 'Public works',
'Education and Culture', Self Defence and Village Defence', 'Planning and
Administration', 'Community Development, Agriculture, Preservation of forests and
Pasture Lands', 'Animal Husbandry', 'Village Industries' and 'Collection of Land P
Revenue'. Under each of these heads innumerable subjects are specified. In regard to
the collection of land revenue express provision is further made by Sec. 149 that the
Government shall, notwithstanding anything contained in Land Revenue Code or any
other law, entrust to every Gram Panchayat and every Nagar Panchayat, any or all of
the functions and duties of village Accountant or Patel or other similar functions of any
other person by whatever name called, in relation to the collection of land revenue
and dues recoverable as arrears of land revenue and all other functions and duties of
village Accountant under the Land Revenue Code. Sec. 150 provides that the
Panchayat so entrusted under Sec. 149 shall be responsible for the collection of land
revenue and other dues of the Gram or Nagar as the case may be.
9 . In addition to the functions enumerated in Sch. E. Sec. 89 imposes certain other
duties and functions on the Panchayat. A Panchayat may, for example, carry out in the
area within the limits of jurisdiction, any other work or measure which is likely to
promote health, safety, education, comfort, convenience or social or economic or
culture well-being of the inhabitants of the area including secondary education. A
Panchayat is also required to carry out the directions or orders given or issued from
time to time by the State Government for the amelioration of the condition of
scheduled castes and scheduled tribes, and other backward classes.
10. Taluqa and District Panchayats are required by secs. 117 and 137 respectively to
make reasonable provision in respect of matters specified in Schedules II and III. In
Schedule II, a number of subjects are enumerated under the beads 'Sanitation and
Health', 'Communication', 'Education and Culture', 'Social Education', 'Community
Development', 'Agriculture and Irrigation', 'Animal Husbandry', 'Village and Small
Scale Industries', 'Corporation'. 'Women's Welfare', 'Social Welfare', 'Relief, 'Collection
of Statistics', 'Trusts', 'Forests', 'Rural Housing,' and 'Information'. ID Schedule III,
similarly, a number of subjects are enumerated under the heads 'Sanitation and
Health', 'Public Works', 'Education and other Cultural Activities', 'Administration',
'Community Development', 'Agriculture', 'Animal Husbandry', 'Village and Small Scale
Industries', 'Social Welfare', 'Relief and 'Minor Irrigation Projects'.
1 1 . S ec. 155 provides for the transfer of the functions previously performed by
District School Boards under the Bombay and Saurashtra Primary Education Act to

14-11-2022 (Page 6 of 22) www.manupatra.com P WILSON SENIOR ADVOCATE

taluqa and district Panchayats.
12. Sec. 156 provides for the delegation to district and taluqa Panchayats such powers
and functions and duties of the Registrar or any other Authority under the Bombay
Cooperative Societies Act, as may be specified.
13. Sec. 157 provides for the transfer to District Panchayats of such powers, functions
and duties relating to any matters as are exercised or performed by the State
Government or any Officer of the Government under any enactment which the State
Legislature is competent to enact, or otherwise in the executive power of the State. On
the transfer of such functions, the Government is also required to allot to the District
Panchayats such funds and personnel 297 as may be necessary to enable the District
Panchayats to exercise the powers and discharge functions and duties so transferred.
S ec. 157(2) mentions the subjects which in particular may be transferred to the
District Panchayats. Sec. 157(3) further provides that on the transfer of powers,
functions and duties under Sub-sec. (1) and (2), the District Panchayat shall, if the
State Government so directs and may with the previous approval of the Government,
delegate to any Panchayat subordinate to it any of the functions, powers and duties so
transferred and allot to such Panchayats such funds and staff as may be-necessary to
enable the Panchayat to discharge the functions and duties so delegated.
1 4 . Sec. 158 provides that any function and duties relating to any of the matters
specified in the Panchayat functions list, which were previously being performed by
the State Government, shall be transferred to the District Panchayats together with the
funds provided and the staff employed therefore. On such transfer, the District
Panchayat may delegate, subject to the approval of the Government, to any Panchayat
subordinate to it any of the functions and duties so transferred.
15. Sec. 96 of the Act authorises the State Government to vest in a Panchayat open
sites, waste, vacant or grazing lands or public roads, streets, bridges, ditches, dikes
and fences, wells, river Banks, streams, lakes, nallas, canals, water courses, trees or
any other property in the Gram or Nagar.
16. Sec. 99 provides for the creation of gram and nagar funds. Each gram and nagar
is to have a fund called the Gram Fund or the Nagar Fund into which are to be paid,
inter-alia, the proceeds of any tax or fee imposed by or assigned to the Panchayat
under the Act, sums contributed to the fund by the State Government or the Taluqa
Panchayat or the District Panchayat and all sums received by way of loans from the
State Government or the Taluqa Panchayat or the District Panchayat or out of the
District Development Fund or otherwise.
1 7 . S ec. 119 vests in the Taluqa Panchayat every road building and other work
constructed by the Taluqa Panchayat any land or property transferred to the Taluqa
Panchayat by the State Government and any land or property transferred by any other
Panchayat. Sec. 139 vests in the District Panchayat every road 299 building or other
work constructed by the Panchayat, any land or property transferred to a District
Panchayat by the State Government and any land or other property transferred to the
District Panchayat by any other Panchayat.
1 8 . We may now refer, conveniently, at this stage to the provisions relating to
services. Sec. 102 provides that there shall be a Secretary for every Gram Panchayat
and Nagar Panchayat, who shall be appointed in accordance with the rules. Rules, of
course, have to be made by the Government under Sec. 323. Sec. 102 also provides
that a Gram Panchayat and Nagar Panchayat may have suck other servants as may be
determined under Sec. 203, who shall be appointed by such Authority and with such
conditions of service, as may be prescribed. 'Prescribed' again means 'prescribed by
rules' and rules have to be made by the Government. It is further provided that having
regard to the population of a gram and its income, the State Government may direct

