Case: State of Madhya Pradesh Vs. State of Maharashtra and Others

This appeal is by certificate from the judgment dated 6 March, 1967 of the High Court ofappellant is the State of Madhya Pradesh. The first respondent is the State of Maharashtra. The second respondent is the plaintiff-decree holder. They will be referred to, for short, as Madhya Pradesh, Maharashtra and thetrial court passed a decree in favour of the plaintiff. It was declared that the order dated 9 January, 1954 of the suspension of the plaintiff as well as the. order of removal of the plaintiff from service passed on 2 February 1956 is illegal, void and inoperative. The further declaration was t hat the: plaintiff shall be deemed to be continuing in service from 16 September, 1943. A sum of Rs. 64, 588-2-0 was decreed in favour of the plaintiff and Bombay the predecessor of Maharashtra was ordered to pay the same with interest. Both Madhya Pradesh and Maharashtra were ordered to pay costs to thepreferred an appeal against the decree. Madhya Pradesh preferred objections against the order ofHigh Court confirmed the decree and the declarations. The High Court however modified the decree and held Madhya Pradesh liable. The claim of the plaintiff against Maharashtra wasplaintiff was appointed Assistant Medical Officer in 1938. In 1939 he was appointed officiating Assistant Surgeon. He was posted at Elichpur (now Achalpur). In 1942 he was transferred to Hoshangabad. In 1943 he applied for medical leave for four months. The Civil Surgeon recommended leave for six weeks. The plaintiff again applied for leave in the month of August, 1943. The leave was sanctioned by t he Civil Surgeon. The plaintiff then requested the Civil Surgeon in anticipation of sanction of leave by the Government for relief because he was not keeping good health. The Civil Surgeon then reported to the Government that the plaintiff absented himself from duty from 10 August, 1943 without leave. The Government sanctioned leave for six weeks. On 28 September, 1943 the plaintiff was suspended by an order with effect from 16 September, 1943.The plaintiff was served with a notice dated 30 September, 1943 to show cause why he: should not be dismissed from service. Four charges Were levelled against the plaintiff. Firs t, that he refused to come to duty at the time of epidemic in August, 1943; Second, that he left his station without permission. Third, that he refused to attend the Departmental enquiry when ordered to do so. Fourth , that he wilfully and deliberately acted in total disregard of orders and absented himself from duty though he was declared to be fit to. resumeEnquiry Officer by report dated 22 February, 1945 gave his findings that the first charge was not proved; that the second charge was proved but mitigated and the third and the fourth charges were technically21 June, 1945 the plaintiff was asked to show cause why he. should not be dismissed or reduced in rank. On 18 August, 1945 the Government of Central Provinces and Berar intimated to the plaintiff that the Government accepted the report of the Enquiry Officer and proposed to remove the plaintiff from service with effect from the date of the passing of the final order. By order dated 7 November, 1945 the Provincial Government passed an order removing the plaintiff from service with effect from that date. On 10 May, 1945 the plaintiff filed an appeal to the Governor but it was6 January, 1949 the plaintiff filed a suit in the court of the Second Additional District Judge, Nagpur. By judgment dated 31 August, 1953 the District Judge held that the suspension order and the order of dismissal were illegal and declared the plaintiff to. be deemed to. continue in service. The plaintiff was thereafter reinstated in service aS Assistant Surgeon on 12 December, 1953. He was posted at Rays Hospital, Nagpur on 15 September, 1953.On 13 January, 1954 the plaintiff was again suspended from ser vice under order dated 9 January, 1954. The plaintiff handed over charge on 13 January, 1954. On 1 February 1954 the plaintiff was served with a notice dated 29 January, 1954 to show cause why he should not be removed from service. The former report of the Enquiry Officer dated 22 February, 1945 was also given to the plaintiff. On 2 February, 1956 the plaintiff was removed from service. He appealed to the Governor. The appeal was6 October, 1956 the plaintiff filed this suit in the court of the Joint Civil Judge, Nagpur against Madhya Pradesh and Maharashtra. The plaintiff asked for a declaration that the order dated 9 January, 1954 suspending the plaintiff as well as the order dated 2 February, 1956 is illegal. The plaintiff asked for a declaration that he is deemed to continue in service. He claimed recovery of Rs. 64, 58 8-2-0 as arrears ofplaintiff in his suit alleged that both Maharashtra and Madhya Pradesh