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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

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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

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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

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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

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             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

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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.

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(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