Holding

The Sikkim Government Establishment Rules, 1974 are "law in force" protected by Article 371F(k)’s non‑obstante clause, and the preference for locals is constitutionally valid under Article 16(3).

Summary

The State of Sikkim terminated the services of several non‑local employees appointed under temporary posts, invoking Rule 4(4) of the Sikkim Government Establishment Rules, 1974, which gave preference to Sikkimese nationals. The employees challenged the terminations before the Sikkim High Court, which held that the rule was no longer effective because Sikkimese nationality ceased to exist after Sikkim became a State of India, and that the rule violated Articles 14, 15 and 16. On appeal, the Supreme Court examined whether the 1974 Establishment Rules constitute "law in force" under Article 371F(k) and are therefore protected by its non‑obstante clause, and whether the preference for locals can be justified under Article 16(3). The Court held that the Rules are indeed existing law covered by Article 371F(k), that the non‑obstante clause shields them from being struck down for inconsistency with fundamental rights, and that the residence‑based preference is permissible under Article 16(3). Consequently, the High Court’s order was set aside and the writ petitions dismissed. The appeal was allowed.

Issues considered

Whether the Sikkim Government Establishment Rules, 1974 (especially Rule 4(4)) qualify as "law in force" under Article 371F(k) and enjoy protection of the non‑obstante clause.
Whether the preference for Sikkimese nationals in employment violates Articles 14, 15 and 16 of the Constitution.
Whether the adaptation and modification of the Rules under Article 309 affect their status as existing law under Article 371F(k).
Whether the non‑obstante clause of Article 371F(k) can immunise the Rules from judicial scrutiny for inconsistency with fundamental rights.
Whether the residence requirement can be validly enacted under the power conferred by Article 16(3).

Legislation cited

Constitution of Indias. Article 13, s. Article 14, s. Article 15(1), s. Article 16(2), s. Article 16(3), s. Article 309, s. Article 35(b), s. Article 366(10), s. Article 371F(1), s. Article 371F(k), s. Article 372(1)

Subjects

law in forcenon-obstante clauseArticle 371Fclassificationequalityemployment reservationSikkimconstitutional lawArticle 16(3)subordinate legislation

Judgment

STATE OF SIKKIM A
v.
SURENDRA PRASAD SHARMA AND ORS. ETC. ETC.

APRIL 19, 1994

[A.M. AHMADI AND N. VENKATACHALA, JJ.] B

Constitution of India-Article 371,F(kj-J'Laws in Force"-Held, in-
cludes subordinate legislation and hence includes Sikkim Government Estab-
lishment Rules 1974-Adaptation Orders under Article 371-F (1) and
adoption of the said Rule with modifications under Ariicle 309-held, did not C
detract from their Character as "law in force"-Non obstante clause protects
all existing laws even if they conflict with provisions of the Constitution.

Constitution of India-Article 16(3)-Held, protects preference given to
residents of Sikkim under Rule 4(4) of the Sikkim Government Establishment
Rules, I974. D
Constitution of India-Article 14-Tests for classification reiterate~
Held, emphasis is not only on <le jure equality but also on de facto equality.

Interpretation of statute-Constitutio,,_Transitory provisiorn-Liberal
construction must be adopted. E
The Sikkim Government Establishment Rules, 1974. were in force
before Sikkim became part of the territory of India. Rule 4(4) of the said
Rules provided inter alia for giving preference to Sikkimese nationals over
non-Sikkimese nationals in the matter of employment under the Govern-
ment, and also for replacement of non Sikkimese appointees by suitable F
Sikkimese candidates as and when they became available.

By the Constitution 35th Amendment Act, 1974 Sikkim became an
associate State of the Union of India and by the Constitution 36th Amend-
ment Act, 1975 which came into force with effect from 26.4.1979, Sikkim G
became a full-fledged State of the Union of India. The latter amendment
introduced Article 371-F in the Constitution, making special provisions
with respect to the State of Sikkim, including continuation of laws in force.

After Sikkim became a State of the Union of India the Directorate
of Survey and Settlement of the Government of Sikkim created and adver- H
563
564 SUPREME COURT REPORTS (1994] 3 S.C.R.

A tised certain temporary posts. The Respondents who were "non locals"
applied for and were appointed in different capacities in 1976. When the
sunrey work was completed, the services of surplus employees were ter-
minated in 1980, 1981 and 1982. While "locals" were retained, the "non-lo-
cals" were relieved regardless of their seniority. In the meantime, by a
notification dated 17 .11.1980 the Governor of Sikkim in exercise of powers
B under Article 309 of the Constitution adopted the Sikkim Government
Establishment Rules, 1974 as the Rules governing recruitment and condi-
tions of service of persons appointed to the services and posts in connec-
tion with the affairs of the State of Sikkim with modifications, with effect
from 26th April, 1975.
c
The Respondents challenged the termination of their. services by
. means of writ petitions before the Sikkim High Court. The State sought to
support its action with reference to Rules 4(4) read with Article 371-F (k)
and (1). By his judgment and order dated 29.2.1984 a Single Judge allowed
the writ petitions and quashed the orders of termination, holding inter alia
D that with the incorporation of Sikkim as a component State of the Union
of India, Sikkimese a nationality ceased to exist as a politic-legal concept
and hence Rule 4(4) ceased to have any efficacy in law. The High Court
further held that even assuming that the expression "Sikkimese Nationals"
could be read as and equated with "locals", the classification between
E "locals" and "non-locals" could not be sustained on the strength of the non
obstante clause in Article 371-F since the Rules adopted under Article 309
acquired a distinct legal entity apart from the Rules as they existed prior
to 26.4.1975 and the said Rules under Article 309 were required to satisfy
the equality test under Articles 14, 15 and 16 of the Constitution.

F The State of Sikkim appealed to this Court by special leave. >

Allowing the appeals, this Court

HEL.D : I.I. It is well" settled that while article 14 prohibits dis-
crimination and requires that pe, sons subjected to any legislation should
G be treated alike, it does not forbid classification for implementing the
right to equality guaranteed by it provided the classification is based on
an intelligible differential which distinguishes persons or things thut are
grouped together from others left out of the group and that the said >--
differential has a rational nexus to the object sought to be achieved by the
H said legislation. Of course the classification must not be arbitrary but
STATE OF SIKKIM v. S.1'. SHARMA 565

must be based on some distinct qualities and characteristics peculiar to A
• the persons included in the group and absent from those excluded, and
those peculiarities must have a reasonable nexus to the object proposed
to be achieved. In other words the doctrine of classification evolved by the
Courts permits equals to be grouped together and does not permit une·
quals to be treated by the same yardstick. Differential treatment becomes
unlawful if it is arbitrary and not based on any rational relation with the
B
statutory objective. The emphasis is not only on de jure equality but also
on de facto equality. Article 15(1) prohibits discrimination inter alia on the
ground of place of birth. So also Article 16(2) prohibits discrimination on
grounds of descent, place of birth, residence or any of them in respect of
any employment or appointment. The former prohibits the State from C
discriminating against any citizen whereas the latter prohibits discrimina-
tion in matters of employment or office under the State. However, Article
16(3) empowers Parliament to make a law prescribing requirement of
residence in the matter of employment. [576-G-H, 577-A-C]
D
2. Tiie Establishment Rules of 1974 were in existence before the
historical developments led to Sikkim becoming an associate State in the
first instance and later a full fledged State of the Union of India. The
President of India in exercise of powers conferred by clause (1) of Article
371-F made the Adaptation of Sikkim Laws (No.I) Order, 1979, which
defined the expression "existing laws" to mean any law in force before the E
appointed day, i.e. 26th April 1975 in the whole or any part of the ter·
ritories comprised in the State of Sikkim and the term "law" was defined
to include any enactment, proclamation, regulations, rule, notification, or
other instrument having immediately before the appointed day, the force
of law in the whole or any part of the territory now comprised in the State F
of Sikkim. It is, therefore, obvious from the broad definition of the term
• "law" that the Establishment Rules of 1974 would fall within the fold of the
expression "existing law" and in any case "law in force" within the meaning
of clause (k) of Article 371-F of the Constitution. This Court has la,tl down
that in deciding whether an order is legislative i.e. law, what is necessary
to be borne in mind is the nature of the order, the scope and effect of its G
provisions, the setting and context thereof, the method of its promulgation
etc. Applying this test and beariug in mind the definition of the expression
"existing law" read with the definition of "law", there can be no doubt that
the Rules in question fall within the meaning of "law in force" under Clause
(k) of Article 371-F. It is for that reason that the Respondent exercised H
566 SUPREME COURT REPORTS [1994) 3 S.C.R.