14-11-2022 (Page 7 of 22) www.manupatra.com P WILSON SENIOR ADVOCATE

that a group of Gram Panchayats shall have one Secretary only. The Secretary is
required to keep in his custody all records and registers of the Panchayats, issue
receipts on behalf of the Panchayats, prepare all statements and reports required
under the Act and perform such other functions and duties, as may be prescribed
under the Act. Other servants of the Panchayat are required to perform such functions
and duties and exercise such powers as may be imposed or conferred on them by the
Panchayat, subject to any rules which may be made.
19. Sec. 122 provides that there shall be a Secretary for every Taluqa Panchayat and
that the Taluqa Development Officer, who shall be an Officer belonging to the State
service and posted under the Panchayat, shall be the ex-officio Secretary of the
Panchayat. Sec. 122 further provides that the taluqa Panchayat shall have such other
Officers and servants as may be determined under Sec. 203, who may be appointed by
such Authority, with such conditions of service, as may be prescribed.
20. Similarly, Sec. 142 provides that the District Development Officer posted under
the District Panchayat shall be the ex-officio Secretary of the District Panchayat. In
addition, the District Panchayat shall have such Officers and servants, as may be
determined under Sec. 203, performing such functions as may be prescribed and
appointed by such Authority with such conditions of service, as may be prescribed. We
have earlier referred to Secs. 157 and 158 300 which provide for the allotment and
transfer of staff to the District Panchayat when functions are transferred by the
Government to the District Panchayats under those provisions. We have already
referred to Sec. 326 which provides that all Officers and servants in the employment
of an existing District Local Board shall be deemed to be transferred of the service of
the successor District Panchayat. We have also referred to Sec. 325 which stipulates
that the Secretaries and all Officers and servants in the employ of old Village
Panchayats under the Bombay Village Panchayats Act shall be Secretaries, Officers and
servants of the new Gram Panchayats. We have further referred to Sec. 307 which
provides that all Officers and servants in the employment of Municipalities whose local
areas have been declared as Grams or Nagars as the case may be, shall be Officers
and servants of the interim Panchayats of such Grams or Nagars.
21. Sec. 203, as it stood before it was amended in 1978, provided for the constitution
of a Panchayat Service for the purpose of bringing about uniform scales of may and
uniform conditions of service for persons employed in the discharge of functions and
duties of Panchayats. Such service, it was declared, shall be distinct from the State
Service. The Panchayat service was to consist of such classes, cadres and posts and
the initial strength of Officers and strength of such classes cadres and posts was to be
such as the State Government might determine from time to time. District Panchayats
were empowered to alter, with the previous approval of the State Government, any
class, cadre or number of posts determined by the Government. The cadres were to
consist of district cadres, taluqa cadres and local cadres. A servant belonging to a
district cadre was liable to be posted, whether by promotion or transfer, to any post in
any taluqa or of the district. A servant belonging to the taluqa cadre was liable to be
posted whether by promotion or transfer to any post in any Gram or Nagar in the
same taluqa. A servant belonging to a local cadre was liable to be posted whether by
promotion or transfer to any post in the same Gram or Nagar. In addition to the posts
in the district taluqa and local cadres, a Panchayat might have such other posts of
such classes as the State Government may, by general or special order, determine
such posts being called 'deputation posts'. They were to be filled in accordance with
the provisions of Sec. 207. The State Government was empowered to make rules
regulating the mode of recruitment either by holding examinations or otherwise and
conditions 301 of service of persons appointed to the Panchayat service and powers of
appointment, transfer and promotion of Officers and servants in the Panchayat service
and disciplinary action against such Officers and servants. The rules were required to
make provision entitling servants of such cadres in the Panchayat Service to promotion

