Om Prakash Gupta vs The State Of Uttar Pradesh

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 85 of 1954

Decision Date: 21 April 1955

Coram: Syed Jaffer Imam, Bhuvneshwar P. Sinha, Vivian Bose, Natwarlal H. Bhagwati, B. Jagannadhadas

In the matter of Om Prakash Gupta versus The State of Uttar Pradesh, a judgment was delivered on the twenty-first day of April, 1955 by the Supreme Court of India. The judgment was authored by Justice Syed Jaffer Imam and was pronounced by a bench consisting of Justice Syed Jaffer Imam, Justice Bhuvneshwar P. Sinha, Justice Vivian Bose, Justice Natwarlal H. Bhagwati, Justice B. Jagannadhadas, Justice B. Aiyyur and Justice T. L. Venkatarama. The citation for the decision is reported in the 1955 All India Reports at page 600 and also in the 1955 Supreme Court Reports (Second Series) at page 391. The case concerned a government servant who challenged an order of dismissal issued by the Government and sought a declaration that the dismissal was illegal. In addition, the servant paid court-fee on an alternative claim for damages, which he later abandoned, and subsequently asked for a refund of that extra fee. The servant also claimed arrears of pay that had accrued after his dismissal, and the respondent State argued that the suspension order that preceded the dismissal had lapsed, thereby barring the claim for arrears.

The appellant, who held a position in the United Provinces Civil (Executive) Service, had been suspended with effect from the twenty-fourth of August, 1944 while an enquiry into his conduct was pending. Following the enquiry, the Commissioner submitted a report and on the twenty-fifth of November, 1944 the Government issued an order dismissing the appellant from service. That dismissal order was served on the appellant on the first of December, 1944. The appellant filed a suit seeking a declaration that the dismissal order was wrongful, illegal and inoperative, and that he remained entitled to his salary and any arrears thereof. The suit also contained an alternative prayer for a declaration of illegality coupled with a claim for damages of one hundred and twenty thousand rupees; the requisite court-fee on that valuation was paid. After the Privy Council decision in the case of High Commissioner for India and High Commissioner for Pakistan v. I. M. Lal, the appellant abandoned the damages claim and amended the plaint accordingly. The Civil Judge ruled that the dismissal order was illegal and that the appellant continued to be in service, but refused to grant a decree for arrears of salary on the ground that a suit for such a decree was not maintainable, and also denied the refund of the extra court-fee. The respondent did not appeal the declaration that the dismissal was illegal, but the appellant appealed the Civil Judge’s decision to the High Court. The High Court affirmed the Civil Judge’s finding of illegality of the dismissal, yet again denied the decree for arrears of salary and refused the refund of court-fee. Leave to appeal to the Supreme Court was granted. In view of the Supreme Court’s earlier decision in The State of Bihar v. Abdul Majid, the respondent did not contest the appellant’s entitlement to recover arrears of pay; instead, the respondent sought to sustain the decision that the dismissal order dated the twenty-fifth of November, 1944, being declared illegal and void, revived the earlier suspension order dated the twenty-fourth of August, 1944, and that such revival should bar the claim for arrears. The Court ultimately held that the suspension order, which was pending an enquiry, ceased to exist upon the issuance of the dismissal order, and that the later declaration of the dismissal’s illegality could not resurrect a superseded suspension. Consequently, the claim for refund of the additional court-fee was also denied because the Privy Council’s clarification precluded such a refund.

In this case, the respondent argued that because the order of dismissal dated 25 November 1944 had been declared illegal and void, the earlier order of suspension dated 24 August 1944 should be revived, and that revival would prevent the appellant from claiming any arrears of salary. The Court held that the suspension order, which had been made while an enquiry was pending, ceased to exist when the dismissal order was issued. Consequently, the later declaration by the Civil Court that the dismissal order was illegal could not bring back an order that had already terminated. The Court explained that the validity of the suspension order and whether it was issued after a proper enquiry would matter only for a salary claim covering the period from 24 August 1944 to 1 December 1944. Since the appellant did not pursue a claim for that specific period, the Court saw no need to order an enquiry on that point. The Court further held that the appellant’s claim for a refund of the extra court-fee could not be allowed. It ruled that a decision of the Privy Council, which clarified the law, could not serve as a basis for refund when the fee had been paid in accordance with the law that was then applicable. The Court cited several authorities in support of its reasoning, including The State of Bihar v. Abdul Majid ([1954] S.C.R. 786), Shenton v. Smith ([1896] A.C. 229), B. Venkata Rao v. Secretary of State for India in Council (L.R. 64 I.A. 55), M. Gopal Krishna Naidu v. State of Madhya Pradesh (A.I.R. 1952 Nag. 17), Provincial Government, Central Provinces and Berar through Collector, Amraoti v. Shamshul Hussain Siraj Hussain (I.L.R. [1948] Nag. 576), and also referred to earlier reports (1) [1948] L.R. 75 I.A. 225 and (2) [1951] S.C.R. 786.

