PETITIONER: SHRI MADHAV LAXMAN VAIKUNTHE V. Vs. RESPONDENT: THE STATE OF MYSORE DATE OF JUDGMENT: 12/04/1961 BENCH: SINHA, BHUVNESHWAR P.(CJ) BENCH: SINHA, BHUVNESHWAR P.(CJ) DAS, S.K. SARKAR, A.K. AYYANGAR, N. RAJAGOPALA MUDHOLKAR, J.R. CITATION: 1962 AIR 8 1962 SCR (1) 886 CITATOR INFO : D 1966 SC1529 (3,5,9,12) R 1971 SC 766 (7) F 1972 SC2638 (3) R 1974 SC 338 (8) R 1974 SC 423 (18) RF 1976 SC1766 (12) RF 1976 SC2547 (21) RF 1980 SC1773 (9) R 1992 SC2009 (9) ACT: Public Servant-Reversion to substantive rank--if and Punishment-Test--Recovery of arrears of salary--Limitation Government of India Act, 1935 (26 Geo..5, Ch. 2), S. 240(3)--Constitution of lndia, Art. 311(2)--Indian Limitation Act, 1908 (9 of 1908), art. 102. HEADNOTE: The appellant, who held the rank of a Mamllatdar in the first grade and was officiating as District Deputy Collector, was alleged to have wrongly charged travelling allowance for 59 miles instead of 51 and was, as the result of a departmental enquiry, reverted to his substantive rank for three years and 887 directed to refund the excess be had charged. He made a re- presentation to the Government which was of no avail although the Accountant General was of the opinion that the appellant had not overcharged and committed no fraud. Ultimately the appellant was promoted to the selection grade but the order of reversion remained effective and affected his position in the selection grade. After retirement he brought a suit for a declaration that the order of reversion was void and for recovery of Rs. 12, 516 and odd as arrears of salary, allowances, etc., with interest and future interest. The trial court held that there was no compliance with the provisions of s. 240(3) of the Government of India Act, 1935, granted the declaration but refused the arrears claimed. The plaintiff filed an appeal and the State a cross-objection and the High Court dismissed the appeal and allowed the cross-objection, holding that the order of reversion was not a punishment within the meaning of S. 240(3) of the Government of India Act, 1935. Held, that the matter was covered by the observations of this Court in Purshottam Lal Dhingra's case and of the two tests of punishment laid (town by this Court, namely, (1) whether the servant had a right to the rank or (2) whether he had been visited by evil consequences of the kind specified therein, the second certainly applied. The appellant might or might not have the right to hold the higher post, but there could be no doubt that the was visited with evil consequences as a result of the order of reversion. Mere deprivation of higher emoluments, however, in conse- quence of an order of reversion could not by itself satisfy that test which must include such other conseqnences as forfeiture of substantive pay and loss of seniority' In the instant case, by the order of reversion for three years to his substantive post, the appellant lost seniority and promotion and the belated action of the Government could not wholly undo the mischief. Since the requirement of s. 240(3) of the Government of India Act, 1935, which corresponds to Art. 311(2) of the Constitution, had not been found to have been fully complied with, the order of reversion must be held to be void. Purshottam Lal Dhingra v. Union of India, [1958] S.C.R. 826, applied. The claim of arrears of salary was governed by art. 102 of the Indian Limitation Act, and the appellant, therefore, was entitled to no more than what fell due during the 3 years previous to his retirement. The Punjab Province v. Pandit Tarachand, [1947) F.C.R. 89, followed. JUDGMENT:
CIVIL APPELLATE JURISDICTION: CIVIL Appeal No.84 of 1960.
888
Appeal from the judgment and decree dated July 26, 1956. of
the Bombay, High Court in Appeal No. he 138 of 1956.
The appellant in person.
B. R. L. Ayengar and D. Gupta, for the respondent.
1961. April 12. The Judgment of the Court was delivered by
SINHA, C. J.-The main question for decision in this appeal,
on a certificate of fitness granted by the’ High Court of
Judicature at Bombay, is whether a public servant, who has
been officiating in a higher post but has been reverted to
his substantive rank as a result of an adverse finding
against him in a departmental enquiry for misconduct, can be
said to have been reduced in rank within the meaning of s.
