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Issues Involved:
1. Validity of Rule 6(2)(iii) of the U.P. Palika (Centralised) Services Rules, 1966. 2. Violation of Articles 14 and 16 of the Constitution. 3. Legal fiction of final absorption under Rule 6(2)(iii). 4. Opportunity of hearing before termination of services. Issue-wise Detailed Analysis: 1. Validity of Rule 6(2)(iii) of the U.P. Palika (Centralised) Services Rules, 1966 The appellants challenged the validity of Rule 6(2)(iii) on the grounds that it was ultra vires the State Government as it led to the extinction of the employer-employee relationship between them and the erstwhile Municipal Boards. The Supreme Court noted that this objection was not pressed before them due to the language of Entry 5, List II of the Seventh Schedule. The Court upheld the validity of the amendments made to Rule 6(2), emphasizing that the legislature had expressly conferred powers on the State Government to make retrospective rules. 2. Violation of Articles 14 and 16 of the Constitution The appellants argued that the orders were violative of Articles 14 and 16 of the Constitution because the State Government's classification of officers and servants into two categories, based on their salary, was without any rational basis. The Supreme Court dismissed this contention, stating that their view of the various circulars issued by the State Government did not support the claim of violation of Articles 14 and 16. 3. Legal Fiction of Final Absorption under Rule 6(2)(iii) The appellants contended that due to the legal fiction contained in Rule 6(2)(iii), their services stood finally absorbed on March 31, 1967, as the State Government failed to pass the necessary orders before that date. The Court rejected this argument, stating that the subsequent amendment made on June 26, 1967, which introduced a new clause (iii) with retrospective effect from July 9, 1966, was effective. This amendment shifted the date for passing the order of final absorption to August 31, 1967, thereby nullifying the earlier fictional date of March 31, 1967. 4. Opportunity of Hearing before Termination of Services The appellants argued that the orders of termination were vitiated due to the State Government's failure to provide them an opportunity of hearing. The Supreme Court emphasized the importance of natural justice, stating that the State Government had a duty to act in a quasi-judicial manner and provide a fair hearing to the officers and servants concerned. The Court found that Ashfaq Hussain was given an opportunity of hearing by the Divisional Committee, which was sufficient. However, in the case of Mohd. Rashid Ahmad, the Court found that no such opportunity was provided before the termination of his services. Consequently, the order of termination in his case was deemed invalid. Conclusion: - Civil Appeal No. 1724 of 1969 (Mohd. Rashid Ahmad): The appeal was allowed, and the termination order was set aside due to the lack of a fair hearing. - Civil Appeal No. 1732 of 1971 (Ashfaq Hussain): The appeal was dismissed as the termination order was found to be valid, given that he was afforded an opportunity of hearing. There was no order as to costs in either case.
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