The appeal was filed under Civil Appellate Jurisdiction as Civil Appeal No. 85 of 1954, seeking relief under Article 133(1)(c) of the Constitution against the judgment and decree dated 6 November 1950 of the High Court of Judicature at Allahabad in F.A. No. 141 of 1949. Counsel for the appellant and the respondent were listed, and the judgment was delivered on 21 April 1955. The Court noted that the appellant had been appointed to the United Provinces Civil (Executive) Service in 1940, later confirmed, and had served in several postings before being transferred to Lakhimpur Kheri in July 1944. On 23 August 1944, the Deputy Commissioner of Lakhimpur Kheri received a telegram from the Government informing him that the appellant was suspended immediately pending an inquiry into his conduct, and a copy of that telegram was sent to the appellant for his information. Subsequently, on 26 August 1944, the Deputy Commissioner wrote to the appellant requiring his appearance before the Commissioner of the Lucknow Division on 28 August 1944 to answer the charges, and indicated that the copy of this notice would also be forwarded. The letter further advised the appellant that his case could be treated under rule 55 of the Civil Services (Classification Control and Appeal) Rules of 1930, published in the United Provinces Gazette of 28 June 1930, and that, because of his suspension, his leave application was cancelled.

The Deputy Commissioner also told the appellant that he could present his case under rule fifty-five of the Civil Services (Classification Control and Appeal) Rules of 1930, which had been published in the United Provinces Gazette on 28 June 1930. He further informed the appellant that, because of his suspension, the leave application he had submitted was cancelled. On 28 August 1944 the appellant appeared before the Commissioner at Lucknow and protested against the procedure that the Commissioner had adopted for conducting the inquiry. The Commissioner completed the first inquiry on 1 September 1944 and thereafter forwarded his report to the Government. Nevertheless, the Commissioner reopened the inquiry on 11 September 1944; after completing this second inquiry, he submitted the documentation to the Government on 30 September 1944. By an order dated 25 November 1944, the Government of the United Provinces dismissed the appellant from the United Provinces Civil (Executive) Service. That dismissal order was served on the appellant on 1 December 1944. The appellant then lodged a memorial with the Governor on 7 August 1945; the Governor rejected the memorial on 28 May 1947. While the appellant remained under suspension, he received a subsistence allowance equal to one-fourth of his salary, which at that time amounted to Rs 310 per month. On the basis of section eighty of the Code of Civil Procedure, the appellant gave notice of his intention to institute legal proceedings, and he filed his suit on 2 January 1948. In the plaint he sought a declaration that the dismissal order was wrongful, illegal, void and inoperative, and that he continued to be a member of the Civil Service entitled to full salary with all increments as they became due. He also prayed for a decree ordering the Government to pay arrears of salary totaling Rs 16,810-8-0, reduced by the subsistence allowance he had already received for the period from 24 August 1944 to 31 December 1947. Alternatively, he asked that the Court declare the dismissal order wrongful and that a decree for Rs 1,20,000, together with interest as damages, be entered in his favour. The appellant paid the required court fee based on a valuation of Rs 1,20,000. However, this alternative claim was later removed from the plaint by amendment, following a subsequent decision of the Privy Council which held that a person illegally dismissed from Government service could obtain only a declaration that the dismissal order was inoperative and that he remained a member of the Service. The appellant also requested a refund of the excess court fee he had paid, but the Civil Judge rejected that request in a separate order. Nonetheless, the Civil Judge partially decreed the appellant’s suit, holding that the order of dismissal was illegal and that the appellant continued to be a member of the United Provinces Civil (Executive) Service. The Civil Judge, however, refused to grant a decree for the arrears of salary.

