Holding

Rule 5‑C is ultra vires the Cantonments Act and void; the High Court’s order striking it down is affirmed.

Summary

The respondent, Subhash Chandra Yadav, was appointed as Sub‑Charge of the Cantonment General Hospital, Lucknow, and later transferred to Varanasi under Rule 5‑C of the Cantonment Funds Servants Rules, 1937. He challenged the transfer, arguing that Rule 5‑C, which permits inter‑Board transfers, exceeded the rule‑making authority granted by the Cantonments Act, 1924. The High Court struck down Rule 5‑C as ultra vires and quashed the transfer order. On appeal, the Supreme Court examined whether the Central Government, under Section 280(2)(c) (as amended) of the Act, could validly make a rule allowing transfers between autonomous Cantonment Boards, and whether such services constitute a centralized or State‑level service. The Court held that the services are not centralized, the Boards are autonomous, and the amendment to Section 280(2)(c) does not empower the Central Government to frame inter‑Board transfer rules, rendering Rule 5‑C void. Consequently, the High Court’s decision was affirmed and the appeal dismissed.

Issues considered

The validity of Rule 5‑C of the Cantonment Funds Servants Rules, 1937, in view of the Cantonments Act, 1924.
Whether Section 280(2)(c) of the Cantonments Act, as amended, confers power on the Central Government to make rules permitting transfer of employees between different Cantonment Boards.
Whether the services of employees of Cantonment Boards constitute a centralized or State‑level service.
Whether the amendment to Section 280(2)(c) in 1983 validates Rule 5‑C retrospectively.
Whether the effect of rules under Section 281(2) can cure a rule that exceeds statutory authority.

Legislation cited

Cantonments Act, 1924s. 280(2)(c), s. 281(2)

Subjects

Cantonment Funds Servants RulesRule 5‑Ctransfer of serviceultra viresrule making powerCantonments Actcentralised serviceautonomous bodiesstatutory rulespublic service law

Judgment

GENERAL OFFICER COMMANDING-IN-CHIEF & ANR. '(
A v.
SUBHASH CHANDRA YADAV & ANR.

FEBRUARY 25, 1988

~ [RANGANATH MISRA AND MURARI MOHON DUp, JJ.]
,+
Cantonments Act, 1924: Section 280(2)(c)-Rule making power-
Cantonment Funds Servants Rules 1937, Rule 5C-Held void being in
excess of rule making power.
··~
Cantonment Funds Servants Rules 1937: Rule SC-Services of
c employees of Cantonment Boards-Transfer of-From one post in one '
Board to another post in another Board-Whether valid-Rule 5C held -~.
void-fxcess of rule making power under section 280(2)(c) of Canton-
ments Act, 1924.

i:> The first respondent was appointed a Sub-Charge, Cantonment
General Hospital, Lucknow by the Cantonment Board by an appoint-
ment letter dated 23.4.1969, and was confirmed in that post on
!. 12.1969. The conditions of service of the employees of the Canton-
ment Board, a statutory hoard, were governed by the provisions of the
Cantonment Funds Servants Rules, 1937. At the time of appointment,
E the services of the respondent were not transferable as per the provi- ~
sions of the Rules as then prevailing. His appointment letter also did not
include any condition for transfer from one Board to another.
•
By a notification dated 16.12, 1972, the Rules were amended and a
new rule, being rule 5--C was added to provide for the transfer of the
services of the employees of the Cantonment Boards from one· post in
F one Board to another post in another Board within the same State. >---
The G.O.C.-in-Chief, Central Command by his order dated
October 27, 1986 transferred the first respondent from the Cantonment
General Hospital, Lucknow, to the Cantonment General Hospital,
Varanasi, and the incumbent at Varanasi in turn being transferred to
G the Cantonm~nt General Hospital, Bareilly.
. Being aggrieved by the order of transfer passed under rule 5--C of
the Rules, the first respondent filed a writ petition in the High Court >--··
challenging the validity of the order of transfer on the ground that rule
5-C was ultra yires the provisions of the Cantonments Act and as such,
H void.
62
;
~
GENL. OFFICER v. S.C. YADAV 63

