2 S.C.R.

SUPREME COURT REPORTS 391

Official Receiver.

The position was rightly summed up by the High Court as under:-

"W e thus reach the position that no leave of Court was needed before the Receiver appointed by the mortgagee debenture-holders exercised the power of sale and that as there is no allegation of want of bona ft.des or recklessness or fraud against the Receiver in exercising such a power, it would follow that the sale held by the Receiver is valid and effectual to convey title to the purchaser and that such a sale cannot be avoided on the ground either of want of due notice given by the Receiver before effecting the sale or on the ground of undervalue".

The result therefore is that the appeal fails and must be dismissed with costs of the contesting Respondent 3.

The other Respondents who have appeared before us will bear and pay their own costs of the appeal.

OM PRAKASH GUPTA

ti.

THE ST ATE OF UTT AR PRADESH.

[VIVIAN BosE, BHAGWATI, JAGANNADHADAS, VENKATARAMA AYYAR, S1NHA and IMAM, JJ.]

Government servant-Order of dismissal-Suit fOt" declaration that order dismissing the appellant from service was. illegal-Court

fee paid on an alte.-native claim fol" damages which was subsequently given up-Refund of-Whether could be granted-Arrears of pay-- Claim for-LApse of suspension order after order of dismissal.

The appellant, a member of the United Provinces Civil (Executive) Service, was suspended from service with effect from the 24th August, 1944, pending aP enquiry into his conduct.

As a result of enquiry and report by the Commissioner, the Government passed an order on the 25th November, 1944, dismissing the appellant from service, which order was served on the appellant on the !st December, 1944.

The appellant instituted a suit for a declaration that the order of dismissal passed against him was wrongful, illegal and inoperative, and that he continued to be in service and was entitled to a decree for recovery of arrears of his sal:rry. The plaint included an alternative prayer for a declaration that the order of dismissal was

M. K. RangQll/Jthan ""' ,,,,,,, Mr ....

G~•f Madns ad oth6rs

i].

4jlril :u

~·. l ., ..

. .

' 1955

Om Prakash Gupta

wrongful 'and. for a decree for Rs. 1,20,000/- by way of damages being passed in his favour. .The requisite. court-fee on the valuation of Rs. ),20,000 /- .. was paid. The claim for damages was later on

al>andon~<:f iii' view of "the decision of the Privy Council in High Commissionir for India and High Commissioner for Pakistan v. /. M •

Tiu Staie of Uttar . Prsh ·.,

Li/{1 ) and:'fonsequentlal amendments were made in the plaint. The Civil J udgc granted a declaration that the order of dismissal was illegal and that the appellant continued to be in service in spite of th:µ: order. . But he declined to grant a decree for arrears of salary on the groui:id that a suit therefore was not maintainable. A prayer .for the refund of 'the additional court-fee paid in respect of the claim for damages was 'also refused.

The respondent did not appeal against the decision that the order of dismiisal was illegal. But the appellant took the matter in appeal to the High Court which, affirming the decision of the Civil Judge, negatived his claim for arrears of salary and also r_cfused refund of Court-fee.

Leave was, however, granted to dppeal to thi:: Supreme Court.

"-·" "l

- :.:'' ' lf.,1. .d ' ' .. dn view of the decision of the Supreme Court in the case of The Siate of Bihar v., Abdu/'Majid('), the respondent did not dispute the right of-'ilic 'appellant to recover arrears of pay. But he sought to support the decision on the ground that the order of dismissal dated the 25th November, 1944, having been declared to be illegal and void, the order of suspension dated the 24th August, 1944, became revived and that would bar the claim for arrears of salary.

