# Hiralal Patni v. Loonkaram Sethiya Subba Rao ]. April I2

- **Citation:** [1962] 1 S.C.R. 886
- **Court:** Supreme Court of India
- **Decided:** 1962
- **Bench:** B. P. Sinha, s. K. DAS, A. K. Sarkar, N. Rajagopala Ayyangar, J. R. Mudholkar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/hiralal-patni-v-loonkaram-sethiya-subba-rao-april-i2-2103
- **Pages:** 10

## Headnote

Public Servant-Reversion to substantive rank-If and when
punishment-Test-Recovery of arrears of salary-LimitationGovernment of India Act, 1935 (26 Geo. 5, ch. 2), s. 240(3)--Constitution of India, Art. 3n(2)-lndian Limitation Act, 1908 (9 of
r908), art. ro2.
The appellant, who held the rank of a Mamlatdar in the
first grade and was officiating as District Deputy Collector, was
alleged to have' wrongly charged travelling allowance for 59
!
I
J
miles instead of 5 I and was, as the result of a departmental
~
enquiry, reverted to his substantive rank for three years and
l
)
1 S.C.R.
SUPREME COURT REPORTS
887
directed to refund the excess he had charged. He made a rer96r
presentation to the Government which was of no avail although
.
the Accountant General was of the opinion that the appellant
Shri Madhav
had not overcharged and committed no fraud. Ultimately the,Laxman Vaikunthe·
appellant was promoted to the selection grade but the order of
v.
reversion remained effective and affected his position in the State 0! Mysore
·selection grade. After retirement he brought a suit for a declaration that the order of reversion was void and for recovery
of Rs. r2,516 and odd as arrears of salary, allowances, etc., with
interest and future interest. The trial court held that there
was no compliance with the provisions of s. 240(3) of the
Government of India Act, 1935, granted the declaration but
refused the.arrears claimed. The plaintiff filed an appeal and
the State a cross-objection and the High Court dismissed the
appeal and allowed the cross-objection, holding that the order of
reversion was not a punishment within the meaning of s. 246(3)
of the Government of India Act, r935.
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 down by this Court, namely, (1) whether the
servant had a right to the rank or (2) whether he had been
visited by ~vii 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 he was visited with evil consequences as a result of
the order of reversion.
Mere deprivation of higher emoluments, ho;vever, in consequence 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 substantb,e 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. 3u(2) of the Constitution, had not been found to have been fully complied with,
the order of reversion must be held to be void.
Pttrshottam Lal Dhingra v. Union of India, [1958] S.C.R.
826, applied.
The claim of arrears of salary was governed by art. 102 of
the Indian Limitation Act, and the appellant, therefore, was
entitled to no more than what fell due during the 3 years previous to his retirement.
The Punjab Provinte v. Pandit Tarachand, [1947] F.C.R. 89,
followed.