14-11-2022 (Page 8 of 22) www.manupatra.com P WILSON SENIOR ADVOCATE

 to such cadres in the State service as may be prescribed. The rules were also required
to provide for inter-district transfer of servants belonging to the Panchayat service.
22. Subject to the rules made under Sec. 203, appointment to posts in the Panchayat
service, Sec. 205 provides, shall be made by direct recruitment by promotion or by
transfer of a member of the State service to the Panchayat service. Sec. 206 obliges
the State Government by general or special order to allocate to the Panchayat service:
"(i) such number of Officers and servants out of the staff allotted or transferred to a
Panchayat under Sections (157, 158 and 325) as it may deem fit, (ia) all Officers and
servants of the Municipalities dissolved under Sec. 307, (ii) all Officers and servants in
the service of district local boards and district school boards immediately before their
dissolution under this Act and transferred to the Panchayats under secs. 155 and 326".
It is further provided that Officers and servants so allocated shall be taken over by
such Panchayats in such cadre and on such tenure, remuneration and other conditions
of service, as the State Government may determine. Sec. 204 provides that, subject to
the rules which the State Government may make, the expenditure towards the pay,
allowances and other benefits allowed to an Officer or servant of the Panchayat
Service serving for the time being under any Panchayat shall be met by that Panchayat
from its own fund. Sec. 207 enables the State Government to direct the posting of
Officers of the Indian P administrative service and of Class II services of the State
under Panchayat institutions Sec. 208 enables a Panchayat to obtain the services of
any Officer of Government on loan. Sec. 210 provides for the constitution of a
Panchayat Services Selection Board and Sec. 211 provides for the constitution of
District Panchayat Service Selection Committees and District Primary Education Staff
Selection Committees."
6.1 Analysing Section 203 of the Gujarat Panchayat Act, 1961 in para 21, the Court observed
that in 1978 Panchayat Service was declared as a distinct service providing for a three tier
system of district cadres; taluka cadres and local cadres. The State Government under the
Section was empowered to make Rules for recruitment etc. of such employees. The issue arose
before the Court when the State Government did not extend the benefits of revisions of pay to
the staff born on the local cadre of Panchayat service though such benefits were extended to
the District and Taluka Cadre. No promotional avenues were also provided for such local
cadres. Writ Petitions were filed by such employees of the local cadre which were resisted by
the State of Gujarat on the principal ground that the members of the Panchayat Service were
not Government Servants. The High Court allowed the petitions holding that the members of
the Panchayat Service belonging to the local cadre were Government Servants. The
Government to overcome the judgment brought in an ordinance of 1978 which was later
replaced by the Gujarat Panchayat (Third Amendment) Act, 1978.
7. While discussing the merits of the case on hand prior to such amendment what substantial
features the judgment suggests need to be briefly stated:--
(1) The broad and general picture on a perusal of the relevant provisions of the Act,
as it stood before it was amended in 1978, is that the Gujarat Legislature aimed at the
democratic de-centralization of important Governmental functions by vesting such
functions in gram, nagar, taluqa and district Panchayats and, besides, by enabling the
State Government to transfer other powers, functions and duties to the Panchayat
institutions. A perusal of the lists of subjects entrusted to the Panchayat Institutions
shows that they are not merely the ordinary run of subjects entrusted to Municipal
bodies, such as public health, sanitation, etc., but they include, a great variety of
subjects intimately connected with all aspects of community life and vital to it, except
functions, such as, law and order, administration of justice and the like. Even part of
the revenue administration is entrusted to Panchayat institutions, as evident from the
fact that collection of land revenue is one of the duties of the Gram Panchayats under
the Act. Since decentralisation was not to mean mere chaotic fission and confusion, a
three tier organisation was set up, subject to the overall control of the Government

14-11-2022 (Page 9 of 22) www.manupatra.com P WILSON SENIOR ADVOCATE

 and it was as if a parallel but subsidiary or subordinate Government was set up by the
Government itself to discharge some of its functions. Not merely were the Panchayat
institutions required to discharge Governmental functions, the organisation
and its three-tier units were to have very close links with the Government at
every twist and turn, as it were. The property of the Panchayat was that
which previously belonged to the Government but came to be vested in them
or transferred to them and the funds of the Panchayats were those to be
provided substantially by way of contribution or loan by the Government.
The Government was not only empowered to make the rules to carry out the
objects of the Act, but also to issue directions from time to time to all or any
of the Panchayats. For the purpose of efficiently discharging the functions and
duties of the various Panchayat institutions and having regard to the three-tier system
which had been established, it was apparently thought necessary to constitute a
Panchayat service, the members of which would have uniform scales of pay and
uniform conditions of service. So a single centralised Panchayat Service was
constituted which was to be 'distinct from the State Service'. The distinction
lay in that it was a service parallel to the State Service and not in that the
members of the service were not Government servants. The question whether
the members of the Panchayat service are Government servants or not is the principal
question to be answered in the appeal and we will come back to it again later.
(2). Considerable stress was laid by the Counsel for the State of Gujarat on the
statement in Section 203 that such service (Panchayat Service) shall be distinct from
the State Service. All that it can possibly mean is that the Panchayat Service is not a
service which can be identified with other State Services for the reason that while the
Panchayat Service too discharges the duties connected with the affairs of the State, it
does so not directly under the State but under the various Panchayat Institutions to
whom are delegated or transferred certain functions of the State Government.
Panchayat Service is distinct from a State Service because the Panchayat
Institutions whom it serves together constitute an almost parallel but
subsidiary Government. It is only in that sense Panchayat Service is distinct
from a State Service and not in the sense that members of the service are
not servants of the State. Government servants do not cease to be
Government servants merely because, for the time being, they are allotted
to different Panchayat Institutions and are paid out of the funds of those
institutions.
(3) The Court was of the view that the Panchayat Service constituted under Section
203 of the Gujarat Panchayats Act is a civil service of the State and that the members
of the service are Government servants. This very question had been decided by the
High Court of Gujarat more than 15 years back in G.L. Shukla v. State of Gujarat,
MANU/GJ/0125/1967 : (1967) 8 Guj LR 833, and there appears no good reason to
depart from the view then taken by the High Court. Bhagwati, J., who spoke for the
Court had said, "The Panchayat Service contemplated under the Act is as much a civil
service of the State as the State Service. The legislature by enacting the Act provided
for the establishment of the Panchayat Organisation of the State and for the efficient,
administration of the Panchayat Organisation, particularly in view of the fact that a
large part of the service personnel would be drawn from different sources and would,
therefore, be heterogeneous in composition with widely differing scales of pay and
conditions of service, the Legislature felt that it would be desirable to have a separate
civil service of persons employed in the discharge of functions and duties of
Panchayats with uniform scales of pay and uniform conditions of service and,
therefore, with that end in view the Legislature provided for constitution of the
Panchayat Service. All the provisions of the Act relating to the Panchayat
Service point unmistakably and inevitably to one and only one conclusion,
namely, that the Panchayat Service is one single service with the State as
the master. The Panchayat Service is to be constituted by the State