The High Court struck down rule 5-C as being ultra vires the
A
provisions of the Cantonments Act, i924 and held that the services of
the employees of the Cantonment Board are neither centralised nor i.-
there a common State level service and that rule 5-C having provided
for the transfer of the employees of one Board to another Board by the

.,.
'
GOC-in-Chief, Central Command is beyond the rule making power of
the Central Goverument as contained in clause (c) of sub-section (2) of
section 280 of the Cantonments Act as it stood before it was amended. It
B

accordingly quashed the order of transfer dated October 27, 1988 pas-
sed by the GOC-in-Chief, Central Command.

In the appeal to this Court it was contended on behalf of the
appellants: (!)that after the amendment of clause (c) of sub-section (1)
of Section 280 of the Cantonments Act conferring on the Central c
Government the power to lay down the conditions of service of the
employees of the Boards. which include the power to make rules for
transfer, rule 5-C is valid being in conformity with the provisions of
the rule making power under section 280(2)(c) of the Act, and (2) that
the respondent would not be in the least prejudiced by the transfer D
inasmuch as full safeguard has been provided for in rule 5-C.

On behalf of the respondent it was contended that: (i) service
under the Cantonment Board is not a centralised service or a service at
-~ the State level, and (2) the transfer of an employee from one Canton-
ment Board to another would mean the termination of the appointment E
of the employees in the Cantonment Board from which he is transferred

- and a fresh appointment in the Board where he is so transferred.

Dismissing the Appeal,

HELD: J. The High Court was justified in striking down rule F
s~c of the Rules and in quashing the order of transfer of the res-
pondent. 172G)

2. Rules framed under the provisions of a statute form part of the
statute. Rules have statutory force. But before a rule can have the effect
of a statutory provision two conditions must be fulfilled, namely, ( 1) it G
must conform to the provisions of the statute under which it is framed;
and (2) it must also come within the scope and purview of the rule
making power of the authority framing the rule. If either of these two
conditions is not fulfilled the rule so framed would be void. [69F-G I

3. When Rule 5-C was inserted in the Rules, it was void as being H
64 SUPREME COURT REPORTS [1988] 3 S.C.R.

A contrary to and in excess of the rule making power of the Central
Government as contained in the unamended clause (c) of sul>--section (2)
of Section 280 of the Act. It does not become valid merely because of the
amendment of clause (c), conferring power on the Central Government
to frame rules relating to conditions of service. [69C]

B 4. The position remains the same even though sul>--section (2) of
Section 28 i of the Act has specifically provided that after the rules are
framed and pnblished they shall have eff{ct as if enacted in the Act. In
spite of the provision of sul>--section (2) of Section 28i, any rule framed
-
under the Cantonments Act has to fulfil the aforementioned two condi-
tions regarding their validity. [69G-H]
c Jestamani v. Scindia Steam Navigation Company, [i96i] 2 SCR
8 i 1, distinguished.
·~
'
5. The Cantonment Board are statutory and autonomous bodies
controlled entirely by the Cantonments Act. Each Cantonment Board is
D an independent body functioning within its limited jurisdiction. The
Board is the appointing authority of its employees. The services nuder
the Cantonment Board is not a centralised service nor is it a service at
the State level. [70C]

6. One autonomous body cannot transfer its employee to another ).--.
E autonomous body even within the same State, unless the services of the
employees of these two bodies are under a centralised or .State-level
service. [70E-F]

In the instant case, the GOC-in-Chief, Central Command is not
-
the appointing authority of the respondent or the employees of the
F Cantonment Board, and so transfer of the respondent by the GOC-in-
Cbief is not permissible. [70E]

Om Prakash Rana v. Swarup Singh Tomar, [1986] 3 SCC 118,
referred to.

