J. B. MEHTA, S. H. SHETH, J. ( 1 ) THE petitioners are the primary school teachers in the employment of Jamjodhpur Taluka Panchayat. They have filed this petition in a representative capacity under Order 1 Rule 8 of the Code of Civil Procedure in which they challenge the validity of the General Provident Fund Scheme framed by the State Government (Annexure B to the petition ). It was applied to the primary teachers in the panchayat service with effect from 21st April 1972. The petition shows that on 29th June 1973 the Director of Education addressed a circular letter to all District Educational Officers intimating to them that the General Provident Fund Scheme had been applied with effect from April 1972 to all employees of the School Committee. He further directed them to see that it was Strictly implemented and that there should be no delay in doing so. On 13th May 1974 the Taluka Development Officer Jamjodhpur wrote a letter to the Head Master of Taluka School No. 3 at Jamjodhpur directing him to deduct from the salaries of the teachers the amount of provident fund which had become due and payable under the said scheme for the months of March and April 1974 ( 2 ) IT is this scheme which is challenged by the petitioners in this petition. ( 3 ) MR. Vakharia who appears for the petitioners has raised before the following four contentions :1 The State Government has no authority to frame such a scheme. 2 If the State Government has authority to frame such a scheme it is ultra vires secs. 203 and 206 of the Gujarat Panchayats Act 19613 If the scheme is held to be valid it is not applicable to those teachers who joined service prior to 1st August 1956 in the former State of Saurashtra and also to those who joined the School Board service between 1st August 1956 and 31st March 1963. 4 The impugned scheme is not a Provident Fund Scheme but a compu- lsory Savings Scheme According to him therefore it cannot be given effect to. ( 4 ) SO far as the first contention raised by Mr. Vakharia is concerned it is necessary to look at sec. 4 The impugned scheme is not a Provident Fund Scheme but a compu- lsory Savings Scheme According to him therefore it cannot be given effect to. ( 4 ) SO far as the first contention raised by Mr. Vakharia is concerned it is necessary to look at sec. 46a of the Bombay Primary Education Act 1947 Sub-sec (1) thereof provides as follows : the State Government shall establish a provident fund (hereinafter called the said fund) for the staff maintained by district school boards. It is not necessary to make any detailed reference to sub-sec. (2) because it provides for merger of the already existing provident fund into the provident fund scheme established or introduced under sub-sec. (1) of sec. 46a. Sub sec. (3) requires to be taken note of. It provides as follows:-THE district school board concerned shall in respect of each of its employees who is a subscriber to the said fund pay into the said fund such portion of the con. tribution in such manner as the State Government may from time to time determinedsec. 70 provides as follows :subject to the provisions of sub-sec. (2) in this Act except in secs. 2 (10) 3 4 5 6 6 7 7 8 9 9 10 10 11 14 41 42 43 44 and 57 all references to a District School Board shall be with effect on and from the 1st April 1963 construed as reference to a taluka panchayat or district panchayat constituted under the Gujarat Panchayats Act 1961 according as the powers functions and duties of a District School Board vest in the taluka panchayat or as the case may be district panchayat in accordance with all order made under sub-sec (2) of sec. 155 of the Gujarat Panchayats Act 1961 (hereinafter referred as the said order ). (2) In sec. 12 in sub-sec. (2) for the words 4every district school board substitute the words such taluka panchayats in a district or as the case may be such district panchayat as the State Government may determine having regard to the distribution of powers functions and duties between taluka panchayats and district panchayat under the said order. (3) Notwithstanding anything contained in sec. 155 of the Gujarat Panchayats Act 961 the provisions contained in secs. (3) Notwithstanding anything contained in sec. 155 of the Gujarat Panchayats Act 961 the provisions contained in secs. 2 (11) 3 4 5 6 6 7 7 8 9 9 10 10 11 14 41 42 43 44 and 57 shall not apply to a taluka panchayat or as the case may be a district panchayat exercising the powers and performing the functions and duties of a district school board under this Act. SEC. 70 inter alia requires references to a District School Board in sec. 46a to be construed as references to a Taluka Panchayat or District Panchayat constituted under the Gujarat Panchayats Act 1961 When these two sections are read together it becomes amply clear that under sec. 46a the State Government has the power or authority to establish a provident fund scheme for the members of the staff maintained by a Taluka Panchayat. Sec. 155 of the Gujarat Panchayats Act 1961 provides for consequences of dissolution of district school boards and transfer of their functions to Taluka Panchayats and District Panchayats. Clause (d) of sub-sec. (2) of sec. 155 is material for the purpose of the present case. It provides as follows :for giving effect to the provisions of sub-sec. (1) the State Government having regard to the Panchayat Functions List shall by an order published in the Official Gazette provide for. . . . . . . . . . . . . . . (D) the adaptations and modifications of the relevant Act or of any other law whe- ther by way of repeal or amendment as may be necessary to give effect to the provisions of sub-sec. Now clause (e) of sub-sec. (1) of sec. 155 provides for the following consequences of the dissolution of the district school board :the employees of the existing school board shall stand transferred to the taluka panchayats and the district panchayat in accordance with the distribution made in that behalf and on such terms and conditions as may be provided in the said orderssec. 