Held that the order of suspension made against the appellant being one pending an enquiry, it lapsed with the order of dismissal and the subsequent declaration by the Civil Court that the order of dismissal Was illegal. could not revive an order_ which. had ceased to exist. ·. i. ·

- ·· ·

t'~·l:.. Theque"tioil whether the order of suspension dated the 24th August, 1944, . was valid . and whether it was passed after due en- . quiry; woold be material only with reference to the claim for salary .for the period between the 24th August, 1944 and the. !st December, 1944, arid as the appellant did not press the claim for that period there was no need to direct an enquiry on that point, . . "") . ·• Heid ·£U, ther 'tliat the claim for refund of extra court-fee could . not be. gianted illasmuch as the decision of. the Privy Council dari- . lying the. pi>si\ion eould not be a ground for the refund of xcess rou_rtf": -whCQ at the time it was _paid it was in accordance with. the :}i_w. as i~, thcii ~~ The State of Bihar v. Abdul Majid ([1954) S.C.R. 786), Sh""um

v. ,.Smith.([188~] .A.C. 229), R. Venkata Rao v. Secretary of State for 'Jnilia. 'in CounCii (r.;.R. 64 I.A. 55), M. Gopal Krishna Naid,. v. s- ; f, fMadhf.a:Pr1idesh (A.I.R. 1952 Nag. 17), Provincial Government, "i::'1itrti1 Pt/vi."cei , and Berar through Collector, Amraoti v. Shams/Jiil

;!fps~'4n Sirifi H.uss'ain (I.LR. [1948] Nag. 576), referred ID.

(I) [1948] L.R. 75 I.A. 225.

(2) [1954] S.C.R. 786.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 85 .of 1954. ,,

i Appeal under Article 133( 1) ( c) of the Constitution from the Judgment and Decree dated the 6th November, 1950, of the High Court of Judicature at Allahabad in F. A. No. 141 of 1949.

S. Ramaswamy Iyer (K. R. Clioudhry, with him) for th~ appellant.

M. C. Setalvad, Attorney-General for India ( C. P.

Lal, with him) for the respondent.

1955.

April 21.

The Judgment of the Court was delivered by

IMAM J.-This is an appeal against the decision of the Allahabad High Court affirming the decision of the Civil Judge of Allahabad.

The appellant was appointed to the United Pri>- vinces Civil (Executive) Service in 1940 and in due course was confirmed.

He was posted to various stations and in 1944 he was posted to Lakhimpur Kheri, where he joined n July,

1944. On the 23rd August, 1944, the Deputy Commissioner of Lakhimpur Kheri received a telegram from Government informing him that the appellant was suspended forthwith pending inquiry into his conduct and that a copy of the telegram was forwarded to the appellant for information.

On the 26th August, 1944, the Deputy Commissioner wrote to the appellant that he was required to appear before the Commissioner of the Lucknow Division on the 28th August, 1944. to answer the charges, a copy of which would be forwarded to him. He further informed the appellant that he could treat his case under rule 55 of the Civil Services {Classification Control and Appeal) Rules of 1930, published in the United Provinces Gazette of June 28, 1930.

The appellant was further informed that in view of his suspension his leave application was cancelled.

On the 28th August, 1944, the appellant appeared before the Commissioner at Lucknow and protested against the pri>- cedure adopted by him for the inquiry. The Commis- " 7-83 S. C. India/59.

Om Prakash Gupta

The State of Ullar

Prat/uh

Om FTakash G•Pta

v, The State of Uttar

Pradesh

Imam J,

sioner having completed the inquiry on the 1st September, 1944, submitted his report to Government.

The Commissioner, however, recommenced the inquiry on September 11, 1944, and after completing the inquiry submitted the papers to Government on the 30th September, 1944.

The Government of the United Provinces by an order dated the 25th November, 1944, dismissed the appellant from the United Provinces Civil (Executive) Service.

This order was served on the appellant on the 1st December, 1944, and he submitted a memorial to the Governor on August 7, 1945, which was rejected on the 28th May, 1947.

During the period of suspension the appellant was paid subsistence allowance at the rate of one-fourth of his salary which was then Rs. 310 per month.

The appellant gave notice under section 80 of the Code of Civil Procedure of h.is intention to bring a suit and on the 2nd Januay, 1948, he filed his suit.