14-11-2022 (Page 10 of 22) www.manupatra.com P WILSON SENIOR ADVOCATE

 Government and its strength is also to be determined by the State
Government. Section 203. sub-Section (2) says that the Panchayat Service
shall consist of such classes, cadres and posts and the initial strength of
Officers and servants in each such class and cadre shall be such as the State
Government may by order from time to time
determine...............................................................................................................
"The provision of different cadres in Panchayat Service and the
transferability of persons employed in the Panchayat Service from a post in
the district cadre to a post in any taluka in the District and from a post in
the taluka cadre to a post in any Gram or Nagar in the same taluka
emphasize that the Panchayat Service is one single service with one master.
namely, the State and each Panchayat is not the master of the servant
employed in the discharge of its functions and duties. It is difficult to
imagine that the Legislature should have provided for transfer of servants
from one master to another..............................."The mode of recruitment,
the conditions of service and matters relating to appointments, transfers and
promotions of persons employed in the Panchayat Service as also
disciplinary action against them are all determined by the State Government
and that is consistent only with the State being the master in the entire
Panchayat Service. The mandatory provision for promotion from Panchayat
Service to State Service which is required to be made in the rules also shows
that both the services are services of the State. There could be no question of
promotion from one service to another if the masters in the two services were
different. Then it would be a case of termination of one service and appointment to
another......................" Then comes Sec. 206 which provides for making of an order
of allocation to the Panchayat Service.............." This provision relating to allocation
of Officers and servants under clauses (i) and (iii) does not contemplate any
termination of service of such Officers and servants or any fresh appointment to a new
service. There is no concept of termination of the existing service and reappointment
to a new service involved in the process of allocation; the concept is only of transfer
from one service of the State to another without any break in the continuity of service
and that clearly postulates that both services are under the same master, namely, the
State. Sec. 206-A also reinforces this conclusion. It makes the initial allocation
provisional and permits the State to review the allocation within a period of four years
from 1st April, 1963.......... "It is not possible to believe that the Officer or
servant could have been intended by the Legislature to be treated like a
chattel which can be tossed about from one master to another. 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."
(4) When the Panchayat Service was initially constituted soon after the passing of the
Gujarat Panchayats Act, there were three cadres, the district cadre, the taluqa cadre

14-11-2022 (Page 11 of 22) www.manupatra.com P WILSON SENIOR ADVOCATE

 and the local cadre, Secretaries, Officers and servants of the old Village Panchayats
under the Bombay Village Panchayats Act, 1958 became Secretaries, Officers and
servants of the new Gram Panchayats under Section 325(2)(x) of the Gujarat
Panchayats Act, 1961. Talatis and Kotwals, who were Government servants were
Secretaries and Officers of the old Village Panchayats under the Bombay Village
Panchayats Act And so they became Secretaries and Officers of the new Gram
Panchayats under the Gujarat Panchayats Act, 1961. Some Municipalities constituted
for Municipal Districts and Municipal boroughs under the Bombay District Municipal
Act and the Bombay Municipal Boroughs Act as applied to areas in the State of
Gujarat, were converted into Gram and Nagar Panchayats under S. 307 of the Gujarat
Panchayats Act and all Officer and servants in the employ of such Municipalities
became Officers and servants of interim Panchayats and allocated to the Panchayat
Service. Thus, Secretaries and Officers of dissolved Municipalities also became
Secretaries and Officers of Gram and District Local Boards constituted under the
Bombay Local Boards Act stood dissolved on the passing of the Gujarat Panchayats Act
and all Officer and servants in the employment of the Board were deemed to be
transferred to the service of the successor District Panchayat under Section 326 of the
Gujarat Panchayats Act. Also allocated to the Panchayat Service were those
Government servants who were transferred to the Panchayats under Section 157 and
such other Officers and servants employed in the State Service as were necessary (S.
206). All these Secretaries, Officers and servants became members of a service under
the State as soon as they were allocated the Panchayat Service. Now, by the Amending
Act, Secretaries, Officers and servants of Gram and Nagar Panchayats who were
allocated to the Panchayat Service from the ranks of the ex-Municipal employees are
sought to be meted out differential treatment from the other members of the
Panchayat Service, more particularly the Secretaries, Officers and servants of Gram
and Nagar Panchayats who were drawn from the ranks of Secretaries, Officers and
servants of old Village Panchayats, that is the Talatis and Kotwals. Their status as
members of a service under the State is to go with no option to them. Retrospectivity
is sought to be given to the Amending Act so that they could not claim that they were
ever Government servants and so could not be made to cease to be Government
servants and so that they could not claim that were singled out for differential
treatment, for, if they were never in the Panchayat Service, they could not complain of
being taken out of the Panchayat Service. In 1978 before the Amending Act was
passed, thanks to the provisions of the Principal Act of 1961. the ex-
Municipal employees who had been allocated to the Panchayat Service as
Secretaries. Officers and servants of Gram and Nagar Panchayats, had
achieved the status of Government servants. Their status as Government
servants could not be extinguished, so long as the posts were not abolished
and their services were not terminated in accordance with the provisions of
Art. 311 of the Constitution. Nor was it permissible to single them out for
differential treatment. That would offend Art. 14 of the Constitution. An
attempt was made to justify the purported differentiation on the basis of
history and ancestry, as it were. It was said that Talatis and Kotwals who
became Secretaries. Officers and servants of Gram and Nagar Panchayats
were Government servants, even to start with, while Municipal employees
who became such Secretaries. Officers and servants of Gram and Nagar
Panchayats were not. Each carried the mark of the 'brand' of his origin and a
classification on the basis of the source from which they came into the
service, it was claimed, was permissible. We are clear that it is not. Once
they had joined the common stream of service to perform the same duties, it
is clearly not permissible to make any classification on the basis of their
origin. Such a classification would be unreasonable and entirely irrelevant to
the object sought to be achieved. It is to navigate around these two
obstacles of Art. 311 and Art 14. that the Amending Act is sought to be
made retrospective, to bring about an artificial situation as if the erstwhile

