Quashed

I a S Khakhu v. State of Gujarat

Gujarat HC9 Jan 2008SCA/24841/2007

Case brief

AI extract

What is this about?

This common judgment holds that the State Government's 2007 policy permitting private practice by in-service doctors and discontinuing Non-Practicing Allowance violates statutory rules and the Constitution. The court ruled the classification based on 15 years of service was unreasonable, finding no rational link between service length and the policy's objectives under Articles 14 and 16, and quash

What did the court decide?

Impugned Resolution dated 29.3.2007 is quashed and set aside; service conditions reverted to prior status.

I a S Khakhu Vs State of Gujarat — Service and Employment | Gujarat HC (2008)

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SCA/11170/2007

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JUDGMENT

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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

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For Approval and Signature:

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HONOURABLE MR.JUSTICE JAYANT PATEL

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1^{Whether Reporters of Local Papers may be allowed}

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to see the judgment ?

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2 To be referred to the Reporter or not ?

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3^{Whether their Lordships wish to see the fair copy} of the judgment ?

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Whether this case involves a substantial question

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of law as to the interpretation of the

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4 constitution of India, 1950 or any order made thereunder ?

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5^{Whether it is to be circulated to the civil judge} ?

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CHITRA M. PRAKASHKER & 35 - Petitioner(s) Versus

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STATE OF GUJARAT - Respondent(s)

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Appearance :

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MR SJ GAEKWADfor Petitioner(s) : 1 – 36.

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JUDGMENT

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MR KAMAL TRIVEDI, ADVOCATE GENERAL WITH MS SANGEETA VISHEN, AGP, for
Respondent(s) : 1,

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NOTICE SERVED BY DS for Respondent(s) : 1,

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CORAM : HONOURABLE MR.JUSTICE JAYANT PATEL

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Date : 09/01/2008

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COMMON ORAL JUDGMENT

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1. All in-service doctors, whose services are

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governed by various statutory Rules framed by the
Government in exercise of the power under Article

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309 of the Constitution, including that of

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Gujarat Civil Services (Conduct) Rules, 1971

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(hereinafter referred to as the “Conduct Rules”

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for the sake of convenience), Gujarat Civil

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Services (General Conditions of Services) Rules,

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2002 (hereinafter referred to as the “General

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Rules” for the sake of convenience), and Gujarat
CivilServices(Pension)Rules,2002

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((hereinafter referred to as the “Pension Rules”

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for the sake of convenience), have preferred all

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the petitions for challenging the policy of the

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State Government vide Resolution dated 29.3.2007

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for discontinuingNon-Practicing Allowance

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(hereinafter referred to as “NPA” for the sake of

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JUDGMENT

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convenience) and for permitting them for private
practice after office hours. As the policy of the
Government also provides for giving option to in-
service doctors, who have completed 15 years of
service for continuing with the NPA and/or for
permission for private practice and as such
options are not given to the petitioners, the
said policy of the State Government is also
challenged on the ground as the same being
discriminatory amongst in-service doctors, who
are similarly situated. The aforesaid appears to
be, in substance, the challenges to be considered
by this Court in the present group of petitions.
As the facts are more or less inter-connected and

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common and in any event, the challenges are
common, they are being considered by this common
judgement.

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2. With the consent of the learned Counsel appearing

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for both the sides, the contents and record of
the Civil Application No.5869 of 2007 preferred
by the State Government are treated as the stand
and the contentions of the State Government for
maintaining the policy, which is impugned in the

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JUDGMENT

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petitions. The relevant facts of the case for
appreciating the aforesaid challenge appear to be
as under.

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3. In the year 1965, the State Government vide

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Resolution dated 27.10.1965, with a view to

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attract adequately qualified medical persons to

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Government service and with a view to stop
private practice in respect of new entrant,
decided to upgrade the post, to give advance
increments to new-comers and also decided to give
allowance for the loss of private practice as per
the details given in the accompanying statement.

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The details of such allowances for loss of
private practice are not much relevant for the
purpose of deciding the present petitions, but
suffice it to state that a policy decision was
taken to introduce the payment of allowances for

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loss of private practice. In the same manner,

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such policy continued with the modification in
the quantum of the amount vide Resolution dated

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12.7.1970 of the State Government. The same
position continued further with the modification
for the rates and there was one additional

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JUDGMENT

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development in the payment of the allowances for
loss of private practice (popularly known as
“NPA”) and the same was that it was linked up
with the pay of the doctors concerned. The said
policy continued further with the additional
change that NPA was indirectly merged with the
basic pay in computing T.A., D.A., etc.

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4. In the year 1987, in the Rules framed by the
Government namely;Gujarat Civil Services
(Revision of Pay) Rules, 1987(hereinafter
referred to as the “Pay Rules of 1987” for the

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sake of convenience), the non-practising
allowance was given a statutory recognition for
the purpose of inclusion thereof in the revision

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of pay-scale and the consequential benefits

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thereof. The same continued further even in the
year 1998 when the Government framed the Rules
for revision of pay-scale namely; Gujarat Civil

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Services (Revision of Pay) Rules, 1998
(hereinafter referred to as the “Pay Rules of

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1998). It may be recorded that such entitlement
of NPA was also extended by the State Government
to the other medical services namely; ESI –

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Ayurved - Homeopathy Doctors etc., who were

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working in respective posts in the State
Government. The aforesaid position for payment
of NPA continued from 1965 to 2005, roughly for
about 40 years.

