JUDGMENT

1. We have heard Mr. <NAME> for the appellants and Mr. <NAME> for the respondents. Special leave granted.

2. The appeal is by <ORG>, State of U.P., against the judgment dated 11-1-91 by <ORG> at Allahabad in Civil Misc. Writ Petitions Nos. 10718/88,11144/88,20882/ 88,4853/89,18796/89,26515/90 and 35389/ 91.

In the year 1986, appellant engaged the 0513s940159.htm respondents for the work of preparing certificates to be issued by the appellant to the successful candidates at the examinations conducted by it. The certificates were printed forms and respondents were required to fill up the particulars such as the name of the candidate, name of the school, date of birth etc. in the appropriate space. The respondents were paid initially Rs. 12/-for 100 certificates which was subsequently raised to Rs. 20/-. It would appear that there was a back-log of certificates to be cleared and the services of the respondents were engaged to clear that back-log on payment ad quantum. The backlog having been cleared and the preparation of the certificates in future having been computerised, the services of the respondents were not continued to be utilised. Respondents did the work of clearance of the back-log for a period ranging from one to two years before the assignment was discontinued.

3. Respondents challenged this discontinuance of their services in the writ petitions from the order in which these appeals arise. <ORG> was persuaded to the view that respondents were casual workmen who had completed 240 days of work; that the preparation of the certificates was referable to certain statutory obligations of the appellant; that the discontinuance of services of the respondents was not legal; and that they were entitled to reinstatement. Accordingly, <ORG> directed the appellant to take respondents back to service as casual workers and continue their service upon payment of wages admissible to the regular employees doing similar work. <ORG> further directed that respondents be considered for regular appointment as <ORG> Clerks as and when these posts are filled up on the basis of their qualifications and seniority as daily wages labourers and that the services of the respondents shall not be dispensed with till they were absorbed on a regular basis.

4. We are unable to uphold the order of <ORG>. There were no sanctioned posts in existence to which they could be said to have been appointed. The assignment was an ad hoc one which anticipated spent itself out. It is difficult to envisage for them, the status of workmen on the analogy of the provisions of Industrial Disputes Act , 1947, importing the incidents of completion of 240 days' work. The legal consequences that flow from work for that duration under the Industrial Disputes Act , 1947 are entirely different from what, by way of implication, is attributed to the present situation by way of analogy. The completion of 240 days' work does not, under that law import the right to regularisation. It merely imposes certain obligations on the employer at the time of termination of the service. It is not appropriate to import and apply that analogy, in an extended or enlarged form here.

5. Be that as it may, further discussion on the merits of <ORG> order is unnecessary as the appeals admit of being disposed of on a concession of the appellant on which both sides are agreed.

6. The appellant-Perished has offered to consider the cases of these 27 respondents, who were writ petitioners before <ORG>, for purposes of recruitment to the post of Lower Division Clerks as and when vacancies arise and steps for filling up of those posts are taken up by the appellant. The appellant submits that if the respondents make appropriate applications at the appropriate time of filling up of the vacancies and if they possess the requisite minimum qualifications for the posts and if they were not beyond the prescribed maximum age limit as on the date on which utilization of their services commenced in the year 1986, their cases would be duly considered, affording to them preference in the recruitment, other conditions being equal subject to the reservations-policy. Appellant also requires registration of the respondents with the employment exchanges. For purposes of the age limit, their respective age as at the time of commencement of their earlier casual employment would be reckoned.

7. This concession is placed on record and the orders of <ORG> under appeal are set aside. The appeals are disposed of accordingly. No costs.


CASE NO.: Appeal (civil) 87-88 of 1986 PETITIONER: <NAME> VIKAS BANK LTD. RESPONDENT: <NAME> & ORS. DATE OF JUDGMENT: 17/01/2002 BENCH: S.P.BHARUCHA CJI & S.S.M.QUADRI & SANTOSH N.HEGDE & S.N.VARIAVA & S.V.PATIL JUDGMENT:

JUDGMENT DELIVERED BY:

S.V.PATIL,J.

<NAME>

From the Order of Reference made in <CITATION> [], the question that arises for consideration is:

"If the approval is not granted under Section 33(2)(b) of the Industrial Disputes Act, 1947, whether the order of dismissal becomes ineffective from the date it was passed or from the date of non-approval of the order of dismissal and whether failure to make application under Section 33(2)(b) would not render the order of dismissal inoperative?"

Finding conflict of views expressed by <NAME> of three learned Judges of this court on the question, the Reference is made.

The two Benches consisting of three learned Judges in (1) <CITATION> [1962 Supp. (3) SCR 618] and (2) <CITATION> [1965 (3) SCR 411] have taken the view that if the approval is not granted under Section 33(2)(b) of the Industrial Disputes Act, 1947 (for short 'the Act'), the order of dismissal becomes ineffective from the date it was passed and, therefore, the employee becomes entitled to wages from the date of dismissal to the date of disapproval of the application. Another Bench of three learned Judges in <CITATION> . [1978 (3) SCR 370] has expressed the contrary view that non-approval of the order of dismissal or failure to make application under Section 33(2)(b) would not render the order of dismissal inoperative; failure to apply for approval under Section 33(2)(b) would only render the employer liable to punishment under Section 31 of the Act and the remedy of the employee is either by way of a complaint under Section 33A or by way of a reference under Section 10(1)(d) of the Act. It may be stated here itself that there was no reference in this decision to the two earlier decisions aforementioned.

A Bench of two learned Judge in <CITATION> 1993 (4) SC 10] has followed the view taken in <ORG> (supra) and <ORG> (supra) and has held that the order of dismissal passed without the approval under Section 33(2)(b) remains in inchoate condition but this decision has not noticed the decision in <ORG> (supra).

Rival submissions were made on behalf of the parties in support of the respective contentions in the light of aforementioned decisions and referring to and relying on the provisions contained in Sections 31 , 33 and 33A of the Act.