14-11-2022 (Page 12 of 22) www.manupatra.com P WILSON SENIOR ADVOCATE

 Municipal, employees never became members of a service under the State.
Can a law be made to destroy today's accrued constitutional rights by
artificially reverting to a situation which existed seventeen years ago.
[Emphasis Supplied]
8 . Salient features of the judgment in R.K. Soni (supra) therefore can be summarized as
under:--
(A) Panchayat Institutions were grass root level institutions carrying out functions of
the State service assigned to them under the provisions of the Panchayat Act, 1961.
Essential functions basic to the rural infrastructure and basic human needs are catered
to by the Institution which is manned at the local cadre by its employees who were
recruited through the Panchayats even prior to coming into force of the Gujarat
Panchayat Act, 1961 with effect from 01.04.1963.
(B) 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"
(C) The employees of the Panchayat institution namely that of the local cadre carry the
mark of the 'brand' of his origin and a classification on the basis of the source from
which they came into the service, was sought to be justified as a reasonable
classification. The Court held that it wasn't. Once they had joined the common stream
of service to perform the same duties, it is clearly not permissible to make any
classification on the basis of their origin. Such a classification would be unreasonable
and entirely irrelevant to the object sought to be achieved.
These basic tenets lead us to trace the history of the Bombay Village Panchayats Act, 1958, a
precursor to the Gujarat Panchayats Act of 1961 which undisputedly came into force on and
from 1.4.1963 and the Recruitment Rules came into force in 1967. The relevant Sections are
reproduced hereunder:--
Section 3(14) - "Panchayat" means a Panchayat established or deemed to have been
established under this Act;
Section 9 - Every Panchayat shall be a body corporate by the name of "the Village
Panchayat of ", having perpetual succession and a common seal, with power to
acquire and hold property, both moveable and immoveable, whether within or without
the limits of the village over which it has Authority and may in its corporate name sue
and be sued.
Section 38 - (1) The executive power, for the purpose of carrying out the provisions of
this Act and the resolutions passed by a Panchayat, vests in the Sarpanch who shall be
directly responsible for the due fulfillment of the duties imposed upon the Panchayat
by or under this Act. In the absence of the Sarpanch, the powers and duties of the
Sarpanch shall, save as may be otherwise prescribed by rules, be exercised and
performed by the Upa-Sarpanch.
(2) Without prejudice to the generality of the foregoing provisions--
(i) the Sarpanch shall--
(a) preside over and regulate the meetings of the Panchayat;
(b) keep the records and registers of the Panchayat in his custody;
(c) exercise supervision and control over the acts done and action

14-11-2022 (Page 13 of 22) www.manupatra.com P WILSON SENIOR ADVOCATE

 taken by all Officers and servants of the Panchayat
(d) incur contingent expenditure up to ten rupees at any one
occasion;
(e) operate on the village fund including authorisation of payment,
issue of cheques and refunds;
(f) issue receipts under his signature for sums of money received by
him on behalf of the Panchayat;
(g) be responsible for the safe custody of the village fund;
(h) cause to be prepared all statements and reports required by or
under this Act;
(i) exercise such other powers and discharge such other functions as
may be conferred or imposed upon him by this Act or rules made
thereunder;
(j) call meeting of Gram Sabha as provided in Section 7 and preside
over them;
(ii) the Upa-Sarpanch shall,--
(a) in the absence of the Sarpanch preside over and regulate the
meetings of the Panchayat
(b) exercise such of the powers and perform such of the duties of the
Sarpanch as the Sarpanch may, from time to time, delegate to him;
(c) pending the election of a Sarpanch or in case the Sarpanch has
been continuously absent from the village for more than fifteen days
or is incapacitated, exercise the powers and perform the duties of the
Sarpanch.
(3) Every meeting of a Panchayat shall, in the absence of both the Sarpanch and the
Upa-Sarpanch, be presided over by such one of the members present as may be
chosen by the meeting to be Chairman for the occasion."
Section 45 - (1) Subject to the general control of the Panchayat Mandal, it shall be the
duty of a Panchayat, so far as village fund at its disposal will allow, to make
reasonable provision within the village in regard to all or any of the following matters,
namely:-
I. In the sphere of sanitation and health--
(a) the supply of water for domestic use and for cattle;
(b) the cleansing of public roads, drains, bunds, tanks and wells
(other than tanks and wells used for irrigation) and other public
places or works;
(c) sanitation, conservancy, the prevention and abatement of
nuisance, and the disposal of carcasses of dead animals;
(d) the preservation and improvement of the public health;
(e) the regulation by licensing or otherwise of tea, coffee and milk
shops,