A power in relation to the said law under Clause (I) or Article 371-F or the
Constitution. This is further reinforced by the fact that these Rules were
adopted with modifications under Article 309 or the Constitution.
[581-C-H; 582-A-B]

Union of India v. Gwalior Rayon Silk Manufacl!lling (Weaving) Co.
B Lid., (1964] 7 SCR 89; Naning Pratap Singh Deo v. State of Orissa, AIR
(1964) SC 1763 = [1964] 2 SCR 112 and State of Madhya Pradesh & Anr.
v. Lal Bhargavendra Singh, (1964] 2 SCR 56, relied on.
~ l
3. Clause (k) or Article 37-F provides that notwithstanding anything
in the Constitution, all laws in force immediately before the appointed day
c in the territories comprised in the State of Sikkim or any part thereof,
were to continue to be in force until altered or repealed. Although the
expression "all laws in force" has not been defined the said expression
must receive its ordinary, natural and grammatical meaning. The latter
part of the clause until amended or repealed by a competent legislature
or other competent authority - is indicative of the fact that the said
D
expression was not intended to be confined only to legislative enactrnents
but also to laws which could be altered or amended or repealed by "other
competent authority" other than the legislature itself. This supplies a clear
indication that the said expression is wide enough to include subordinate ' ..
legislation, e.g. Rules, Regulations, Orders etc. The expression "existing
E law" is defined by Article 366(1) to include any rule, regulation, bye law
etc. and the expression "all laws in force" means all existing laws. Rut quite
apart from the definitions in Article 366(10), on a plain reading of clause
(k) in which the expression occurs, it seems clear that the said expression
is wide enough to include the Establishment Rules of 1974. (583-H;
584-A-D]
F
Edward Mills Co. Ltd. Beawar v. State of Ajmer, AIR (1955) SC 25,
•
relied on.

Director of I11dust1ies & Commerce, Govt. of A.P. Hayderabad v. V.
G Venkata Reddy, (1973] 2 SCR 562; A. V.S. Narasimha Rao & Ors. v. State
of A.P., (1970] 2 SCR 115; Desh Bandhu Gupta & Co. Ors. v. Delhi Stock
Exchange Assn. Ltd., [1979] 3 SCR 373 and K.P. Varghese v. The Income
Tax Officer, Emakulam & Anothe1; (1982] 1 SCR 629, referred to.

4. The view of the High Court that it is not possible to constme the ;,...,
H expression "Sikkimese Nationals" in Rule 4(4) as "locals" or permanent
STATE OF SIKKIM v. S.P.SHARMA 567
ftsidents or Sikkim and that the preference sought to be given by Rule 4(4) A
• has become Ineffective and unworkable because Sikkimese nationality has
ceased to exist as a politico-legal concept is highly technical and difficult to
<
accept. Since this was an existing law which was c_ontinued in force, it would
naturally contain expressions which were in vogue on the appointed day.
These expressions had to be understood in the sense in which they were
defined in the Sikkim Subjects Regnlations, 1961. Regulation 3 defines
B
Sikkim subjects and Regulation 7 explains who shall not be Sikkim sub-
,. jects. The expressions "Sikkimese nationals" and "non-Sikkimese nationals"
used in the proviso to Rule 4(4) are to be read and understood in the context
of the provisions of the aforesaid Regnlations. (585-A-E]
c
5. The Establishment Rules of 1974 are "existing law" within the
meaning of clause (k) of Article 371-F and therefore enjoy the protection of
the non-obstante clause, notwithstanding the fact that they were the subject
matter of Adaptation Orders issued by the President of India and were
modified under Article 309 of the Constitution with effect from 26th April
1975. In relation to clause (k) of Article 371-F, thenon-ohstante clause seeks D
to extend protection to all existing laws even if they may conflict with any of
the provisions of the Constitution and in the absence of such protection

--· • would be declared u/tar vires the Constitution. Since the laws which were in
force before the appointed day bad not to go through the test of satisfying
the requirement of the Constitution, the possibility of those laws being in E
conflict with the provisions of the Constitution could not be ruled and hence
they had to be protected by the non-obstante clause. There b no question of
clause (k) itself being in conflict with the provisions of the Constitution, bnt
there was every possibility of the laws in force immediately before the
appointed day being in conflict and they bad to be protected from being
assailed to be unconstitutional. [585-G-H; 586-A-D]
F

• RC Poudyal & Ors. v. Union of India & Ors., JT (1993) 2 SC 1,
referred to.

6. It may be noticed that even the laws which were prevailing in India
G
under the British Rules were not expected to accord with the Constitution
' of free India. Article 371-F occupies a special position to cope with a
special situation with a special historical backdrop. The reason why it
begins with a non-obstante clause obviously is that the matters referred to
in the various clauses immediately following required a protective cover
so that matters are not struck down as unconstitutional. Unless such H
568 SUPREME COURT REPORTS [1994] 3 S.C.R.

A immunity was granted the laws in force would have had to meet the test
of Article 13 of the Constitution. This being the objective, existing laws or
laws in force came lo be protected by clause (k) of Article 371-F. The said
laws in force in the state of Sikkim were therefore protected, until
amended or repealed, to ensure smooth transition from the Chogyal's rule
to the democratic rule under the Constitution. Inherent io clause (I) is
B the assumption that many of such existing laws may be inconsistent with
the Constitution and therefore the President came to be conferred with a
special po~r to make adaptation and modifications with a view to making
the said rule consistent with the Constitution. Of course this power has
to be exercised within two years from the appointed day. If any adaptation
C or modification is made in the Law in force prevailing prior to the
appointed day, the law would apply subject to such adaptation and
modification. It is thus obvious that the adaptation and modification
made by the President in exercise of this special power does not have the
effect of the law ceasing to be a law in force within the meaning of clause
(k) of Article 371-F. Therefore on the plain language of the said provision
D it is difficult to hold that the effect of adaptation or modification is to
take the law out of the purview of "law in force". (588-F; 589-H; 590-A-EJ

7. The Establishment Rules were merely "adopted" with modification
with effect from 26th April 1975. Rule 4(4) remains as it was and the Rules •
continue to be effective from !st April 1974. Effect must be given to the
E intendment of the said provision viz Article 371-F (k) specially introduced
in the Constitution to comply with the understanding on which Sikkim had
agreed to merge with India. And since all laws in force in the territory of
erstwhile Sikkim immediately before tl!e appointed day could not be
changed overnight, those existing laws had to be continued, more so
F because the transition had to be smooth and gradual so that it did not give
a sudden and severe jolt to the establishment. (590-F-H; 591-A]
•
8. It is well settled that constitutional provision must be liberally
construed to the extent the language permits it and should not be inter-
G preted in a narrow and pedantic manner, more so in the case of transitory
provisions. (588-D-E]

Synthetic & Chemicals Ltd. etc. v. State or U.P. & Ors., (1989] Supp.
I SCR 623 and Indian Cement Ltd. v. State of Tamil Nadu etc., [1989] 1
H Supp. SCR 692, relied on.
STATE OF SIKKIM v. S.P.SHARMA[AHMADl,J.] 569

9. Besides, provision as to residential requirement could always be A
made by virtue of Article 16(3) of the Constitution. Therefore if a provision
in the Establishment Rules appears to offend Article 16(2), since such a
provision is permissible by virtue of Article 16(3) and the Parliament
permits its continuance by a special provision, Article 371 (k), the said
requirement giving preference to "locals" cannot be struck down as uncon- B
stitutional and any action based on the said provision would not be
inconsistent with Part Ill of the Constitution. [591-A-C]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4918 of
1984 etc. etc.

From the Judgment and Order dated 29.2.84 of the Sikkim High
c
Court io W.P.No. 29 of 1982.

K. Parasaran, K. Swami and A. Subba Rao for the '.'.'-ppellant.

Narayan B. Shetye, G.S. Chatterjee and Raja Chatterjee for the D
Respondents.

