Case ID: 1232

Judgment:
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. 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 section 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	 (exhibit 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	 (exhibit 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 section 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 section 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 vs 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) 	 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 article 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 (exhibit 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 section 240(3) of the Government of India Act	 1935	 corresponding to article 311 (2) of the Constitution	 had not been fully complied with. His (1) 	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 section 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 vs 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 vs 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 article 102 of the Indian Limitation Act (IX of 1908) as laid down by the Federal Court in the case of The Punjab Province vs 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 section 80 of the Code of Civil Procedure given to (1) (1948) L.R. 75 I.A. 225. (2) ; (3) 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 article 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.

Summary:
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 section 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 section 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 section 240(3) of the Government of India Act	 1935	 which corresponds to article 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 vs Union of India	 	 applied. The claim of arrears of salary was governed by article 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 vs Pandit Tarachand	 [1947) F.C.R. 89	 followed.