In this case the appellant challenged the decision of the Civil Judge by filing an appeal in the High Court. The High Court dismissed the appeal. The respondent did not file a cross-objection nor appeal against the Civil Judge’s order. Consequently, the High Court considered only two issues: whether the appellant was entitled to a decree for arrears of salary and whether he could obtain a refund of the excess court fee he had paid. Both of those questions were decided against the appellant, and the High Court thereafter granted him a certificate of leave to appeal to this Court. The Court noted that, following its earlier ruling in The State of Bihar v. Abdul Majid, the appellant’s right to sue for arrears of salary was unquestionable because his dismissal had been held illegal. Thus a detailed discussion of that point was unnecessary. During the hearing before this Court, the Attorney-General argued that the suspension order dated August 1944 remained in effect despite the Civil Judge’s declaration that the dismissal was illegal, and therefore the appellant was entitled only to a subsistence allowance and not to salary. That argument had not been raised in any written statement before the trial court, nor had any issue been framed on it. The Attorney-General sought permission to file an additional written statement, and the Court granted that request, also allowing the appellant time to reply. The respondent subsequently filed the additional written statement, the appellant filed his reply, and the matter was set down for further hearing. At the next hearing the appellant’s counsel made submissions on the additional statement, after which the Attorney-General responded.

The question of the excess court fee was addressed later in the proceedings. The appellant’s counsel did not raise the refund of the court fee in his opening argument; he raised it only in his reply after the Attorney-General had concluded his argument. The Court considered whether a point not raised in the opening submission could be introduced at that stage and found that, even if it were permissible, the appellant’s contention had no merit. Consequently, the Court indicated that there was no basis for granting a refund of the excess court fee.

The appellant had paid a court fee of Rs 1,20,000 which he had claimed as part of the damages sought in the suit. At the time the suit was filed, the law as it was then understood allowed a party to claim a refund of court fee in a damages claim. Subsequently, however, the Privy Council rendered a decision that clarified the law. The Privy Council held that a government servant could not maintain a claim for a refund of court fee as part of damages; the only relief available to a government servant was a declaration that the dismissal order was illegal and that the servant remained a member of the Civil Service. Because the Privy Council’s decision came after the fee had already been paid, that decision could not be used as a basis for a refund of the fee that had been lawfully paid at the relevant time. Moreover, the appellant neither appealed nor filed any application challenging the order of the Civil Judge who had refused to grant a refund of the fee. When the matter was taken before the High Court, the appellant did not seek refund on the basis of any specific statutory provision; instead, he invoked the inherent powers of the High Court to obtain relief. The Court Fees Act contains certain provisions that allow a refund of court fee under particular circumstances, but the present case did not fall within any of those listed provisions. Accordingly, the High Court, after considering the facts, correctly declined to order a refund of the excess court fee that the appellant had paid. It also appeared that the Civil Judge, in refusing to grant a refund, had not acted illegally or beyond his jurisdiction.

The respondent’s additional written statement raised the issue of whether the order of suspension imposed on the appellant was valid and whether, during the period of suspension, the appellant could recover arrears of salary. The appellant’s counsel argued that the order of suspension constituted a penalty under rule 49 of the Classification Rules, and that imposing such a penalty before the conclusion of an inquiry prescribed under rule 55 was contrary to the principles of natural justice. The counsel further pointed out that an order imposing suspension as a penalty was appealable under rule 56 of the Classification Rules, and that rule 59 required the appellate authority to examine whether the facts on which the suspension was based had been properly established and whether those facts sufficiently justified the imposition of the penalty. In addition, rule 54 of the Fundamental Rules empowers a revising or appellate authority, upon finding that a suspension penalty was unjustified or only partially justified, to order that the government servant receive his full pay and any allowances to which he is entitled if he is honourably acquitted, or to award a proportionate amount of pay and allowances as may be prescribed. The appellant’s counsel emphasized that suspension caused a serious loss of salary and allowances, and that imposing such a penalty before an inquiry was effectively a prejudgment of the case, thereby undermining the servant’s right to appeal.