G 7. Even in spite of substituted clause (c) of sul>--section (2) of
Section 280 the Central Government will not be entitled to frame rules
for transfer of an employee from one Cantonment Board to another
within the State for the reasons: (l) the Cantonment Boards are.auton-
omous bodies; (2) the service under the Cantonment Board is neither a
centralised service nor is it a service at the State-level and (3) any such
H transfer of an employee will mean termination of service of the
GENL. OFFICER v. S.C. YADAV !DUTT, J.I 65
employee in the Cantonment Board from where he is transferred and a A
fresh appointment by the Cantonment Board which he joins on such
transfer. 172B-C]

8. The Central Government, however, has power to frame rules
about transfer of servants of the Board in exercise of its powers under
B
clause (c) of sub-section (2) of Section 280 of the Act within the region in
respect of which it has jurisdiction. For example, the respondent in tjte
instant case, could he transferred from one hospital of the Cantonment
Board, Lucknow, to another hospital under the sam~ Board.172E-F]

9. The Central Government had better consider the question of
making the Cantonment Board Service a centralised service so as to C
enable one Cantonment Board to transfer its employees to another
Cantonment Board. 172D]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 754
of 1988.
D
From the Judgment and Order dated 31.8.1987 of the Allahabad
High Court in W.P. No. 7899 of 1986

Raja Ram Aggarwal, V.K. Pandita, E.C. Aggarwala and Atul
Sharma for the Appellants.
E
S.C. Misra and P.K. Chakraborty for the Respondents.

Manoj Swarup and Ms. Lalita Kohli for the Jnterveners.

The Judgment of the Court was delivered by
F
DUTT, J. As elaborate submissions have been made by both •the
parties at the prelinliflar)r hearing of the special leave petition, we
proceed to dispose of the points involved in the case on merits after
granting special leave.
G
The appeal is directed against the judgment of the Allahabad
High Court striking down rule 5-C of the Cantonment Funds Servants
Rules, 1937, hereinafter referred to as 'the Rules', as ultra vires the
provisions of the Cantonment A 0 t, 1924 and also quashing the
impugned order of transfer dateci Jctober 27, 1986 passed by the
GOC-in-Chief, Central Command. H
66 SUPREME COURT REPORTS [1988] 3 S.C.R.

The respondent, Dr. Subhas Chandra Yadav, was appointed a
A
Sub-Charge, Cantonment General Hospital, Lucknow, by the
Cantonment Board by the appointment letter dated 23.4.1969. He was
confirmed in that post on 1.12.1969 by an order issued by the Canton·
ment Board. The conditions of service of the employees of the Canton·
men! Board, which is a statutory body, are governed by the provisions
B of the Rules. At the time of the appointment of the respondent, his
services were not transferable as per the provisions of the Rules then
prevailing. His appointment letter also did not include any condition
for transfer from one Board to another.

By a notification dated 16.12.1972, the Rules were amended and
a new rule, being rule 5-C was added to the Rules. Rule 5-C reads as
c follows:

"R.5-C. (1) The service of a servant shall be transferable
from one post in one Board to another post in another
Board.
D '
Provided that:

(a) The transferor and transferee Boards are situated
within the same State; and

E (b) The posts in both the Boards are similar and
carry the same scales of pay.

(2) Subject to such general directions as the Central
Government may issue from time to time, the Officer Com·
manding-in-Chief, the Command, or such other authority
F as may be authorised by the Central Government in this
behalf, shall be the competent authority to transfer a
servant under this rule.

(3) A servant on transfer under sub-rule (1) from
one Board to another may, for the purpose of determina·
G tion of seniority and eligibility for promotion opt:

(i) to be governed by the conditions applicable in this
behalf to the servants of the Board from which he has
been transferred (hereinafter referred to as the trans-
feror Board); or
H
GENL. OFFICER v. S.C. YADAV (DUTT, J.] 67

(ii) to be governed by the-conditions applicable in A
this behalf to the servants of the Board to which he
has been transferred (hereinafter referred to as the
transferee Board): '

Provided that where, a servant does not opt under this
rule within thirty days from the date of assumption of B
charge in the transferee Board, he shall, for purposes of
promotion and seniority, be governed by the conditions
application in this behalf to the servants of the transferor
Board.

