Holding

A cancellation of an extension of service order that has not yet become operative does not infringe natural‑justice requirements nor create a vested right, and estoppel does not apply.

Summary

Dr. Girish Bihari, an IPS officer, was due to retire on 31 March 1996. The Governor of Uttar Pradesh ordered, on 20 March 1996, an extension of his service for six months under Rule 16 of the All India Services (Death‑cum‑Retirement Benefits) Rules, 1958. On 23 March 1996, the Governor cancelled that extension order under Section 21 of the General Clauses Act after advice from the Election Commission. The respondent challenged the cancellation before the Central Administrative Tribunal, claiming that the extension created a vested right and that the cancellation without a hearing violated natural justice; he also pleaded estoppel. The Tribunal held that no vested right arose but observed a breach of natural‑justice principles. On appeal, the Supreme Court held that until the extension order became operative (1 April 1996) no vested right existed, so no hearing was required and estoppel did not apply. Consequently, the cancellation order was upheld and the Tribunal’s decision set aside.

Issues considered

Whether an order extending service, issued before the date of superannuation, creates a vested right before it becomes operative.
Whether the cancellation of such an extension order without granting a hearing violates the principles of natural justice (audi alteram partem).
Whether the doctrine of estoppel can be invoked by the respondent in the circumstances.
Whether the Governor’s cancellation order is valid under the applicable statutory provisions.

Legislation cited

All India Services (Death-cum-Retirement Benefits) Rules, 1958s. Rule 16
Constitution of Indias. Article 156(2), s. Article 311(2), s. Article 356
General Clauses Act, 1897s. Section 21
Indian Evidence Act, 1872s. Section 115

Subjects

service lawextension of servicevested rightnatural justiceaudi alteram partemestoppeladministrative lawCentral Administrative Tribunalcancellation order

Judgment

STATE OF U.P. AND ANR. A
v.
GIRISH BIHARI AND ORS.

FEBRUARY 14, 1997

[AM. AHMADI, CJ., SUJATA V. MANOHAR AND B
K. VENKATASWAMI, JJ:)

Service Law :

All India Service (Death-cum-Retirement Benefits) Rules, 1958, R. 16. C
Service-Extension of~efore superannuation-Cancellation of exten-
sion before it actually came into effect-Held : Such cancellation of extension,
not invalid.

Evidence Act, 1872 : Section 115 : D
Estoppel-Applicability of-Party pleading estoppel did not alter his
position-Held : Plea of estoppel, rejected.

Administrative law :

Natural justice-Audi alteram partem-Hearing-Gralit of-Order of
E
extension of servic~eyond superannuation-cancellation of extension
before in actually came into effect-Held : Retiring employee had no vested
right-Hence, it was not necessary to grant him hearing before cancellation of
extension order.
F
The respondent, a member of the Indian Police Service, was to retire
on superannuation. The Governor passed an order for extension of the
service of the respondent for six months from the date of his retirement
under Rule 16 of the All India Services (Death-cum-Retirement Benefits)
Rules, 1958. Subsequently, the Governor cancelled his earlier order of
extension before it actually came into effect. The respondent challenged the G
aforesaid order before the Central Administrative Tribunal on the
grounds that the order granting extension had created a vested right in
the respondent to continue for a period of six months; that the order of
cancellation of extension passed without an opportunity to the respondent
of being heard, was vitiated on account of violation of the principles of H
53
54 SUPREME COURT REPORTS (1997) 2 S.C.R.

A natural justice. The Tribunal allowed the petition of the respondent. Hence
this appeal.

On behalf of the respondent the principle of Estoppel was pleaded.

Allowing the appeal, this Court
B
HELD : 1.1. Till the order of extension of service could become
operative, on right under the order had vested in the incumbent. It was,
therefore, not necessary to grant him hearing before the extension order
was cancelled. The respondent did not ask for an extension. It was
C unilateral action on the part of the State/appellant. The respondent may
or may not have accepted the offer. Till the order come into force no vested
right could have arisen. If the order of extension did not create any right,
the cancellation order could not have withdrawn any such right. Hence,
the question of right to hearing did not arise and there is no violatio~ of
rules of natural justice. [58-F-G]
D
Sharwan Kumar !ha v. State of Bihar, [1991) Supp. 1 SCC 310 and
Scheduled Caste and Weaker Section Welfare Association v. State of Kar-
nataka, [1991) 2 sec 604, held inapplicable.

State of Maharashtra & Anr. v. Lok Shikshan Sansatha & Ors., [1971)
E 2 sec 410, cited. •·

1.2. There is no statutory estoppel in favour of the respondent. The
respondent did not plead that the he altered his position in any way on
account of the extension order and hence the subsequent order of cancel-
F lation could not have prejudiced the respondent in any way. The principle
of estoppel is not attracted in this case. [58-H, 59-A]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 795 of
1997.