240(3) of the Government of India Act, 1935. The learned
Civil Judge, Senior Division, by his, Judgment and Decree
dated October 31, 1955, held that it was so. The High Court
of Bombay, on a first appeal from that decision, by its
Judgment and Decree dated July 26, 1956, has held to the
contrary.
In so far as it is necessary for the determination of this
appeal, the facts of this case may shortly be stated as
follows. The appellant was holding the rank of a Mamlatdar
in the First Grade and Was officiating as a District Deputy
Collector. In the latter capacity he was functioning as a
District Supplies Officer. He had to undertake tours in the
discharge of his official duties for which he maintained a
motor car. In respect of one of his travelling allowance
bills, it was found that he had charged travelling allowance
in respect of 59 miles whereas the correct distance was only
51 miles. A departmental enquiry was held against him as a
result of which he was reverted to his original rank as
Mamlatdar, by virtue of the Order of the Government dated
August 11, 1948, (Ex. 35), which was to the following
effect:
“After careful consideration Government have
decided to revert you to Mamlatdar for a
period of
889
three years and have further directed that you
should refund the excess mileage drawn by you
in respect of the three journeys.”
The appellant made a number of representations to the
Government challenging the correctness of the findings
against him and praying for re-consideration of the Order of
Reversion passed against, him but to no effect, in spite of
the fact that ultimately the Accountant General gave his
opinion that the appellant had not overcharged and that
there was no fraud involved in the travelling allowance bill
which was the subject matter of the charge against him. But
ultimately, by a Notification date& March 26, 1951, (Ex.
61), the appellant was promoted to the Selection Grade with
effect from August 1, 1950, but even so the Order of
Reversion passed against the appellant remained effective
and appears to have affected his place in the Selection
Grade. Eventually, the appellant retired from service on
superannuation with effect from November 28, 1953. He filed
his suit against the State of Bombay on August 2, 1954, for
a declaration that the Order of the Government dated August
11, 1948, was void, inoperative, wrongful, illegal and ultra
vires, and for recovery of Rs. 12,866 odd or account of his
arrears of salary, allowances, etc. with interest and future
interest. The learned Civil Judge Senior Division, at
Belgaum, came to the conclusion that the first part of the
departmental enquiry held against the plaintiff leading up
to the findings against him was free from any defect but
that he had no been given the opportunity of showing cause
against the punishment proposed to be inflicted upon him a a
result of those findings, in so far as no show-cause notice
was given to him nor a copy of the enquire, report showing
the grounds on which the findings ha, been based. There
was, thus, according to the finding of the Trial Court, no
full compliance with the requirements of s. 240(3) of the
Government of India Act 1935. The Court also held that the
Order of Reversion amounted to a penalty imposed upon the
plaintiff as a result of the enquiry. The Court, therefore,
cam
890
to the conclusion that the Order aforesaid passed by the
Government reverting him to the substantive rank was void
and granted him that declaration, but dismissed his suit,
with costs, in respect of the arrears Claimed by him as
aforesaid on the ground that it was based on tort and not on
contract. There was an appeal by the plaintiff in respect
of the dismissal of his claim for arrears, and cross-
objections by the State in respect of that part of the
judgment and decree which had granted declaration in favour
of the plaintiff. The High Court dismissed the appeal by
the plaintiff and allowed the cross-objections of the de-
fendant-respondent in respect of the declaration, but made
no orders as to the costs of the appeal and the cross-
objections. The High Court held that the Order of
Reversion, even assuming that it was a punishment as a
result of the departmental enquiry against the appellant,
was not a punishment within the meaning of s. 240(3) of the
Government of India Act, 1935. It also held that the Order
of Reversion was not a punishment at all.
In this Court, the appellant, who has argued his own case
with ability, has urged in the first place, and in our
opinion rightly, that his case is covered by the
observations of this Court in Parshotam Lal Dhingra v. Union
of Indid (1). Those observations are as follows:-
“A reduction in rank likewise may be by way of
punishment or it may be an innocuous thing.
If the Government servant has a right to a
particular rank, then the very reduction from
that rank will operate as a penalty, for he
will then lose the emoluments and privileges
of that rank. If, however, he has no right to
the particular rank, his reduction from an
officiating higher rank to his substantive
lower rank will not ordinarily be a
punishment. But the mere fact that the
servant has no title to the post or the rank
and the Government has, by contract, express
or implied, or under the rules, the right to
reduce him to a lower post does not mean that
an order of reduction of a servant to a lower
(1) [1958] S.C.R. 826, 863-64.