In this matter the Court observed that the remedy of refusing suspension pending an inquiry was without substance. It noted that certain statutes issued by governmental or quasi-governmental bodies expressly authorised suspension while an inquiry was still pending. Examples cited included rule ninety-five of the Bihar and Orissa Service Code, which had been referenced in the Abdul Majid decision, and rule one thousand seven hundred eleven of the Indian Railway Establishment Code. The Court further recorded that counsel for the appellant referred to judgments which held that, in a master-servant relationship, the master could not suspend the servant unless the employment contract contained an explicit clause permitting such a power. The Attorney-General admitted that, aside from the Classification Rules and the Fundamental Rules, he was unaware of any other rule that allowed a suspension penalty to be imposed on a Government servant. He also acknowledged that, under the Classification Rules, a suspension order constituted a penalty. Moreover, he accepted that, in the master-servant context, the master’s power to suspend was dependent on either an express contractual term, a statutory provision, or a specific rule, but he argued that this principle did not extend to individuals serving the Crown in India. Nonetheless, the Attorney-General contended that rule forty-nine of the Classification Rules permitted a suspension penalty to be imposed before an inquiry was completed. He emphasized that the wording of that rule did not restrict the imposition of a penalty to the conclusion of an inquiry; rather, a suspension could be justified on solid grounds derived from material already on record while the inquiry was pending. He explained that after the inquiry, the authorities might either increase the penalty, set a definite period of suspension, or rescind the suspension order entirely. The Attorney-General further pointed out that, although there was a right of appeal against a suspension imposed pending an inquiry, rule fifty-four of the Fundamental Rules did not inevitably require that such a penalty be imposed only after an inquiry. He suggested that clause (a) of that rule could envisage a penalty imposed after an inquiry, whereas clause (b) could cover a penalty imposed before the inquiry concluded.

The Court also considered the argument that no breach of natural-justice principles occurred because the appellant had been given an opportunity to explain the accusations against him. It referred to a letter from the Commissioner of the Lucknow Division, together with its annexure identified as Exhibit A in the trial court, which demonstrated that the Deputy Commissioner of Lakhimpur Kheri had recorded statements from persons concerning three separate cases, and that the appellant had been made aware of these statements. The appellant admitted the factual background of the allegations but attempted to provide explanations for his actions. However, he refused to furnish a written statement. The Court noted that the suspension order was based on material that the appellant fully understood. In an alternative line of argument, the Attorney-General urged that, even if the matter were considered under a different perspective, the authority to suspend pending an inquiry remained valid.

In the year 1944 the appellant was a member of the Civil Service of the Crown in India and his office was held at the pleasure of the Crown. Accordingly the Crown and its representative possessed an inherent power to issue a suspension order against the appellant while an inquiry was pending. The Classification Rules and the Fundamental Rules were merely advisory directions and did not create a contractual relationship between the Crown and its servants. To support this view the Court referred to the observations of Lord Hobhouse in Shenton v. Smith (1). The Court also relied on the remarks of Lord Roche in B. Venkata Rao v. Secretary of State for India in Council (2), noting that “Section 96-B in express terms states that office is held during pleasure. There is, therefore, no need for the implication of this term and no room for its exclusion. The argument for a limited and special kind of employment during pleasure but with an added contractual term that the rules are to be observed is at once too artificial and too far-reaching to commend itself for acceptance. The rules are manifold in number and most minute in particularity, and are all capable of change… Inconvenience is not a final consideration in a matter of construction, but it is at least worthy of consideration and it can hardly be doubted that the suggested procedure of control by the Courts over Government in the most detailed work of managing its services would cause not merely inconvenience but confusion.” In the lower courts the principal issue for consideration was whether the appellant could recover arrears of salary after having been illegally dismissed. The question of whether the suspension order was valid, and therefore whether the appellant could not claim salary during its operation, was not pleaded, and no specific issue on that point was framed. The Court observed that, had the decision in Abdul Majid’s case been available to those courts, they would likely have held that the appellant was entitled to recover salary arrears when his dismissal was illegal, and they would then have been required to decide the validity of the suspension order and whether salary could be recovered during the period it was in force. The respondent filed an additional written statement in this Court, and the submissions of the appellant’s counsel and of the Attorney-General warranted examination, potentially requiring a remand to the trial court. However, the Court found it unnecessary to record a decision on those submissions because of the appellant’s counsel’s stance. The appellant’s counsel objected to a remand, arguing that such a step would impose heavy expenses and harassment on the appellant. Consequently the appellant chose to abandon his claim for salary arrears, except for the subsistence allowance that had been paid to him from the date of the suspension up to the date of his dismissal.