## Text

Hiralal Patni
v.
Loonkaram
Sethiya
Subba Rao ].
April I2,
886
SUPREME COURT REPORTS
[1962]
' '..
deciding the conflicting claims of a lessee and a third
party arises in this cas~; nor is the court called upon
to pronounce on the vested rights of a lessee in conflict with those of the Receiver. But this is a simple
case of a court in the course of its administration of
the estate through the agency of a receiver making a
suitable provision for the running of the mills.
As
the agreed term had expired, the court, in our view,
could certainly direct the appellant to put the mill in
the possession of the Receiver.
Lastly it has. been brought to our notice that an
application for the discharge of the Receiver is pending in the lower court. Any observations that we
have made in this judgment are not intended to affect
the merits one way or other in the disposal of that
application. That application will be disposed of in
accordance with law.
In the result, the appeal fails and is dismissed with
costs.
Appeal dismissed.
SHRI MADHA V LAXMAN V AIKUNTHE
v.
THE STATE OF MYSORE
(B. P. SINHA, c. J., s. K. DAS, A. K. SARKAR,
N. RAJAGOPALA AYYANGAR and
J. R. MUDHOLKAR, JJ.)
Public Servant-Reversion to substantive rank-If and when
punishment-Test-Recovery of arrears of salary-LimitationGovernment of India Act, 1935 (26 Geo. 5, ch. 2), s. 240(3)--Constitution of India, Art. 3n(2)-lndian Limitation Act, 1908 (9 of
r908), art. ro2.
The appellant, who held the rank of a Mamlatdar in the
first grade and was officiating as District Deputy Collector, was
alleged to have' wrongly charged travelling allowance for 59
!
I
J
miles instead of 5 I and was, as the result of a departmental
~
enquiry, reverted to his substantive rank for three years and
l
)
1 S.C.R.
SUPREME COURT REPORTS
887
directed to refund the excess he had charged. He made a rer96r
presentation to the Government which was of no avail although
.
the Accountant General was of the opinion that the appellant
Shri Madhav
had not overcharged and committed no fraud. Ultimately the,Laxman Vaikunthe·
appellant was promoted to the selection grade but the order of
v.
reversion remained effective and affected his position in the State 0! Mysore
·selection grade. After retirement he brought a suit for a declaration that the order of reversion was void and for recovery
of Rs. r2,516 and odd as arrears of salary, allowances, etc., with
interest and future interest. The trial court held that there
was no compliance with the provisions of s. 240(3) of the
Government of India Act, 1935, granted the declaration but
refused the.arrears claimed. The plaintiff filed an appeal and
the State a cross-objection and the High Court dismissed the
appeal and allowed the cross-objection, holding that the order of
reversion was not a punishment within the meaning of s. 246(3)
of the Government of India Act, r935.
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 down by this Court, namely, (1) whether the
servant had a right to the rank or (2) whether he had been
visited by ~vii 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 he was visited with evil consequences as a result of
the order of reversion.
Mere deprivation of higher emoluments, ho;vever, in consequence 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 substantb,e 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. 3u(2) of the Constitution, had not been found to have been fully complied with,
the order of reversion must be held to be void.
Pttrshottam Lal Dhingra v. Union of India, [1958] S.C.R.
826, applied.
The claim of arrears of salary was governed by art. 102 of
the Indian Limitation Act, and the appellant, therefore, was
entitled to no more than what fell due during the 3 years previous to his retirement.
The Punjab Provinte v. Pandit Tarachand, [1947] F.C.R. 89,
followed.
CIVIL APPELLATE JURISDICTION:
Civil Appeal No,
84of1960.
888
SUPREME COURT REPORTS
[1962]
i96i
Appeal from the judgment and decree dated July
Shri Madhav
26, 1956, of the Bombay High Court in .(\ppeal No.
Laxman Vaikunthe 138 of 1956.
v.
State of Mysore
The appellant in person.
B. R. L. Ayengar and D. Gupta,
dent.
for the respon.
1961. April 12. The Judgment of the Court was
delivered by
Sinha c. J.
SINHA, C. J.-The main question for decision in this
appeal, on a certificate of fitness granted by the High
Court of Judicature at Bombay, is whether a public
servant, who has been officiating in a higher post but
has been reverted to his substantive rank as a result
of an adverse finding against him in a departmental
enquiry for misconduct, can be said to have been
reduced in rank within the meaning of s. 240(3) of the
Government of India Act, 1935. The learned Civil
Judge, Senior Division, by his Judgment and Decree
dated October 31, 1955, held that it was so. The High
Court of Bombay, on a first appeal from that decision,
by its Judgment and Decree dated July 26, 1956, has
held to the co'ntrary.
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 officia.ting
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, (Ex. 35),
which was to the following effect:
"After careful consideration Government have
decided to revert you to Mamlatdar for a period of
' . •
I
J
. '
.,
I
,· _,
1 S.C.R. SUPREME COURT REPORTS
889
three years and have further directed that you
1961
should refund the excess mileage drawn by you in
t f th th
.
,,
Shri Madhav .
respec O
e
ree Journeys.
.
Laxman Vaikunthe
The appellant made a number of representations
v.
to the Government challenging the correctness of the State of Mys°''
findings against him and praying for re-consideration
of the Order of Reversion passed against him but to
Sinha c. J.
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 dated March 26, 1951,
(Ex. 61), the appellant was promoted to the Selection
Grade with effect from August 1, 1950, but even so the
Order of Reversion passed against the appellant remained effective and appears to have affected his
place in the Selection Grade. Eventually, the appellant retired from service on superannuation with effect
from November 28, 1953. He filed his suit against
the State of Bombay on August 2, 1954, for a declaration that the Order of the Government dat~d August
11, 1948, was void, inoperative, wrongful, illegal and
ultra vires, and for recovery· of Rs. 12,866 odd on
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 not
been given the opportunity of showing cause against
the punishment proposed· to be inflicted upon him as
a result of those findings, in so far as no show-cause
notice was given to him ndr a copy of the enquiry
report showing the grounds on which the findings had
been based. There was, thus, according to the finding
of the Trial Court, no full compliance with the requirements of s. 240(3) of the Government of India Act,
1935. The Court also held that the Order of Rever- ,
sion amounted to a penalty imposed upon the plaintiff
as a result of the enquiry. The Court, therefore, came