are "liable to make good the plaintiffs claim the liability for which is not exclusive but joint and several". T he alternative case. of the plaintiff in the suit was that"if it will be held that the State of Maharashtra and not the State of Madhya Pradesh is liable or viceversa the plaintiff will claim the decree against such State as would beCivil Judge passed the. decree on 25 April 1959 declaring: the order dated 9 January, 1954 suspending the plaintiff as well as the order dated 2 February, 1956 removing the plaintiff from service as illegal, void and inoperative. The decree further stated that the plaintiff was deemed to continue in service from 16 September, 1943. The Civil Judge passed a decree against the State of Bombay with the direction to pay Rs. 64, 588-2-0 with interest at 6 per cent.Both Maharashtra and Madhya Pradesh went up in appeal. The Division Bench of the Bombay High Court placed the matter be fore a larger Bench and referred these two questions for the decision of the Larger Bench. (1) Whether in the events that have happened which of these two States of Maharashtra and Madhya Pradesh can be compelled to take the plaintiff in service. (2) Whether both or only one of the two States can be made liable for the payment of arrears of salary of the plaintiff, if so, which State islarger Bench of the Bombay High Court said that the State of Madhya Pradesh is constituted after the States Reorganisation Act referred to as the Act came into. force on 1 November, 1956 is the principal successor State of the former State of Madhya Pradesh. The High Court further said that the State of Maharashtra is the successor State of the former Madhya Pradesh inasmuch as certain territories, namely, Vidharbha which formed part of the former St. ate of Madhya Pradesh became: a part of the new State of Maharashtra. The High Court then referred to. clause (B) of section 88 of the Act and said that Maharashtra would be liable for the claim of the plaintiff only if the cause of action has arisen in its entirety within the territories which formed part of Maharashtra, otherwise initial liability for the plaintiffs claim will be on the principal successor State Madhya Pradesh under section 88(c) of the Act. The larger Bench therefore referred the matter to the Division Bench to consider the question whether the cause of action for the plaintiffs claim arose in its entirety within the territories which formed part of theHigh Court held that under section 88(c) of the Act Madhya Pradesh is responsible for the claim of the plaintiff. The High Court further held that the plaintiff was appointed under conditions of service Prescribed for him and accepted by him, and, therefore, the plaintiffs claim for arrears of salary would be governed by section 87 of the Act and not by section 88 of the Act. The High Court said that the plaintiffs claim for arrears of salary and allowance was based on contract, either express or implied, on the basis of the terms. of appointment and the conditions of service p rescribed by the Government and accepted by the plaintiff. The High Court also said that at the time of the plaintiffs appointment in 1939 the plaintiffs services were available for the then entire Province of Central Provinces and Berar and not only for those districts which formed part of Madhya Pradesh. Therefore, the High Court said that section 87(b) of the Act would not apply. Under the residuary clause of section 87(c) of the Act Madhya Pradesh would be liable as the principal successor State because the purpose of the contract were as from the appointed day not exclusively purposes of any of the two successor States.Madhya Pradesh raised three contentions. First, the plaintiff did not claim salary and allowances for the period subsequent to 15 September, 1943 in the. suit filed by the. plaintiff in 1949 and was therefore by reason of t he provisions contained in Order 2 Rule 2 of theCode of Civil Procedure precluded from claiming the salary and allowances for the period of 16 September, 1943 to 31 August, 1953 in the second suit which was filed on 6 October, 1956. Second, the plaintiffs claim in the second suit for salary and allowances prior to 6 October 1953 would be barred by the reason of Article 102 of the Limitation Act 1908. Third, the liability, if any, would be under section 88(b) of the Act of Maharashtra which succeeded the State of Madhya Pradesh on 1 November, 1956 in so far as Nagpur District of the then existing State of Madhya Pradesh was concerned. Reference was made to section 8(1) (c) of the Act for the purpose. Further it is said by the appellant that on or after 1 November, 1956 the plaintiff could continue the suit only against the State of Bombay later known as State of Maharashtra and not against the State of Madhya Pradesh as constituted on or after 1 November, 1956.