14-11-2022 (Page 14 of 22) www.manupatra.com P WILSON SENIOR ADVOCATE

 (f) provision, maintenance and regulation of burning and burial
grounds;
(g) the lay out and maintenance of play grounds and of public
gardens;
(h) the disposal of unclaimed corpses and unclaimed cattle;
(i) the construction and maintenance of public latrines;
(j) the taking of measures to prevent the outbreak, spread or
recurrence of any infectious disease;
(k) the reclaiming of unhealthy localities;
(l) the removal of rubbish heaps, jungle growth, prickly pear, the
filling in of disused wells, insanitary ponds, pools, ditches, pits or
hollows, the prevention of water logging in irrigated areas and other
improvements of sanitary conditions;
(m) maternity and child welfare;
(n) providing medical relief;
(o) the encouragement of human and animal vaccination.
II. In the sphere of public Works-
(a) removing of obstructions and projections in public streets or
places and in sites, not being private property, which are open to the
public whether such sites are vested in the Panchayat or belong to
Government;
(b) construction, maintenance and repair of public roads, drains,
bunds and bridges;
Provided that if the roads, drains, bunds and bridges vest in any other
public Authority, such works shall not be undertaken without the
consent of that Authority;
(c) maintenance and regulation of the use of buildings handed over to
the Panchayat or of Government buildings under the control of the
Panchayat, grazing lands, forest lands including lands assigned under
Section 28 of the Indian Forest Act, 1927. and tanks and wells (other
than tanks and wells for irrigation) vesting in or under the control of
the Panchayat;
(d) lighting of the village;
(e) control of fairs, bazars, tonga-stand and cart stands ;
(f) construction and maintenance or control of slaughter houses;
(g) planting of trees in market places and other public places and
their maintenance and preservation;
(h) the destruction of stray and ownerless dogs;
(i) construction and maintenance of Dharmashalas;

14-11-2022 (Page 15 of 22) www.manupatra.com P WILSON SENIOR ADVOCATE

 (j) management and control of bathing and washing ghats which are
not managed by any Authority;
(k) establishment and maintenance of markets;
(l) construction and maintenance of houses for conservancy staff and
village functionaries of the Panchayat;
(m) the provision and maintenance of camping grounds;
(n) the establishment, control and management of cattle pounds;
(o) the establishment and maintenance of works or the provision of
employment particularly in times of scarcity;
(p) the extension of village sites and the regulation of buildings in
accordance with such principles as may be prescribed;
(q) the establishment and maintenance of warehouses;
(r) excavation, cleansing and maintenance of ponds for the supply of
water to animals
III. In the sphere of education and culture--
(a) the spread of education;
(b) the establishment and maintenance of akhada, parks, clubs and
other places of recreation;
(c) the establishment and maintenance of theatres for promotion of
art and culture;
(d) the establishment and maintenance of libraries and reading
rooms;
(e) promotion of social and moral welfare of the village including the
promotion of prohibition, the removal of untouchability, amelioration
of the condition of backward classes, the eradication of corruption
and the discouragement of gambling and other useless litigation.
IV. In the sphere of self-defence and village-defence--
(a) watch and ward of the village, and of the crops therein:--Provided
that the cost of watch and ward shall be levied and recovered by the
Panchayat from such persons in the village, and in such manner, as
may be prescribed;
(b) regulating, checking and abating of offensive or dangerous trades
or practices;
(c) rendering assistance in extinguishing fires, and protecting life and
property when fire occurs.
V. In the sphere of administration-
(a) the numbering of premises;
(b) the drawing up of programmes for increasing the output of
agricultural and non-agricultural produce in the village;

14-11-2022 (Page 16 of 22) www.manupatra.com P WILSON SENIOR ADVOCATE

 (c) the preparation of the statement showing the requirement of
supplies and finances needed for carrying out rural development
schemes;
(d) acting as a channel through which assistance given by the Central
or State Government for any purpose reaches the village;
(e) making surveys;
(f) the control of cattle stands, threshing floors, grazing grounds and
community lands;
(g) the establishment, maintenance and regulation of fairs,
pilgrimages and festivals;
(h) the preparation of statistics of unemployment;
(i) reporting to proper Authorities village complaints which are not
removable by Panchayat;
(j) the preparation, maintenance and up-keep of Panchayat records;
(k) the registration of births, deaths and marriages in such manner
and in such form as may be laid down by Government by general or
special order in this behalf;
(l) the preparation of plans for the development of the village.
VI. In the sphere of the welfare of the people--
(a) assistance in the implementation of land reform schemes;
(b) the relief of the crippled, destitute and the sick:
(c) assistance to the residents when any natural calamity occurs;
(d) making arrangements for co-operative management of lands and
other resources in the village, and organisation of collective farming,
credit societies and multipurpose co-operative societies;
(e) the reclamation of waste land and bringing waste land under
cultivation with the previous permission of the State Government;
(f) organising voluntary labour for community works and works for
the uplift of the village.
(g) opening of fair price shops.
VII. In the sphere of agriculture and preservation of forests--
(a) the improvement of agriculture and establishment of model
agricultural farms;
(b) the establishment of granaries;
(c) bringing under cultivation waste and fallow lands vested by
Government in the Panchayat;
(d) securing minimum standards of cultivation in the gram with a
view to increasing agricultural production;