The Judgment of the Court was delivered by

AHMADI, J. A short but ioterestiog question arises io these appeals
by special leave beariog on the true scope and meaning of Rule 4(4) of the E
Sikkim Government Establishment Rules, 1974, (hereinafter called 'the
Rules'), which were in force before Sikkim became a part of the territory
of India. The relevant part of the said Rule with which we are concerned
reads as follows :

"4(4) : APPOINTMENT : (A) Appoiotment to senice under the F
Government shall be by one or both the methods indicated below:

(a) Direct recruitment;

(b) Promotion from one grade to another.

- (B) Direct recruitment shall include appointment on contract, and
appoiotment on deputation :

Provided these two types of appointment shall be made havin'g due
G

regard to the exact nature of specific duties and responsibilities
and the qualifications required for the post, and further provided H
570 SUPREME COURT REPORTS [1994] 3 S.C.R.
1
I
A that (i) Non-Sikkimese nationals may be appointed only when
suitably qualified and experienced Sikkimese nationals are not
available, and (ii) replacement of such appointees by suitable
Sikkimese candidates may be made as and when available."

Fortunately, the facts on which this group of cases arise were admitted in
B the High Court. The admitted facts were recorded by the High Court on
14.9.1983 and the said record was signed by the learned coiJnsel for the
parties in token of their having accepted them as forming the factual matrix
for the decision of the writ petitions. But before we set out the factual
matrix we may take note of the historical developments leading to Sikkim
C becoming one of the State of India.

Pursuant to an agreement reached between the Chogyal of Sikkim
and leaders of the political parties representing the people of Sikkim on
the one hand and the Govt. of India on the other, the Sikkim Assembly
D unanimously passed the Government of Sikkim Bill, 1974, which was duly
promulgated by the Chogyal on 4.7.1974 as the Government of Sikkim Act,
1974. By this Act the Government of Sikkim was empowered to take steps
for seeking representation of the people of Sikkim in India's Parliamentary
system. A formal request to this effect was made to the Government of
India which gave effect to the Will of the people of Sikkim by amending
E the Constitution of India. By the Constitution 35th Amendment Act, 1974,
Article 2A was inserted in the Constitution which ran as under :

"2A. Sikkim to be associated with the Union. -Sikkim, which
comprises the territories specified in the Tenth Schedule, shall be
F associated with the Union on the terms and conditions set out in
that Schedule."

The terms and conditions of Sikkim's association with the Union of India
were set out in Part B of the Tenth Schedule of the Constitution. There-
after a special opinion poll was conducted by the Government of Sikkim
G on 14.4.1975 on the basis whereof the Chief Minister of Sikkim requested
the Government of India to admit Sikkim as a full-fledged State in the First
Schedule to the Constitution. Consequently by the 36th Amendment Act,
1975, entry 22 was added and inserted in the First Schedule whereby
Sikkim became a part of India. Article 371-F was also introduced in our
H Constitution, clauses (k) and (1) whereof provided as under : ·
}

STATE OF SIKKIM v. S.P. SHARMA [AHMADI, J.] 571

, "371-F. Special provisions with respect to the State of Sikkim- A
Nothwithstanding anything in this Constitution, -

(k) all laws in force immediately before the appointed day in the
territories comprised in the State of Sikkim or any part thereof
shall continue to be in force therein until amended or repealed by
a competent legislature or other competent authority; B
........ ~
(1) For the purpose of facilitating the application of any such law
as is referred to in clause (k) in relation to the administration of
the State of Sikkim and for the purpose of bringing the provisions
of any such law into accord with the provisions of this Constitution,
the President may, within two years from the appointed day, by
c
order, make such adaptations and modifications of the law,
whether by way of repeal or amendment, as may be necessary or
expedient, and thereupon, every such law shall have effect subject
to the adaptations and modifications so made, any such adaptation
or modification shall not be questioned in any court of law." D

By the said amendment which came into force w.e.f. 26.4.1975, Article 2A
. - was repealed since it had lost significance once Sikkim was added as a
territory of India.

We may now briefly outline the undisputed factual matrix. After
E
Sikkim became the 22nd State of the Union of India, the Directorate of
Survey and Settlement of the Government of Sikkim created and advertised
certain posts and invited applications for filling up the said temporary
posts. The respondents in this group of appeals applied for the posts and
were appointed in different capacities in 1976. As and when the survey F
work was completed the surplus employees were relieved of their jobs in
1980, 1981 and 1982. In 1982 some of the surplus employees who were 'non-
locals' filed writ petitions in the High Court of Sikkim challenging the
Government's decision terminating their services. A learned Single Judge
of the High Court by his judgment and order dated 29.2.1984 allowed the
G
writ petitions and quashed the termination orders. It is against the view
taken by the leaned Single Judge that the present appeals have been
preferred.

, .• -~ Before we proceed to deal-with the submissions made before us it
would be advantageous to notice the controversy projected before the High H
572 SUPREME COURT REPORTS [1994] 3 S.C.R.