G From the Judgment and Order dated 21.5.96 of the Central Ad-
ministrative Tribunal at Lucknow Bench in O.A. No. 162 of 1996. ·

Altaf Ahmed, Additional Solicitor General, H.N. Salve, M.C.
Dhingra_ and P.C. Verma for the Appellants.

H In-person for Respondent No. 1.
-~-

STATEv. GIRISHBIHARI [AHMADI, CJ.) 55

The Judgment of the Court was delivered by A
AHMADI, CJI. Leave granted.

The respondent Dr. Girish Bihari, a member of the Indian Police
Service, was to reach the age of Superannuation on 5th March, 1996 and
therefore was to retire from service with effect from the afternoon of B
31.3.1996 i.e. on the last date of the month in which he reached that age.
On 20th March, 1996, the Governor, State of Uttar Pradesh by an order
under Rule 16 of All India Services (Death-cum-Retirement benefits)
Rules, 1958 (hereinafter referred to as "the Rules") passed an order for
extension of the service of Dr. Girish Bihari for 6 months from the date of C
his retirement i.e. 31.3.1996. On 23rd March, 1996, the Governor in exer-
cise of powers under Section 21 of the General Clauses Act issued the
impugned order cancelling the earlier order dated 20th March, 1996 grant-
ing extension to the appellant.

The surrounding circumstances of the case are as under : D

. On 18th October, 1995, under a proclamation issued under Article
356 of the Constitution by the President, the President assumed to himself
all functions of the Government as well as the powers vested in or exer-
cisable by the Governor. Having assumed powers under Article 356, the E
President by a further notification authorised the Governor to exercise all
powers by himself on his behalf. On 19th March, 1996 the Election Com-
mission announced elections to the State Legislature and issued instruc-
tions kiiown as 'Model Guidelines for the Government'. On 20th March
1996, the Election Commission sent out messages to the Chief Secretaries F
about announcement of general elections to the House of People and
Legislative Assemblies inter alia mentioning therein that the standing in-
structions of the Commission including ban on transfers, etc., have come
into force. The Chief Electoral Officer was of the view that the order
retaining the respondent beyond the date of superannuation required the
prior consent of the Election Commission. The Election Commission G
directed that the order dated 20th March, 1996, granting extension to the
respondent be revoked as it was violative of the Model Code of Conduct
issued by the Commission. The Governor sought advice from the Advocate
General and thereafter by the impugned order cancelled the order dated
20th March, 1996. The respondent challenged the impugned· order before H
56 SUPREME COURT REPOR'VS [1997] 2 S.C.R.

A the Central Administrative Tribunal inter alia on the grounds that the
Governor instead of acting on his fair judgment acted under pre-emptory
direction of the Election Commission and therefore, the impugned order
was bad; that the order dated 20th March, 1996 had created a right to
continue for a period of 6 months and therefore the impugned order
B passed without an opportunity to the appellant of being heard was vitiated
on account of violation of the principles of natural justice. The petition was
defended by the appellant State of Uttar Pradesh on the ground that there
was no infirmity in the order as the Governor had used his own judgment
and discretion in a fair manner after obtaining constitutional advice under
Article 156(2) of the Constitution of India anci that the impugned order
C was to be operative with effect from 1.4.1996 and therefore till then the
order had not created any vested right of any kind in the respondent.

The Tribunal returned findings on all the substantial questions in
favour of the appellant and against the respondent. The Tribunal held that
D the letter 20th March, 1996 granting extension to the .respondent did not
create any vested right nor was the protection under Article 311(2) of the
Constitution of India available in the circumstances of the case as the order
of cancellation of extens~on was not passed by way of any disciplinary
action. The Tribunal further held that the advice and direction of the
E Election Commission were not without jurisdiction, nor was the order of
cancellation of extension based on extraneous considerations. The Tribunal
held that the impugned order dated 23rd March, 1996 was not arbitrary or
violative of Articles 14 and 16 of the Constitution. The Tribunal, however,
observed that the principles of natural justice had not been observed before
F passing the order inasmuch as the respondent was not given a hearing
before withdrawing the order of extension. The Tribunal observed that the

'
principles of natural justice implied : (i) the principles of audi alteram
partem; and (ii) justice should not only be done but must also manifestly
appear to be done. The Tribunal said :

G "It is well settled that an administrative decision which results in
adverse civil consequences, must follow the principles of natural
· justice. In the present case while it is true that any vested right did
not accrue to the applicant, before 1.4.1996, it cannot be denied
that the benefit which accrued to him by the order of extension
H dated 20.3.96 was withdrawn rather abruptly within a period of
STATE v. GIRISH BIHARI [AHMADI, CJ.] 57

three days on 23.3.96 without giving him a show cause or an A
opportunity for hearing. We therefore, are of the considered view
that there has been violation of principles of natural justice in the
present case."