(4) Save as provided in sub-rule (3), the terms and
conditions of service of a servant transferred under this rule
c
shall be deemed to be these applicable to the servants of
the transferee Board.

(5) Where the servant opts under clause (ii) of sub-
rule (3), the service put in by him under the transferor D
Board before his transfer shall be deemed to be service
under the transferee Board."

For the first time, rule 5-C provided for the transfer of the
~~ services of the employees of the Cantonment Boards from one post in
one Board to another post in another Board within the same State.· The E
GOC-in-Chief, Central Command, by his order dated October 27,
1986 transferred the respondent from the Cantonment General Hospi-
tal, Lucknow, to the Cantonment General Hospital, Varanasi, in place
of one Dr. Bansal, who was also transferred by the same order to the
__.J Cantonment General Hospital, Bareilly.
\ F
Being aggrieved by the said order of transfer passed under rule
5-C of the Rules, the respondent filed a writ petition in the Allahabad
High Court challenging the validity of the order of-transfer on the
ground that rule 5-C was ultra vires the provisions of the Cantonment
Act and, as such, void.
G
As has been stated already, the High Court has struck down rule
5-C holding, inter alia, that the services of the employees of the
Cantonment Board are neither centralised nor is there a common
State-level service and that the impugned rule 5-C, having provided
for the transfer of the employees of one Board to another Board by the
GOC-in-Chief, Central Command, is beyond the rule making power H
68 SUPREME COURT REPORTS [1988] 3 S.C.R.

A of the Central Government as contained in clause (c) of sub-section
(2) of section 280 of the Cantonment Act as it stood before it was
amended. Hence this appeal.

Section 280 of the Cantonment Act confers power on the Central
B Government to make rules. The relevant portion of section 280 of the
Cantonment Act is as follows:

"S. 280. POWER TO MAKE RULES: The Central
Government may after previous publication, make rules to J.·~
carry out the purposes and objects of this Act. r·
c . (2) In particular, and without prejudice to the gener-
ality of the foregoing power, such rules may provide for all ·~.
or any of the following matters, namely:

(a)
D
(b)

(bb) ......................................•....

(c) the tenure of office, salaries and allowances, pro-
E vident funds, pensions, gratuities, leave of absence
and other conditions of service of servants of
Boards;"

Clause (c) of sub-section (2) of section 280 was substituted by
the amendment of the Cantonment Act by Act XV of 1983. Before \._
F such amendment in 1983, clause (c) was as follows: I
"(c). the appointment, control supervision, suspension,
removal, dismissal and punishment of servants of Boards;"

It is apparent that before the amendment, clause (c) did not
G
confer on the Central Government power to frame rules regarding
conditions of service which necessarily include transfer of the
employees of the Boards. Rule 5--C, which was inserted in the Rules
by a notification dated November 23, 1972 providing for the transfer of
the employees of the Cantonment Boards, is on the face of it contrary
to the rule making power of the Central Government, as it stood
H before the amendment of the Act in 1983.
GENL. OFFICER v. S.C. YADAV [DUTI, J.J 69
1· It is, however, contended by Mr. Raja Ram Aggarwal, learned
A
Counsel appearing on behalf of the appellants, that after the amend-
ment of clause (c) of sub-section (2) of section 280 of the Cantonment
Act, conferring on the Central Government the power to lay down the
conditions of service of the employees· of the Boards, which include
the power to make rules for transfer, rule 5-C is valid, being quite in
conformity with the provisions of the rule making power under section B
t- 280(2)(c) of the Cantonment Act. We are unable to accept the con-
tention.