Answer to the question on which conflicting decisions are rendered, as noticed above, depends on a fair reading and proper interpretation of Section 33(2)(b) of the Act. Prior to the amendment of 1956, provision contained in Section 33 corresponded to the present Section 33(1) only. The object behind enacting Section 33 , as it stood before it was amended in 1956, was to allow continuance of industrial proceedings pending before any authority/court/tribunal prescribed by the Act in a peaceful atmosphere undisturbed by any other industrial dispute. In course of time, it was felt that unamended Section 33 was too stringent for it placed a total ban on the right of the employer to make any alteration in conditions of service or to make any order of discharge or dismissal even in cases where such alteration in conditions of service or passing of an order of dismissal or discharge, was not in any manner connected with the dispute pending before an industrial authority. It appears, therefore, that Section 33 was amended in 1956 permitting the employer to make changes in conditions of service or to discharge or dismiss an employee in relation to matters not connected with the pending industrial dispute. At the same time, it seems to have been felt that there was need to provide some safeguards for a workman who may be discharged or dismissed during the pendency of a dispute on account of some matter unconnected with the dispute. This position is clear by reading re- drafted expanded Section 33 in 1956 containing five sub-sections. For the present purpose, we are concerned with the proviso to Section 33(2)(b) . The material and relevant portion of Section 33 reads:-

"Conditions of service, etc. to remain unchanged under certain circumstances during pendency of proceedings. -- (1)..............

(2) During the pendency of any such proceeding in respect of an industrial dispute, the employer may, in accordance with standing orders applicable to a workman concerned in such dispute or, where there are no such standing order, in accordance with the terms of the contract, whether express or implied, between him and the workman -

(a) ..........................

(b) for any misconduct not connected with the dispute, discharge or punish, whether by dismissal or otherwise, that workman;

Provided that no such workman shall be discharged or dismissed, unless he has been paid wages for one month and an application has been made by the employer to the authority before which the proceeding is pending for approval of the action taken by the employer."

The proviso expressly and specifically states that no workman shall be discharged or dismissed unless he has been paid wages for one month and an application has been made by the employer to the authority before which the proceeding is pending for approval of the action taken by the employer. It is clear from the proviso to Section 33(2)(b) that the employer may pass an order of dismissal or discharge and at the same time make an application for approval of the action taken by him. In the <ORG> case (supra) dealing with the contention that if the employer dismisses or discharges a workman and then applies for approval of the action taken and the tribunal refuses to approve the action, the workman would be left with no remedy as there is no provision for reinstatement in Section 33(2) , it is held that "if the tribunal does not approve of the action taken by the employer, the result would be that the action taken by him would fall and thereupon the workman would be deemed never to have been dismissed or discharged and would remain in the service of the employer".

A Constitution Bench of this Court in the case of <CITATION> [1964 (2) SCR 104] referring to Strawboard has observed thus:-

"The main point which was raised in this appeal is now concluded by the decision of this <ORG> in <ORG>

Limited, Saharanpur vs. <NAME>.

This Court has held in that case that "the proviso to Section 33(2)(b) contemplates the three things mentioned therein, namely,

(i) dismissal or discharge, (ii) payment of wages, and (iii) making of an application for approval, to be simultaneous and to be part of the same transaction so that the employer when he takes the action under Section 33 (2) by dismissing or discharging an employee, should immediately pay him or offer to pay him wages for one month and also make an application to the tribunal for approval at the same time. It was further held that "the employer's conduct should show that the three things contemplated under the proviso, are parts of the same transaction; and the question whether the application was made as part of the same transaction or at the same time when the action was taken would be a question of fact and will depend upon the circumstances of each case."

In the case of <ORG> (supra) it is reiterated and stated thus:-

"It is now well-settled that the requirements of the proviso have to be satisfied by the employer on the basis that they form part of the same transaction; and stated generally, the employer must either pay or offer the salary for one month to the employee before passing an order of his discharge or dismissal, and must apply to the specified authority for approval of his action at the same time, or within such reasonably short time thereafter as to form part of the same transaction. It is also settled that if approval is granted, it takes effect from the date of the order passed by the employer for which approval was sought. If approval is not granted, the order of dismissal or discharge passed by the employer is wholly invalid or inoperative, and the employee can legitimately claim to continue to be in the employment of the employer notwithstanding the order passed by him dismissing or discharging him. In other words, approval by the prescribed authority makes the order of discharge or dismissal effective; in the absence of approval, such an order is invalid and inoperative in law."

In the same judgment, it is also stated that "order of dismissal or discharge being incomplete and inchoate until the approval is obtained, cannot effectively terminate the relationship of the employer and employee and that if the approval is not accorded by the tribunal, the employer would be bound to treat the respondent as its employee and paying his full wages for the period even though the employer may subsequently proceed to terminate the services of the respondent".

Per contra, in Punjab Beverages (supra), it is held that an order dismissing the workman contravening Section 33(2)(b) shall not be void and inoperative and hence the workman was not entitled to maintain the application for determination and payment of wages under Section 33(C)(2) ; a workman can proceed under Section 33(C)(2) only after the tribunal has adjudicated on a complaint under Section 33A or on a reference under Section 10 that the order of discharge or dismissal was not justified and has set aside that order and reinstated the workman; rejecting a contention that the workman would be left without any remedy on the interpretation that contravention of Section 33 does not invalidate an order of discharge or dismissal, it is stated that if the employer contravenes Section 33 , he would be liable to punishment under Section 31(1) and moreover the aggrieved workman can act under Section 10 or he can make a complaint to the tribunal under Section 33A ; it was held that the withdrawal of the application made under Section 33(2)(b) stands on the same footing as if no application thereunder has been made; if there was no decision on merit of the said application, it cannot be said that the approval has been refused by the <ORG>.