14-11-2022 (Page 17 of 22) www.manupatra.com P WILSON SENIOR ADVOCATE

 (e) ensuring conservation of manurial resources, preparing composts
and sale of manure;
(f) the establishment and maintenance of nurseries for improved
seeds and provision of implements and stores;
(g) the production and use of improved seeds;
(h) the promotion of co-operative farming;
(i) crop experiments and crop protection;
(j) minor irrigation;
(k) raising, preservation and improvement of village forests.
VIII. In the sphere of breeding and protecting cattle--
(a) improvement of cattle and cattle-breeding and the general care of
livestock.
IX. In the sphere of Village Industries--
(a) the promotion, improvement and encouragement of cottage and
village industries.
X. In the sphere of collection of land revenue--
(a) collection of land revenue when so empowered by the State
Government under Section 169; and
(b) maintenance of village records relating to land revenue in such
manner and in such form as may be prescribed from time to time by
or under any law relating to land revenue.
(2) A Panchayat may with the previous sanction of the Chairman of the
Panchayat Madal, also make provision for carrying out, outside the village,
any work of the nature specified in sub-Section (1).
(3) A Panchayat may also make provision for carrying out within the village
any other work or measure which is likely to promote the health, safety,
education, comfort, convenience, or social or economic, or cultural well being
of the inhabitants of the village.
(4) A Panchayat may by resolution passed at its meeting and supported by
two thirds of the whole number of its members make provision for any public
reception, ceremony or entertainment within the village or may make
contribution towards an annual gathering or such other gathering of
Panchayats in the district or the State:--
Provided that except with the previous sanction of the Chairman of
the Panchayat Mandal the Panchayat shall not incur expenditure
exceeding rupees fifteen on any such reception, ceremony,
entertainment or gathering.
(5) If it comes to the notice of a Panchayat that on account of the neglect of a
landholder or dispute between him and his tenant the cultivation of his estate
has seriously suffered, the Panchayat may bring such fact to the notice of the
Collector.

14-11-2022 (Page 18 of 22) www.manupatra.com P WILSON SENIOR ADVOCATE

 (6) A Panchayat shall in regard to the measures for the amelioration of the
condition of Scheduled Castes and Scheduled Tribes and other backward
classes, and in particular, in the removal of untouchability carry out the
directions or orders given or issued in this regard from time to time by the
State Government, the Collector or any Officer authorised by the Collector.
(7) A Panchayat shall perform such other duties and functions as are entrusted
to it by any other law for the time being in force.
Section 61 - A Panchayat may appoint such servants as may be necessary for the
proper discharge of its duties under this Act and pay their salaries from the village
fund. A Sarpanch may also, in cases of emergency, engage such temporary servants
as he may deem necessary. A Panchayat may from time to time, by written order, fine,
suspend or dismiss any servant appointed by it; but an appeal shall lie against any
such order passed by the Panchayat to the Panchayat Mandal, within one month from
the date of the communication of the order to the servant."
9. Similarly, Section 325 of the Gujarat Panchayats Act, 1961 which provides for Repeal of the
Bombay Act reads as under:--
"(1) The Bombay Village Panchayats Act, 1958 is hereby repealed.
(2) Notwithstanding the repeal of the said Act-
(i) any local area declared to be a village immediately before the [date of the
coming into force of this Section] shall be deemed to be a gram under this
Act;
(ii) the Panchayats constituted under the said Act immediately before the said
date (hereinafter called "the old village Panchayats") shall be deemed to be
Panchayats of the respective Grams (hereinafter called "the new Gram
Panchayats.");
(iii) the Sarpanch or Upa-Sarpanch and the members or panchas elected or
appointed for the old village Panchayats and holding office immediately before
the said date shall respectively be deemed to be the Sarpanch, the Upa-
Sarpanch and the members of the new Panchayats;
(iv) the said Sarpanch, the Upa-Sarpanch and the members shall hold office
as such Sarpanch, the Upa-Sarpanch and members for the period for which
they would have held office under the said Act, subject however to the
provisions relating to disqualification, resignation, removal and vacancy
provided in this Act;
(v) any Nyaya Panchayats constituted by or for the old village Panchayats
shall be deemed to have been constituted by or for the said gram or grams for
the new Gram Panchayat thereof and shall continue to exercise the powers
conferred on them as if they had been conferred under this Act until they are
reconstituted under this Act and the chairman & deputy chairman, members or
panchas elected or appointed for the N.P. of the old village Panchayats and
holding office immediately before the said date shall respectively be deemed
to be the chairman, deputy chairman, and the members or Panchas of the
Nyaya Panchayats of the new Gram Panchayats;
(vi) the unexpended balance of the village fund and all the properties
(including arrears of rates, taxes and fees) vesting in the old village
Panchayats shall from the said date vest in the new Gram Panchayats and such
arrears of rates, taxes and fees shall be recoverable under the provisions of

