Introduction:

The Allahabad High Court has delivered a significant ruling on the retrospective effect of declaring a post-Constitution law or statutory regulation unconstitutional, holding that an employee’s termination cannot survive where it was founded upon a regulation subsequently struck down as violative of fundamental rights. The Court clarified that when a post-Constitution statute or statutory rule is declared unconstitutional for offending Part III of the Constitution, the declaration is ordinarily retrospective and the law is treated as void from its inception. Consequently, an action taken solely under such an unconstitutional provision cannot be sustained merely because the action preceded the judicial decision declaring the provision invalid.

The Division Bench of Justice J.J. Munir and Justice Indrajeet Shukla decided the appeal in Sachindra Kumar Pandey v. Gorakhpur Kshetriya Gramin Bank and Others, reported as 2026 LiveLaw (AB) 612. The Court set aside the termination of a Gramin Bank employee that had taken place more than four decades earlier and held that the statutory regulation invoked by the Bank to terminate his services had subsequently been declared unconstitutional. Since the regulation was a post-Constitution law, the Court held that its invalidation operated retrospectively, rendering the termination legally unsustainable.

The case also raised another important issue relating to probation and deemed confirmation. The appellant had been appointed as a Clerk with the Gorakhpur Kshetriya Gramin Bank in 1981 and joined service in July of that year. His initial appointment was subject to a probationary period of one year. The Bank subsequently extended his probation by six months through an order dated July 20, 1982.

The Bank claimed that the appellant’s performance during probation was not satisfactory. On March 11, 1983, shortly after the expiry of the maximum period of probation, the Bank terminated his services with immediate effect under Regulation 10 of the Gorakhpur Kshetriya Gramin Bank (Staff) Service Regulations, 1980.

The appellant challenged the termination in the same year by instituting a civil suit seeking a declaration that the order was illegal and that he continued to remain in service. The trial court decreed the suit in his favour in 1985. However, the Bank succeeded in its first appeal, leading to the reversal of the trial court’s decree. The appellant’s second appeal was also dismissed. While doing so, the Court held that the termination was not contrary to the applicable Regulations and that the civil court could not examine the constitutional validity of those Regulations. The appellant was left free to pursue remedies under the Industrial Disputes Act or invoke the High Court’s jurisdiction under Article 226 of the Constitution.

The appellant thereafter approached the Allahabad High Court under Article 226. The writ petition was dismissed by a learned Single Judge in 2004. This led to the present appeal before the Division Bench.

By the time the matter reached the Division Bench, the dispute had acquired an additional constitutional dimension. Regulation 10(2)(a), which formed the foundation of the appellant’s termination, had already been declared unconstitutional by the High Court in Rudra Kumar Pal v. Chairman, Gorakhpur Kshetria Gramin Bank in 1994. That decision followed the Supreme Court’s ruling in M.K. Agarwal v. Gurgaon Gramin Bank, which had examined an identically worded provision and found that it conferred arbitrary and unguided power.

The central question was therefore whether the appellant’s 1983 termination could survive despite the fact that the regulation authorising it was declared unconstitutional only in 1994. The Bank argued, in substance, that a later judicial declaration could not undo an action taken years earlier. The appellant, however, contended that the declaration of unconstitutionality was retrospective because the impugned regulation was a post-Constitution law offending Part III of the Constitution.

The Division Bench accepted the appellant’s case. It held that the legal consequences of declaring a post-Constitution law unconstitutional are fundamentally different from the doctrine applicable to certain pre-Constitution laws. A post-Constitution law found inconsistent with fundamental rights is void from its inception under Article 13 and is treated as having been invalid from birth. Such a law cannot be revived merely because constitutional provisions are later amended or judicially interpreted differently.

This distinction between pre-Constitution and post-Constitution laws became central to the Court’s reasoning. In the case of a pre-Constitution law, the doctrine of eclipse may apply. Such a law is not necessarily destroyed altogether but becomes inoperative to the extent of its inconsistency with fundamental rights and may, in certain circumstances, revive if the constitutional impediment disappears. However, according to the Court, a post-Constitution law violating Part III stands on an entirely different footing. Once declared unconstitutional, it is void from its very inception.

The Court also considered the fact that the appellant had long since crossed the age of superannuation. Reinstatement was therefore no longer a meaningful remedy. Taking into account the extraordinary delay, the appellant’s pursuit of legal remedies and the fact that he had been kept out of employment for decades because of an illegal termination, the Court moulded the relief by awarding 50 per cent back wages from the date of termination until superannuation, together with consequential post-retiral benefits.

The decision is therefore important not merely as a service law ruling but also as a substantial exposition of the consequences of judicial review. It reaffirms that when a post-Constitution statutory provision is declared unconstitutional, the declaration is ordinarily not confined to the date of the judgment. Rather, the defect is treated as existing from the moment the provision came into force, subject to any express limitation imposed by the court declaring it invalid.