The facts of the said case are: the workman was dismissed from service holding him guilty after inquiry by an order dated 23rd December, 1974. Since an industrial dispute was pending at that time, in view of the provisions contained in Section 33(2)(b) , the employer approached <ORG> at Chandigarh before which the industrial dispute was pending for approval of the action taken. However, that application was dismissed as withdrawn on 4th September, 1976. Then the workman demanded full wages from the employer from the date of his suspension till the date of demand contending that the action of the employer dismissing him from service was not approved by the <ORG>; he continued to be in service and was entitled to all the emoluments. Since the employer did not respond, he made an application to <ORG> under Section 33(C)(2) for determination and payment of the amount of wages due to him. The employer resisted the said application inter alia on the ground that the application under Section 33(2)(b) having been withdrawn, the effect of which was as if no application had been made at all; even though there was contravention of Section 33(2)(b) in not making an application seeking approval, it did not render the order of dismissal void ab initio and it was merely illegal and unless it is set aside in an appropriate proceeding taken by the employee under Section 33A or in a reference under Section 10 , <ORG> had no jurisdiction under Section 33 (C)(2) to direct payment of wages to the first respondent on the basis as if he continued in service. <ORG> rejected this contention and allowed the application of the workman filed under Section 33(C)(2) . This Court, allowing the appeals by special leave, held that the employer contravened Section 33(2)(b) in dismissing the workman but such contravention did not have the effect of rendering the order of dismissal void or inoperative and hence the workman was not entitled to maintain the application under Section 33(C)(2) . However, the amounts ordered to be paid by <ORG> were treated as compensation instead of wages to meet the demands of social justice. The reasons recorded in taking such a view are: (i) Section 33 in both its limbs undoubtedly uses mandatory language and Section 31(1) makes it penal for the employer to commit a breach of the provisions of Section 33 and, therefore, if Section 33 stood alone, it might lend itself to the construction that any action by way of discharge or dismissal taken against workman would be void if it is in contravention of Section 33 . But Section 33 cannot be read in isolation, for the intention of the <ORG> has to be gathered not from the one provision but from the whole of the statute. If Sections 33 and 33A are read together, it is clear that legislative intent shall not invalidate an order of discharge or dismissal passed in contravention of Section 33 despite the mandatory language implied in the Section and the penal provision enacted in Section 31(1) . (ii) The mere contravention of Section 33 by the employer will not entitle the workman to an order of reinstatement because inquiry under Section 33A is not confined only to the determination as to the contravention of Section 33 , but even if such contravention is proved, the <ORG> has to go further and deal also with the merits of the order of discharge or dismissal. (iii) If the contravention of Section 33 were construed as having invalidating effect of the order of discharge or dismissal, Section 33A would be rendered meaningless and futile, because in that event the workman would invariably prefer to make an application straightaway under Section 33(C)(2) even before adjudication whether the order of discharge or dismissal is void and inoperative.

(iv) The contention of the workman that in the absence of approval for action taken under Section 33(2)(b) , the order of dismissal was inoperative, was rejected on the ground that withdrawal of the application made for approval stood on the same footing as if no application under Section 33(2)(b) has been made at all; since there was no application made under Section 33(2)(b) , the <ORG> had no occasion to apply its mind to consider whether the dismissal of workman amounted to victimization or unfair labour practice. Hence, it was difficult to say that the approval has been refused by the <ORG>.

The proviso to Section 33(2)(b) , as can be seen from its very unambiguous and clear language, is mandatory. This apart, from the object of Section 33 and in the context of the proviso to Section 33(2)(b) , it is obvious that the conditions contained in the said proviso are to be essentially complied with. Further any employer who contravenes the provisions of Section 33 invites a punishment under S.31(1) with imprisonment for a term which may extend to six months or with fine which may extend to Rs.1000/- or with both. This penal provision is again a pointer of the mandatory nature of the proviso to comply with the conditions stated therein. To put it in other way, the said conditions being mandatory, are to be satisfied if an order of discharge or dismissal passed under Section 33(2)(b) is to be operative. If an employer desires to take benefit of the said provision for passing an order of discharge or dismissal of an employee, he has also to take the burden of discharging the statutory obligation placed on him in the said proviso. Taking a contrary view that an order of discharge or dismissal passed by an employer in contravention of the mandatory conditions contained in the proviso does not render such an order inoperative or void, defeats the very purpose of the proviso and it becomes meaningless. It is well-settled rule of interpretation that no part of statute shall be construed as unnecessary or superfluous. The proviso cannot be diluted or disobeyed by an employer. He cannot disobey the mandatory provision and then say that the order of discharge or dismissal made in contravention of Section 33(2)(b) is not void or inoperative. He cannot be permitted to take advantage of his own wrong. The interpretation of statute must be such that it should advance the legislative intent and serve the purpose for which it is made rather than to frustrate it. The proviso to Section 33(2)(b) affords protection to a workman to safeguard his interest and it is a shield against victimization and unfair labour practice by the employer during the pendency of industrial dispute when the relationship between them are already strained. An employer cannot be permitted to use the provision of Section 33(2)(b) to ease out a workman without complying with the conditions contained in the said proviso for any alleged misconduct said to be unconnected with the already pending industrial dispute. The protection afforded to a workman under the said provision cannot be taken away. If it is to be held that an order of discharge or dismissal passed by the employer without complying with the requirements of the said proviso is not void or inoperative, the employer may with impunity discharge or dismiss a workman.

Where an application is made under Section 33(2)(b) proviso, the authority before which the proceeding is pending for approval of the action taken by the employer has to examine whether the order of dismissal or discharge is bona fide; whether it was by way of victimization or unfair labour practice; whether the conditions contained in the proviso were complied with or not, etc. If the authority refuses to grant approval obviously it follows that the employee continues to be in service as if order of discharge or dismissal never had been passed. The order of dismissal or discharge passed invoking Section 33(2)(b) dismissing or discharging an employee brings an end of relationship of employer and employee from the date of his dismissal or discharge but that order remains incomplete and remains inchoate as it is subject to approval of the authority under the said provision. In other words, this relationship comes to an end de jure only when the authority grants approval. If approval is not given, nothing more is required to be done by the employee, as it will have to be deemed that the order of discharge or dismissal had never been passed. Consequence of it is that the employee is deemed to have continued in service entitling him to all the benefits available. This being the position there is no need of a separate or specific order for his reinstatement. But on the other hand, if approval is given by the authority and if the employee is aggrieved by such an approval, he is entitled to make a complaint under Section 33A challenging the order granting approval on any of the grounds available to him. Section 33A is available only to an employee and is intended to save his time and trouble inasmuch as he can straightaway make a complaint before the very authority where the industrial dispute is already pending between the parties challenging the order of approval instead of making efforts to raise an industrial dispute, get a reference and thereafter adjudication. In this view, it is not correct to say that even though where the order of discharge or dismissal is inoperative for contravention of the mandatory conditions contained in the proviso or where the approval is refused, a workman should still make a complaint under Section 33A and that the order of dismissal or discharge becomes invalid or void only when it is set aside under Section 33A and that till such time he should suffer misery of unemployment in spite of statutory protection given to him by the proviso to Section 33(2)(b) . It is not correct to say that where the order of discharge or dismissal becomes inoperative because of contravention of proviso to Section 33(2)(b) , Section 33A would be meaningless and futile. The said Section has a definite purpose to serve, as already stated above, enabling an employee to make a complaint, if aggrieved by the order of the approval granted.