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5. In the year 2006, the State Government vide
Resolutiondated20.11.2006decidedto

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discontinue payment of NPA to all in-service

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doctors (irrespective of their length of service)

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from 1.12.2006 and it was also resolved to permit
such doctors for private practice after duty

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hours with the restrictions of not to utilize the
medicines, place of dispensary, etc., for their

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private practice, etc. It appears that various

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writ petitions were filed challenging the
aforesaid decision of the State Government for

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discontinuation of NPA and for permitting private

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practice by in-service doctors, including Special

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Civil Application No.24845 of 2006 and allied

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matters. In the said petition, this Court had
initially issued notice and the interim stay

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order was also granted. Therefore, the said
petitions were disposed of by this Court, since

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JUDGMENT

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the State Government, through the learned
Advocate General, had declared before the Court
to resolve the issue with deliberations and to
give opportunity of hearing to the Associations
of doctors concerned and it was also agreed that

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if required, the State Government shall
reconsider the matter and until the same, the
operation of the Government Resolution dated
20.1.2006 for giving effect from 1.12.2006 shall
remain suspended. Based on the aforesaid
declaration made before this Court, the State
Government vide Resolution dated 14.12.2006
suspended the implementation of the Resolution.
It appears that thereafter the State Government,

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after considering the representation made on
behalf of the Association of various Medical
Officers, passed another Resolution dated
29.3.2007 (impugned herein), whereby it has
continued with the policy of Non-payment of NPA
to all in-service doctors, but with the

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modification that if the doctor has completed 15
years or more years of service in the Government
Service, then he will have an option to opt for

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JUDGMENT

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NPA, or not to opt for NPA and for permission for

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private practice. It is under these
circumstances, all the petitioners have

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approached this Court by preferring the present
petitions.

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6. I have heard the learned Counsels appearing for

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the respective petitioners, and the concerned
respondents including Mr.Shelat, learned Sr.

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Counsel appearing with the Advocates on record
for the petitioners and Mr.Kamal Trivedi, learned
Advocate General with Ms.Sangeeta Vishen, learned

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AGP for the State Authorities in all the
petitions for final disposal.

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7. It was submitted on behalf of the petitioners
that the policy of the State Government to
discontinue with NPA is in contravention to the
statutory Rules inasmuch as NPA is treated as
part of the pay and discontinuation thereof is
not permitted by the Government Resolution, which

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is an executive instruction. It was also
submitted that such position has continued for
about 40 years coupled with the circumstances
that it has also been given statutory recognition

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JUDGMENT

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in the Rules framed by the State Government for

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Pay Rules of 1987 and 1998. Therefore, even if
the first contention of the petitioners cannot be
accepted that the executive instruction or the
policy of the Government would not prevail over
the statutory rules, it was alternatively
submitted that for discontinuing the policy,
which is in operation for about 40 years, there

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should be proper inspection and material before
the State Government to change such policy and
not only that, but all such details, even if they
are there, should be with overwhelming public
interest for nullifying the principles of
legitimate expectation. It is, therefore,

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submitted that the policy of the State Government
of discontinuing NPA is in contravention to the

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statutory rules, arbitrary, and violative of

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Article 14 of the Constitution of India. It was

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also alternatively submitted that even if such

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policy is to stand the test of Article 14 of the

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Constitution, if this Court is not inclined to
accept the contention of the petitioners that the

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policy is bad in law, then also there is

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absolutely no justification on the part of the
State Government to create a class amongst a
homogeneous class of in-service doctors on the
ground of length of service of 15 years and
thereby not to give option to the petitioners,
who have not completed 15 years of service. It
was submitted that the ground stated for
classification has no object to be achieved by

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the change of the policy and, therefore, the same
is arbitrary, discriminatory and violative of the
Constitution of India. Therefore, in any case,

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if the policy is not found as illegal by this
Court, the part of the policy for creating two
classes may be declared as illegal and the
petitioners be given the same treatment for
option of NPA and/or private practice at par with

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the other doctors, who have completed 15 years of
service. The learned Counsel appearing for the
petitioners have relied upon various decisions of
the Apex Court for the scope of judicial review

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for examining the legality and validity of the
policy of the State Government or for examining
the classification made by the Government, which

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may meet with the test of Articles 14 and 16 of
the Constitution of India.

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8. Whereas, on behalf of the State Government, the

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learned Advocate General contended that NPA is
based on condition of not permitting private
practice. It is one type of allowance and cannot

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be termed at par with the basic pay. He submitted
that if the State is permitting private practice
by the present policy, the in-service doctors,

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cannot assert as of right that the NPA must be
paid to them. He submitted that it was
experienced that in the rural area, services of
doctors are not available and the Government was

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finding difficulty in getting services of doctors

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with super-speciality and, therefore, based on
the recommendation of the Central Government the

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State Government has come out with the change of

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policy. It was submitted that the Government has

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right to change the policy by changing the

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service condition and the policy if made to meet
with the change of circumstances, the same cannot

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be termed as arbitrary. It was also submitted

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that this Court, in exercise of judicial review,

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would not sit in appeal over the wisdom of the
State Government to change any policy, unless the

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policy is in contravention to law or

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Constitution. It was submitted that there is a

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rational behind the change in the policy.
Further, there is also a rational in making the
classification of the in-service doctors on the
basis of completion of 15 years of service and

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the said rational is that the pension would be
affected if the NPA is discontinued for all of
them. Further, they are generally in the
administrative field and they have lost contact
for private practice. It was submitted that the
Government has the power to classify the group in

¶175

the present circumstances, based on the length of
service and such classification is with an object

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to achieve service. Therefore, it was submitted

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that the policy cannot be said as illegal or
arbitrary or unconstitutional. The learned

¶178

Advocate General has also relied upon various
decisions of the Apex Court for showing the scope

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of judicial review in the matter where the Court

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has to examine the policy framed by the

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JUDGMENT

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Government.