He asked for a declaration that the order of dismissal was wrongful, illegal, void and inoperative nd that he still continued to be a member of the Civil Service ontitled to full pay with all increments as they fell due.

He prayed for a decree for , recovery of arrears of salary amounting to Rs. 16,810-8-0 less subsistence allowance already drawn from August 24, 1944, to December 31, 1947.

In the alternative he prayed for a declaration that the order of dismissal was wrongful and that a decree to the extent of Rs. 1,20,000 with interest by way of damages may be passed in his favour.

He paid the requisite court fee on the valuation of Rs. 1,20,000.

This alternative claim was deleted from the plaint as a result of an amendment, having regard to a rnbsequent decision of the Privy Council* which held that a person illegally dismissed from Government service could only get a declaration that the order was inoperative and that he still continued to be a member of the Service.

The appellant asked for refund of the extra court fee paid which was rejected by the Civil Judge by a separate order.

The Civil Judge, however, decreed

*High CommiJJiorttr for India and H;, gh Commissioner for PakistaN Y.

J. ,\f. Lal-. [1948] L.R. 75 I.A .. ~~·"·

ts.c.R.

SUPREME COURT REPORTS

the appellant's suit in part declaring that the order dismissing him from service was illegal and that he still continued to be a member of the United Provinces Civil (Executive) Service.

The Civil Judge, however, declined to pass a decree for arrears of salary.

Against the decision of the Civil Judge the appellant appealed to the High Court and his appeal was dismissed.

The respondent did not appeal against the decision of the Civil Judge or file a cross-objection.

The appeal in the High Court proceeded on the basis that the order of dismissal made against the appellant was illegal and that it was rightly declared that he continued to be a member of the service of the United Provinces Civil (Executive) Service. The only two questions which were considered and decided by the High Court were as to whether the appellant was entitled to a decree for arrears of salary and a refund of the excess court fee paid by him.

Both these questions were decided against the appellant by the High Court which subsequently gave him a certificate for leave to appeal to this court.

It may be stated at once that in view of the dedsion of this court in The State of Bihar v. Abdul Majid(1) there can be no question now that the appellant had the right to institute a suit for recovery of arrears of salary as he was dismissed illegally.· It is unnecessary, therefore, to refer to the elaborate discussion of the law in this respect to be found in the judgment of the learned Judges of the High Court.

When this appeal came on for hearing before this court and the appellant had been heard, the Attorney- General in the course of his argument had contended that the order of suspension of August 1944 subsisted although the order of dismissal had been declared illegal by the Civil Judge and all that the appellant was entitled to was subsistence allowance and not salary so long as the order of suspension remained effective.

This plea was not taken in the written statement filed in the trial court, nor was there any issue framed in this respect.

The Attorney-General

(ll [1954] S.C.R. 786.

Om Prakash Gupla

TM State of Utlar

Pradesh

Imam].

!955

Om Prakash Gupta

Thi SlaU of Uttar

Prad<sh

Imam J.

asked for time to file an additional written statement on behalf of.' the respondent. This court allowed time for the respondent to <lo So and the appellant was also given time to reply to . any additional written statement filed 'on behalf of the respondent. The respondent filed the additional written statement and the appellant filed his reply to it. Thereafter the appeal came on for hearing again and the learned Advocate for the appellant made his submissions on the addi- 0tional written statement and the Attorney-General replied to the same.

So far as the . payment of excess court fee is concerned, the learned. Advocate for the appellant did riot urge this point in his opening argument but urged it in reply after the Attorney-General had concluded his argument.

Apart from the question as to whether the Advocate can be allowed to urge a point like this in reply when no submission had been made by him in his opening, it seems there is no merit in the submission made by the Advocate.

The court fee had been paid on Rs. 1,20,000 which was claimed as damages. At the time the suit was instituted" the law as then understood permitted such .a claim to be made.

The decision of the Privy Council, however, made it clear that no such claim could be made and all that a Government servant could ask for was a declaration that the order of dismissal was illegal and that he still continued to he a member of • the Civil Service.