~· When rule.5-C was inserted into the Rules, it was void as being
contrary to and in excess of the rule making power of the Central
Government as contained in the unamended clause (c) of sub-section
c
~-- (2) of section 280 of the Cantonment Act. It does not become valid
merely because of the amendment of clause (c), inter alia, conferring
power on the .Central Government to frame rules relating to conditions
of service.

Our attention has been drawn to the provision of sub-section (2) D
of section 281 of the Cantonment Act, which provides that all rules
made under the Act shall be published in the official Gazette and in
such other manner, if any, as the Central Government may direct and,
on such publication, shall have effect as if enacted in the Act. It is
~ urged on behalf of the appellants that in view of sub-section (2) of
section 281, rule 5-C became a part of the statute and, accordingly, the E
question of its being contrary to the provisions of the Cantonment Act
does not at all arise.

This contention is unsound. It is well settled that rules framed
under the -provisions of a statute form part of the statute. In other
words, rules have statutory force. But before a rule can have the effect F
of a statutory provision, two conditions must be fulfilled, namely, (1) it
must conform to the provisions of the statute under which it is framed;
and (2) it must also come within the scope and purview of the rule
making power of the authority framing the rule. If either of these two
conditions is not fulfilled, the rule so framed would be void. The
position remains the same even though sub-section (2) of section 281 G
of the Act has specifically provided that after the rules are framed and
·~ published they shall have effect as if enacted in the Act. In other
words, in spite of the provision of sub-section (2) of section 281, any
rule framed under the Cantonment Act has to fulfil the two conditions
mentioned above for their validity. The observation of this Court in
Jestamani \/. Scindia Steam Navigation Company, [1961] 2 SCR 811, H
70 SUPREME COURT REPORTS 11988] 3 S.C.R.

relied upon by Mr. Aggarwal, that a contract of service may be trans-
'l
A
ferred by a statutory provision, does not at all help the appellants.
There can be no doubt that a contract of se..Vice may be transferred by
statutory provisions, but before a rule framed under a statute is re-
garded a statutory provision or a part of the statute, it must fu/fil the
above two conditions. Rule 5-C was framed by the Central Govern-
B ment in excess of its rule making power as contained in clause (c) of
sub-section (2) of section 280 of the Cantonment Act before its
amendment by the substitution of clause (c}; it is, therefore, void.

It is not disputed that the Cantonment Boards are statutory and
autonomous bodies controlled entirely by the Cantonment Act. Each
Cantonment Board is an independent body functioning within its
c limited jurisdiction. The Board is the appointing authority of its
eIIlployees. The service under the Cantonment Board is not a centra-
lised service nor is it a service at the ~!ate-level.

There is much force in the contention of the respondent that as
D service under the Canionment Board is not a centralised service or a
service at the State-level, the transfer of an employee from one
Cantonment Board to another would mean the termination of appoint-
ment of the employee in the Cantonment Board from which he is
transferred and a fresh appointment in the Board where he is so trans-
ferred. The GOC-in-Chief, Central Command, is not the appointing
E authority of the respondent or the employees of the Cantonment
Board, and so transfer of the respondent by the GOC-in-Chief is not
permissible. In any event, one autonomous body cannot transfer its
employee to another autonomous body even within the same State,
unless the services of the employees of these two bodies are under a
centralised or a State-level service. In this connection, we may refer to
F a decision of this Court in Om Prakash Rana v. Swarup Singh Tamar,
11986] 3 SCC 118. Pathak, J. (as His Lordship then was} speaking for
the Court observed as follows:

"As is clear by now, the fundamental basis of the conten-
tion that the power of transfer under the Education Act
G and its Regulations continues in force even after the enact-
ment of the Services Commission Act rests on the assump-
tion that the power of appointment does not include the
power of transfer. In our opinion, the assumption is unsus-
tainable. The scheme under the Education Act envisages
the appointment of a Principal in relation to a specific col-
H lege. The appointment is in relation to that college and to
GENL. OFFICER v. S.C. YADAV [DUTI, J.J 71

no other. Moreover, different colleges may be owned by
A
different bodi~s or organisations, so that' each l>rincipal
serves a different employer. Therefore, on filling the office
of a Principal to a college, a new contract of employment
with a particular employer comes into existence. There is
no State-level service to which Principals are appointed'.
Had that been so, it would have been possible to say that B
·~
, when a Principal is transferred from one college to another
no fresh appointment is involved. But when a Principal is
appointed in respect of a particular college and is thereafter
transferred as a Principal of another college' it can hardly be
doubtecl that a new appointment comes into existence.
Although the process of transfer may be governed by consi~
derations and move through a machinery different from the
c
considerations governing the appointment of a person ab
initio as Principal, the nature of the transaction is the same,
namely, that of appointment, and that is so whether the
appointment be through direct recruitment, through pro-
motion from the teaching staff of the same institution or by D
transfer from another institution."

The observation extracted above clearly supports 'the contention
made on behalf of the respondent that the employees of one ·canton-
~...., ment Board cannot be transferred to another Cantonment Board
inasmuch as the service under the Cantonment Board is not a cen- E
tralised service or a service at the State-level.

Mr. Aggarwal, however, submits that the respondent would not
be in the least prejudiced by the transfer inasmuch as full safeguard
has been provided for in rule 5-C. The question whether the interest of
the transferee has been protected or full safeguard has been provided F
for by rule 5--C is quite irrelevant, if it is invalid and void. Moreover,
the provisions of rule 5--C are clumsy and lack clarity and a transfer
may affect the transferee prejudicially. It is not necessary for us to
discuss how the provisions of rule 5--C may be prejudicial to the
interest of an employee transferred to another Cantonment Board
within the State, for, we are of the view that rule 5--C is ultra vires the G_
provision of the rule making power of the Central Government under
the Cantonment Act.

The question, however, is whether the Central Government is
entitled to frame rules for transfer of the employees of the Canton-
ment Boards under the substituted clause (c) of sub-section (2) of H
,,f,

72 SUPREME COURT REPORTS 11988] 3 S.C.R.
'~

A section 280 of the Cantonment Act. It is true that under clause (c), as it '
now stands, the Central Government can frame rules pertaining to
conditions of service of the Cantonment Board employees. But, in our
opinion, even in spite of substituted clause {c), the Central Govern-
ment will not be entitled to frame rules for transfer of an employee
from one Cantonment Board to another within the State for the
B reasons stated already, namely,{!) the Cantonment Boards are auton-
omous bodies; (2) the service under the Cantonment Board is neither a
centralised service nor is it a service at the State-level; and {3) any
such transfer of an employee will mean termination of service of the
employee in the Cantonment Board from where he is transferred and a
fresh appointment by the Cantonment Board which he joins on such
c transfer.

So long as the Cantonment Board service is not made a centra-
lised service or at least a State-level service, there can be no transfer
from one Cantonment Board to another Cantonment Board within the
same State. The Central Government has better consider the question
D of making the Cantonment Board sevice a centralised service so as to
enable one Cantonment Board to transfer its employees to another
Cantonment Board.

As has been held by the High Court, the Central Government
has power to frame rules about the transfer of the servants of the
E Board in exercise of its powers under clause (c) of sub-section {2) of
section 280 of the Act within the region in respect of which it has
jurisdiction. For example, the respondent could be transferred from
one hospital of the Cantonment Board, Lucknow, to another hospital
under the same Board. But that apart, the Cantonment Act does not
authorise the Central Government to frame rules for transfer from one
F Cantonment Board to another.

The High Court was, therefore, quite justified in striking down
rule 5-C of the Rules and in quashing the impugned order of transfer
of the respondent.
G For the reasons aforesaid, the judgment of the High Court is
affirmed and this Appeal is dismissed. There will, however, be no
order as to costs. ,

N.V.K. Appeal dismissed.