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9. In order to consider the scope of judicial

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review, it would be worthwhile to refer the
decision of the Apex Court in case of Balco

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Employees' Union (Regd.) vs. Union of India &
Ors, reported in 2002(2) SCC, 333. In the said
decision, the Apex Court, after taking into
consideration its various earlier decisions,
while examining the validity of the decision of

¶188

the Government of India had decided to make
disinvestment by way of a policy in its one of
the undertakings namely; Balco, inter alia,
observed at para 46 as under:-

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“46.... it is neither within the
domain of the courts nor the scope of the
judicial review to embark upon an inquiry
as to whether a particular public policy is
wise or whether better public policy can be
evolved. Nor are our courts inclined to
strike down a policy at the behest of a
petitioner merely because it has been urged
that a different policy would have been
fairer or wiser or more scientific or more
logical.

¶190

10.In the very decision, the Apex Court, after

¶191

taking into consideration its earlier decisions,
has concluded at paragraphs 92 and 93 as under:-

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JUDGMENT

¶195

“92.In a democracy, it is the
prerogative of each elected Government to
follow its own policy. Often a change in
Government may result in the shift in focus
or change in economic policies. Any such
change may result in adversely affecting
somevestedinterests.Unlessany
illegality is committed in the execution of
the policy or the same is contrary to law
or mala fide, a decision bringing about
change cannot per se be interfered with by
the Court.

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93.Wisdomandadvisabilityof
economic policies are ordinarily not
amenable to judicial review unless it can
be demonstrated that the policy is contrary
to any statutory provision or the
Constitution.”

¶197

11.It is by now well settled for the scope of
judicial review by this Court for examining the
policy of the State Government and it can broadly
be classified as under:-

¶198

(a)The policy will be struck down by the
Court, if the same is in contravention to
any Article of the Constitution.

¶199

(b)The policy would be struck down by the
Court, if the same is in contravention to
any statutory provisions.

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JUDGMENT

¶203

(c)Change in policy by executive instruction
is not permitted, if the basic policy is
statutorily recognized.

¶204

(d)The Court would not sit in appeal over the
wisdom of the Government in formulating or
changing the policy from time to time.

¶205

12.The examination of the policy shows that for all

¶206

doctors, who are government servants, their NPA

¶207

is to be discontinued and private medical
practice is permitted other than the specified

¶208

duty hours of 9 O'clock morning to 5.30 p.m. in
the evening, inclusive of recess or other shift,

¶209

which may be assigned to such doctors. The

¶210

necessary consequences of the aforesaid policy
would be that such doctors shall be accountable

¶211

during the period of private practice for their
work only during the period for which the duty is

¶212

assigned to them and for the remaining period
they would be entitled for their private medical

¶213

practice and consequently would not be
accountable. Further, as private medical practice
is permitted they would be entitled to profess in

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JUDGMENT

¶217

the field of medicine and to earn remuneration
during the said period.

¶218

13.It is an admitted position that all the in-
service doctors, including the petitioners herein
are governed by General Rules of 2002. Rule 34
of such Rules reads as under:-

¶219

“ 34. Whole time of a Government employee to be at the disposal of Government: Unless in any case it be otherwise distinctly provided, the whole time of a Government employee is at the disposal of Government and he may be employed in any manner required by the proper authority, without a claim for additional remuneration, whether the services required of him are such as would ordinarily be remunerated from the Consolidated Fund of India or of a State or from the funds of a body incorporated or not, which is wholly or substantially owned or controlled by the Government.”

¶220

14.Therefore, as per the aforesaid Rules, unless, in

¶221

any case, it be otherwise distinctly provided,
the Government employees for whole time, shall be
at the disposal of the Government. Whole time
would mean 24 hours and would not mean for only
duty hours, for which the work is assigned to
such Government servants. Further, as per the
language of Rule 34, if any relaxation is to be
permitted, it has to be as per the express

¶222

SCA/11170/2007

¶223

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¶224

JUDGMENT

¶225

language of any other provisions of the Rules.

¶226

It is not the case of the State Government that
General Rules, 2002 are amended and thereafter

¶227

the policy decision is taken, whereas it is the

¶228

case of the State Government that after the
policy, the Rules may be amended. Therefore, by
virtue of Rule 34 when in-service doctors as per
the statutory rules are at the disposal of the

¶229

State Government for the whole time (24 hours),
the policy of the State Government for permitting
private medical practice after the duty hours

¶230

would not only run counter to the express
language of Rule 34, more particularly when there
is no statutory exercise for relaxation by the
State Government, but would also result into
lowering down the accountability of such
government servant, only for a period during
which, he is expect to work in the dispensary as
against whole time at the disposal of the
Government. It may be recorded that had it been
a case where the Government came out with the new

¶231

policy of new doctors, who are to be taken in
service in a separate cadre, who are governed by

¶232

SCA/11170/2007

¶233

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¶234

JUDGMENT

¶235

separate Rules, the matter would have been
different, but in the present case, the policy is
changed for permitting private practice during
the period other than the duty hours assigned as

¶236

against the express Rules for whole time
government employee at the disposal of the
Government. To say in other words, the services
of such doctors are available for 24 hours at the

¶237

disposal of the government, as per Rule 34,
whereas by the present policy, it is restricted
to only duty hours assigned to such doctors, if

¶238

not 1/3rd, but would be less than 1/2nd to the
extent of not only restricting the services of
such doctors, but would also result into lowering
down the accountability of such doctors.