The decision of the Privy Council clarifying the position could not be a ground for re- . fund of court fee when at the time it was paid it was in accordance .with the law as then understood. Indeed the appellant did .. not appeal or file an application 'against the order of the Civil Judge refusing to pass Lan order.of 'refund. In the' High Court he did not i ask 1•foi this relief on 'the basis of any statutory provision.

; lHe invoked ·. the inherent powers of the High Court. bThe: .. Court Fees. Act contains,, certain provisions for

irefund of court fee paid by a party but admittedly the present case is not covered by any of those provi-

1 sions. It seems, therefore, that the High Court in the circumstances of the present case rightly refused

to order a refund of the excess court fee paid by the appellant. .Jt also does not appear that the Civil_ Judge acted illegally in refusing to order a refund.

On the additional written statement filed in this Court by the respondent a question has arisen whether the order of suspension was valid and during the period it was in force the appellant could recover arrears of salary.

The learned Advocate for the appellant contended that an order of suspension is a penalty under rule 49 of the Classification Rules and it was against all sense of natural justice to impose a penalty upon a Government servant pending an inquiry against him under rule 55 of the said rules.

An order imposing the penalty of suspension was an appealable order under rule 56 of the Classification Rules and under rule 59 of the said rules, an appellate authority was bound to consider whether the facts on which the penalty was imposed had been established and whether those facts disclosed sufficient grounds for imposing such a penalty.

Rule 54 of the Fundamental Rules authorises a rev1smg or an appellate authority, when it finds that the penalty of suspension was unjustified or not wholly justified, to make an order granting to the Government servant his full pay and any allowance to which he was entitled if he was honourably acquitted and in other cases such proportion of pay and allowances as it may prescribe. The penalty of suspension, it was urged involved serious loss in the matter of salary and allowances and to impose this penalty pending an inquiry was to prejudge the case against a Governme9-t servant and in effect to make his right of appeal a meaningless remedy.

It was pointed out that in some of the rules framed by a Government or quasi- Government authority the penalty of suspension pending an inquiry was specifically provided for, such as rule 95 of the Bihar and Orissa Service Code referred to in Abdul Majid's case and rule 1711 of the Indian Railway Establishment Code.

On behalf of the appellant reference was also made to certain decisions to the effect that as between master and servant, the master had no power of suspension unless

Om Prakash Gupta

Till State of Uttar

Praduh

Imam].

!955

Om PrakashGupaJ .v.

The Stat, of UUar

had<sh

lmam J.

398 SUPREME COURT REPo; R.TS 119.55]

there was an e; rrpress term to that effect in the contract between them.

The Attorney-General conceded that apart from the Classification Rules and the Fundamental Rules he was not aware of any other rules under which the penalty of suspension could be imposed upon a Government servant.

He also conceded that under the Classification Rules an order of suspension was a penalty.

He further conceded that as between master and servant the former had no power of suspension unless the terms of the contract between them permitted it or a statute or a rule provided for it but his principle, he said, did not apply to a person in the service of the Crown in India. He, however, contended that under rule 49 of the Classification Rules a penalty of suspension could be imposed pending an inquiry.

There was nothing in the rule itself which enjoined that a penalty could only be imposed at the conclusion of an inquiry.

The penalty could be imposed for good and sufficient reasons which may be based on materials already existing pending an inquiry.

After the inquiry there may be the imposition of a severer penalty or a definite period of suspension may be fixed or there may be cancellation of the order of suspension.

No doubt there was a right of appeal against an order imposing a penalty of smpension pending an inquiry but the provisions of rule ~4 of the Fundamental Rules did not necessarily lead to the conclusion that the penalty of suspension could only be imposed after an inquiry.

Clause (a) of the said rule might contemplate a case where the penalty had been impo".rl after an inquiry but clause (b) could cover a case where the penalty had been imposed pending an inquiry.