ll2
890
SUPREME COURT REPORTS
r96r
to the conclusion that the Order aforesaid passed by
. M d
the Government reverting him to the substantive rank
La;::::. v:i;~~the was void and granted him that declaration, but disv.
missed his suit, with costs, in respect of the arrears
State of Mysore claimed by him as aforesaid on the ground that it was
based on tort and not on contract. There was an
Sinha C.J.
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 defendant-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 s. 240(3) of the Government of India Act, 1935. It
also held that the Order of Reversion was not a
punishment at all.
In this Court, the appellant, who has argued his
own case with ability, has urged in the first place,
and in our opinion rightly, that his case is covered by
the observations of this Court in Parshotam Lal Dhingra v. Union of India('). Those observations are as
follows:-
" A reduction in rank likewise may be by way of
punishment or it may be an innocuous thing. If the
Government servant has a right to a particular
rank, then the very reduction from that rank will
operate as a penalty, for he will then lose the emoluments and privileges of that rank. If, however,
he has no right to the particular rank, his reduction
from an officiating higher rank to his substantive
lower rank will not ordinarily be a punishment.
But the mere fact that the servant has no title to
the post or the rank and the Government has, by
contract, express or implied, or under the rules, the
right to reduce him to a lower post does not mean
that an order of reduction of a servant to a lower
(1) [1958] s.c.R. 826, 863-64.
"
~, ) fl S.C.R. SUPREME COURT REPORTS
891
I
post or rank cannot in any circum_st:i-nces be . a
r95r
punishment. The real test for determrnrng whether
sh,i'Madhav
the reduction in such cases is or is not by way ofLaxman Vaikunthe
punishment is to find out if the order for the reducv.
tion also visits the servant with any penal conse- Stat• of Mysore
sequences. Thus if the order entails or provides
for the forfeiture of his pay or allowances or the
Sinha c. f.
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 "terminate" or "discharge" is not conclusive. In spite of
tho use of such innocuous expressions, the court h11s
to apply the two tests mentioned above, namely, (1)
whether the· servant had a right to the post or the
rank or (2) wh";ther he has 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 constitutional 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
SUPREME COURT REPORTS
'96'
O_rder aforesaid of the Government. In the ordinary
Shri Madhav
course? he would have continued as a Deputy Co!lecLaxman Vaikunthe tor with all the emoluments of the post and would
v.
have been entitled to further promotion but for the
State of Mysore setback in his service as a result of the adverse finding against him, which finding was ultimately declarSiuha c. J.
ed by the Accountant 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.
But 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 Dhin-•
gra'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
(I) [1958] S.C.R. 826, 863-64.
I
,.
;
1 S.C.:R. SUPREME COURT REPORTS
893
test to the present case, it cannot be said that simply
r96r
because the appellant did not-get a Deputy Collector's
. 111 dh
salary for three years, he was visited with evil conse- La;;:. 'v;ik:;,h,
quences of the type contemplated in Dhingra' s case (1 ).
v.
Even if he had been reverted in the ordinary course of State of Mysore
the exigencies of the service, the same consequences
would have ensued. If the loss of the emoluments
Sinha c. J.
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 rever.sion 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 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
{I) [1958] S.C.R. 826, 863-64.
894
SUPREME COURT REPORTS
[1962]
r96r
reversion in rank, therefore, was in violation of the
Sh . M dh
constit,utional guarantee. In view of these consideraLaxm~n v:ik::the tions it must be held that the High Court was not
v.
right in holding against the appellant that his reverState of Mysore sion was not a punishment contemplated by s. 240(3)
of the Government of India Act, 1935. On this part
Sinha c. f.
of the case, in our opinion, the decision of the High
Court has to be reversed and that of the Trial Court
that 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. 4 71 odd, thus aggregating to the sum of Rs. 12,886 odd. This claim is spread
over the period August, 1946, to November, 1953,
that is to say, until the date of his retirement from
Government service, plus future interest also. On
this part of the case the learned Trial Judge, relying
upon the case of the High Commissioner for India and
Pakistan v. I. M. Lall(') held that a government servant has no right to recover arrears of pay by an
action in a Civil Court. He got over the decision of
this Court in the State of Bihar v. Abdul Majid(') 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 dowrl by the Federal Court in the case of The
Punjab Province v. Pandit Tarachand ('). 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) (19f8) L.R. 75 I.A. 225.
(2) [1954] S.C.R. 786.
(3) [1947] F.C.R. 89.
/
l S.C.R. SUPREME COURT RE!>OR'l'S
Government, the claim would be in time from June 2,
I96I
1951. Hence the Trial Court, while giving the declaSh . M dh
ration that the Order impugned was void, dismissed Laxm~nv:ik:;,he
the rest of the claim with a. direction that the plainv.
·
tiff was to pay 3/4ths of the costs of the suit to the State of Mysore
defendant. The High Court dismissed the suit in its
entirety after allowing the cross-objections of the
Sinha c. J.
iState. The appellant contended that his suit for
arrears of salary would not be governed by the three
years rule laid down in Art. 102 of the Limitation Act
and that the decision of the Federal Court in Tarachand's case (1) was not correct. The sole ground on
which this contention was based was that "salary"
was not included within the term "wages". In our
opinion, no good reasons have been adduced before us
for not following the aforesaid decision of the Federal
Court. In the result, the appeal is allowed in part,
that is to say, the declaration granted by the Trial
Court that the Order of the Government impugned in
this case is void, is restored, in disagreement with the
decision of the High Court. The claim as regards
arrears of salary and allowance is allowed in part
only from the 2nd of June, 1951, until the date of the
plaintiff's retirement from Government service. There
will be no decree for interest before the date of the
suit, but the decretal sum shall bear interest at 6%
per annum from the date of the suit until realisation.
The plaintiff-appellant will be entitled to three-fourths
of his costs throughout, in view of the fact that his
,
entire claim is not being allowed.
Appeal allowed in part .
•
(I) (I947) F.C.R. 89.