¶239

15.Hence, the impugned policy of the Government for

¶240

permitting private practice during the period of
other than duty hours can be said contrary to the
express language of Rule 34 of the General Rules

¶241

and can also be said as reducing the
accountability of all in-service doctors, who are
governed by Rule 34 of the General Rules.

¶242

16.The Conduct Rules, inter alia, provides for

¶243

SCA/11170/2007

¶244

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¶245

JUDGMENT

¶246

various Code of Conduct to be observed by
Government Servants while on duty. Rule 15 of

¶247

the Conduct Rules reads as under:-

¶248

“15. Private trade or employment:-

¶249

(1)subject to the provisions of sub-rule (2), no Government servant shall, except with the previous sanction of the Government-

¶250

(a)engage directly or indirectly in
any trade or business, or

¶251

(b)negotiate for, or undertake, any
other employment, or

¶252

(c) hold an elective office, canvass for a candidate or candidates for an elective office, in any body whether incorporated or not, or

¶253

(d) canvass in support of any business of insurance agency, commission agency etc. owned or managed by any member of his family, or

¶254

(e) take part except in the discharge of his official duties, in the registration, promotion or management of any bank or othe company registered, or required to be registered, under the Companies Act, 1956 (1 of 1959) or any other law for the time being in force or of any co-operative society for commercial purposes

¶255

(2)A Government servant may, without the previous sanction of the Government,-

¶256

(a)undertake honorary work of a social

¶257

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¶258

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¶259

JUDGMENT

¶260

or charitable nature, or

¶261

(b)undertake honorary work of a social or charitable nature, or

¶262

(c)participate in sports activities as an ameteur, or

¶263

(d)take part in the registration,
promotionormanagement(not
involving the holding of an elective
office) of a literacy, scientific or
charitable society or of a club or
similar organization, the aims or
objects of which relate to promotion
of sports, cultural or creation
activities registered under the
Societies Registration Act, 1860 (21
of 1860) or any other law for the
time being in force, or

¶264

(e)take part in the registration,
promotionormanagement(act
involving the holding of elective
office) of a co-operative society
substantially for the benefit of the
Government servants registered under
the Gujarat Co-operative Societies
Act, 1961 (Guj.X of 1962) or any
other Law for the time being in
force:

¶265

Provided that-

¶266

(i)He shall discontinue taking part in such activities if so directed by the Government;

¶267

(ii)in a case falling under clause (d) or clause (e) of this sub-rule, his official duties shall not suffer thereby and he shall, within a period of one month of his taking part in such activity, report to the Government giving details of the nature of his participation

¶268

SCA/11170/2007

¶269

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¶270

JUDGMENT

¶271

(iii)every Government servant shall report to the Government if any member of his family is engaged in a trade or business or owns or manages an insurance agency or commission agency.

¶272

(iv)Unless otherwise provided by general of special of the Government, no Government servant shall accept any fee for any work done by him for any private or public body or any private person without the sanction of the prescribed authority.”

¶273

17.The aforesaid Rule expressly prohibits private
trade or employment by the Government servant,
except with the previous sanction of the State
Government. The Conduct Rules are for not only
maintaining the discipline of the Government
Servants, but are for observing the excellent
Code of Conduct by the Government Servants. It

¶274

may be that in a given case, in view of the
peculiar facts and circumstances, the Government
may grant sanction to the Government Servants,
but such relaxation, cannot be read as enabling
the Government to permit trade and employment by
all Government Servants working in a particular
branch of department. If private trade and
employment are generally permitted amongst
Government Servants, it would not only result

¶275

SCA/11170/2007

¶276

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¶277

JUDGMENT

¶278

into lowering down the accountability of the

¶279

duty, which is assigned to such Government
Servants, but may also result into permitting
conduct, which otherwise if not observed, would
result into misconduct and may attract other
disciplinary action against such Government
Servants. Therefore, such powers of grant of
sanction under Rule 15 is to be read only in

¶280

exceptional circumstances and in individual
cases, where such engagement of the Government
servants does not come in conflict with the duty

¶281

assigned to the said Government Servants. Since
it is not the case of the State Government that
separate sanction is to be granted to each doctor

¶282

for permitting private practice in exercise of

¶283

power under Rule 15 of the Conduct rules, no

¶284

further discussion may be required, but it
deserves to be observed that with a view to not

¶285

only maintain the accountability, but to maintain

¶286

the efficiency, while granting permission, the

¶287

relevant circumstances may be that the engagement
of such Government Servants does not come in
conflict with the duty to be discharged by such

¶288

SCA/11170/2007

¶289

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¶290

JUDGMENT

¶291

Government Servants. There would hardly be any
difference between discharging duty in dispensary
and hospital and the doctor discharging duty
outside the hospital while professing as medical

¶292

professional, except on the aspects of
remuneration. Had it been a case where the
Government came out with the new policy of taking
services of the doctors, who are governed by

¶293

separate cadre and separate Rules, the matter may
stand on different footing. Further, when it is
an admitted position that all in-service doctors
are governed by the Conduct Rules, such change of
policy for permitting private practice may run
counter to language and spirit of Rule 15 of
Conduct Rules. It may also be resulted into
lowering down the accountability and efficiency
of such Government Servants.