Arguments of the Parties:

The appellant’s principal submission was that his termination could not be sustained because, by the time the matter was finally considered by the Division Bench, the very regulation under which his services had been terminated had been declared unconstitutional. Regulation 10(2)(a) of the Gorakhpur Kshetriya Gramin Bank (Staff) Service Regulations, 1980 had been struck down by the High Court in Rudra Kumar Pal on the ground that it offended the constitutional guarantee against arbitrary State action.

The appellant contended that the declaration of unconstitutionality was not merely prospective. Since the Regulation had been framed after the commencement of the Constitution, it was a post-Constitution law within the meaning of Article 13. Therefore, once it was declared unconstitutional for violating Part III, it had to be treated as void from its inception. According to the appellant, the Bank could not defend the termination merely by pointing out that the dismissal order had been passed in 1983, whereas the declaration of invalidity came in 1994.

It was also argued that the appellant had already completed the maximum permissible period of probation before the termination order was issued. Regulation 8(2) provided for a probationary period of one year, with the possibility of an extension not exceeding six months. Regulation 9 dealt with confirmation upon satisfactory completion of probation.

The appellant relied upon the Supreme Court’s decision in M.K. Agarwal v. Gurgaon Gramin Bank, where similar service regulations had been interpreted. It was argued that where the applicable rules prescribe a maximum period up to which probation may be extended and contemplate that the employee must thereafter either be confirmed or discharged, continuation in service beyond that maximum period results in deemed confirmation.

According to the appellant, his extended probation ended on January 19, 1983. Since no order discharging him from service had been passed at the conclusion of the maximum period of probation, he had acquired the status of a confirmed employee. The termination order of March 11, 1983 was therefore passed after he had already become a permanent employee.

The appellant further argued that the impugned Regulation could not be treated as continuing to exist merely because the decision in Rudra Kumar Pal had been rendered in another case. A declaration that a statutory regulation is unconstitutional operates in rem and is not restricted only to the parties before the Court. Once the High Court had declared the provision unconstitutional, the Bank could not invoke it against another employee as though it remained valid.

The appellant also relied upon the principle that a judicial declaration striking down a post-Constitution law is ordinarily declaratory in nature. The decision does not create the invalidity; it recognises the constitutional infirmity that existed from the beginning. Since the regulation had been constitutionally defective from its inception, the appellant argued that the termination order based exclusively upon it had no legal foundation.

On the question of relief, the appellant submitted that he had been deprived of his employment for almost his entire working life. The termination had not resulted from any misconduct proved in disciplinary proceedings but had been effected through a regulation later found to be unconstitutional. He had pursued legal remedies over a prolonged period and could not be blamed for the Bank’s illegal action.

The Bank, on the other hand, maintained that the appellant’s service had been terminated because his performance during probation was unsatisfactory. It argued that the termination was made under the service regulations then in force and that the Bank had acted according to the legal framework existing at the relevant time.

The Bank also disputed the appellant’s contention regarding deemed confirmation. It sought to argue that the expiry of the maximum probationary period did not automatically result in confirmation and that a positive act or decision by the appointing authority was necessary under the Regulations.

Another important argument raised by the Bank concerned the effect of the earlier decision in Rudra Kumar Pal. Counsel submitted that a point relevant to the constitutional validity of the Regulation had allegedly passed sub silentio in that decision. On that basis, the Bank attempted to question the extent to which the earlier ruling could govern the present dispute.

The Bank further argued that the termination order had been passed in March 1983, whereas the Supreme Court’s decision in M.K. Agarwal was rendered in November 1987 and the High Court’s decision striking down the relevant Gorakhpur Gramin Bank Regulation came in December 1994. Therefore, according to the Bank, these subsequent decisions could not retrospectively invalidate an administrative action completed years before.

The Bank’s argument was essentially based on the proposition that a judicial decision declaring a law unconstitutional should not automatically unsettle every past action taken under that law. It sought to distinguish the timing of the termination from the subsequent judicial pronouncements and contended that the legality of the 1983 order had to be assessed in the context of the law as it was understood at that time.

As regards the relief sought, the Bank could also rely upon the settled principle that back wages do not automatically follow every declaration that a termination was illegal. The passage of several decades, the negligible period for which the appellant had actually worked and other equitable considerations required the Court to exercise discretion rather than mechanically award full salary for the entire period.

The Division Bench was thus required to resolve several connected issues: whether the appellant had acquired deemed confirmation after the maximum period of probation, whether Regulation 10(2)(a) could still sustain the termination despite its later declaration as unconstitutional, whether such declaration operated retrospectively and, finally, what relief could appropriately be granted to an employee who was no longer capable of being reinstated because he had crossed the age of superannuation.

Court’s Judgment:

The Allahabad High Court allowed the appeal and held that the termination could not survive. The Court’s reasoning proceeded through two independent but closely connected legal foundations: first, the appellant had to be treated as having been confirmed after the expiry of the maximum probationary period; and second, the regulation relied upon to terminate him had been declared unconstitutional and, being a post-Constitution regulation, was void from its inception.

On the question of probation, the Court emphasised that whether an employee acquires deemed confirmation after the maximum probation period depends upon the precise language of the applicable service rules. There is no universal principle that expiry of probation always results in automatic confirmation. The answer depends upon whether the rules impose a ceiling on the extension of probation and what they provide regarding the employee’s status after that period.