A Court. The grievance of the employees was that in effecting termination of
the services of surplus employees, the employees were classified as 'locals'
and 'non-locals' and while the employees belonging to the former class
were retained, the employees belonging to the latter class were relieved,
their inter-se seniority notwithstanding. There is no dispute that the services
of the respondent were terminated on the ground that they were 'non-
B locals' rega~dless of their seniority. On behalf of the State, this dis-
criminatory lreatment was sought to be supported under the proviso to
Raje4(4) read with clauses (k) and (1) of Article 371F of the Constitution.
The action was also sought to be supported on the ground that in the
advertisement issued for the posts in question it was specifically stated that
C 'preference will be given to local candidates, whose name/parent's name
has been included in the relevant Sikkim Government Register'. It was
urged on behalf of the State that iinder the extant laws candidates-from
outside coJ!ld not be directly recruited so long as 'locals' were available for
such work. Lastly it was said that since they were temporary hands their
D services could be terminated on a month's notice. The learned Single
Judge, on the basis of the above averments, framed two questions for
determination, namely (i) whether the termination of employment on the
basis of the aforesaid classification isjustified under the extent laws and(ii)
if so, whether the relevant laws are valid and constitutional? The learned
judge answered these posers in paragraph 19 of his judgment as under :
E
' ......... the relevant provisions of Rule 4(4) of the Sikkim Govern-
ment Establishment Rules, 1974, which, when these Rules were
framed, directed the "Sikkimese-nationals' to be preferred to the
non'sikkimese-nationals in all employment s or appointments
F under the then Government of Sikkim, have become unworkable
as a result of Sikkimese-nationality having having ceased to exist
as a legally cognizable concept with the incorporation of Sikkim
as a component State in the Union of India in 1975. I have also
held further that even assuming that the construction of the of the
expression "Sikkimese-nationals 11 in the releVant Rules to mean
G permanent residents of Sikkim would have made the Rules work-
able in the post-1975 context, such a construction is not possible
or locally permissible as one can be a national of one country
without being a resident thereof and with his domicile in another
country. And I have also held that even if such a construction was
H p~ssible or permissible, the relevant Rules, so construed, would be
STATE OF SIKKIM v. S.P.SHARMA[AHMADl,J.] 573
' violative of Article 16 of the Constitution as being discriminatory A
on the ground of residence and 1 have also pointed out herein-
beffre in considerable details that nothing in Article 371F (k) or
Article 35(b), their non-obstante clauses notwithstanding, would
protect them from t!ie challenge of Article 16(1) an (2) read with
Article 14 of the Constitution."
B
Thus, the learned judge held that the discrimination based solely on the
ground of the employees being 'non-locals' was impermissible under Ar-
ticles 14 and 16 of the Constitution and consequently struck down the
orders of termination based on that ground.
c
Now before Sikkim became a part of India under the Sikkim Subjects
Regulations, 1961, every person domiciled in the territory of Sikkim imme-
diately before the commencement of the said Regulations i.e., 3.7.1961 was
declared to be a Sikkim subject if he (a) was born in the territory of Sikkim
and was a resident thereof or (b) he had been ordinarily residing in the D
territory of Sikkim for not less then 15 years immediately preceding the
commencement of the Regulations or ( c) is the wife or minor child of a
person mentioned in (a) or (b) above. Provision was also made in the said
Regulations for conferment of the said status by & registration, descent
and naturalisation. Any person who renounces his status as a Sikkim
subject or voluntarily acquires the citizenship of any other country or a E
Sikkimese woman marries a non-Sikkim subject or one who serves his
connection with Sikkim are treated under the Regulations as non- Sik-
kimese. As pointed out earlier certain historical developments led to the
enactment of the 35th Amendment which came into force w.e.f. 1.3.1975
whereby Article 2A was introduced in the Constitution of India. By the F
said newly added provision Sikkim, comprising the territories specified in
the 10th Schedule, was associated with the Union of India on the terms
and conditions set out therein. Certain consequential amendments were
also made in Article 80 and 81 of the Constitution. In Part B of the said
Schedule the responsibilities of the Government of India came to be
mentioned in clauses (a) to ( e) but they were made not enforceable by any G
Court. Pro\'ision \Vas also made giving Sikkim representation in Parliament.
However, shortly thereafter this newly added Article was repealed by the
36th Amendment which came into effect from 26.4.1975. By the said
amendment Sikkim was added to the list of States at Serial No.22 in the
First and Fourth Schedules. Article 371F was inserted making special H
574 SUPREME COURT REPORTS [1994] 3 S.C.R.
)
A provisions with respect to the new State of Sikkim. The said Article begins
wi,h a non-obstante clause - notwithstanding anything contained in the
Constitution - and, thereafter mentions the various provisions in clauses (a)
to (p) thereof, of which clauses (k) and (1) reproduced earlier are relevant
for our purpose. By clause (k) all laws in force in the State of Sikkim
immediately before the appointed date were to continue in force therein
B until amended or repealed, notwithstanding anything contained in the
Constitution. By clause (1) the President was empowered to make, within
two years from the appointed date, provision for adaptations and modifica-
tions of the law for the purpose of bringing the provisions of the extant law
into accord with the provisions of the Constitution and thereupon such law
C had to have effect subject to such adaptations or modifications. It was
further provided by clause (m) that neither the Supreme Court nor any
other court shall have jurisdiction in respect of any dispute or other matter
arising out of any treaty, agreement, engagement or other similar instru-
ment relating to Sikkim which was entered into or executed before the
D appointed day. Pursuant to Article 371F (1) the President made. the
Adaptation of Sikkim Laws (No. 1) Order, 1975, which was brought into
force w.e.f. 26.4.1975 i.e. the appointed day. By this Order the laws set out
in the First Schedule were repealed whereas those mentioned in the
· Second Schedule were to have effect, subject to the adaptations and
modifications directed by the Schedule. By a subsequent Order called the
E Adaptation of Sikkim Laws (No.1) Amendment Order, 1975, which by a
deeming fiction was also brought into force w.e.f. 26.4.1975, a new provision
was inserted in the previous Order whereby review petitions pending
before the appointed day were ordered to be transferred to the High
Court. Taking note of these changes the High Court held :
F
"With the incorporation of Sikkim as a component State within the
'
Union of India in 1975, Sikkimese - nationality as a separate legal
and political concept obviously came to an end and thence forward
all in Sikkim are either citizens of India or alien. And Sikkimese -
nationality as a legal and political concept having thus ceased to
G exist on and from 26.4.1975, the relevant provisions of Rule 4 (4)
of the Sikkim Government Establishment Rules, 1974. Giving
preference to Sikkimese - nationals in matters relating to employ-
ments or appointments under the State could not but ceased to be
workable and to have legal force. On and from the incorporation
H of Sikkim as a component State of India with effect from 2\j.4.1975,
STATE OF SIKKIM "· S.P. SHARMA [AHMAD!.J.] 575
1 Sikkimese nationals ceased to exist as such and. whether or not A
any express repealment of the Sikkim Subjects Regulation 1961,
\Vas necessary, the same was nevertheless expressly repealed \vith
effect from 26.4.1975 by the Adaptation of Sikkim Laws (No. 1)
Order, 1975, promulgated under Clause (1) of Article 371F of the
Constitution of India, inserted by the Constitution India, inserted
by the Constitution (Thirty-Sixth Amendment) Act, 1975. And an
B
Order, being Sikkim (Citizenship) Order, 1975, was also issued by
the President under Section 7 of the Indian Citizenship Act, 1955,
declaring that "every person who immediately before the 26th day
of April, 1975, was a Sikkim Subject under the Sikkim Subjects
Regulation 1961, shall be deemed to have become a citizen of India c
on that day."

Therefore, according to the High Court, with the incorporation of Sikkim
as a component State of the Indian Union w.e.f. 26.4.1975, Sikkimese
nationality ceased to exist as a politico-legal concept and hence Rule 4(4) D
ceased to have efficacy in law. The High Court also found it not possible
to construe the expression 'Sikkimese~nationals' as equivalent to 'locals'
}. , even with the aid of paragraph 11 of the Constitution (Removal or difficul-
ties) Order No. XI of 1975. It further observed that assuming the said
expression could be equated with and read as 'locals' in view of the
non-obstante clause in Article 371F read with clause (k) thereof, the E
classification between 'locals' and 'non~locals' cannot be sustained on the
strength of the non-obstante clause because it stared in the face of the
equality clause enshrined in Articles 14, 15 and 16 of the Constitution. Even
if it is assumed that by virtue of the non-obstante clause in Article 371-F,
the Rules saved by clause (k) thereof enjoyed immunity from the rigour of F
Articles 14, 15 and 16, it must be remembered that the existing rules of
1974 had undergone a change when by Nolification dated 17.11.1980 the
following paragraph was added :

11
In exercise of the powers conferred by the provision of Article
309 of the Constitution of India, the Governor of Sikkim is pleased G
to adopt the Sikkim Government Establishment Rules 1974 as the
rules regarding recruitment and conditions of service of persons
appointed to the services and posts in connection with the affairs
of the State of Sikkim with modifications set out hereinbelow with
effect from the 26th day of April, 1975." H
576 SUPREME COURT REPORTS ll994J 3 S.C.R.

A The High Court observes that the Rules so adopted under Article 309
acquired a distinct legal entity from the Rules as they existed prior to
26.4.1975 and hence \Vhen the impugned orders terminating thC services
were passed the said orders were governed by the Rules adopted under
Article 309 which Rules were required to satisfy the equality test enshrined
.in Articles 14, 15 and 16 of the Constitution. The submission based on
B Article 35 (b) read with Article 372(1) was repelled on the ground that the
said provisions applied to the territories forming part of India on 26.1.1950
and not to those included in the Union of India thereafter. On this line of
reasoning the High Court quashed the termination orders.

C Article 14 provides that the State shall not deny to any person
equality before the law or the equal protection of the laws within the
territory of India. Article 15(1) prohibits the State from discriminating
against any citizen on grounds of religion, race, caste, sex, place of birth
or any of them. Article 16(1) provides that there shall be equality of
D opportunity for all citizens in matters relating to employment/appointment
to any office under the State. Article 16(2) next provides that no citizen
shall, on grounds only of the religion, race, caste, sex, descent, place of
birth, residence or any of them, be ineligible for, or discriminated against
in respect of, any employment or discriminated against in respect of, any
employment or office under the State. Article 16(3), however empowers
E Parliament to make prescribing, in regard to a class or classes of employ-
ment or appointment to an office (under the Government of, or any local
or other authority within, a State or Union territory) any requirement as
to residence within the State or Union territory prior to such employment
or appointment. These briefly are the relevant Parts of Articles 14, 15 and
F 16 with which we are concerned.

It is well settled that while Article 14 prohibits discrimination and
requires that all persons subjected to any legislation shall be treated alike,
it does not forbid classification for implementing the right of equality
guaranteed by it provided the classification is based on an intelligible
G differcntia which distinguishes persons or things that are grouped together
from others left out of the group and that the said differentia has a rational
nexus to the object sought to the achieved by the said legislation. Of course,
the classification must not be arbitrary but must be based on some distinct > -
qualities and characteristics peculiar to the persons included in the group
H and absent from those excluded and those peculiarities must have· a
STATE OF SIKKIM 1·. S.P. SHARMA [AHMADI, J.J 577

reasonable nexus to the object proposed to be achieved. In other words, A
the_ doctrine of classification evolved, by the Courts_ permits equals to he
grouped together and does not permit unequals to_ be treated by the same
yardstick. Differential treatment becomes unlawful if it is arbitrary and not
based on rational relation with the statutory objective. The emphasis is not
1 only <le jure equality but also on de facto equality.
B

-- Article 15(1) prohibits discrimination imer a/ia on the ground of
place of birth. So al<o Article 16(2) prohibits discrimination on grounds of
decent, place of birth, residence or them in respect of, any employment or
appointment. The former prohibits the State from discriminating against
any citizen whereas the latter prohibits discrimination in matters of employ- c
ment or office under the State. However, Article 16(3) empowers Parlia-
ment to make law prescribing requirement of residence in employment as
stated earlier. Thus Article 14 prohibits the State from denying to any
person equality before the law and equal protection of the laws within the
territory of India whereas Articles 15(1) and 16(2) protect the citizen D
against discrimination on stated counts. This, in brief, is the import of these
provisions.