¶294

18.It is an admitted position that whenever the

¶295

pension of in-service doctors is to be fixed, NPA
is to be considered for the purpose of fixation
of pension as per the Pension Rules. Even in the
impugned policy of the State Government, the
distinction is made for creating a separate class

¶296

SCA/11170/2007

¶297

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¶298

JUDGMENT

¶299

of the in-service doctors, who have completed 15
years or more service, on the ground that if NPA
is discontinued of such doctors who have
completed 15 years of service, it may result into
adversely affecting their pension and other
retiral benefits. Therefore, if NPA is to be
considered for fixation of pension as per the
Pension Rules, discontinuation or abolition of

¶300

NPA would run counter to statutory Rules for
fixation of pension. As observed earlier, had it
been a case where the State Government has come
out with new policy of recruiting new doctors by
separate cadre and by separate conditions or
Rules, it may stand on a different footing, but
in the present case, when it is an admitted
position that discontinuation of NPA would have
direct repercussion on the on the fixation of
pension of all in-service doctors, such change in
policy would contravene the statutory provisions

¶301

of Rules for fixation of pension of such
Government Servants.

¶302

19.Apart from the above, various recruitment rules
expressly provide ban of private practice and

¶303

SCA/11170/2007

¶304

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¶305

JUDGMENT

¶306

they are as under:-

¶307

(a)The Physician Class-I Employees' State

¶308

Insurance Scheme Recruitment Rules, 1983, inter
alia, provides for Rule 8, which reads as

¶309

under:-

¶310

“The selected candidate shall be a
full-time Government Servant and
shall not undertake any private
practice of any kind.”

¶311

(b)Medical Officers (Gujarat Medical Service)
Class-II Recruitment Rules, 1977, inter alia,
provides Rule 7 as under:-

¶312

“The selected candidate shall be a
full-time Government Servant and shall
be debarred from private practice of
any kind”.

¶313

(c)The District Family Planning Medical Officers'

¶314

Recruitment Rules, 1967, inter alia, provides
for Rule 8, which reads as under:-

¶315

“Appointment will be full-time and no
private practice will be allowed.”

¶316

(d)The Gujarat Insurance Medical Officers –

¶317

Class-II(Alopathy)Employees'State

¶318

Insurance Scheme Recruitment Rules, 1981,

¶319

inter alia, provides for Rule 8, which reads
as under:-

¶320

SCA/11170/2007

¶321

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¶322

JUDGMENT

¶323

“The selected candidate shall not
undertake private practice.”

¶324

20.It is an admitted position that there is no

¶325

amendment made prior to the policy in the

¶326

aforesaid recruitment rules deleting the
aforesaid prohibition against private practice.

¶327

All petitioners have entered service based on the

¶328

aforesaid recruitment rules since they are all
those who have not completed 15 years period in

¶329

service. The stand of the State Government is
that the recruitment rules shall be amended after

¶330

getting concurrence of Gujarat Public Service
Commission. The fact remains that rules are
uptil now not amended and even if amended, may be

¶331

for prospective effect. Therefore, the policy
runs counter to aforesaid existing recruitment
rules.

¶332

21.In view of the above, the policy of the State

¶333

Government of permitting private practice can be
said as in contravention to Rule 34 of the

¶334

General Rules, Rule 15 of the Conduct Rules,
Pension Rules and the aforesaid Recruitment
Rules.

¶335

SCA/11170/2007

¶336

32/49

¶337

JUDGMENT

¶338

22.The ground of challenge for discrimination within

¶339

the policy framed by the Government deserves
consideration.

¶340

23.Before the aforesaid aspect is examined further,

¶341

it would be worthwhile to extract certain
observations made by the Apex Court in the case

¶342

of Rameshwar Prasad & Ors. V. Union of India and

¶343

Anr. reported at JT 2006(1) SC 457, wherein the
Apex Court had an occasion to examine the action
or dissolution of the Legislative Assembly of
State of Bihar. In the said decision, the Apex
Court (speaking through Mr. Justice Arijit
Pasayat) observed at para 239 to 242 as under:

¶344

“239. A person entrusted with discretion
must, so to speak, direct himself properly
in law. He must call his attention to
matters which he is bound to consider. He
must exclude from his consideration matters
which are irrelevant to what he has to
consider. If he does not obey those rules
he may truly be said to be acting
unreasonably. Similarly, there may be
something so absurd that no sensible person
person could ever dream that it may law
within the powers of the authority.

¶345

240. It is an unwritten rule of the law,
constitutional and administrative, that
whenever a decision making function is
entrusted to the subjective satisfaction of

¶346

SCA/11170/2007

¶347

33/49

¶348

JUDGMENT

¶349

a statutory functionary, there is an
implicit obligation to the apply his mind
to pertinent and proximate matters only,
eschewing the irrelevant and the remote.
(See, Smt, Shalini Soni and Ors. Vs. Union
of India & Ors.)“

¶350

241. The Wednesbury principle is often
misunderstoodtomeanthatany
administrative decision which is regarded
by the court to be unreasonable must be
struck down. The correct understanding of
the Wednesbury principle is that a decision
will be said to be unreasonable in the
Wednesbury sense if(i) it is based on
wholly irrelevant material or wholly
irrelevant consideration, (ii) it has
ignored a very relevant material which it
should have taken into consideration,
or(iii) it is so absurd that no sensible
person could ever have reached to it.