Court's reasoning:
Relying on the decision of this Court in Jai Chand Sawhneys case and Sakal Deeps case (supra) counsel for Madhya Pradesh contended that the plaintiff would not be entitled to more than three years salary. The present case is not one of setting aside an order of dismissal simpliciter. When the plaintiff filed a suit in 1949 he could not ask for arrears of salary. Pursuant to the decree dated 30 August, 1953 in his favour he was reinstated on 1 2 December, 1953. Three features are to be borne in mind in appreciating the plaintiffs case from the point of view of limitation. First the plaintiff became entitled to salary for the period 16 September, 1943 up t o the date of reinstatement on 12 December, 1953, only when pursuant to the decree dated 30 August, 1953 there was actual reinstatement of the plaintiff on 12 December, 1953. Second, the plaintiff was again suspended on 19 January, 1954 and was dismissed on 23 February 1956. The Madhya Pradesh Government on 5 March, 1954 decided that during the period of first suspension till his reinstatement on 12 December, 1953 he was not entitled to salary. Again on 29 January, 1956 the Madhya Pradesh Government decided under Fundamental Rule 54(iii ) that during the period of suspension from 16 September 1943 to 12 December 1953 and again from 19 January 1954 to 23 February 1956 he would not be entitled to any payment of allowances.On these facts two consequences arise in the present appeal. First, since the plaintiff was under suspension from 16 September, 1943 till 12 December, 1953 when he was rein- stated and again suspended from 19 January, 1954 till 23 February, 1956 when he was dismissed, his suit on 6 October, 1956 is within a period of three years from the date of his reinstatement on 12 December, 1953. Second, during the period of suspension he was not entitled to salary under Fundamental Rule 53. Further decision to that effect was taken by the Madhya Pradesh Government on 28 January, 1956 under Fundamental Rule 54. Therefore, the plaintiffs cause of action for salary for the period of suspension did not accrue until he was reinstated on 12 December, 1953. The plaintiffs salary accrued only when he was reinstated as a result of the decree setting aside the orders of suspension and ofrulings of this Court in Jai Chand Sawhneys case (supra) and Sakal Deeps case (supra) do. not apply to the present appeal because there was no aspect of any suspension order remaining operative until the fact of reinstatement pursuant to theplaintiffs cause of action for arrears of salary is this. When the plaintiff was reinstated on 12 December, 1953 pursuant to the decree dated 30 August, 1953 the plaintiff became entitled to salary which was suspended during the period of suspension. The plaintiff was again suspended from 19 January, 1954 and he was dismissed from service on 23 February, 1956. Therefore, when the plaintiff filed the suit on 6 October, 1956 his entire claim for salary is founded first on his reinstatement on 12 December, 1953 pursuant to the decree and second on the order of suspension dated 19 January, 1954 and the order of dismissal on 23 February 1956 which the plaintiff challenged as illegal.The original order of suspension on 16 September, 1943 as welt as the original dismissal dated 7 November, 194 5 was declared to be illegal by the decree dated 30 August, 1953. Therefore, when the plaintiff was reinstated on 12 December, 1953 it is then that the plaintiffs claim for salary accrued due. This salary was again suspended from 19 January, 1954. Dismissal on 23 February, 1956 was at a time when the plaintiff was still under suspension. The order of suspension does not put an end to his service. Suspension merely suspends the claim to salary. During suspension there is suspension allowance. See Khem Chand v. Union of India(1) where this Court said that the real effect of the order of suspension is that though he continues to be a member of the service he is not permitted to work and is paid only subsistence allowance which is less than his salary. Under Fundamental Rule 52 the pay an d allowance of a Government servant who is dismissed or removed from service, cease from the date. of his dismissal or removal. Therefore, there would be no question of salary accruing or accruing due so long as orders of suspension and dismissal stand. The High Court was correct in the conclusion that the plaintiffs claim for salary accrued due only on the order of dismissal dated 23 February, 1956 being set aside.