The next question is whether the law protected by virtue of the power
conferred by Article 371-F is immune from being tested on the touchstone
of the requirement being consistent with the basic structure of the Con- E
stitution in view of the non-obs/ante clause with which the said provision
opens. For example, in view of clause (k) of that article can an existing law
continue_ to remain in force in the territory of erstwhile Sikkim even if it is
inconsistent with the fundamental rights conferred by Articles 14. 15 and
16 of the Constitution? Or will the said provision be protected by the F
omnibus non-obs/ante clause - notwithstanding anything in this Constitu-
•
tion? In R.C. Poudyal & Ors. v. Tiie Union of India & Ors., JT (1993) 2 SC
1, this Court was required to consider the scope and validity of clause (!)
of Article 371F, since it was challenged on the ground that it violated the
(one person one vote' rule and, therefore, contravened the essence of
democracy, a basic feature of the Constitution. This Court by majority G
upheld the validity of the said provision and held that the non-obstante
clause therein cannot be construed as taking clause (!) of Article 371F
outside the limitations of the amending power itself. The majority held that
the provision of clause (!) of Article 371F read with Article 2 have to be
harmoniously construed, which construction must accord with the basic H
578 SUPREME COURT REPORTS [1994[ 3 S.C.R.

A features of the Constitution. It, therefore, rejected the contention that the
vires of the said provision and its effect are not justiciable. Agarwal, J.
while concurring with the said view observed that the power conferred by
Articles 2 is not wider in ambit than the amending power under Article
368 and must, therefore, be read as subject to the limitation that it must •
conform to the basic structure concept. The scope of the power was,
B therefore, held to be subject to judicial review although the area of jus-
ticiability was restricted. Sharma, J. pointed out that in the case of Sikkim
the power was not exercised under Article 2 read with Article 371F but
under Article 2A read with the relevant clause of Article 371F. Sharma, J.
~ -
however, held that since the impugned provisions were inconsistent with
C basic concept of democracy, namely, 'one man, one vote' clause (t} of
Article 371F was ultra vires. Thus, the majority upheld the constitutionality
of Article 371F with which we are concerned.

But Mr. Parasaran contended that while the terms and conditions
D imposed under Article 2 may have to be consistent with the basic feature
of the Constitution, the same cannot be said of existing law protected by
the non-obstante clause in Article 371F read with clause (k) thereof. He
pointed out that in 'Poudyals' case the question of recognition and enfor-
cement of the rights which the petitioners had as residents of the ceded
territory against their own sovereign did not actually arise, vide paragraph
E 31 of that decision, and hence the said decision is not an authority for the
proposition that even the law as it existed before Sikkim became a part of
India, which stands protected by clause (k) of Article 371F, mustcomply
with the basic feature doctrine for its enforcement. He invited out attention
to Article 16(3) which in terms permits Parliament to make a law prescrib-
F ing, in regard to a class or class of employment or appointment to an office,
any requirement as to residence within the State of Union Territory,
•
notwithstanding the other clauses of the said article. He next invited our
attention to Article 35. This article begins with a non-obstante clause - '
)-
notwithstanding anything in this Constitution - and then clause (a) (i)
proceeds to add that Parliament alone ;hall have power to make laws with
G respect to any of the matters which under clause (3) of Article 16, clause
(3) of Article 32, Article 33 and Article 34 may be provided for by
Parliament. Clauses (b) of that Article lays down that notwithstanding
anything in the Constitution any law in force immediately before the
commencement of the Constitution in the territory of India with respect to
H any of the matters referred to in sub-clause (a)(i) shall, subject to the terms 'I
'
STATE OF SIKKIM v. S.P.SHARMA[AHMADl,J.J 579

thereof or any modifications made therein under Article 372, continue in A
force until altered, repealed or amended by Parliament. Article 372(1} says
that subject to the provisions of the Constitution, all the laws in force in
the territofy in India immediately before the commencement of the Con-
stitution shall continue in force therein until repealed, altered or amended
by a competent legislature or authority. But these provisions have to be B
read with Article 13 which lays down all laws in force in the territory of
India before the commencement of the Constitution, insofar as they are
inconsistent with the provisions of Part III, shall to the extent of such
inconsistency, be void.

From the above constitutional scheme what emerges is that the laws C
which were in force in the territory of India immediately before the
commencement of the Constitution shall continue in force therein until
altered, repealed or amended by a competent legislature or authority
except to the extent inconsistent with Part III of the Constitution. However,
notwithstanding anything in the Constitution, Parliament was empowered D
to make laws inter a/ia with respect to any matter referred to in Article
16(3). Thus, Parliament could prescribe by law the requirement as to
residence within a State of Union Territory and if such a law is made
nothing in Article 16 will stand in the way of such prescription. Since
Article 16(3} is in Part III of the Constitution, the law, if made, would
dearly be intra vires of the Constitution. By virtue of Article 35 (b) any law E
in force immediately before the commencement of the Constitution in
relation to any matter in Article 16(3) shall continue in force, notwithstand-
ing anything in the Constitution. The expression 'law in force' has the
meaning assigned to it in Article 372, Explanation-I. This is the conjoint
effect of Articles 13, 16(3), 35(b) and 372 of the Constitution. Since Sikkim F
was never a part of the territory of India immediately before the commen-
cement of the Constitution, the High Court has ruled out the applicability
of the said provisions in this case. Article 2 provides that Parliament may
be law admit into the Union, or estahlish new States on such terms and
1

conditions as it thinks fit. The laws so made n1ust conforrri to the require-
ments of Article 13. That is the \iew expressed in Poudyal's case. But the G
historical events preceeding its inclusion in the territory of India must be
borne in mind. Sikkim during the British period was ruled by a monarch
called the Chogyal. After India became free there was a popular demaqd
from the people of Sikkim for its merger with India. Pursuant to the
sentiments expressed by the People of Sikkim, a treaty \Vas entered into H
580 SUPREME COURT REPORTS [1994] 3 S.C.R.

A between India and the Chogyal short of merger which was followed up by
consequential changes. However, the public demand became violent forc-
ing the Chogyal to request the Union Government to assume the respon-
sibility for good Government. Ultimately, on 8th May, 1973, a formal
agreement was signed between the Chogyal and the political leaders of
Sikkim on the one side and the Government of India on the other in
B pursuance whereto the people of Sikkim were to enjoy certain democratic
rights. This development would show that Sikkim which was a British
protectorate under the British paramountacy until 1947 came within the
protectorate of India under the treaty of 3rd December, 1950 and later
became an associate State by the insertion of Article 2A in the Constitution
c by the 35th Amendment on the terms and conditions set out in the Tenth
Schedule and soon therefore, by the 36th Amendment Article 2A was
deleted and full statehood under the Union of India was conferred on the
terms and conditions incorporated in the newly added Article 371F. These
constitutional changes had to be introduced in 1975 in reciprocation of the
D understanding on which Sikkim agreed to its merger with India and to
fulfil the aspirations of the Sikkim found in Article 371F have, therefore,
to be viewed in this background.