¶351

242. As observed by Lord Diplock in CCSU's
case (supra) a decision will be said to
suffer from Wednesbury unreasonableness if
it is “so outrageous in its defiance of
logic or of accepted moral standards that
no sensible person who had applied his mind
to the question to be decided could have
arrived at it”

¶352

24.It is an admitted position that all in-service

¶353

Doctors are governed by the very set of Rules and
statutory provisions including that of the
respective recruitment rules, relevant rules
providing for condition of service, pay rules,
general rules and conduct rules, etc.

¶354

SCA/11170/2007

¶355

34/49

¶356

JUDGMENT

¶357

25.Article 16 of the Constitution provides for equal

¶358

treatment by the State in the matter of public
employment. Similarly, Article 14 of the

¶359

Constitution provides for equality before law to
all concerned. However, a separate treatment by
a reasonable classification is not prohibited
under Article 14 of the Constitution. In the
case of Deepak Sibbal Vs. Punjab University and
Ors. reported at 1989 (2) SCC 145, the Apex
Court had an occasion to consider the
classification made for admission to the evening
classes of three year LLB degree course. The
Rule provided for admission of regular employees
of Government/Semi-Government institution and did

¶360

not provide for admission for private/public
establishment. The basis of the classification

¶361

was the possibility of production of bogus
certificates of employment from private employers
imparting legal education to the employees of the
Government in public interest, continuity of
service of three years period and elimination of
the wastage of seats. The Apex Court in the said
decision inter alia observed at para 9 as under:

¶362

SCA/11170/2007

¶363

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¶364

JUDGMENT

¶365

“It is by now well settled that Article 14
forbids class legislation, but does not
forbid reasonable classification. Whether a
classificationisapermissible
classification under Article 14 or not, two
conditions must be satisfied, namely, (1)
that the classification must be founded on
anintelligibledifferentiawhich
distinguishes persons or things that are
grouped together from others left out of the
group, and (2) that the differentia must
have a rational nexus to the object sought
to be achieved by the statute in question.”

¶366

26.In the case of MP Singh & Ors. Vs. Union of

¶367

India & Ors., reported at AIR 1987 SC 485, while
considering the question of classification of the

¶368

officers in two groups, i.e. direct recruit and
officers taken from various State cadre, for
paying the special pay, it was inter alia
observed by the Apex Court at para 5 as under:

¶369

“It is well settled by several decisions of
this Court that in order to pass the test of
permissible classification of persons
belonging to the same class into groups for
the purpose of differential treatment two
conditions must be fulfilled, namely, that
the classification must be founded on an
intelligible differentia which distinguishes
persons who are grouped together from others
left out of the group and that differential
must have rational relation to the object
sought to be achieved by the law which
brings about discrimination between the two
groups.”

¶370

SCA/11170/2007

¶371

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¶372

JUDGMENT

¶373

27.Ultimately, it was found by the Apex Court that

¶374

the classification is not meeting with the
condition of Articles 14 and 16 of the
Constitution since it does not bear any rational
relation to the object of the classification.

¶375

28.It is true that in the present case, there is no

¶376

legislation or statute made for creation of two
classes. However, the impugned policy of the
State Government does provide for creation of two
classes amongst all in-service Doctors; one being

¶377

for those who have completed 15 years and more
service in the Government and the another being
for those who have not completed 15 years of
service in the Government.

¶378

29.Therefore, two things will be required to be

¶379

examined for testing the policy of the Government
creating a separate classification of the
employees who are petitioners herein, viz. who

¶380

have not completed 15 years service and such test

¶381

would be; (1) whether such classification is
reasonable and the (2) whether, it has any
intelligible differentia to achieve the objects

¶382

SCA/11170/2007

¶383

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¶384

JUDGMENT

¶385

of such policy.

¶386

30.It deserves to be recorded that all in-service

¶387

Doctors irrespective of their length of service
at the time of entry in service of the Government

¶388

must have opted for a particular volition of

¶389

their life. A person completing medical
education, if is interested in treating the
patients, may opt for either opening his own
dispensary, clinic or a hospital, as the case may

¶390

be. But, due to the financial constraint or
otherwise, he may opt for joining Government
dispensary, clinic, hospital, etc. One might also
opt for joining Government clinic, dispensary,

¶391

hospital, etc. with a view to serve the needy
class with a limited reasonable remuneration. If

¶392

a Doctor who has completed study is desirous to
advocate himself in the field of education, he
might join the service in the field of academic

¶393

that of tutor, lecturer, professor, reader, etc.

¶394

If one is desirous to render service to the

¶395

patients belonging to the labour class or

¶396

downward class of the society, he might also join
the field of medical service in a manner, which

¶397

SCA/11170/2007

¶398

38/49

¶399

JUDGMENT

¶400

might concentrate service on a particular class
of society like ESI, etc. At the time when one
has joined the service, he might legitimately
accept a remuneration to be received by him

¶401

coupled with the revision from time to time,
based on the position prevailing at the time of
entry in service. Such legitimate expectation
would also continue for the revision of the pay-

¶402

scale and the retiral benefits and also other
conditions of service. Though strictly, the
conditions of service may not be asserted as of

¶403

right unless given statutory recognition, the
Government servant would have the legitimate
expectation of preservation of conditions of
service so long as he continues to discharge his
duty honestly and efficiently and in accordance

¶404

with law. Such may fall in the category of
principles of legitimate expectations. If the
State is to act fairly, the doctrine based on the
principles of legitimate expectation should be

¶405

allowed to operate. The reference may be made to
the decision of the Apex Court in the case of

¶406

Confederation of Ex-Servicemen Association Vs.