The Tribunal referred to a few judgments on the aspect of the B
application of the principles of natural justice in the context of administra-
tive law. The State of Maharashtra and Another v. Lok Shikshan Sansatha
and Others, (1971) 2 SCC 410 was cited by the State. The two decisions
which are referred to by the Tribunal in support of its decision are Shrawan
Kumar !ha v. State of Bihar, [1991] Supp. 1 310 and Scheduled Caste and
Weaker Section Welfare Association v. State of Karnataka, [1991] 2 SCC 604. C
-- In Shrawan Kumar's case, 175 candidates were appointed as Assistant
Teachers but before they could join the Deputy Development Commis-
sioner cancelled the orders of appointment on the ground that the District
Superintendent of Education, Dhanbad, who issued the orders of appoint-
ment, had no authority to make the appointments. A Division Bench of this D
Court comprising Kuldip Singh and K. Ramaswamy, JJ. observed that the
candidates should have been given an opportunity of hearing before their
appointments were cancelled. The Court accordingly directed the Solicitor
General to ask the Secretary (Education), Government of Bihar to grant
an opportunity of hearing to the candidates and to give a finding as to
whether they were validly appointed as Assistant Teachers. The Court also E
ordered that if anyone had actually worked as a Teacher, he or she would

- be entitled to the salary for that period. It is interesting to note that this
Court while directing that a hearing be given to those appointed as Assis-
tant Teachers did not grant any relief in terms of actual appointment in
pursuance to the appointment letters. Nor did the Court order for any F
pecuniary benefits being given to those appellants pursuant to the appoint-
ment letters. Salary, etc., were ordered to be paid only in case anyone of
those candidates had actually joined and worked. The Tribunal, however
has gone much further by holding that the respondent would be deemed
to have continued in service after retirement in pursuance to the extension
order. · G

In Scheduled Caste and Weaker Section Welfare Association's case
(supra), the State of Karnataka had issued a notification in, respect of
certain area as the salum area, under Section 3 of the Karnataka Slum
(Improvement & Clearance) Act and subsequently after hearing objections H
58 SUPREME COURT REPORTS [1997] 2 S.C.R.

A declared the entire area as slum clearance area under Section 11 of the
same Act but later after about three years cancelled the earlier notification
and redeclared only a much smi/-ller area as slum area. The residents of
the area not covered by the last notification of slum area contended that
they had been deprived of the benefits of the Act in violation of the
principles of natural justice and Article 14 of the Constitution. One of the
B points which came up for consideration in the case was of the principles
of natural justice. The notifications under Section 3 and Section 11 of the
Karnataka Slum (Clearance & Improvement) Act which provided for
declaration of areas as slum areas and as slum clearance areas respectively,
affected the rights of the inhabitants of that area. This Court held that when
C any alteration was sought to be made in the original scheme, it became
incumbent upon the authorities to give an opportunity to the persons who
had been affected by the earlier order and were required to adopt a certain
course. of action. This case is clearly distinguishable on facts. The Tribunal
itself has held that the order of extension of service did not create any right
D and had been cancelled before the date the order came into operation.
Consequently, the respondent was not affected either by the order of
extension or by the order cancelling the extension. In contrast, in Scheduled
Caste & Weaker Sectio11 Welfare Associatio11's case (supra), the Court held
that the rights of the inhabitants of the concerned areas were affected by
declaration under Sections 3 and 11 as well as by any change in the ,
E declared policy.

In the face of the Tribunal's own findings that till the order of
extension of service could become operative, no right under the order had
vested in the incumbent, it is difficulN:o agree that thcre still was a necessity
--
F to·grant him hearing before the extension order was cancelled. The respon-
dent did not ask for an extension. It was a unilateral action on the part of
the State/appellant. The respondent may or may not have accepted the
offer. Till the order came into force, as correctly observed by the Tribunal,
no vested right could have arisen. If the order of extension did not create
any right, the cancellation order could not have withdrawn any such right.
G Hence, the question of right to hearing did not arise and we see no
violation of rules of natural justice.

Before this Court, the principle of estoppel was pleaded on behalf
of the respondent. Again there is no basis on which any such plea can be
H Liken. There is no statutory estoppel in favour of the respondent. The
STATE v. GIRISH BIHARI [AHMADI, CJ.] 59

respondent does not say that he altered his position in any way on account A
of the extension order dated 20th March, 1996 and hence the subsequent
order of 23.3.1996 could not have prejudiced him in any way. We do not
see how the principle of estoppel can be attracted to this case.

On the above premises, the judgment of the Tribunal has to be set
aside and the order dated 23rd March, 1996 must be upheld. The appeal B
is allowed but we make no order as to costs.

v.s.s. Appeal allowed.

L