Mr. Parasaran buttressed his submission by inviting our attention to
three decisions, (i) P.L. Lakhanpal v. The State of Jammu and Kashmir,
E [1955] 2 S.C.R. 1101, (ii) Sampat Prakash v. State of Jammu & Kashmir &
Anr., [1969] 2 S.C.R. 365 and (iii) Abdul Ghani v. State of Jammu &
Kashmir, [1971 J 3 S.C.R. 275 which arose in the context of the modifications
in the Constitution in relation to the provisions of Article 22 in their
application to the detention law in force in hmmu & Kashmir having
F regard to Article 35( c) as it then existed and Article 370 which confers full
discretion in the President to apply the Constitution subject to such excep- •
tions and modifications as he may by order specify. This Court held that
since the modification in Article 35 by the introduction of clause (c) was
at the initial stage itself it could not be challenged on the ground that it
abridged the fundamental rights conferred. by Part III of the Constitution
G in relaLion to preventive detention. Since no such if under mental right
existed in Jammu & Kashmir at ihe time of applying the Constitution they
came into operation in that State by virtue of the Prsidential Order apply-
ing the Constitution in the modified form itself. By Article 35(c) the validity
of any law of preventive detention made by the legislature of that State
H could not be questioned on the ground that it contravened any of the
STATE OF SIKKIM v. S.P. SHARMA [AHMADl,J.J 581

r fundamental rights enshrined in Part III of the Constitution, initially for 5 A
years which period was extended later. Counsel submitted that these
decisions clearly show that even provisions inconsistent \Vith Part III of the
Constitution will be valid until the expiry of the period prescrihed hy
Article 35( c) of the Constitution. If a fundamental right toughing life and
liberty can be bridged fo1 specified period by the introduction of clause
(c) in Article 35, so also it would be permissible to make provision in clause
B
(b) of that Article which may have the effect of impinging on certain rights
enumerated in Part Ill of the Constitution on the basis of the protection
.conferred by clause (k) of Article 371F. We will examine this provision
shortly but before we do so we must examine the character of the Rules
issued by the Chogyal before the merger of Sikkim into the Union of India. c
The Establishment Rules of 1974 were in existence before the his-
torical development led to Sikkim becoming an associate State in the first
instance and later a full-fledged State of the Union of India. The President
of India in exercise of power conferred by clause (1) of Article 371F made D
the Adaptation of Sikkim Laws (No. 1) Order, 1975, which defined the
expression 'existing law' to mean any law in force before the appointed day
, i.e. 26th April 1975, in the whole or any part of the territories comprised
in the State of Sikkim and the term 'law' was defined to include any
enactment, proclamation, regulation, rule, notification or other instrument
having, immediately before the appointed day, the force of law in the whole E
or any part of the territory now compnsed in the State of Sikkim. It is,
therefore, obvious from the broad definition of the term 'law' that the
Establishment Rules of 1974 would fall within the fold of the expression
'existing law' and in any case 'law in force' within the meaning of clause
(k) of Article 371F of the Constitution. In this connection, we may usefully
refer to the Constitution Bench decision in Union of India and Others v. F
Gwalior Rayon Silk Manufacturing (Weaving) Co. Ltd. and anotlw; [1964]
, 7 S.C.R. 892, by which this Court approved the ratio of the decision in
Narsingh Pratap Singh Dea v. State of 01issa & Am AIR (1964) SC
'.1793 ~ [1964] 7 SCR 112 in which iL was held that whcn"ver a dispute arises
as to the true character the order passed by an absolute Ruler it is G
necessary to realise that an absolute monarch combines in himself all the
three functions, legislative, judicial and executive and therefore all relevant
factors must be considered before r~pciding whether the Act in question is
'_,. ~
legislative i.e. law. What is necessary to be borne in mind is the nature of
the order, the scope and effect of its provisions, the setting and context
thereof, the method of its promulgation and allied methods before H
582 SUPREME COURT REPORTS [1994] 3 S.C.R.

A pronouncing on the ~haracter of the order. These observations were
quoted with approval once against in State of Madhya Pradesh and Another
v. Lal Bargavendra Singh, [1966] 2 S.C.R. 56 at 58-59. Applying this test
and bearing in mind the definition of the expression 'existing law' read with
the definition of 'law', there can be no doubt that the Rules in question fall
within the meaning of 'law in force' under clause (k) of Article 371F. It is
B for that reason that the President exercised power in relation to the said
law under clause (1) of Article 371F of the Constitution. This is further
reinforced by the fact that these Rules were adopted with modification
under Article 309 of the Constitution, vide Establishment Department
Notification No. 202/Gen/Est. dated 17th November, 1980.
c We may now notice a decision on which considerable reliance was
placed by the learned counsel for the appellant. In 77ie Director of In-
dustries & Commerce, Government of A.P., Hyderabad & Another v. V.
Venkata Reddy & Ors., 2 S.C.R. 562, a question arose whether the
Hyderabad Civil Service Regulations promulgated by the Nazims's Firman,
D popularly known as the Mulki Rules, could be described as 'laws in force'
·at the commencement of the Constitution and therefore continued in force
by virtue bf Article 35(b) notwithstanding the States Reorganisation Act,
1956, by which the Telangana area of Hyderabad State and the State of
Andhra were combined to form the new State of Andhra Pradesh. The
Mulki Rule.s were promulgated before the merger of the State of
E Hyderabad with India. They laid down certain qualifications as to
residence in the State for appointment t,1 State services. The respondent
challenged their validity. The High Court declared them invlid whereupon
the matter was brought to this Court in appeal. The !Iiain question was
whether the Mulki Rules could be described as 'laws in force' immediately
before the commencement of the Constitution in the territory of India and,
F if yes, could they be treated as continuing force by the thrust of Article
35(b) of the Constitution? On the first part of the question this Court held •
that the words 'laws in force in the territory of India' occurring in Article
35(b), which also occur in Article 372, can only mean all laws which existed
not only in Provinces of British India but also all In<lia Stales. ll would be
G remarkable if it were otherwise thought the Court. On the second part of
the question this Coorl pointed out that Article 35(b) in terms saves 'law
in force' existing immediately before the commencement of the Constitu-
tion if it is a law in respect of any matter referred to in Article 35(a)(i)
which includes any matter coming within the scope of Article 16(3).
Relying on the interpretation placed in relation to the matter under Article
H
STATE OF SIKKIM ,. S.P. SHARMA [AHMADI, J.[ 583

r 16(3), this court in A. V.S. Narasima Rao & Others v. 77ic State of A.P. & A
A11othcr, [ !9711[ 1 S.C.R. 115, held that the impugned Rules could have been
provided for hy Parlian1cnt. ()n the question \Vhethcr the said Mulki Rules
continued in force even after the formation of the State of Andhra Pradesh
under the State Reorganisation Act, 1956, this Court concluded in the
affirmative. (:ounsel submitted that this decision applied on all fours to the
facts of thr.·· present casC and hence the High Court's decision cannot be B
allowed1-tl'stand. He reinforced his submission by pressing into service the
rule at ~01uen1poranea e..lposito in vic\v of the exposition it had received
from the authorities whose duty it was to construe, apply and implement
the same. He supported his submission with reference to the decision in
Desh Bandhu Gupta & Co. & 01:<. v. Delhi Stock Exchange Assn. Ltd., (1979)
3 SCR 373 at 383 and in K.P. Vaighese v. 77ie Income-Tax Officer, Er-
c
naku/am, & Another, [1982) l S.C.R. 629 at 650.

Now we have already noticed that the Establishment Rules of 1974
were promulgated by the Chogyal of Sikkim as its absolute monarch for
regulating the appointments to the Civil services of the State and they were D
undoubtedly in existence before Sikkim acquired the status of an associate
State by the 35th Amendment and a full-fledged State of the Indian Union
by the 36th Amendment. In view of the developments and political activity
that had preceded these constitutional changes to bring the people of
Sikkim within the main treat of a democratic polity, certain provisions in
the nature of transitory provisions had to be made. They .are to be found E
in Article 371F. This Article begins with a non obstante clause which, to
the extent relevant and contextually permissible, applies to all the clauses
of that Article and cannot be read as limited in its application only to those
clauses which run contrary to the provisions of the Constitution. The
Article is a special provision relating to the State of Sikkim. The Article F
begins with a non-obstante clause and goes on to add in clause (1) that
Parliament may, with a view to protecting the rights and interests of
different sections of the population of Sikkim make provision for the
number of seats in the Legislative Assembly of the State of Sikkim which
may be filled by candidates belonging to such sections, etc. This provision
was scrutinised by this Court in Poudyal's case to which we have referred G
earlier. By majority the constitutional validity of this provisions was uph.eld
by this Court in that case. For our purpose, however, clause (k) of Art\)::le
371F is relevant which we nave extracted earlier. That clause provides that
notwithstanding anything in the Constilution, all laws in force immediately
H
584 SUPREME COURT REPORTS f1994J 3 S.C.R.