¶407

SCA/11170/2007

¶408

39/49

¶409

JUDGMENT

¶410

Union of India reported at 2006 SC 2945 and more

¶411

particularly the observations made at paras 34 &
35:

¶412

“34.The expression 'legitimate expectation'
appears to have been originated by Lord Denning,
M.R. in the leading decision of Schmidt v.
Secretary of State, [(1969) 1 All ER:(1969) 2
WLR 337: (1969) 2 Ch D 149]. In Attorney
General of Hong Kong V. Ng Yeun Shiu, [(1983) 2
All ER 346: (1983) 2 AC 629], Lord Fraser
referring to Schmidt sated:

¶413

“The expectations may be based on some
statement or undertaking by, or on behalf
of, the public authority which has the duty
of making the decision, if the authority
has, through its officers, acted in a way
that would make it unfair or inconsistent
with good administration for him to be
denied such an inquiry. (Emphasis supplied)

¶414

35.In such cases, therefore, the Court may
not insist an administrative authority to
act judicially but may still insist it to
act fairly. The doctrine is based on the
principle that good administration demands
observance of reasonableness and where it
has adopted a particular practice for a long
time even in absence of a provision of law,
it should adhere to such practice without
depriving its citizens of the benefit
enjoyed or privilege exercised”

¶415

31.However, thereby, it cannot be said that the

¶416

State cannot alter the conditions of service, if

¶417

in the given facts and circumstances, it is so
warranted either for overwhelming public interest

¶418

SCA/11170/2007

¶419

40/49

¶420

JUDGMENT

¶421

or for gearing up the efficiency and increasing

¶422

the accountability in the field of employment in
the Government. Nothing can be considered and
treated as static which leaves no room for
advancement or for achieving the public interest
or for raising the efficiency and increasing the
accountability. Therefore, if the policy of the
Government for prohibiting the private practice

¶423

of the in-service Doctors have continued for
about 45 years, and if in the matter of payment
of NPA, all in-service Doctors are given the same
treatment subject to the variation of the rights
and scale as per the relevant rules and policy,
the petitioners who are in-service Doctors, but

¶424

not completed 15 years of service, can
legitimately expect the same treatment as are
being given to all other in-service Doctors who
have completed 15 years of service.

¶425

32.As observed earlier, the doctrine of legitimate

¶426

expectation can be invoked only in ordinary and
normal circumstances, but such doctrine cannot be

¶427

invoked if the Government has made departure
therefrom in view of the overwhelming public

¶428

SCA/11170/2007

¶429

41/49

¶430

JUDGMENT

¶431

interest.

¶432

33.If the object of the policy are considered as is

¶433

apparent from the impugned resolution, it is
mentioned that out of the experience, it is
observed by the State Government that if the
eligible medical graduates/post graduates or

¶434

super specialties are permitted private practice,
their services will be available in the field of
medical to the State Government. The same was

¶435

the object as mentioned in the resolution dated
20.11.2006 when the policy was introduced for the
first time by the said resolution. In the very
resolution of 20.11.2006, it is also mentioned
that the services of in-service Doctors can be
made available to the citizens of the State and

¶436

more particularly the citizens staying in the
rural and distantly located border area.
Therefore, two objects are the basis for
introducing the policy; one is for making the
services of the Doctors with specialty available

¶437

in the Government hospital by permitting them

¶438

private practice and the another is for making
their services available to the citizens staying

¶439

SCA/11170/2007

¶440

42/49

¶441

JUDGMENT

¶442

within the State and more particularly in the
rural area. If the classification made by the
Government of two groups on the ground of length
of service is considered, it has no nexus with

¶443

the aforesaid objects to be achieved by the
policy. No data is on record to show that
Doctors having less than 15 years of service are
only working in the rural area. The first object

¶444

if considered, is to encourage new Doctors to
join the service by permitting them to private
practise so as to enable the Government to have
their services in the health administration. Such
object is directly related to new Doctors whose
services are to be made available and it would

¶445

not apply to the Doctors who are already in
service and whose services are already made
available to the Government. Therefore, subject
object cannot be connected with all in-service
Doctors who are in service or in any case with

¶446

their length of service, may be 15 years or
otherwise. The second object for making the
medical facilities available to the citizens in

¶447

the rural area by permitting private practise, if

¶448

SCA/11170/2007

¶449

43/49

¶450

JUDGMENT

¶451

considered, there has to be material before the

¶452

State Government about a particular number of
Doctors who are working in the rural area and not
completed 15 years of service. Neither such

¶453

datas are available on record showing that
Doctors who have not completed 15 years of
service are more working in the rural area where
the medical facilities are required nor there is

¶454

any study undertaken for such purpose. The
medical services being rendered by the State is
through out the State and the services are

¶455

transferable throughout the State. If the
administration requires, the posting of any
Doctor can be made at the place where the post

¶456

is available, may be for the urban area or may be

¶457

in the rural area. Therefore, when the clinics,
dispensaries and the hospitals of the State are
located throughout the State, it would not be
possible to consider that only those Doctors who

¶458

have not completed 15 years of services are

¶459

posted in the rural area or interior distant area
and those who have not completed 15 years of
services are posted in the urban area. Further

¶460

SCA/11170/2007

¶461

JUDGMENT

¶462

44/49

¶463

on the contrary, it would be appropriate to
consider that irrespective of the length of
service of the Doctors, in-service Doctors are
posted as per the requirement by the
administration irrespective of the urban area or
rural area. Therefore, under these circumstances,

¶464

it cannot be said that creation of the class
based on non-completion of 15 years of service by

¶465

the Government under the policy has any nexus to
second object to be achieved.