The view that when no application is made or the one made is withdrawn, there is no order of refusal of such application on merit and as such the order of dismissal or discharge does not become void or inoperative unless such an order is set aside under Section 33A , cannot be accepted. In our view, not making an application under Section 33(2)(b) seeking approval or withdrawing an application once made before any order is made thereon, is a clear case of contravention of the proviso to Section 33(2)(b) . An employer who does not make an application under Section 33(2)(b) or withdraws the one made, cannot be rewarded by relieving him of the statutory obligation created on him to make such an application. If it is so done, he will be happier or more comfortable than an employer who obeys the command of law and makes an application inviting scrutiny of the authority in the matter of granting approval of the action taken by him. Adherence to and obedience of law should be obvious and necessary in a system governed by rule of law. An employer by design can avoid to make an application after dismissing or discharging an employee or file it and withdraw before any order is passed on it, on its merits, to take a position that such order is not inoperative or void till it is set aside under Section 33A notwithstanding the contravention of Section 33(2)(b) proviso, driving the employee to have recourse to one or more proceeding by making a complaint under Section 33A or to raise another industrial dispute or to make a complaint under Section 31(1) . Such an approach destroys the protection specifically and expressly given to an employee under the said proviso as against possible victimization, unfair labour practice or harassment because of pendency of industrial dispute so that an employee can be saved from hardship of unemployment.

Section 31 speaks of penalty in respect of the offences stated therein. This provision is not intended to give any remedy to an aggrieved employee. It is only to punish the offender. The argument that Section 31 provides a remedy to an employee for contravention of Section 33 is unacceptable. Merely because penal provision is available or a workman has a further remedy under Section 33A to challenge the approval granted, it cannot be said that the order of discharge or dismissal does not become inoperative or invalid unless set aside under Section 33A . There is nothing in Sections 31 , 33 and 33A to suggest otherwise even reading them together in the context. These Sections are intended to serve different purposes.

As already noticed above, the Constitution Bench of this Court in <CITATION> has referred to <CITATION> and approved the view taken in the said decision as regards the requirements of the proviso to Section 33(2)(b) . Unfortunately in <CITATION> , the earlier two cases of <ORG> and <ORG> were not noticed touching the question. It is true that in <CITATION> , there is no reference to <ORG>. But the view taken in two earlier decisions of <ORG> and <ORG> is followed on the question and rightly so in our opinion.

In view of what is stated above, we respectfully agree with and endorse the view taken in the case of <ORG> and <ORG> and further state that the view expressed in <ORG> on the question is not the correct view. The question raised in the beginning of this judgment is answered accordingly.

In these appeals, respondent No. 1 was employed as Clerk-cum-Cashier with the appellant. He was dismissed from service. As certain proceedings were pending before <ORG>, Jaipur, an application seeking approval of the <ORG> for the said dismissal was submitted by the appellant before the <ORG> under Section 33(2)(b) . The said application was contested on various grounds by the respondent including that the appellant-Bank had failed to comply with the provisions of Section 33(2)(b) as salary for one month was not paid. The <ORG>, on facts, found that the appellant failed to comply with the provisions of Section 33(2)(b) and in that view dismissed the application. The appellant challenged the order of the <ORG> before <ORG> in writ petition No. 666 of 1980. The same was dismissed concurring with the order passed by the <ORG>.

In the view we have taken, the contentions raised in these appeals do not help the appellant. We find no merit in these appeals. Consequently, these are dismissed. No costs.


ORDER <NAME>, J.

1. This is an application in revision against the order of the Subdivisional Magistrate, Khagaria dated the 19th December, 1958 in a proceeding under Section 145. Code of Criminal Procedure. By this order, he declared the first party to be in possession of the disputed land.

2. One of the points taken by the learned counsel in support of this application is that the affidavits tiled by the parties have not been taken into consideration by the learned Magistrate, Learned counsel referred to the following observations of the learned Magistrate:--

"A large number of affidavits have been filed on behalf of both the parties. There are thus men from both the sides to swear on oath that the land in dispute belongs to this party and that party. There is oath against oath and affidavits against affidavits. It is difficult to attach any value to these oaths and affidavits."

It will appear from the above that the learned Magistrate has ignored the affidavits altogether and has taken into consideration the documents and other circumstances of the case. No doubt, he preferred his judgment by saying that he was going to consider the affidavits and other circumstances relating to the possession of the disputed land by one or the other party but as will appear from the above, the affidavits have not been considered. If the affidavits are ignored, it is difficult to understand on what evidence the question of possession will be decided. Both the parties have no doubt filed documents and there may be some circumstances but by themselves they are inadequate to establish possession. They may be taken into consideration in support of one or the other version given by one or the other party but the documents by themselves cannot and do not establish possession. For establishing possession one has to refer to the affidavits.

At present in deciding a proceeding under Section 145, Code of Criminal Procedure, the parties have been permitted to adduce evidence by means of affidavits and affidavits cannot be ignored in the manner as has been done by the learned Subdivisional Magistrate. He had to consider the affidavits and give reasons for accepting the affidavits of one or the other party. He cannot ignore the affidavits and base his finding of possession on documents or other circumstances. To that extent his judgment is entirely vitiated and it must be said that there is no legal basis for the finding of possession recorded by the learned Magistrate. On this one ground alone the order of the learned Magistrate cannot be sustained.

3. In the result, this application is allowed, the order of the learned Magistrate dated the 19th December, 1958 is set aside and the case is sent back for disposal in accordance with law.


JUDGMENT

1. Second Appeal No. 801 and Second Appeal No. 802 of 1920 are plaintiff's appeals arising out of a suit for sale, on the basis of a mortgage-deed, dated the 16th of November 1905, executed by the father of the present defendants in favour of the plaintiff. The defendants did not put in an appearance in the Court of first instance and no written statement was filed on their behalf. The learned Subordinate Judge, relying on a clause in the mortgage-deed, which entitled the mortgagee to sue for the whole amount of principal and interest on default of payment of annual interest, held that the claim to enforce the charge was barred by time under Article 132 of the Limitation Act , but he was, however, of opinion that the personal remedy was not barred. He, accordingly, granted the plaintiff a simple money decree.

