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The broad and general picture that we have on a perusal of the relevant provisions of the Act, as it stood before it was amended in 1978, is that the Gujarat Legislature aimed at the democratic decentralization of important governmental functions by vesting such functions in gram, nagar, taluqa and district panchayats (see Sec. 88 read with Sch. I, Sec. 117 read with Sch. II and Sec. 137 read with Sch. III) and, besides, by enabling the State Government to transfer other powers, functions and duties to the Panchayat institutions (see Secs. 89, 149, 150, 155, 156, 157 and 158). A perusal of the lists of subjects entrusted to the Panchayat Institutions shows that they are not merely the ordinary run of subjects entrusted to municipal bodies, such as, public health, sanitation, etc, but they include a great variety of subjects intimately connected with all aspects of community life and vital to it, except functions, such as, law and order, administration of justice and the like. Even part of the revenue administration is entrusted to panchayat institutions, as evident from the fact that collection of land revenue is one of the duties of the gram panchayats under the Act. Since decentralisation was not to mean mere chaotic fission and confusion, a three-tier organisation was set up, subject to the overall control of the Government and it was as if a parallel but subsidiary or subordinate Government was set up by the Government itself to discharge some of its functions. Not merely were the panchayat institutions required to discharge governmental functions, the organisation and its three-tier units were to have very close links with the Government at every twist and turn, as it were. The property of the panchayats was that which previously belonged to the Government but came to be vested in them or transferred to them and the funds of the panchayats were those to be provided substantially by way of. contribution or loan by the Government. The Government was not only empowered to make the rules to carry out the objects of the Act. but also to issue directions from time to time to all or any of the panchayats. The Government was also, empowered to cause inspection to be made and, further, to call for the proceedings of the panchayat, to satisfy itself as to the legality or propriety of any order made by the Panchayat. For the purpose of efficiently discharging the functions and duties of the various panchayat institutions and havining regard to the three-tier system which had been established, it was apparently thought necessary to constitute a panchayat service, the members of which would have uniform scales of pay and uniform conditions of service. So a single centralised Panchayat Service was constituted which was to be 'distinct from the State Service'. The distinction lay in that it was a service parallel to the State Service and not in that the members of the service were not Government servants. The question whether the members of the panchayat service are Government servants or not is the principal question to be answered in the appeal and we will come bark to it again later.

Considerable stress was laid by the Counsel for the State of Gujarat on the statement in Sec. 203 that such service (Panchayat Service) shall be distinct from the State service. We do not think this is to be interpreted as a disclaimer by the Legislature that the Panchayat service is a service under the State. All that it can possibly mean is that the Panchayat service is not a service which can be identified with other State Services for the reason that while the Panchayat service too discharges the duties connected with the affairs of the State, it does so not directly under the State but under the various Panchayat Institutions to whom are delegated or transferred certain functions of the State Government. Panchayat Service is distinct from a State Service because the Panchayat institutions whom it serves together constitute an almost parallel but subsidiary Government. It is only in that sense Panchayat Service is distinct from a State Service and not in the same that members of the service are not servants of the State.