¶466

34.In view of the aforesaid, it can be said that though the Government may have power to alter the service conditions of the petitioners who are inservice Doctors not completed 15 years of service

¶467

by depriving them from the principles of
legitimate expectation, in view of the public
interest for the object of the policy, such
classification has no intelligible differentia
for achieving the object of the policy.

¶468

35.Even on the aspects of reasonable classification of the petitioners on the basis of their length of services of less than 15 years, if the matter

¶469

SCA/11170/2007

¶470

45/49

¶471

JUDGMENT

¶472

is considered and examined, it appears that the
rationale mentioned in the Government Resolution
is that in-service Doctors who have completed 15

¶473

years of service are out of contact in the filed

¶474

of private practice and that they are more
discharging administrative duties and therefore,
pensionary benefit may be adversely affected, if
the option is not given since they may reach to

¶475

the age of superannuation in the near future.

¶476

36.As observed earlier, in-service Doctors who have

¶477

not completed 15 years of services, have also an
option to retire after completion of 10 years of
service. Therefore, such class would also be
adversely affected if there pension is lowered
down on account of discontinuation of NPA. No
data is available in the resolution nor on record
to show that a particular number of Doctors who

¶478

have completed 15 years of services are
discharging administrative duty as against those

¶479

who have not completed 15 years of service. Such
cannot be accepted at its face value, more
particularly when the service of all Government
Doctors are transferable throughout the State and

¶480

SCA/11170/2007

¶481

46/49

¶482

JUDGMENT

¶483

as per the exigencies required by the

¶484

administration. There is no rationale for
considering that those Doctors who have not
completed 15 years of service are having contacts

¶485

for private practice, whereas those Doctors who
have completed 15 years of service have lost
contact of private practice. Whether one is
competent enough or is having capacity for
private practice can hardly be decided on the
basis of the length of service in the Government.
If the object is to see that more medical

¶486

services are available to the citizens at large
by permitting private practice, the services of
seasoned and experienced Doctors who have
completed more length of service may be called
for.

¶487

37.Under the circumstances, keeping in view the
object to be attained by the policy, the

¶488

classification can be said as based on irrelevant

¶489

circumstances, which are not germane to the

¶490

object to be achieved of the policy. Hence, the

¶491

classification can be said as unreasonable and
there is no intelligible differentia for

¶492

SCA/11170/2007

¶493

47/49

¶494

JUDGMENT

¶495

achieving the object of the policy.

¶496

38.In view of the aforesaid observations and

¶497

discussions, the impugned Resolution of the State
Government providing for permitting private
practice to all in-service Doctors is in
contravention to Rule 34 of the General Rules,

¶498

Rule 15 of the Conduct Rules, Pension Rules, and
the aforesaid Recruitment Rules, and hence, ultra
vires to the powers of the State Government and

¶499

therefore, void. Further, the classification
made within the policy based on the length of

¶500

service of all in-service Doctors is

¶501

discriminatory, and does not meet with the test
of reasonable intelligible differentia for

¶502

achieving the objects of the Policy and

¶503

unreasonable and therefore, violative of Articles
14 & 16 of the Constitution of India.

¶504

39.Hence, the impugned Resolution dated 29.03.2007
is quashed and set aside.

¶505

40.In Special Civil Application Nos. 28449 and 24896

¶506

to 24899 of 2007, the petitioners are the persons
who have been selected as per the prevailing

¶507

SCA/11170/200748/49JUDGMENT

¶508

rules. It is not the case of the State
Government that they are appointed on a separate
Cadre by separate Recruitment Rules etc.
Therefore, if the policy and the Govt. Resolution
are quashed and set aside, the consequence in
accordance with law shall also follow in their
cases.

¶509

41.Similarly, in case of in-service Doctors who are
appointed by the Corporation, the contention of
the Corporation is that in view of the impugned
resolution of the State Government and the policy
of permitting private practice, such is adopted

¶510

by the Corporation. Therefore, the same

¶511

consequence would follow inasmuch as since the
policy of the State Government and the impugned
resolutions are quashed and set aside, the
service conditions of all in-service Doctors
working with the Corporation, would remain the
same as it existed prior to the impugned policy.
Such will be the situation in the case of all
petitioners working in the respective field, may

¶512

be with the Government or ESI, etc. as per their
respective position in the concerned department,

¶513

SCA/11170/2007

¶514

49/49

¶515

JUDGMENT

¶516

hospital, clinic, hospital, as the case may be.

¶517

42.Petitions are allowed to the aforesaid extent.
Rule made absolute accordingly. No order as to
costs.

¶518

 (JAYANT PATEL, J.)

¶519

vinod/bjoy

I a S Khakhu v. State of Gujarat

Case brief

What is this about?

What did the court decide?

I a S Khakhu v. State of Gujarat

Case brief

What is this about?

What did the court decide?

What the court decided

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