2. Both parties appealed to the learned District Judge who, holding that the personal remedy also was barred, dismissed the whole suit. The plaintiff appealed to this <ORG> from the lower Appellate <ORG>'s decrees and his appeals came up for hearing before <ORG> of this <ORG>, which, in view of some apparent conflict of opinion, has referred these cases to a Fall Bench. There are only two points which arise for our determination:

(1) Whether the plaintiff's claim to enforce the charge by sale of the mortgaged property is barred by time?

(2) Whether, in any case, he is entitled to a simple money-decree?

3. As some argument has turned on the actual wording of the document in suit, we think it desirable to quote the operative portion of it in full. It is as follows:

I hereby covenant and give in writing that I shall pay the money aforesaid with interest at the rate of 8 annas per cent. per mensem, within a period of twelve years and shall pay interest from year to year. In case of non-payment of interest from year to year, the creditor has the option to add the interest to the principal and to charge interest thereon at the aforesaid rate or to recover through <ORG> principal and interest from me and hypothecated property and also from my other moveable or immoveable property and from my person within the stipulated period. The period fixed shall not bar the claim. In case of non-payment within the stipulated period, the creditor shall have the power to recover the money, principal and interest, together with compound interest from me, mortgaged property or other moveable or immoveable property of mine. If I am not able to pay the money within the stipulated period and with the consent of the creditor the money remains unpaid, the interest and com-pound interest at the aforesaid rate shall continue to run at the stipulated rate till the date of realization.

4. It is clear from the terms of this document that the ordinary period fixed for payment was 12 years, and, if no default were made, the mortgagee would not have been entitled to sue for the recovery of his money before the expiry of the period fixed. If, however, a default were made in payment of the annual interest, it would be open to the mortgagee, if he so desired, to sue for the whole amount of principal and interest; and it is clear that, in that case, the mortgagor could not succeed on the plea that the claim was premature. On the other hand, there is nothing in the deed which makes it obligatory on the mortgagee to sue as soon as a default is made.

5. Now, there can be no doubt that a suit for sale on the basis of a mortgage-deed is one to enforce payment of money charged upon immoveable property within the meaning of Article 132 of the Limitation Act of 1908. The previous decisions to the contrary were overruled by their Lordships of <ORG> in the case of <CITATION> 30 M. 426 : 9 Bom.L.R. 1104 : 4 A.L.J. 625 : 11 C.W.N. 1005 : 6 C.L.J. 379 : 2 M.L.T. 333 : 17 M.L.J. 444 : 34 I.A. 186 (P.C.). This view has been accepted by the <ORG> and the wording of Article 132 has remained unaltered and a special period of grace provided for in Section 31 of the new Act.

6. It being beyond question that Article 132 applies, we have to look So the words in the third column of that Article in order to determine the point of time from which limitation begins to run. The period of limitation is 12 years from the time "when the money sued for becomes due." We have, therefore, to answer the simple question, when did the money become due in the present case? Obviously, money becomes due as soon as it becomes payable by the mortgagor to the mortgagee, that is to 'say, as soon as it can be legally recovered by the mortgagee. The question whether the mortgagee chooses to wait and does not sue at once, is wholly immaterial. The money might be due and yet the mortgagee may not like to call it in at once and may safely wait for a period of 12 years. Examining the terms of the mortgage-deed in this light, it is obvious that, as soon as the first default was made, a right accrued to the mortgagee to sue for the whole sum with interest. Whether he chose to avail himself of it or not, is another matter. On default having been made, the money certainly did become due at once; the mere circumstance that the creditor had the option of not sailing in the money cannot wipe out the fact that the money had in fact become due.

7. The view expressed above is undoubtedly in consonance with the rule of law prevailing in England In <NAME> v. <NAME> (1842) 62 E.R. 423 at p. 426 : 4 Q.B. 519 : 3 G. & D. 402 : 12 L.J.Q.B. 134 : 17 Jur. 302 : 114 E.R. 994, it was remarked: "If he those to wait till all the instalments became due, no doubt he might do so; but that which was optional on the part of the plaintiff would not affect the right of the defendant, who might well consider the action as accruing from the time that the plaintiff had a right to maintain it. The Statute of Limitation runs from the time the plaintiff might have brought his action, unless he was subject to any of the disabilities specified in the Statute." This case was followed by <ORG> in <NAME> v. <NAME> (1891) 2 Q.B. 509 : 60 L.J.Q.B. 619 : 65 L.T. 329 : 39 W.R. 262, where money had been lent for a fixed period of five years subject to the power to call in the same at an earlier period" tinder certain events including a default in the payment of any quarterly interest for 21 days. It was held in that case that a claim brought more than six years after the first default was barred by time, inasmuch as the cause of action arose on the first default, and that the time began to run from the earliest time at which the plaintiff could have brought her action. These cases are accepted laws in England (vide, <NAME> Laws of England, Volume XIX, page 44).

8. It has been very strongly urged before us that the effect of holding that time begins to run from the first default would be to strike out an important clause under which the mortgagee is given the option to wait, and this would be going against the express intention of the parties. But it is not quite easy to see what is really meant by saying that the mortgagee has the option of suing or not suing. In slither case, be is not bound to sue at once; he can, in fact, wait for 12 years. If by the word "option" is meant that the parties agree that, although the money does become recoverable. yet the Mortgagee can wait and at the same time keep the Statute of Limitation in abeyance, then it would be a case of contracting cut of the Statute. An agreement of this kind can never have the effect of preventing the period of limitation from running out. But, as a matter of fact, there is in the deed no covenant that limitation will not begin to run, and the option after all might not mean anything more than that a forbearance to sue would not disentitle the mortgagee from claiming interest, but that interest would continue torun though no suit is brought for some time. If this only in the intention of the parties, then no difficulty whatsoever arises.