891
post or rank cannot in any circumstances be a
punishment. The real test for determining
whether the reduction in such cases is or is
not by way of punishment is to find out if the
order for the reduction also visits the
servant with any penal consequences. Thus if
the order entails or provides for the
forfeiture of his pay or allowances or the
loss of his seniority in his substantive rank
or the stoppage or postponement of his future
chances of promotion, then that circumstance
may indicate that although in form the
Government had purported to exercise its right
to terminate the employment or to reduce the
servant to a lower rank under the terms of the
contract of employment or under the rules, in
truth and reality the Government has
terminated the employment as and by way of
penalty. The use of the expression “termi-
nate” or “discharge” is not conclusive. Tn
spite of the use of such innocuous
expressions, the court has to apply the two
tests mentioned above, namely, (1) whether the
servant bad a right to the post or the rank or
(2) whether he ha,,; been visited with evil
consequences of the kind hereinbefore referred
to? If the case satisfies either of the two
tests then it must be held that the servant
has been punished and the termination of his
service must be taken as a dismissal or
removal from service or the reversion to his
substantive rank must be regarded as a
reduction in rank and if the requirements of
rules and Art. 311, which give protection to
Government servant have not been complied
with, the termination of the service or the
reduction in rank must be held to be wrongful
and in violation of the consti- tutional right
of the servant.”
He has rightly pointed out that he would have continued as a
Deputy Collector but for the Order of the Government, dated
August 11, 1948, impugned in this case, as a result of the
enquiry held against him, and that his reversion was not as
a matter of course or for administrative convenience. The
Order, in terms, held him back for three years. Thus his
emoluments, present as well as future, were adversely
affected by the
892
Order aforesaid of the Government. In the ordinary course,
he would have continued as a Deputy Collector with all the
emoluments of the post and would have been entitled to
further promotion but for the setback in his service as a
result of the adverse finding against him, which finding was
ultimately declared by the Account ant General to have been
under a misapprehension of the true facts. It is true that
he was promoted as a result of the Government Order dated
March 26, 1951, with effect from August 1, 1950. B’ that
promotion did not entirely cover the ground lost by him as a
result of the Government Order impugned in this case. It is
noteworthy that the Judgment of the High Court under appeal
was given in July, 1956, when the decision of this Court in
Dhingra’s case (1) had not been given. The decision of this
Court was given in November, 1957. Of the two tests laid
down by this Court, certainly the second test applies, if
not also the first one. He may or may not have a right to
hold the post or the rank, but there is no doubt that he was
visited with evil consequences. Ordinarily, if a public
servant has been officiating in a higher rank it cannot be
said that he has a substantive right to that higher rank.
He may have to revert to his substantive rank as a result of
the exigencies of the service or he may be reverted as a
result of an adverse finding in an enquiry against him for
misconduct. In every case of reversion from an officiating
higher post to his substantive post, the civil servant
concerned is deprived of the emoluments of the higher post.
But that cannot, by itself, be a ground for holding that the
second test in Dhingra’s case (1), namely, whether he has
been visited with evil consequences, can be said to have
been satisfied. Hence, mere deprivation of higher
emoluments as a consequence of a reversion cannot amount to
the “evil consequences” referred to in the second test in
Dhingra’s case (1); they must mean something more than mere
deprivation of higher emoluments. That being so, they
include, for example, forfeiture of substantive pay, loss of
seniority, etc. Applying that
(1) [1058] S.C.P. 326, 863-64.
893
test to the present case, it cannot be said that simply
because the appellant did not get a Deputy Collector’s
salary for three years, he was visited with evil conse-
quences of the type contemplated in Dhingra’s case (1).
Even if he had been reverted in the ordinary course of the
exigencies of the service, the same consequences would have
ensued. If the logs of the emoluments attaching to the
higher rank in which he was officiating was the only
consequence of his reversion as a result of the enquiry
against him, the appellant would’ have no cause of action.