In the present case, he said, the1e was no contravention of any principle of natural jnstice as the appellant had an opportunity of explaining the accusation marle against him. The letter of the Commissioner of Lucknow Division with its annexure, marked Exhibit A in the trial court, clearly showed that the Deputy Commissioner, Lakhimpur Kheri had recorded statements of persons with reference to three cases and the appellant saw him in

connection therewith.

He admitted the facts but tried to explain them. He, however, declined to give his tatement in writing.

The order of suspension made against him was based on materials of which he was fully aware.

In the alternative the Attorney-General urged that in the year 1944 the appellant was a member of the

Civil Service of the Crown in India holding office during the pleasure of the Crown. There was, therefore, inherent power in the Crown and its representative to pass an order of suspension against the appellant pending an inquiry.

The Classification Rules and Fundam_s:ntal Rules were merely directions for general guidance and they did not constitute a contract between the Crown and its servants. For this propositi_on he referred to the observations of Lord Hobhouse in the case of Shenton v. Smith( 1 ).

He also relied upon the following observations of Lord Roche in the case of R. Venkata Rao v. Secretary of State for India in Council('). "Section 96-B in express terms states that office is held during pleasure.

There is, therefore, no need for the implication of this i:erm and no room for its exclusion.

The argument for a limited and special kind of employment . during pleasure but with an added contractual term that the rules are to be observed is at once too artificial and too far-reaching to commend itself for acceptance.

The rules are manifold in number and most minute in particularity, and are all capable of change .................. Inconvenience is not a final consid4'.ration in a matter of construction, but it is at least worthy of consideration, and it can hardly be doubted that the suggested. procedure of control by the Courts over Government in the most detailed work of managing its services would cause not merely inconvenience but confusion".

In the courts below the principal question for consideration was whether the appellant could recover arrears of salary having been illegally dismissed.

It was not pleaded that the order of suspension V.'as

(1) (18951 A.C. 22~.

('' J •. R. li4 I .A. 55

Om Prakash Guf11a

The State of Uttar

Pradesh

Imam].

Om Prakash Gupta

Tk Stal• of Uttar

Praduh•

Imam f

valid and during the period it was in force the appellant could not recover arrears of salary and no specific issue was framed in this respect. '- If the decision of this court in Abdttl Majid's case had been available to the courts below, they would have held that the appellant was entitled to recover arrears of salary when he had been illegally dismissed and they would have had further to decide whether the order of suspension was valid and during 'the period it was in force the appellant could recover arrears of salary. On the additional written statement filed , by the respondent in this court, the submissions of the Advocate for the appellant _ and. the Attorney General would require examination and_ it might have been necessary to consider whether the case should 'not be remanded to the court of trial. It is unnecessary, however,. to record a decision on.these' submissions having regard to the atti- ' . . . . tude adopted by the Advocate for the appellant.

He objected to the case being ' remanded as such a course would involve the appellant in heavy expenditure. and harassment.

The appellant preferred to give up his claim for arrears of salary less subsistence allowance paid to him from the date of the order of suspension until the date of the order of dismissal.

He, however, contended that the '. order of, suspension continued to be in force only until the 25th November, 1944, the date of the order of dismissal. On that date the order of suspension ceased . to exist and the appellant was entitled to recover arrears of salary from the 25th November, 1944, to -the 31st December, 1947, inclusive.

The Attorney-General strongly contended that _it continued to be in force and that it was not at all affected by the declaration of the- Civil Judge that the order of dismissal was illegal.

In view of that decision the order of dismissal must. be regarded as a nullity and non-existent in the eye of law. The inquiry, the outcome of which was ·-the order of dismissal, had not therfore ended.

It could only end with a valid order which wouldreplace the order of suspension.

Until that happened the accusation against the appellant remained and the inquiry had not ended.

He referred to the case of M. Copa! Krishna' Naid11 v.

.2 .S.C.R.