9. Our attention has not been invited to any Pronouncement of their Lordships of. <ORG> which would cover the point arising in this case. The only <ORG> case to which reference has been made is that of <NAME> v. <NAME>. 1 C. 163 : 25 W.R. 84 : 3 I.A. 1 : 3 Sar.P.C.J. 58 : 3 Suth. P.C.J. 222 : 1 Ind. Dec. (N.S.) 105 (P.C.). Although it is conceded that the point before us did not directly arise in that case and the remark relied upon by the learned <NAME> for the appellant was a mare obiter dictum, nevertheless, any observation of their Lordships is entitled to the greatest weight and should be a guide to us. It is, therefore, necessary for us to consider that case carefully. There was a mortgage-deed executed on the 21st of Jane 1856, which was subsequently registered and under which it was stipulated that the money would be re-paid in June 1886, but that, in the event of the lands being sold in execution of a decree obtained by a third party, the mortgages would be at liberty at once to sue for the recovery of the debt. On the 18th May 1835, the lands mortgaged were actually sold in execution of a simple money-decree. On the 30th of August 1871, that is, more than six years after but within 12 years of the date of the sale, a suit to recover the amount on the mortgage-deed was instituted. The defendants pleaded that Clause 16 of Act XIV of 1859, which was the general clause applicable to suits for which no other limitation was expressly provided, was applicable, and that the claim was barred, by the six years rule. Their Lordships repelled this contention holding that the slangs applicable was Clause 12 which governed suits * for recovery of immoveable property or of any interest in immoveable property to which no other provision of this Act applies." Referring to the contention of the Counsel for the defendants that the six years rule applied, their Lordships remarked that they must not be supposed to give any countenance to the argument that the suit would have bean barred if the limitation of six years under Clause 16 bad been applicable to it.

10. Now, it is to be noted that in the old Limitation Act of 1859 there was no clause which in any way corresponded to Article 132 of the present Limitation Act and their Lordships felt constrained to apply the general article far recovery of immoveable property corresponding to the present Article 144 , No one contends that that Article applies in the present case. Furthermore, the Counsel for the appellant was driven to fall back on the omnibus clause 16 for "suits for which no other limitation is hereby expressly provided," corresponding to the present Article 120 , which, it is contended before us, is inapplicable to the present case. In fact, there is a uniform course of decisions in all the <ORG> that Article 116 of the Limitation Act would be applicable to a mere money claim based on a registered bond, and not the general Article 120. Their Lordships of <ORG> also have, in the recent case of <CITATION> 39 Ind. Cas. 156 : 25 C.L.J. 279 : 1 P.L.J. 262 : 15 A.L.J. 217 : 32 M.L.J. 357 : 21 M.L.T. 262 : 21 C.W.N. 577 : (1917) M.W.N. 363 : 5 L.W. 654 : 19 Bom. L.R. 450 : 44 C. 759 : 44 I.A. 65 (P.C., accepted the interpretation put on Article 116 in a long series of Indian decisions, and held "that the compensation for the breach of a contrast" does not only point to a claim for unliquidated damages but is used in a very wide sense and includes a claim for payment of a certain sum. It is, therefore, obvious that the case of <NAME> v. <NAME> 1 C. 163 : 25 W.R. 84 : 3 I.A. 1 : 3 Sar.P.C.J. 58 : 3 Suth. P.C.J. 222 : 1 Ind. Dec. (N.S.) 105 (P.C.) can-not, in any way, be taken to have decided the point which arises before us, nor had their Lordships than to interpret the meaning of the expression when the money sued for becomes due" which we have to consider.

11. Coming to <ORG>, we find that the decisions have by no means been uniform. We do not, however, feel called upon to review the numerous authorities of the <ORG> other than our own. We simply content ourselves with mentioning a few cases holding the two opposite views.

12. <CITATION> 24 C. 281 : 1 C.W.N. 229 : 12 Ind. Dec. (N.S.) 854; <CITATION> 20 M. 245 : 7 M.L.J. 222 : 7 Ind. Dec. (N.S.) 174 and <NAME>. v. <NAME> 2 Ind. Cas. 653 tend to apart the view that time begins to run from the date of the first default.

13. <CITATION> 22 M. 20 : 8 M.L.J. 167 : 8 Ind. Dec. (N.S.) 15 and <CITATION> 35 Ind. Cas. 418 : 89 M. 981 : 4 L.W. 77 : 20 M.L.T. 174 : (I916) 2 M.W.N. 125 : 31 M.L. 865 favour the contrary view,

14. The case of <NAME> v. <NAME> 16 A. 371 : A.W.N. (1894) 115 : 8 Ind. Dec. (N.S.) 241 was the case of execution of an instalment decree for which different considerations altogether might arise. We consider is unnecessary to express any opinion about that case.

15. The case of <CITATION> , 29 A. 431 : 4 A.L.J. 336 : A.W.N. (1907) 139 was the case of an instalment bond which was governed by Article 75 which expressly provides that the payee or obligee may waive the benefit of the provision entitling him to sue for the whole amount on default being made.

16. The cases of <NAME> v. <NAME> 30 A. 123 : 5 A.L.J. 72 A.W.N. 1903 36, and <NAME> v. <NAME> 20 Ind. Cas. 933 : 35 A. 455 : 11 A.L.X. 661 are also oases under Article 75 and have no direct application to the present case.

17. The leading case in point is the case of <CITATION> 28 Ind. Cas. 910 : 37 A. 400 : 13 A.L.J. 510. In that case the majority of the learned Judges held that money "becomes due" within the meaning of Article 132 and time begins to run from the date of the first default. The learned Chief Justice remarked: "It seems to me that the money is due when it can be legally demanded, and it is admitted in the present case that the money secured by this mortgage could have been legally demanded and recovered after the first default, and had a suit been brought for its recovery by sale of the mortgaged property, the defendants could not have pleaded that such a suit was premature." We entirely agree with this view and consider that it lays down the right teat to apply in such cases. <NAME>, J., in his dissenting judgment, was mainly influenced by the circumstance that, under the terms of the mortgage deed then in suit, the mortgagee was "competent to wait for the full period of 10 years stipulated in the bond and it is not obligatory on him to call in the money on the occurrence of a default in the payment of the instalmets". We are, however, distinctly of opinion that the question whether the mortgagee is bound to sue or not and whether he does at once sue or not, is wholly irrelevant to the issue. So long as he can sub, even though he does not choose to sue, the money has become due. We have, therefore, no hesitation in saying that the view taken by the majority of the learned Judges in the <ORG> case referred to above was correct.

18. The case of <CITATION> 63 Ind. Cas. 477 : 19 A.L.J. 406 suggested a rule contrary to that laid down by <ORG>. Neither the re-port nor the judgment, however, shows that the previous <ORG> case was brought to the notice of the learned Judges. We shall have to revert to this case in connection with the second point raised in these appeals.

