Pre-existing service rules continue after reorganisation unless clearly displaced; military service benefits remained available under the earlier regime.

Pre-existing service rules continued in the Union Territory of Chandigarh after reorganisation unless expressly or by necessary implication modified or repealed. The Supreme Court noted that Section 88 of the Punjab Reorganisation Act preserved the earlier law, and that the 1966 notifications did not extend the Central Civil Services regime to probation, confirmation, seniority and promotion for Class II, III and IV employees under the Administrator's control. As the claimed benefit of earlier qualifying military service arose under the 1965 Rules and was not displaced by the later notifications, those rules remained applicable, with accrued rights also saved by the 1982 Rules.

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Issues: Whether the Punjab Government National Emergency (Concession) Rules, 1965 continued to apply to employees appointed after 1.11.1966 in the Union Territory of Chandigarh, and whether the benefit of earlier qualifying military service could be denied to them on the footing that the later notifications and rules displaced the earlier regime.

Analysis: By virtue of Section 88 of the Punjab Reorganisation Act, 1966, the pre-existing law of the erstwhile State continued in force in the successor territory unless modified, changed or repudiated. The 1965 Rules therefore remained operative in the Union Territory unless displaced by a valid contrary arrangement. The notifications issued on 1.11.1966, read together, did not apply the Central Civil Services regime to matters of probation, confirmation, seniority and promotion for Class II, III and IV employees under the Administrator's control. Since the benefit claimed arose under the 1965 Rules and the later notifications did not cover those matters for such employees, the earlier rules were not superseded in their application to them. The later 1982 Rules also contained a saving of accrued rights.

Conclusion: The 1965 Rules continued to apply to eligible employees appointed after 1.11.1966 in the Union Territory of Chandigarh, and the contrary view of the Tribunal and the High Court was not sustainable.

Final Conclusion: The connected matters were allowed and the claims were directed to be considered under the applicable rules, while the separately noticed civil appeal was dismissed.

Ratio Decidendi: A pre-existing service rule continues to govern the successor territory after reorganisation unless it is expressly or by necessary implication modified, repelled or repealed, and a later notification will not displace it where the subject-matter is excluded from the later regime.

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