46a of the Bombay Primary Education Act 1947 read with sec. 70 thereof not only empowers the State Government to frame a provident fund scheme for primary teachers but that power of the State Govern- ment remains unaffected on account of the provisions of clause (e) of sub-sec. (1) of sec. 155 of the Gujarat Panchayats Act. Next clause (d) of sub-sec. 70 thereof not only empowers the State Government to frame a provident fund scheme for primary teachers but that power of the State Govern- ment remains unaffected on account of the provisions of clause (e) of sub-sec. (1) of sec. 155 of the Gujarat Panchayats Act. Next clause (d) of sub-sec. (2) of sec. 155 enables the State Government by an order to adapt and modify inter asia the provisions of that Act in order to give effect to the provisions of sub-sec. (1 ). ( 5 ) IN S. DAYAL AND ANOTHER V. AMBALAL KUBERDAS PATEL A. I. R. 1975 GUJARAT 194 a Division Bench of this Court has laid down that secs. 155 (2) 206 and 203 (3) of the Gujarat Panchayats Act have given a statutory guarantee of the conditions of service and that statutory protection cannot be nullified by any rule or regulation. It is therefore clear that under the Bombay Primary Education Act 1947 not only the State Government has the power and authority to frame a provident fund scheme for primary teachers but that power remains unaffected by virtue of the provisions of the Gujarat Panchayats Act referred to above. The first contention raised by Mr. Vakharia therefore is without any substance and is rejected. C. The second contention which he has raised requires us to have a look at secs. 203 and 206 of the Gujarat Panchayats Act. Sec. 203 provides for the constitution of a Panchayats Service to be regulated by rules. Sub-sec. (1) thereof provides for bringing about uniform scales of pay and uniform conditions of service for persons employed in the dis- charge of functions and duties of panchayats. Sub-sec. (2) provides for constitution of such classes cadres and posts and the initial strength of officers and servants in each such class and cadre as the State Government may by order from time to time determine. Sub-sec. (2a) provides for certain other conditions like promotion and transfer. Sub-sec. (2b) enables a panchayat to have other posts of such classes as the State Government may by general or special order determine. They are known as deputation posts. Sub-sec. (3) provides for making rules regulating the mode of recruitment appointments transfers and promotions. Sec. 206 provides for allocation of officers and servants to Panchayat Service. Clause (ii) of sub-sec. (1) of sec. They are known as deputation posts. Sub-sec. (3) provides for making rules regulating the mode of recruitment appointments transfers and promotions. Sec. 206 provides for allocation of officers and servants to Panchayat Service. Clause (ii) of sub-sec. (1) of sec. 206 provides that the State Government shall by a general or special order allocate to the Panchayat Service all officers and servants in the service of district local boards and district school boards immediately before their dissolution under the Act and transferred to the panchayats under sec. 155 and 326. Sub-sec. (2) provides that the officers and servants allocated to the Panchayat Service under sub-sec. (1) shall be taken over by such panchayats in such order and on such tenure remuneration and other conditions of services the State Government may by general or special order determine: provided that the conditions of service of any such officer or servant shall not be less favourable than those applicable to him immediately before such allocation; provided further that nothing in the aforesaid proviso shall entitle an officer or servant to claim the same cadre and designation which he had before allocation. ( 6 ) WHEN the relevant provisions of secs. 203 and 206 are read in light of the relevant provisions of sub-secs. (1) and (9) of sec. 155 we find that what the legislature has done is to introduce a comprehensive and harmonious scheme of absorbing the employees of the District School Boards or the District Local Boards into the Panchayat Service and to protect their conditions of service fully. If therefore the State Govern- ment frames a compulsory provident fund scheme under sec. 46a read with sec. 70 of the Bombay Primary Education Act after the Gujarat Panchayats Act has come into force it can hardly be said that such a scheme is ultra vires the powers of the State Government in so far as the primary teachers in the employment of the panchayats are concerned. This view of ours is supported by the decision of this Court in the case of S. Dayal (supra ). Inter alia this Court has held in that decision that the statutory guarantee conferred upon the primary teachers by sec. 24 of the Bombay Primary Education Act 1947 continues in force by reason of the order issued under sec. This view of ours is supported by the decision of