14-11-2022 (Page 19 of 22) www.manupatra.com P WILSON SENIOR ADVOCATE

 this Act as if they had been imposed and recoverable under the provisions of
this Act;
[(via) the unexpended balance of the District Village Development Fund
established in a district under Section 133 of the Act so repealed shall be
transferred to and shall form part of the District Development Fund
established under Section 199 of this Act, in the corresponding District.]
(vii) all debts an obligations incurred and all contracts made by or on behalf
of the old village Panchayats immediately before the said date and subsisting
on the said date shall be deemed to have been incurred and made by the new
Gram Panchayats in exercise of the powers conferred on them by this Act;
(viii) any appointment, notification, notice, tax, fee, order scheme, licence,
permission, rule, bye-law, or form made, issued, imposed, or granted in
respect of the said villages and in force immediately before [the said date]
shall in so far as they are not inconsistent be deemed to have been made,
issued, imposed or granted under this Act in respect of the village and shall
continue in force until it is superseded or modified by any appointment,
notification, notice, tax, fee order, scheme, licence, permission, rule, bye-law,
or form made, issued, imposed or granted under this Act;
(ix) all budget estimates, assessments, assessment lists, valuations or
measurements made or authenticated immediately [before the said date] by
the old village Panchayats shall be deemed to have been nude or
authenticated by the new Gram Panchayats under this Act;
(x) the Secretaries, all Officers and servants in the employ of the old village
Panchayats immediately before the said date shall be Secretaries, Officers and
servants of the new Gram Panchayats and shall until other provision is made
in accordance with the provisions of this Act, receive the salaries and
allowances and be subject to the conditions of service to which they were
entitled or subject on such date:--
Provided that it shall be competent to the State Government, after
giving a Secretary such notice as is required to be given by the terms
of his employment, to discontinue his services if in the opinion of the
Government he is not necessary or suitable to the requirements of the
Panchayat service; and every Secretary whose services are so
discontinued shall be entitled to such leave, pension, provident fund,
gratuity, other rights and privileges as he would have been entitled to
take or receive on being invalided out of service if he had continued
in the employ of the Panchayat or Panchayats after the said date;
(xi) all proceedings pending before the old village Panchayats and Nyaya
Panchayats of the old village Panchayats shall be deemed to have been
instituted and to be pending before the New Panchayats and Nyaya Panchayats
of the new Gram Panchayats, as the case may be, and shall be heard and
disposed of by the said Panchayats or Nyaya Panchayats as the case may be,
under this Act;
(xii) all prosecutions instituted by or on behalf of the (Ad village Panchayats
and all suits or other legal proceedings instituted by or against the old village
Panchayats or any Officer of such Panchayats pending at the said date shall be
continued by or against the new Gram Panchayats:--
(xiii) [any reference in] any enactment or in any instrument to the Act hereby
repealed or to any provision thereof or any Authority elected or appointed

14-11-2022 (Page 20 of 22) www.manupatra.com P WILSON SENIOR ADVOCATE

 thereunder shall be construed as a reference to the Gujarat Panchayats Act,
1961, (Guj. VI of 1962) or to the corresponding provision thereof or to the
corresponding Authority elected or appointed thereunder."
10. A conjoint reading of the provisions of the Bombay Village Panchayat Act and the Gujarat
Panchayat Act bring out the following scenario:--
(A) Prior to 1/4/1963 the Gram Panchayat/Village Panchayat as per Section 9 of the
Bombay Village Panchayats Act, 1958 was a Body Corporate by the name of "the
Village Panchayat of....." having a perpetual succession and a common seal.
(B) The Sarpanch had the power vested in him to take actions in implementation of
the Panchayat's duties through Resolutions.
(C) Section 61 of the Bombay Village Panchayats Act, 1958 provided that the
Panchayat may appoint such servants as may be necessary for the proper discharge of
its duties under this Act and pay salaries from the Village Fund.
(D) Till the promulgation of the Gujarat Panchayats Act, 1961 w.e.f. 1.04.1963
therefore the Village Panchayat was competent to appoint its servants/Officers and act
through Resolutions. The appointment of the Respondent made under such provisions
was therefore valid and in accordance with the prevalent law in force, prior to the
coming into force the provisions of Section 203 of the Gujarat Panchayats Act, 1961
and the Rules thereunder. Therefore it was not a case where the prior sanction of the
Development Commissioner or the State was inevitably a sine-qua non. No such
provision existed. That the Panchayat in discharge of its duties under Section 45 of the
Bombay Act, through its Resolution of the Sarpanch appointed the Respondent herein.
That such appointment was on a sanctioned post was not a germane consideration as
it was so presumed to be in accordance with law and therefore the appointment could
not have been termed to be irregular or illegal.
(E) In the case of Harijan Paniben (supra) also, considering the question of
appointment of servants prior to the 1961 Act which came into force on 1/4/1963,
there was no question of a distinction being drawn on the appointment being on a
sanctioned post or not, and therefore the Division Bench judgment in the case of
Dahyabhai (Supra) would, in our opinion, made a distinction and dismissed the
Petition of the employee on the ground that the appointment was not on a sanctioned
post, would not be in consonance with the law laid down in the case of Harijan
Paniben (supra) and the judgment of the Constitution Bench in R.K. Soni (supra). It
categorically held that all such employees carried a common birth mark and therefore
to hold that the appointment was not on a sanctioned post or that it was irregular or
that the Panchayat employee belonged to a non-converted Gram Panchayat could not
have been held to be against the respondent as that would lead to a microscopic
discrimination which was set aside by the judgment of the Constitution Bench in the
case of R.K. Soni (supra).
(F) Referring to the decision in the case of G.L. Shukla (supra) reaffirmed in R.K. Soni
(supra), the inevitable conclusion that is culled out is that the State is the master.
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.
11. Accordingly, we hold that the objections of the State and the Panchayat Authorities in the

14-11-2022 (Page 21 of 22) www.manupatra.com P WILSON SENIOR ADVOCATE

appeals on their behalf of denying the pensionary benefits to the Respondent amount to
setting at naught an established and a settled principle of law as decided in the case of R.K.
Soni (supra). The Respondent who served the Gram Panchayat is entitled to be granted
pensionary benefits like pension and gratuity and other benefits that go hand in hand with the
terminal benefits available to any other employee of the State who so retires. The appellants
are, therefore, directed to pay the pensionary benefits to the employee within a period of eight
weeks from today. The appeals of the State and the Panchayat are, therefore, dismissed with
costs quantified at Rs. 25,000 to be paid to the respondent by the State.
© Manupatra Information Solutions Pvt. Ltd.

14-11-2022 (Page 22 of 22) www.manupatra.com P WILSON SENIOR ADVOCATE