A before the appoihted day in the territories comprised in the State of Sikkim
or any part thereof shall continue in force therein until amended or
repealed by a competent lcghilature or other competent authority. \)n il
plain reading of this provision it becomes clear that llll law which were in
force prior to 26th April, 1975 in the territeries now falling within the Stale
of Sikkim or any part thereof were intended to continue to be force until
B
altered or repealed. Although the expression 'all laws in force' has not been
defiiied the said expression must receive its ordinary, na·.ural and gram-
matical meaning. The l"tter part of the clause - 'until amended or repealed
by a competent legislature or other competent authority' - is indicative of
the fact that the said expression was not intended to be confined to only
c legislative enactments but also laws which could be altered or amended or
repealed by 'other competent authority' i.e. other than the legislature itself.
This supplies a clear indication that the said expression is wide enough to
include subordinate legislations, e.g. Rules, Regulations, Orders etc. The
expression 'existing law' is defined by Article 366(10) to include any rule,
D regulation, bye-law, etc., and we think the expression 'all laws in force'
means all existing laws. But quite apart from the definition in Article
366(10), on a plain reading of clause (k) in which this expression occurs,
it seems clear to us that the said expression' is wide enough to include the
Establishment Rules of 1974. If any authority is needed reference could be
made to the decision of this Court in Edward Mills Co. Ltd. Beawar and
E Others v. State of Ajmer & another, AIR (1955) S.C. 25 at 30- 31 = [1955] 1
SCR 735 wherein a similar expression used in Article 372 was construed.
There can, therefore, be no doubt that Establishment Rules of 1974 which
were in force in the territories comprised. in the State of Sikkim prior to
26th April, 1975 would stand covered by the expression 'all laws in force'
F used in clause (k) of Article 371F and would continue in force even after
the appointed date as existing law until amended or repealed. This meaning
given to the said expression is consistent with the definitions of 'existing
law' and 'law' employed in the Adaptation of Sikkim Laws (No. 1) Order,
1975.

G In the proviso to Rule 4(4) extracted earlier there is reference to
Sikkimese nationals and non-Sikkimese nationals. The said proviso posits
that non-Sikkimese nationals may be appointed only when suitably
qualified and expe.ricnced Sikkimese.nationals are not available and further
provisions for replacement of such non-Sikkimese nationals by Sikkimese
H Candidates as and when the latter become available. The High Court has
STATEOFSIKKIM v.S.P.SHARMAIAHMADI,.I.] 585

refused to construe the said proviso to mean local residents of Sikkim were A
to he preferred to non-residents of Sikkim. The High Court answers the
contentions thus :

"But even with the aid of these provisions, it is not possible to
construe the expression 11 Sikkirnese-nationals 11 as 'locals' or per-
manent residents of Sikkim, as one ca_n be a national of one countrY B
without being a resident in that country and may in fact be a
permanent resident of another country with his domicile, whether
11
of origin or of choice, in that country.

" I have already noted that the provisions of Rule 4(4) of the Sikkim
Government Establishment Rules, quoted hereinbcfore, provided
for pteferential treatment to Sikkimese- nationals in matters relat-
ing to employments of appointments under the then Government
of Sikkim and and that with the incorporation of Sikkim as a D
component State in the Union of India with effect from 26th April,
1975, Sikkimese-nationality having ceased to exist as a politico-
legal concept, the preference sought to be given by Rule 4(4) has
become inffective and unworkable."

With respect we find it difficult to accept this highly technical approach. E
In the first place since this was an existing law which waf. continued in
force, it would naturally contain expressions which were in vogue before
the appointed day. These expression had to be understood in the sense in
which they were defined in the Sikkim Subjects Regulations, 1961. Regula-
tion 3 defines Sikkim Subjects and Regulation 7 explains who shall not be F
Sikkim Subjects. Therefore, if these expressions 'Sikkimese nationals' and
'non-Sikkimese-nationals' used in the proviso to Rule 4(4) are read and
understood in the context of the provisions of the aforesaid regulations, the
difficulty expressed by the learned Judge in the High Court would appear
to be imaginary.
G
The High Court has then taken the view that since the Establishment
Rules of 1974 were the subject matter of Adaptation Orders issued by the
President of India, they ceased to be existing law within the meaning of
clause (k) of Article 371F and therefore they did not enjoy the protection
thrown by the non-obstante clause. It was further submitted that this was H
586 SUPREME COURT REPORTS [1994] 3 S.C.R.

A all the more so because the said Rules were modified under Article 309 of
the Constitution with effect from 26th April, 1975. The High Court's
approach in this behalf is two-fold (i) the non-obstante clause in Article
371F in relation to clause (k) has no efficacy as the said clause can quite
effectively operate, just like Article 372, without the aid of the non-obstallte
clause as there is nothing to show that it conflicts with any other provision
B
in the Constitution and (ii) its operation in relation to certain clauses like
(i) and G) would lead to an absurd situation. We are afraid the entire
approach of the learned judge is, with respect, wrong. In the first place in
relation to clause (k) the non-obstante clause seeks to extend protection to
all existing laws even if they may conflict with any of the provision of the
c Constitution and in the absence of such protection would be declared
u/tra-vires the Constitution. Since the law which were in force before the
appointed day had not to go through the test of satisfying the requirements
of the Constitution, the possibility of those laws being in conflict with the
provisions of the Constitution could not be ruled out and hence they had
D to be protected by the non-obstante clause. There is no question of clause
(k) itself being in conflict with any of the provisions of the Constitution but
there were every possibility of the laws in force immediately before the
appointed day being in conflict and they had to be protected from being
assailed to be unconstitutional. Secondly, Article 372(1) had a limited role
E to play. By Article 395, the Indian Independence Act, 1947, the Govern-
ment of India Act, 1935, and all related enactments amending or sup-
plementing the same, except the Abolition of Privy Council Jurisdiction
Act, 1949, came to be repealed. Notwithstanding their repeal, all the laws
in force in the territory of India immediately before the commencement of
the Constitution were continued in force therein, until altered or repealed
F or amended by a competent legislature or other competent authority,
subject of course to the other provisions of the Constitution, a limitation
which is not to be found in clause (k) of Article 371F. It is, therefore,
obvious that the scheme and scope of the two provisions is totally different,
in that, Article 371F extends a total protection to matters listed in clauses
G (a) to (p) thereof by the non-obstanle clause while the protection extended
by Article 372(1) was qualified by the word 'but subject to the other
provisions of this constitution', a phrase which is totally absent in the
scheme of the former provisions. So also the High Court missed the
efficacy of the non-obstante clause in relation to clauses (i) and GJ. The
H non-obslanle clause insofar as it concerns clause (i) is intended to protect
STATEOFSIKKIM v.S.P.SHARMA[AHMADl,J] 587

I' the Constitution of the High Court, the appointments of judges on the High A
Court, etc., from being assailed on the ground that they did not accord with
Chapter V of Part VI of the Constitution. Similar appears to be the
intendment of clause G) also with the difference that the protected courts
and authorities will henceforth exercise their respective functions, subject,
to the provisions of the Constitution. It is, therefore, obvious that the
learned judge in the High Court missed the real objective of qualifying all
B
the clauses of Article 371F with the omnibus - notwithstanding anything in
this Constitution.

The next question is whether the Establishment Rules of 1974 as
modified in 1980 under Article 309 of the Constitution can be regarded to· C
have come into force immediately before the appointed day, i.e. 26th April,
1975 to attract the provision of clause (k) of Article 371F? The High Court
answers the poser thus :

"Therefore, as the Sikhm Government Establishment Rules, as
they now stand after being adopted and promulgated by the D
Governor under the Proviso to Article 309, have been made
effective only from, and not immediately before, 26th April 1975
these Rules can not acquire any immunity agairist the provisions
of the Constitution, even assuming that any such immunity was
sought to be and could be given by Article 371F {k)." E

As observed earlier the said rules were in operation in the erstwhile State
of Sikkim immediately before the appointed days and were, therefore,
existing law. Did the Adaptation Orders issued after the appointed day on
16th May, 1975 and 13th September 1975 take the rules outside the scope
of clause {k) of Article 371F? In other words, did the said rules cease lo F
be existing law? What is the impact of the subsequent Notification dated
17th November, 1980 by which certain modifications were made in the said
rules in exercise of power under the proviso to Article 309 of the Constitu-
tion? Whether the said Rules have to pass muster of Articles 14/16 and, if
yes, do they? These arc some of the questions which "will have to be G
answered.

