JUDGMENT
D.P. Wadhwa, J.
(1) This is plaintiff’s appeal. His suit for recovery of Rs. 18.000.00 towards arrears of his salary and interest thereon was dismissed by the Commercial Sub- Judge, Delhi, principally on the ground that the claim was barred by limitation.
(2) The facts are in brief. The plaintiff was appointed as District Rent and Managing Officer-cum-Assistant Custodian in the office of the respondents-defendants and was posted at Ludhiana. There were three defendants (now respondents), first defendant being Union of India through the Secretary in the Department of Rehabilitation, the second defendant being the Chief Settlement Commissioner, New Delhi; and the third defendant was the Regional Settlement Commissioner, Jullundur. The services of the petitioner were terminated on 23/05/1960. He, however, came to know about this fact on 30/05/1960. On 19/12/1961 he filed a suit for declaration challenging his termination. The suit was decreed in his favor on 28/02/1963 and subsequent appeals to the District Judge as well as the High Court of Punjab were dismissed. The judgment and decree in the suit for declaration became final on 29/02/1964 when the HighCourt dismissed the second apdeal. Thereafter, the plaintiff was reinstated and came to be posted at Jullundur on 27/04/1965. He made claim for his salary for the period from 30/05/1960 till 26/04/1965. After his representations he was told by the defendants that his case was under consideration and that further communication would follow. On 4/05/1967the plaintiff was informed that the President was pleased to accept the period from 31/05/1960 to 26/04/1965 as on duty subject to the conditions that (1) the plaintiff, would be paid arrears of pay and allowances for three years; (2) whatever he earned in the legal profession as a lawyer between the period of his termination and reinstatement would be deducted from the arrears of his salary; and (3) he would give his affidavit of that income during that period. Then plaintiff was paid pay and emoluments for three years period mentioned above and a sum of Rs. 2.600.00 was deducted being his income from lawyer’s profession. It may be stated that during the period from the termination of his services and till he was reinstated the plaintiff was practicing as an Advocate. Again the plaintiff represented and said he should be paid his salary for whole of the period. Then he served a notice under Section 80 of the Code of Civil Procedure on 1 7/11/1969. He said although his termination was found to be wrongful and illegal he was made partial payment for three years period from 27/04/1962 to 2 6/04/1965 and that his salary for the period from I June, 1960 to 26/04/1962had been wrongfully withheld. The plaintiff also claimed refund ofRs. 2,600.00 which had been deducted from his salary and emoluments payable to him for the three years period. He, therefore, claimed Rs. 12,198.98on account of arrears of salary and wrongful deduction of Rs. 2,600.00. The plaintiff also in this notice claimed interest of the rate of 6/o per annum on the amount of Rs. 9,598.98 being the arrears of his salary. He also claimed interest on the amount of Rs. 2,600.00 on equitable grounds. He said cause of action arose in his favor when he was reinstated, and again when he was told that his case for payment of salary, etc., was under consideration and yet again when he was told that he would be paid the arrears for three years by letter dated 4/05/1967, and lastly, in the year 1968 when his salary for the earlier period was in fact refused.
(3) Plaintiff then filed this suit on 29/01/1970. The defendants filed their written statement. They said the suit was barred by limitation as the cause of action for recovery of salary accrued month to month. They said the order of the Court declaring the order of termination of services of the plaintiff as illegal was of no consequence and that would not save limitation. It was also said that suit against defendants 2 and 3 was not maintainable as they were not juristic persons. Receipt of the notice under Section80 of the Code of Civil Procedure was admitted and so also the fact of amount due to the plaintiff towards salary for the period from I June 1960to 26/04/1962 was admitted and also the fact of deduction of Rs. 2600.00from the salary paid to the plaintiff after his reinstatement. Claim of interest was denied.
(4) On pleadings of the parties, the following issues were framed : (1)Whether the suit is within time ? OPP(2) Whether the suit is maintainable against defendants Nos. 2 &3? OPP(3) Whether the plaintiff is entitled to interest ? If so, at what rate ? OPP(4) Whether the defendant is entitled to deduct Rs. 2600.00 from the arrears of salary already paid to the plaintiff as alleged ?OPD(5) Relief.Addl. Issue:(5a) To what amount is the plaintiff entitled to recover on account of arrears of pay ? Opp
As would he seen the issues are all legal and as a matter of fact there is no dispute on the facts of the case. The learned Commercial Sub-Judge held that issue against the plaintiff. He held on second issue that suit against defendants 2 and 3 was not maintainable. On third issue, he said that in view of his find in given on on first issue this use did not require any finding, jOn fourth issue also he held that the amount of Rs. 2,600.00 was rightly deducted from the arrears of salary paid to the plaintiff. He held that the I plaintiff worked as an Advocate for about three years from 1962 to 1965 and jearned Rs. 2,600.00. and as the plaintiff was a whole time employee of theGovernment, therefore, whatever earnings he had made during the said period would have to he accounted for by him. The learned Commercial Sub-Judge also held that Counsel for the plaintiff could not show any ruling under which plaintiff could be entitled to recover the said amount ofRs. 2,600.00. On issues 5 and 5a the Learned Commercial Sub-Judge said that in view of his findings on other issues the plaintiff was not entitled to anyrelief. He left the parties to bear their own costs.