19. In the case of <CITATION> 63 Ind. Cas. 25 : 19 A.L.J. 456 the mortgage-deed had provided that, in the event of non-payment of interest for two consecutive half-years, the mortgagees would have the power either to benefit themselves by charging compound interest or to sue without waiting for the period fixed for the whole of the principal and interest or to sue for the interest alone. The learned Judges were of opinion that when three options were given to the mortgagees and they did not choose to exercise the option of suing for the whole amount on default of the payment of two consecutive instalments of interest by the debtor, it cannot be said that the time began to run from such abstention". The previous <ORG> case was distinguished on the ground that "in that case no option, be far as we can Bee from the recital of the terms of the bond given therein, was given to the creditor". We think that this ground of distinction is not well-founded. In the <ORG> case the mortgagee was given "the liberty to realise the entire amount with interest" and ''if the mortgagee in his desire for interest does not bring a suit on any default, the interest shall continue" and the judgment of Banerji, J., proceeded on the ground that the mortgagee had such an option. In any case, as we have already remarked above, the mere fact that a mortgagee has the option to sue or to wait would not prevent the money from becoming due and limitation running under Article 132 against him.

20. In the case of <CITATION> 63 Ind. Cas. 441 : 19 A.L.J. 592 : 43 A. 596 the Full Bench case was followed, though presumably in deference to the view expressed in the earlier case of <CITATION> 63 Ind. Cas. 25 : 19 A.L.J. 456, a point was made that in the deed in question no option whatsoever was given to the mortgagee in the matter. We have already said that any distinction based on the existence of an option is a distinction without a difference and wag, moreover, an error of fact. An option was given.

21. In the case of <NAME> v. Turn 63 Ind. Cas. 886 : 19 A.L.J. 712 : 43 A. 671 the view expressed in the case of <CITATION> 63 Ind. Cas. 477 : 19 A.L.J. 406 was dissented from on the ground that it was in conflict with the Full Bench case, and it was held that "the Statute in our view must run from the date of the first default. The liability to pay or, in other words, the Jest of whether money becomes due or not, is the obligation which the borrower has taken upon himself by his signature to the written document. It cannot depend on the volition of the creditor,"

22. The case of <CITATION> 67 Ind. Cas. 160 : 20 A.L.J. 346 : (1922) A.I.R. (A.) 524 is, so far as we have been informed, the latest reported case of this <ORG> following the previous Fall Bench case,

23. Both on principle and the balance of authority, therefore, we are of opinion that the view taken by the <ORG> is correct and that the first default having occurred more than twelve years before the suit, money sued for became due then and the present claim for the enforcement of the charge is barred by time under Article 132 of the Limitation Act .

24. There remains the second question whether even if the mortgagee cannot get a decree for sale he is nevertheless entitled to a simple money-decree, Although the relief for recovery of money otherwise than by enforcing the charge would be governed by another Article with a different period fixed, yet it would be a startling thing to end that the time for recovery of the amount due by sale of the property has begun to run while that for recovering it as a simple debt has not yet started. One would suppose that the cause of action would be the same for both, though different periods might be fixed for the enforcement of the two reliefs. There is one case in which it has been actually held that, although defaults were made yet the mortgagee was not bound to sue for the whole money as soon as there was failure in payment, and, that time did not begin to run till after the date originally fixed. This is the case of <CITATION> 63 Ind. Cas. 477 : 19 A.L.J. 406 already referred to. Let us examine what the decision in this case comes to. The mortgagee has a right to sue for the whole money if a default is made and his suit can-not be thrown out on the ground that it is premature. He has a perfectly good cause of action to sue if he so chooses, yet the limitation does not begin till the date originally fixed arrives The result is that the mortgagee can sue long before the period of limitation for his suit begins to run. This is a reductio ad absurdum, We must, therefore, examine the premises on which the conclusion is based. The learned Judges have not quoted the Article which, in their opinion, was applicable, bat from the remark that the mortgagee had the option to wait till "the period fixed," We take it that they intended to apply Article 66 , read with Article 116 , of the Limitation Act . This would be in harmony with three earlier cases, namely, the case of <CITATION> 39 Ind. Cas. 574 : 15 A.L.J. 313; <CITATION> 50 Ind. Cas. 640 : 17 A.L.J. 647 : 1 U.P.L.R. (A.) 73 : 41 A. 581 and <CITATION> 58 Ind. Cas. 278 : 18 A.L.J. 476 : 2 U.P.L.R. (A) 102. In the last mentioned case <NAME>, J., while referring to the two earlier cases, remarked whether these decisions are right or wrong, we can see no reason whatsoever, in the present case at any rate, for expressing any opinion to the contrary. One of us was a party to one of these decisions and until these decisions are set aside by a larger Bench, we can see no reason why we should not follow them."

25. There can be no doubt that the basis of these decisions, namely, that the claim for a personal decree is governed by a different Article and not by Article 132 , and that, therefore, the Full Bench ruling in <CITATION> 28 Ind. Cas. 910 : 37 A. 400 : 13 A.L.J. 510 is inapplicable, is perfectly sound and cannot be questioned. The mistake which was made in <CITATION> 39 Ind. Cas. 574 : 15 A.L.J. 313 was in assuming that it was Article 66 , read with Article 116 , which governed the case. In the subsequent cases referred to above, it was simply taken for granted that Article 66 applied. We think that this was not a correct view. The expression single bond" used in Article 66 is clearly borrowed from the English Law. In Lord <NAME>'s Laws of England, Vol. III, page 80, it is said that a bond merely for the payment of a certain sum of money without any condition in or annexed to it, is called a simple or single bond, and that such instruments are rarely, if ever, met with at the present day"...whereas a "double" or "conditional bond" is a form of bond accompanied by a condition in the nature of a defeasance providing that on due performance of the condition the bond shall be void. This distinction wag very clearly pointed out by <NAME>, L. J., in Dixon In re Heynes v. Dixon (1900) 2 Ch. 561 at p. 582 : 69 L.J.C. 609 : 83 L.T. 129 : 48 W.R. 665.

26. Now, the bond in the present case in marked contrast with that before the Full Bench in <NAME> v. <NAME> 3 A. 600 : A.W.N. (1881) 33 : 6 Ind. Jur. 142 : 2 Ind. Dec. (N.S.) 323 (F.B.) which was obviously a single bond without any condition attached and it was then rightly held that Article 86 , read with Article 116 , applied. The bond in suit in the present case cannot at all be called a single bond within the meaning of Article 66. The period primarily specified for payment is 12 years, but it contains the condition that in case of non-payment from year to year the creditor would either add the interest to the principal and charge interest thereon or sue for the whole money and realise the amount from the property hypothecated as Well as the other property of the mortgagor. It further provides that in case the money is not paid within the stipulated period, compound interest will continue to run till realization. In our opinion such a bond cannot be regarded as a single bond, the time for suing on which runs only from the day specified.