We have already indicated the politico-legal scenario which existed

..
._ - immediately before the Sikkimese people through their leaders desired to
a!'sociate themselves with India and the reasons which prevailed for intro-
ducing the 35th and 36th amendments to the Constitution oflndia ultimate- H
588 SUPREME COURT REPORTS f1994j 3 S.C.R.

A ly admilling the State of Sikkim as one of the states in the First schedule
to the Constitution. It also became necessary to make certain special
provisions with respect to this new State and hence Article 371F was
simultaneously introduced by the 36th Amendment. These special
provisions many of them transitory in nature had to be given immunity from
the other provisions of the Constitution and hence Article 371F began with
B a non-obstante clause. The President of India was a1so empowered by
clause ( o) of the said Article to do anything (including any adaptation or
modification of any other Article) which appears to him necessary for
removing any difficulty which may be experienced in giving effect to the
preceding provisions of the Article but the proviso stipulated that no such
c order shall be made after the expiry of two years from the appointed day.
After the Sikkim Assembly unanimously adopted a resolution on 10th
April, 1975 which took note of the prejudicial activities of the Chogyal and
made solemn declaration abolishing the institution of the Chogyal and
resolved that Sikkim should be a constituent unit of Indian enjoying a
D democratic and fully responsible government, that the constitutional chan-
ges were introduced and Article 371F was introduced to meet the special
circumstances and needs of the people of Sikkim. It is well settled by a
long line of decisions that constitutional provisions must be liberally con-
strued to the extent the language permits it and should not be interpreted
in a narrow and pedantic manner, more so in the case of transitory
E provisions. It would suffice to invite attention to the observations of this
Court in this behalf in Synthetics & Chemicals Ltd. Etc. v. State of UP. &
Ors. [1989] Supp. 1 S.C.R. 623 at 672-674 and India Cement Ltd. v. State of
Tamil Nadu Etc., IJ989] 1 Supp. S.C.R. 692 at 704.

F It may be noticed that even the laws which were prevailing in Indi'a
under the British rule were not expected to accord with the Constitution
of free India. That is why Article 13 provides that all laws in force in the
territory of India immediately before the commencement of the Constitu-
tion, insofar as they are not consistent with the provisions in Part Ill
thereof, shall to the extent of such inconsistency be void. After having so
G provided it was further provided by Article 35(b) that notwithstanding
anything in the Constitution, which would include Article 13, law in force
immediately before the commencement of the Constitution in the territory
, referred to in sub-clause (i) of
of India with respect to any of the matters
clause (a), which includes clause (3) of Article 16, shall, subject to the
H terms th~reof and to any adaptations and modifications made therein
STATEOFSIKKIM v.S.r.SHARMA[AHMADLJ.] 589

under Article 372, continue in force until altered or repealed or amended A
r
by parliament. Article 372 (2) provides that for the purpose of bringing the
provisions of any law in force into accord with the constitutional provisions,
the President may by order make such adaptations and modifications of
such law as may be necessary or expedient and specify the date from which
the same would be effective whereupon such law will be effective there-
B
from, subject to such adaptations and modifications. Article 372(3)( a)
makes it clear that thi' ,pecial power conferred on the President is tran-
sitory in nature and will not enure beyond three years from the commen-
cement of the Constitution. This is one group of article which has relation
to laws in existence in the territory of India immediately before the com-
l'1encement of the Constitution. We have referred to the scheme of this c
group of articles to understand the scheme of the special provisions relat-
ing to Sikkim.

From what we have said earlier it is crystal clear that certain political
developments of considerable significance to the People of Sikkim had D
preceded its merger into the Union of India. This merger was based on
certain solemn assurances given to the People of India. The constitutional
• provisions cannot be read as torn from the historical developments which
preceded the merger. The laws which were in force immediately before
merger were enacted at a time when Sikkim was under the Chogyal's rule E
and could not, therefore, be in accord with the constitutional mandates of
the free democratic republic. Therefore, to give effect to the political
commitments and assurances given to the People of Sikkim, special
provisions had to be made in respect of the new State of Sikkim by the
insertion of Article 371F in the Constitution. Just as in the case of Article
35(b), this provision also had to begin with a non-obstante clause to grant
F
temporary immunity from the other provision of _the Const!tution. It is were
not to be so, the laws in force in the erstwhile territory of Sikkim would
conflict with the provision of the Constitution and would be hit by Article
13. But at the same time it must be realised that the Article does not use
the phraseology of making the same subject to the provisions of the G
Constitution. It must also be borne in mind that Article 2 does not make
use of a non-obstante clause and, therefore) the terms and co'nditions
prescribed thereund~r must accord with the other constitutional require-
ments. Thus Article 371F occupies a special position to cope up with a
special situation with a special historical backdrop. H
590 SUPREME COURT REPORTS [1994] 3 S.C.R.

A Article 371.F, is as stated earlier, a special constitution provision with
respect to the State of Sikkim. The reason why it begins with a non-obstante
clause obviously is that the matters referred to in the various clauses
immediately following required a protective cover so that such matter are
not struck down as unconstitutional because they do not satisfy the con-
stitutional requirement. Unless such immunity was granted 'the laws in
B
force' would have had to meet the test of Article 13 of the Constitution.
This being the objective, existing laws or laws in force came to be protected
by clause (k) added to Article 371F. Th~ said laws in force in the State of
Sikkim were, therefore, protected, until ~mended or repealed, to ensure
smooth transition from the Chogyal's rule to the democratic rule under the
C Constitution. Inherent in clause (1) is the assumption that many of such
existing laws may be inconsistent with the Constitution and, therefore, the
President came to be conferred with a special power to make adaptations
and modifications with a view to making the said rule consistent with the
Constitution. Of course this power had to be exercised within two years
D from the appointed day. If any adaptation or modification is made in the
law in force prevailing prior to the appointed day, the law would apply
subject to such adaptation and modification. It is thus obvious that the
adaptation and modification made by the President in exercise of this
special power does not have the effect of the law ceasing to be a law in •
force within the meaning of clause (k) of Article 371F. Therefore, on the
E plain language of the said provision it is difficult to hold that the effect of
adaptation or modification is to take the law out of the purview of 'law in
force'.

The next question is whether the insertion of the introductory clause
F purporting to convey that the said rules are made undel Article 309 of the
Constitution with effect from 26th April, 1975 amounts to substitution of
the Establishment Rules of 1974 to deny them the immunity conferred by
clause (k) of Article 371F? We have extracted the introductory part earlier
which shows that the Establishment Rules were merely 'adopted' with
modification with effect from 26th April, 1975. Rule 4(4) remains as it was
G and the Rules continue to be effective from 1st April, 1974. As held by this
Court in the Mulki Rules case the question to ask is : has parliament
repealed or amended that said Rules which were continued in force by
virtue of the Constitution, Article 35(b) in that case and Article 371F (k)
in the present case. Effect must be given to the intendment of the said
H provision specially introduced in the Constitution to comply with the
STATEOFSIKKIM v.S.P.SHARMA[AHMADI,J.] 591

understanding on which Sikkim had agreed to merge with India. And since A
all law in force in the territory of erstwhile Sikkim immediately before the
appointed day could not be changed overnight, those existing laws had to
be continued, more so because transition had to be smooth and gradual so
that it does not give a sudden and severe jolt to the establishment. Besides,
provision as to residential requirement could always be made by virtue of
Article 16(3) of the Constitution. Therefore, if a provision in the Estab- B
lishment Rules appears to offend Article 16(2), since such a provision is
permissible by virtue of Article 16(3) and the Parliament permits its
continuance by a special provision, Article 371F(k), the said requirement
given preference to 'locals' cannot be struck doivn as unconstitutional and
any action based on the said provision would not be inconsistent with Part c
III of the Constitution. That being so we think that the line of reasoning
adopted by the learned Judge in the High Court is not sustainable.

For the foregoing reasons we are of opinion that the view taken by
the High Court is unsustainable. The appeals, therefore, succeed, the
judgment and order of the High Court are set aside and the Writ petitions D
filed in the High Court must stand dismissed. However, in the facts and
circumstances of the case, we make no order as to costs throughout.

P.R. Appeal allowed.