this Court in the case of S. Dayal (supra ). Inter alia this Court has held in that decision that the statutory guarantee conferred upon the primary teachers by sec. 24 of the Bombay Primary Education Act 1947 continues in force by reason of the order issued under sec. 155 (2) which has the force of law and which pro tanto amends the Primary Education Act. That decision of this Court makes it clear beyond any doubt that the statutory guarantees conferred by the Bombay Primary Education Act are continued in force after the enactment of the Gujarat Panchayats Act and that the State Government has the power under sub-sec. (2) of sec. 155 to make an order amending the provisions inter alia of the Bombay Primary Education Act where there is repugnancy between a provision of the Bombay Primary Education Act and a provision of the Gujarat Panchayats Act. When the relevant sections of the Bombay Primary Education Act referred to above are read in light of sec. 155 of the Gujarat Panchayats Act it is difficult to say that the compulsory provident fund scheme framed by the State Government under sec. 46a of the Bombay Primary Education Act is Ultra vires secs. 203 and 206 of the Gujarat Panchayats Act. The second content- ion which Mr. Vakharia has raised is therefore without any substance and is rejected. ( 7 ) THE third contention which he has raised brings into picture the Gujarat Panchayat Service General Provident Fund Rules 1971 qua the General Provident Fund Scheme for the School Board staff. Academically it is true that two Provident Fund Schemes for the same set of employees cannot co-exist. He has tried to argue that the Gujarat Panchayat Service General Provident Fund Rules 1971 given those who joined service in the former Saurashtra State prior to 1st August 1956 and those who joined the School Board service between 1st August 1956 and 31st March 1963. According to him therefore the General Provident Fund Scheme impug- ned in this petition cannot be made applicable to those two sections of primary teachers. It is very difficult to uphold this contention raised by Mr. Vakharia because sub clause (i) of clause (c) of Rule 1 of the Gujarat Panchayat Service General Provident Fund Rules 1971 furnishes a complete answer to this contention. It is very difficult to uphold this contention raised by Mr. Vakharia because sub clause (i) of clause (c) of Rule 1 of the Gujarat Panchayat Service General Provident Fund Rules 1971 furnishes a complete answer to this contention. It provides as follows : they shall not apply to (I) employees to whom the provisions of the rules of the Provident Fund established under the Bombay Primary Education Act 1947 (Bombay LXI of 1947) apply. It is therefore clear that once the impugned General Provident Fund Scheme has been made applicable to the primary teachers in the service of the Taluka or District Panchayats the Gujarat Panchayat Service General Provident Fund Rules 1971 cannot be made applicable to them. This ground of challenge therefore fails. ( 8 ) NOW if we have a look at clause (b) of Rule 1 of General Provident Fund scheme it is clear that it applies to all teaching employees of a Taluka or District Panchayat. It provides as under. These rules shall apply to all the teaching employees of a Taluka or District Panchayat and non-teaching employees of the former District School Boards who have been absorbed in Panchayat service. . . . . . It is not necessary to reproduce the rest of clause (h) of Rule 1 because it has no application to the present case. When we analyse the above quoted part of clause (b) of Rule 1 of the General Provident Fund Scheme it becomes very clear that it applies to all the teaching employees of a Taluka or District Panchayat which in our opinion not only include teachers employed by a Taluka or District Panchayat after it is established but teachers who were in the employment earlier of the District School Boards or the District Local Boards and who have been absorbed in the Panchayat Service under a Taluka or District Panchayat. So far as non-teaching employees are con- cerned the provision which has been made is slightly different. The General Provident Fund Scheme has been made applicable only to those non-teaching employees of the former District School Boards who have been absorbed in Panchayat Service. So far as non-teaching employees are con- cerned the provision which has been made is slightly different. The General Provident Fund Scheme has been made applicable only to those non-teaching employees of the former District School Boards who have been absorbed in Panchayat Service. It appears to us from clause (b) of Rule 1 of the General Provident Fund Scheme that all teachers who were in the employment of the District School Boards have been absorbed in the Panchayat Service under Taluka or District Panchayats and therefore General Provident Fund Scheme has been made applicable to all of them as also to those who would be employed as teachers after a Taluka or District Panchayat under the Gujarat Panchayats Act has been constituted. However it is quite probable that all the non-teaching employees of the former District School Boards could not have been or might not have been absorbed in the Panchayat Service. In such a case the General Provident Fund Scheme impugned in this petition has been made applicable only to those non-teaching employees of the former District School Boards who have been absorbed in Panchayat Service. It appears to us that those