(5) It would be Article 7 of the Schedule to the Limitation Act, 1963which would apply in the present case as it is in effect the arrears, of his salary (wages) which the plaintiff is claiming in his suit after he is hold that he would be treated on duty. Under this Article period of limitation is three years and the time from which period begins to run is when the wages accruedue.
(6) Narration of events show that the plaintiff got a decree for declaration that termination of his services was illegal which decree became final on 29/02/1964. The defendants could have saved the plaintiff from further agony by making payment of all the salary due for the period when his services were terminated and when the decree became final and in pursuance thereto he was reinstated, but that was not to be so. The plaintiff went on fighting for his cause and ultimately he was told by letter dated 4/05/1967 of the defendants that though the period from 31/05/1960 to 26/04/1965 would be treated as on duty he would be paid salary only for the last three years. This stance of the Government, to say the least, is incomprehensible to us. Government who should supposedly set an example of an ideal employer should not take shelter behind the law of limitation and deprive its officer of his lawful dues which otherwise he was lawfully entitledto. The Supreme Court did not look with favor the tendency on the part of the State to lake the plea of limitation so as to deny the right to receive arrears of salary. It is by this letter of 4/05/1967 that right to sue would accrue to the plaintiff as it is now that the Government considered the plaintiff to he on duty all this period when his services stood terminated. It could not be that while he was not in the employment of the Government he would go on filing suit every month for salary due to him. The defendants certainly cannot take this plea. How could it be so that though the plaintiff during the relevant period was not in its employment yet he was to go on filing suit one after the other to save the bar of limitation. We find whenth(r) plaintiff filed the suit for a declaration he had obtained leave of the Court under Order 2, Rule 2 of the Code of Civil Procedure to file a suit for a recovery of salary. in Union of India v.Kewal KrishanMitlal, l 984(2) SLR614 (DB), this Court held that when the termination was declared null and void by the Court the Government was bound to follow the declaration and pay all the salary and allowances to its employee. In this case the Court also considered the provisions of the Bar Council of India Rules (Rule 51)and Fundamental Rules (Rule 54). In this case also an employee was engaged in legal profession during the term when he remained out of service as a result of his order of termination. When his termination was declared null and void the Government wanted to deduct from his arrears of salary the amount earned by him in the legal profession. Reliance was placed on F.R.54(3)(b) which is as under : “WHERE the reinstated government servant has secured employment during any period between the dismissal/removal/discharge/termination and reinstatement, the pay and allowances admissible to him after reinstatement for the intervening period shall be reduced by the emoluments earned by him, during such employment if such pay and allowances exceeds such emoluments. If the pay and allowances admissible to him are equal to or less than the emoluments earned by him nothing shall be paid to him.”
Reference was also made to Rule 51 of the Bar Council of India Rules which provided as under : “AN Advocate shall not be a full time salaried employee of Any person, government, firm, corporation or concern, so long as he continues to practise and shall, on taking up any such employment intimate the fact to the Bar Council en whose roll his name appears and shall thereupon cease to practise as an Advocate as long as he continues in such employment.”
The Court said this rule required an Advocate not to accept a full time salaried employment from any of the categories mentioned in the rule. The Court said the rule enacted a prohibition. It was a principle of professional ethics now embodied in a statutory rule. The Court said, as in the present case before us, that it was the Government’s own case throughout that having been dismissed from service the plaintiff was no longer in their employment until the Court held that dismissal was wrongful and it did not lie in the month of the Government now to take a contrary stand when it came to payment of arrears of salary which the employee (plaintiff), after years oflitigation, had become entitled to. The Court also said that F.R. 54(3)(b)contemplated a situation where the reinstated Government servant had secured employment between the period of dismissal and reinstatement. The Court held that joining the legal profession did not mean getting secured employment in the sense in which the expression was used in F.R. 54.