27. The expression "bond subject to a condition" as used in Article 68 seems also to have been borrowed from the English Law and refers to what is there called a double or conditional bond with a condition in the nature of a defeasance. The bond in question is not such & bond either. Nor is it an instalment bond within the meaning of Article 75. In our opinion the case falls under Article 80 which governs a bond not herein expressly provided for" in which case the time begins to run from the date when the bond becomes payable". It is to be noted that in the old Limitation Act XIV of 1859, which governed the sage of <NAME> v. <NAME> 1 C. 163 : 25 W.R. 84 : 3 I.A. 1 : 3 Sar.P.C.J. 58 : 3 Suth. P.C.J. 222 : 1 Ind. Dec. (N.S.) 105 (P.C.), there was no clause similar to Article 80 of the new Act which could take the case out of the general clause. Reading Article £0 with Article 116 , which would be applicable to a registered document, the period for recovery of a simple money-decree on the basis of the registered deed in suit would be six years from the date "when the bond becomes payable." Now, the expression "becomes payable" is, in our opinion, very much the same thing as the words "becomes due" need in Article 132. Consequently, the cause of action for both the reliefs would arise at one and the same time, and the period of limitation for both would begin to run simultaneously. Of course, in the case of the enforcement of the charge, the period would be 12 years, whereas for a simple money decree it would be only 6.

28. In a very old case of <NAME> v. <NAME> 2 A. 322 : 3 Ind. Jur. 461 : 1 Ind Dec. (n.s. ) 763 <NAME>, J. was of opinion that a bond, somewhat similar to the one before us, was neither an instalment bond, nor a single bond, nor a bond subject to a condition, and that, therefore, neither Article 75 nor Article 66 nor Article 68 applied. He accordingly applied Article £0. The other learned Judge, however, took a different view.

29. In the case of <NAME> v. <NAME> 8 O.C. 77 the view of <NAME>, J., was followed by <NAME>, <NAME>, who pointed out that ' a single bond is a deed wherein a party acknowledges himself to be bound or indebted to another in a certain sum of money which he promises to pay. If there is appended to it a condition that upon the performance of a certain act. the bond is to be void, otherwise to remain in force, it is called a bond with a condition."

30. We are aware that opinion in the various <ORG> on this point is sharply divided. But agreeing with <ORG>, and <NAME>, A. J. C. we hold that the present bond does not fall either under Article 66 or Article 68 or Article 75 bat fills under Article 80 read with Article 116. In this view of the case the time began to run against the mortgagee for both the reliefs claimed from the date of the first default when the money became payable. The learned District Judge was, therefore, right in dismissing the suit in Mo.

31. The result is that both these appeals fail and are hereby dismissed with costs in all Courts.


PETITIONER: SHRI MADHAV LAXMAN VAIKUNTHE V. Vs. RESPONDENT: THE STATE OF MYSORE DATE OF JUDGMENT: 12/04/1961 BENCH: <NAME>, BHUVNESHWAR P.(CJ) BENCH: <NAME>, BHUVNESHWAR P.(CJ) DAS, <NAME>, <NAME>, <NAME> 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 , 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 <ORG> a cross-objection and <ORG> 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 <ORG> in <NAME> case and of the two tests of punishment laid (town by this <ORG>, 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. <CITATION> ,  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. <NAME>, [1947) F.C.R. 89, followed. JUDGMENT:

CIVIL APPELLATE JURISDICTION: CIVIL Appeal No.84 of 1960.

Appeal from the judgment and decree dated July 26, 1956. of <ORG> in Appeal No. he 138 of 1956. The appellant in person.

<NAME> and <NAME>, for the respondent. 1961. April 12. The Judgment of the Court was delivered by <ORG>, <NAME> main question for decision in this appeal, on a certificate of fitness granted by the' <ORG> 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, <ORG>, by his, Judgment and Decree dated October 31, 1955, held that it was so. <ORG>, 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 <NAME> 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 <NAME>, by virtue of the Order of the Government dated August 11, 1948, (Ex. 35), which was to the following effect:

"After careful consideration <ORG> have decided to revert you to <NAME> for a period of 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 <ORG> of Bombay on August 2, 1954, for a declaration that the Order of the <ORG> 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 <ORG>, no full compliance with the requirements of s. 240(3) of the <ORG> 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 to the conclusion that the Order aforesaid passed by the <ORG> 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 <ORG> in respect of that part of the judgment and decree which had granted declaration in favour of the plaintiff. <ORG> 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. <ORG> 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 <ORG> 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 <CITATION> (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 <ORG> 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 <ORG> 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.

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 <ORG>, 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 Order aforesaid of the <ORG>. 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 <ORG> 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 <ORG> Order impugned in this case. It is noteworthy that the Judgment of <ORG> under appeal was given in July, 1956, when the decision of this <ORG> in <NAME>'s case (1) had not been given. The decision of this <ORG> was given in November, 1957. Of the two tests laid down by this <ORG>, 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 <NAME>'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 <NAME>'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.

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 <NAME>'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 <NAME>'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 <NAME>'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)  S.C.R. 826,863-64.

reversion in rank, therefore, was in violation of the Constitutional guarantee. In view of these considerations it must be held that <ORG> 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 <ORG> 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 <ORG> service, plus future interest also. On this part of the case the learned Trial Judge, relying upon the case of the High Commissioner for <CITATION> (1) held that a government servant has no right to recover arrears of pay by an action in <ORG>. He got over the decision of this Court in the <CITATION> (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 <ORG> in the case of The Punjab Province v. <NAME> (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)  S.C.R. 786. (3)  F.C.R. 89.

<ORG>, the claim would be in time from June 2, 1951. Hence <ORG>, 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. <ORG> dismissed the suit in its entirety after allowing the cross- objections of the <ORG>. 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 <ORG> 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 <ORG>. In the result, the appeal is allowed in part, that is to say, the declaration granted by <ORG> that the Order of the <ORG> impugned in this case is void, is restored, in disagreement with the decision of <ORG>. 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 <ORG> 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.