non-teaching employees of the former District School Boards who have not been absorbed in Panchayat Service are not governed by the impugned scheme but are probably governed by some other Provident Fund Scheme. It is therefore clear that whereas the Gujarat Panchayat Service General Provident Fund Rules 1971 exclude their application to employees to whom the latter Provident Fund Scheme established under the Bombay Primary Education Act 1947 applies the latter has been made applicable to all teachers in the employment of a Taluka Panchayat or District Panchayat. The third contention which Mr. Vakharia has raised is therefore without any substance and is rejected. ( 9 ) THE last contention which he has raised is that the impugned General Provident Fund Scheme is really not a Provident Fund Scheme but a Scheme of Compulsory Savings. He has placed before us the following facts in support of his contention. The first undisputed fact is that to the impugned General Provident Fund a teacher alone contributes and that there is no contribution from his employer. The second undisputed fact is that whatever is appropriated from the salary of a teacher of his Provident Fund carries only the nominal interest of 4 per cent per annum. The first undisputed fact is that to the impugned General Provident Fund a teacher alone contributes and that there is no contribution from his employer. The second undisputed fact is that whatever is appropriated from the salary of a teacher of his Provident Fund carries only the nominal interest of 4 per cent per annum. According to him a real Provident Fund Scheme properly so called can be one in which there is all obligation on the part of the employer to make some corresponding contribution so that the future of a teacher is better protected. It cannot be gainsaid that the argument which Mr. Vakharia has advanced has some substance. According to him what the impugned General Provident Fund Scheme envisages is a compulsory loan by a teacher to the Government or Panchayat at a nominal rate of interest. That seems to be the present state of affairs. Sub-sec. (3) of sec. 46 of the Bombay Primary Education Act 1947 has to be borne in mind before expressing any opinion on the nature and character of the impugned Scheme. It requires the employer to pay into the Provident Fund of a teacher such portion of the contribution in such manner as the State Government may from time to time determine. Whereas sub-sec. (3) of sec. 46a casts an obligation upon the employer to make a contribution that obligation becomes absolute only when the State Government determines the portion of contribution which he or it is required to make. So far as the State Government is concerned discretion has been con- ferred upon the State Government to determine the portion of such contri- bution. The use of the expression shall in relation to the employer and the use of the expression may in relation to the State Government in the same sub-sec. make it very clear that the obligation which the employer has to make good becomes Absolute only when the State Government exercises its discretion conferred upon it Sub-sec. (3) of sec 46a has therefore the potentiality of establishing a real Provident Fund Scheme. The State Government has not exercised the power thereunder probably because of the considerations relating the financial position of the panchayats. We trust and hope that the State Government will exercise that power and cater to the welfare of its economically hard hit class of employees. The State Government has not exercised the power thereunder probably because of the considerations relating the financial position of the panchayats. We trust and hope that the State Government will exercise that power and cater to the welfare of its economically hard hit class of employees. So far as the State Government is concerned it has an obligation under sec. 46 to establish a provident fund scheme. Secondly it provides for an obligation for the employer to make a contribution to it but the link between these two obligations can be established only when the State Government exercises its power conferred upon it by sub-sec. (3) of sec. 46a. We think that the power conferred upon the State Government by sub-sec. (3) of sec. 46a will in course of time be exercised in order to introduce a real Provident Fund Scheme properly so called in order to alleviate the hardship of this economically hard-hit class of panchayat employees. Rules 14 and 17 of the General Provident Fund Scheme provide for repayment of the amount of provident fund standing to the credit of a subscriber under the circumstances specified therein. We do not find any power conferred upon the State Government or anyone else to confiscate the amount of the provident fund of a subscriber in case of his outright dismissal. We are therefore of the opinion that the legislature has contemplated a real Provident Fund Scheme. However financial considerat- ions probably have not given it a full form. It therefore appears to us to be at a transitional stage. In that view of the matter we find no infirmity in the impugned General Provident Fund Scheme. The last contention which Mr. Vakharia has raised therefore fails and is rejected. ( 10 ) THESE are the only contentions which have been raised by him before us. All of them fail and are rejected. ( 11 ) THEREFORE the petition fails and is dismissed. Rule is discharged with no order as to costs in the circumstances of the case. Petition dismissed. .