(7) Again in somewhat similar circumstances a Division Bench of the Madras High Court in Union of India v. N.R.Venkatarama Naidu l975 (1)M.L.J. 345, held as under : “IN a suit for recovery of salary or wages, the Article in the Limitation Act of 1963, which would be applicable is Article 7,corresponding to Article 102 of the Limitation Act of 1908. The third column of Article 7 of the Limitation Act says “when the wages accrue due”. This phrase has to be liberally interpreted in a case where an employee’s services were wrongfully terminated and later he was reinstated after the employer realised that such termination was unlawful or unconstitutional. During the interregnum he is not entitled to any salary at all under any of the service conditions. When he is in service, obviously, the salary to a Government servant becomes due by the end of the month. But in a case where his services were terminated under a rule of service, which was later declared by the Supreme Court as unconstitutional, then the or diary rule of limitation to claim the arrears of salary cannot prevail.If it were so, then in a given case, if it takes several years for the unfortunate employee to get redress and to get a pronouncement asto the invalidity of the order of termination and if as is conceivable the litigation takes more than three years, for him to be reinstated’,is it necessary that he should file an empty suit for arrears of salary for the period when he was not in service and, when he is a dismissed servant or a servant whose services have been terminated and get his suit dismissed only on the ground that he has not been reinstated ? It would be an empty formality besides leading to unjust consequences because such a suit would automatically be dismissed as he would be confronted with the order of dismissal or termination for which he cannot have any answer at all. In the light of our observations as above, the third column in Article 7,when the wages accrue due, in a case like the one with which we are faced, has to be interpreted, as we said, liberally and equitably.When an employee whose services have been illegally terminated has been reinstated and when he is informed that the period during which he was off from service would be treated as if he was onduty, then a fresh cause of action would arise on the date when he was reinstated and on the date when a communication to that effect was issued to him.”
(8) We are, thus, of the opinion that cause of action for the plaintiff to file the present suit arose on 4/05/1967 when he was told that the period from 31/05/1960 to 26/04/1965 was to be treated as his being on duty but he was not to be paid his salary for whole of this period. Wages (salary)could not be said to have accrued when the Government was yet considering whether the period between the termination and reinstatement was to be treated as on duty and if the employee was entitled to arrears of salary for whole or part of that period. Once the Government decided that the whole of the period when services of the plaintiff stood terminated was to be treated as on duty, the wages for whole on the period accrued from the date the said decision was communicated to the plaintiff. The suit having been filed on 29/01/1970 would be within the period of limitation.
(9) As we have discussed above, F.R. 54(3)(b) is not applicable and the defendants were not authorised to deduct Rs. 2.600.00 from the arrears of salary paid to the plaintiff. This amount defendants must refund.
(10) Then there is question of interest as claimed by the plaintiff. The Interest Act, 1978 came into force in 1982, This Act is not applicable to the pending proceedings as per Sub-section (2) of Section 6 which is as under : "THE provisions of this Act shall not apply to any suit or other legal proceedings pending at the commencement of this Act and the provisions of the corresponding law applicable immediately before?uch commencement shall, notwithstanding the repeal of such law by Sub-section (1), continue to apply to such suit or other legalproceedings." (11) In Thawardas Pherumal and Another v. Union of India, , where the question was award of interest by the Arbitrator in his Award the Court held that Interest Act, 1939, applied as interest was not otherwise payable by law in that kind of case and reference was made to a decision of the Privy Council in B.N. Ry. Co.v. Ruttanji Ramji . The Court said interest could be awarded when following among other conditions must be fulfillled : (1)there must be a debt or a sum certain;(2) it must be payable at a certain time or otherwise;(3) these debts or sums must be payable by virtue of some written contract at a certain time;(4) there must have been a demand in writing stating that interest will be demanded from the date of the demand. (12) In the present case before us all these elements are present. The interest was demanded by means of notice under Section 80 of the Code of Civil Procedure and interest would, therefore, become due from the date of notice which would be the date of the demand. Thus, the plaintiff would been titled to interest on the amount of Rs. 12,198.98 from 17/11/1969till the filing of the suit which is 29/01/1970. Interest pendents lite can be awarded by Court under Section 34 of the Code of Civil Procedure. Thus,issues Nos. 1, 3 and 4 are decided in favor of the plaintiff-appellant and against the defendants. There is no challenge to the decision on Issue No. 2in this appeal. (13) We, therefore, allow the appeal and set aside the impugned judgment and decree and instead grant a decree in favor of the plaintiff against defendant No. 1 for recovery of Rs. 12,198.98 and interest on this amount from 17/11/1969 till filing of the suit calculated at the rate of 6/o per annum. We further award interest pendent lite on the amount ofRs. 12,198.98 at the rate of 10% per annum from the date of filing the suit till payment. Plaintiff will also be entitled to casts throughout on the amount decreed. In case, however, the defendant makes payment of the decretal amount with pendente lite interest at the rate of 6% per annum instead ofl0% per annum within a period of two months from today, the whole of the decree shall stand satisfied.