SUPREME COURT REPdRTS 401

State of Madhya Pradesh(1). On behalf of the appellant reliance was placed on the case of Provincial Government, Central Provinces and Berar through Collector, Amraoti v. Shamshul Hussain Sirai Hussain(2). The order of suspension made against the appellant was clearly one made pending an inquiry.

It certainly was not a penalty imposed after an enquiry.

As the result of the inquiry an order of dismissal by way of penalty had been passed against the appellant. With that order, the order of suspension lapsed.

The order of dismissal replaced the order of suspensio-9which then ceased to exist. That clearly was the position between the Government of the United Provinces and the appellant. The subsequent declaration by a Civil Court that the order of dismissal was illegal could not revive an order of suspension which did not exist.

The case referred to by the Attorney-General is not directly in point and that decision does not conflict with the case relied upon by the appellant.

The appellant is, therefore, entiled to recover arrears of salary from the 25th of November, 1944, to 31st J)ecember, 1947.

The appeal is accordingly allowed in palt with costs throughout and th~ decree of the courts below is set aside. The , plaintiff's suit is decreed for arrears of salary from the 25th of November, 1944, to the 31st of J)ecember, 1947, inclusive.

The appellant had claimed Rs. 16,810-8-0 less subsistence allowance already drawn as arrears of pay from the 24th of August, 1944, to the 31st J)ecember, 1947.

As his claim for arrears of salary from the 24th of August 1944, to the 25th of November, 1944, is given up, the total salary payable to him during thi$ period less subsistence allowance already drawn, must be deducted from the sum of Rs. 16,810-8-0.

The judgment of the High Court as well as the additional written statement filed by the respondent in this court show that subsequent to the decree passed by the Civil Judge the appellant was treated as under suspension until he was dismissed by a fresh order of

( 1) A.I.R. 1952 Nag. 170.

(1) I.L.R.1948 Nag. 576; A.I.R. (36) 194r1 :Sag. 118.

Om Prakash Gupta

The State of Utlar

Pradtsh

Imam].

Om Prakash Gu1ta

Tlie Stale of Ufla,

Prtkhsh

Imam].

April 21

SUPREME OOURT REPORTS [1955)

dismissal and that he has been paid subsistence allowance for the entire period. Such . subsistence allowance as has been paid to the appellant from the 25th of November, 1944, to the 31st December, 1947, inclusive, must, thertfore, be credited to the respondent and the same must be adjusted against the salary claimed by the appellant.

A decree will accordingly be prepared stating the amount recoverable by the appellant.

The appellant was permitted to appeal in forma pauperis.

As he has succeeded in the appeal, the Registrar shall calculate the amount of court fee which would have been paid by the appellant ; f he had not been allowed to appeal as a pauper and incorporate it in the decree.

The court fee shall be paid by the appellant and the same will be recoverable by the Government of India from him and shall be the first charge on the amount decreed to him.

Under Rule 7 of Order XIV of the Rules of this Court, the appellant will be allowed the fees paid by him to his Advocates, in the taxation of costs.

THE DELHI CLOTH AND GENERAL MILLS

CO., LTD.

ti.

HARNAM SINGH AND OTHERS.

(VMAN BosE, JAGANNADHADAS and BHUVANESHWAR

PRASAD SINHA, JJ.)

Priv11te International Law-Law applic11ble to contractual obligations-English and Continental schools of thought-Lex situs and uProper I.Au/' of contract-Partition of India-Post partition debt -Action for recovery where lies-Analogy of banking transactions and insurance claims-Place of primary obligatio11-Debt, whether property-Sections 3 and 130 of Transfer of Property Act-Evacuee property laws-Pakistan (Protection of Evacuee Property) Ordinance, 1948 (XV/ll of 1948)-Pakistan (Administration of Evacuee Pro

perty) Ordinance (XV) 1949-Whether confiscatory in nature

During the years in question cloth was rationed at Lyallpur, then a part of the Punjab in undivided T ndia, and sales could only be made to government nominees and other authorised persons. The plaintiffs rcsii!cnt in Lyallpur, were the government nominees. The