But it is clear that as a result of the Order dated August
11, 1948 (Ex. 35), the appellant lost his seniority as a
Mamlatdar, which was his substantive post: That being so, it
was not a simple case of reversion with no evil
consequences; it had such consequences as would come within
the test of punishment as laid down in Dhingra’s case. If
the reversion had not been for a period of three years, it
could not be said that the appellant had been punished
within the meaning of the rule laid down in Dhingra’s case,
(1). It cannot be asserted that his reversion to a
substantive post for a period of three years was not by way
of punishment. From the facts of this case it is clear that
the appellant was on the upward move in the cadre of his
service and but for this aberration in his progress to a
higher post, he would have, in ordinary course, been
promoted as he actually was sometime later when the
authorities realised perhaps that he had not been justly
treated, as is clear from the Order of the Government, dated
March 26, 1951, promoting him to the higher rank with effect
from August 1, 1950. But that belated justice meted out to
him by the Government did not completely undo the mischief
of the Order of Reversion impugned in this case. It is
clear to us, therefore, that as a result of the Order of
Reversion aforesaid, the appellant had been punished and
that the Order of the Government punishing him was not
wholly regular. It has been found that the requirements of
s. 240(3) of the Government of India Act, 1935,
corresponding to Art. 311 (2) of the Constitution, had not
been fully complied with. His
(1) [1958] S.C.R. 826,863-64.
894
reversion in rank, therefore, was in violation of the
Constitutional guarantee. In view of these considerations
it must be held that the High Court was not right in holding
against the appellant that his reversion was not a
punishment contemplated by s. 240(3) of the Government of
India Act, 1935. On this part of the case, in our opinion,
the decision of the High part has to be reversed and that of
the Trial Court hat his reversion to his substantive rank
was void, must be restored.
The question then arises whether he is entitled to any
relief in respect of his claim for arrears of salary and
dearness allowance. He has claimed Rs. 10,777 odd as
arrears of pay, Rs. 951 odd as arrears of dearness
allowance, as also Rs. 688 odd as arrears of daily allowance
plus interest of Rs. 471 odd, thus aggregating to the sum of
Rs. 12,886 odd. This claim is spread over the period
August, 1946, to November, 1953, that is to say, until the
date of his retirement from Government service, plus future
interest also. On this part of the case the learned Trial
Judge, relying upon the case of the High Commissioner for
India and Pakistan v. I. M. Lall (1) held that a government
servant has no right to recover arrears of pay by an action
in a Civil Court. He got over the decision of this Court in
the State of Bihar v. Abdul Majid (2) on the ground that
that case has made a distinction between a claim based on a
contract and that on a tort. In the instant case, he came
to the conclusion that as the plaintiff had claimed the
difference between the pay and allowance actually drawn and
those to which he would have been entitled but for the
wrongful orders, the claim was based on tort and, therefore,
the plaintiff was not entitled to any relief. On the
question of limitation, he held that the suit would be
governed by Art. 102 of the Indian Limitation Act (IX of
1908) as laid down by the Federal Court in the case of The
Punjab Province v. Pandit Tarachand (3). In that view of
the matter, the learned Judge held that adding the period of
two months of the statutory notice under s. 80 of the Code
of Civil Procedure given to
(1) (1948) L.R. 75 I.A. 225. (2) [1954] S.C.R. 786.
(3) [1947] F.C.R. 89.
895
Government, the claim would be in time from June 2, 1951.
Hence the Trial Court, while giving the declaration that the
Order impugned was void, dismissed, the rest of the claim
with a direction that the plaintiff was to pay 3/4ths of the
costs of the suit to the defendant. The High Court
dismissed the suit in its entirety after allowing the cross-
objections of the State. The appellant contended that his
suit for arrears of salary would not be governed by the
three years rule laid down in Art. 102 of the Limitation Act
and that the decision of the Federal Court in Tarachand’s
case (1) was not correct. The sole ground on which this
contention was based was that “salary” was not included
within the term “wages”. In our opinion, no good reasons
have been adduced before us for not following the aforesaid
decision of the Federal Court. In the result, the appeal is
allowed in part, that is to say, the declaration granted by
the Trial Court that the Order of the Government impugned in
this case is void, is restored, in disagreement with the
decision of the High Court. The claim as regards arrears of
salary and allowance is allowed in part only from the 2nd of
June, 1951, until the date of the plaintiff’s retirement
from Government service. There will be no decree for
interest before the date of the suit, but the decretal sum
shall bear interest at 6% per annum from the date of the
suit until realisation. The plaintiff-appellant will be
entitled to three-fourths of his costs throughout, in view
of the fact that his entire claim is not being allowed.
Appeal allowed in part.
(1) (1947) F.C.R. 89.
896