The appellant argued that the suspension order remained effective only up to 25 November 1944, the date on which the dismissal order was issued. He maintained that on that date the suspension ceased to exist and that he became entitled to recover salary arrears from 25 November 1944 through 31 December 1947, inclusive. The Attorney-General countered that the suspension continued in force and was not affected by the Civil Judge’s declaration that the dismissal order was illegal. According to the Attorney-General, because the dismissal order was declared a nullity, the inquiry that produced it could not be considered concluded until a valid order replaced the suspension. He further submitted that until such a valid replacement order was made, the accusation against the appellant persisted and the inquiry remained open. The Attorney-General relied on the decision in M. Gopal Krishna Naidu v. State of Madhya Pradesh (1). In response, the appellant relied upon the precedent set in Provincial Government, Central Provinces and Berar through Collector, Amraoti v. Shamshul Hussain Siraj Hussain (2). The Court observed that the suspension order was issued merely to pending an inquiry and was not a penalty imposed after the inquiry. When the inquiry concluded, it resulted in a dismissal order that acted as a penalty and thereby caused the suspension order to lapse. Consequently, the dismissal order replaced the suspension, and the suspension ceased to exist between the Government of the United Provinces and the appellant. The Court further held that a later declaration by a Civil Court that the dismissal order was illegal could not revive a suspension order that had already terminated. The Court found that the case cited by the Attorney-General was not directly applicable and did not conflict with the authority relied upon by the appellant. Accordingly, the Court concluded that the appellant was entitled to recover salary arrears covering the period from 25 November 1944 to 31 December 1947.

For that reason, the appeal was allowed in part, costs were awarded throughout, and the decree of the lower courts was set aside. The plaintiff’s suit was therefore decreed for the arrears of salary from 25 November 1944 to 31 December 1947, inclusive. The appellant had originally claimed Rs. 16,810-8-0, subtracting any subsistence allowance already received for the period from 24 August 1944 to 31 December 1947. Because the appellant abandoned his claim for salary arrears covering 24 August 1944 to 25 November 1944, the amount payable for that interval, less the subsistence allowance already drawn, must be deducted from the claimed sum of Rs. 16,810-8-0. The Court ordered that the decree of the lower courts be vacated and that a fresh decree be drawn in accordance with the entitlement determined. It directed that the amount of Rs. 16,810-8-0 be reduced by the sum calculated for the period relinquished by the appellant, after accounting for the subsistence allowance already paid. The direction further required that the final decree reflect the net amount recoverable by the appellant as salary arrears. The judgment of the High Court together with the additional written statement filed by the respondent in this Court show …

In the proceedings that followed the decree issued by the Civil Judge, the appellant was regarded as being under suspension until a new order dismissed him; the dismissal was recorded in the authorities cited as (1) A.I.R. 1952 Nag. 170, (2) I.L.R. 1948 Nag. 576 and A.I.R. (36) 1949 Nag. 118. During the entire period of his suspension and subsequent dismissal, the appellant had received a subsistence allowance. The Court held that the subsistence allowance paid to the appellant from 25 November 1944 through 31 December 1947, inclusive, should be credited to the respondent and set off against the salary that the appellant was claiming. Consequently, a fresh decree would be prepared whereby the amount recoverable by the appellant would be specified after adjusting the subsistence allowance against his salary claim. The appellant had been allowed to pursue the appeal in forma pauperis. Because his appeal succeeded, the Registrar was directed to determine the amount of court fee that the appellant would have been required to pay had he not been permitted to sue as a pauper, and to incorporate that amount in the decree. The court fee, once calculated, was to be payable by the appellant; the Government of India would recover that fee from him, and it would constitute the first charge on any sum awarded to him by the decree. Further, under Rule 7 of Order XIV of the Rules of this Court, the appellant was to be permitted to recover from the respondent the fees he had paid to his advocates as part of the taxation of costs.