In the present case, Regulation 8(2) prescribed probation for one year and permitted an extension of not more than six months. Regulation 9 provided for confirmation where the appointing authority was satisfied that the employee had completed probation satisfactorily.

The Court found these provisions to be pari materia with the Gurgaon Gramin Bank service regulations considered by the Supreme Court in M.K. Agarwal v. Gurgaon Gramin Bank. In that decision, the Supreme Court had examined the effect of a statutory ceiling on the extension of probation and held that, where the regulatory framework required the employee to be confirmed or discharged at the end of the maximum probationary period, continuation beyond that period without discharge resulted in confirmation by implication.

Applying this principle, the Division Bench concluded that the appellant’s extended probation had ended on January 19, 1983. Since he had not been discharged from service upon the expiry of the maximum permissible period, he was deemed to have been confirmed. Consequently, by the time the Bank issued the termination order on March 11, 1983, he had already acquired the status of a permanent employee.

This finding itself significantly weakened the basis of the termination. The Bank could not continue to treat the appellant as a probationer after the legally permissible maximum period had expired. The nature of the power that could be exercised against a probationer could not automatically be invoked against an employee who had acquired confirmed status.

The Court then addressed the constitutional validity of Regulation 10(2)(a). It noted that the same provision had been declared unconstitutional by the High Court in Rudra Kumar Pal v. Chairman, Gorakhpur Kshetria Gramin Bank. That decision had followed the reasoning of the Supreme Court in M.K. Agarwal, where an identically worded provision was found to confer arbitrary and unguided power.

The Bank attempted to argue that a relevant point had passed sub silentio in the earlier decision. The Court rejected the argument insofar as it sought to resurrect the Regulation. It observed that even if an earlier judgment’s value as a binding precedent could be questioned on the ground that a particular point had not been considered, that did not alter the legal effect of an actual declaration striking down a statutory provision as unconstitutional.

The Court made an important distinction between the precedential force of judicial reasoning and the operative consequence of a declaration of unconstitutionality. A judgment may be examined for whether a proposition of law was consciously decided. However, once a competent court declares a statutory regulation unconstitutional, the declaration has an effect beyond the individual parties unless the judgment itself restricts its operation.

The Division Bench held that the declaration of invalidity in Rudra Kumar Pal operated in rem. The Regulation could not be considered invalid only between the parties to that case and simultaneously treated as valid against another employee. As far as the High Court was concerned, it could not restore life to a statutory provision that had already been declared unconstitutional.

The most significant aspect of the judgment concerned retrospectivity. The Bank argued that because the termination took place in 1983, the subsequent decisions of 1987 and 1994 could not affect it. The Court rejected this argument by distinguishing between a judicial precedent and a judicial declaration that a specific post-Constitution law is unconstitutional.

The Supreme Court’s decision in M.K. Agarwal, the Court explained, did not automatically invalidate the Gorakhpur Gramin Bank Regulations merely because they were similarly worded. The direct declaration concerning the relevant Gorakhpur Regulation came later in Rudra Kumar Pal. The question was therefore whether that declaration, made in 1994, could affect an action taken in 1983.

The Court answered this in the affirmative. It held that when a post-Constitution law is declared unconstitutional for violating Part III, the judicial pronouncement is declaratory and ordinarily retrospective. The law is treated as constitutionally infirm from its inception.

The Court explained that such a post-Constitution law is different from a pre-Constitution law to which the doctrine of eclipse may apply. A pre-Constitution law inconsistent with fundamental rights may remain on the statute book in an eclipsed condition and, in appropriate circumstances, may revive if the constitutional restriction is removed.

A post-Constitution law violating Part III, however, does not enjoy the same possibility of revival. Under Article 13, such a law is void to the extent of its inconsistency. Where a court declares it unconstitutional, the defect is treated as existing from the very beginning. The Court described the consequence in powerful terms: such a law is “destroyed at birth” and cannot later be infused with life merely because a fundamental right is amended or later interpreted differently.

The Court relied on the Constitution Bench decision in Central Bureau of Investigation v. R.R. Kishore while considering the effect of a declaration of unconstitutionality. It found nothing in the earlier judgment striking down Regulation 10(2)(a) to indicate that the declaration had been made prospective or subject to any temporal restriction.

This absence of a limitation was decisive. Courts may, in appropriate cases, restrict the retrospective consequences of constitutional decisions by expressly applying prospective overruling or by otherwise limiting the effect of the judgment. But where no such restriction exists, the ordinary declaratory effect follows.

Accordingly, the Court held that the Regulation relied upon by the Bank had been declared unconstitutional without any saving clause or temporal limitation. The termination order, which expressly rested on that Regulation, therefore lost its legal foundation.

The Court held that there was nothing capable of saving the impugned termination. The order had been issued under a regulation that was constitutionally void, and the appellant had, in any event, already crossed the maximum period of probation and acquired deemed confirmation before the termination was made.

Having concluded that the termination was illegal, the Court then considered the appropriate reedy. The appellant was approximately 70 years old