Union of India vs Jeewan Ram

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

Court: Supreme Court of India

Case Number: Appeal (civil) 379 of 1956

Decision Date: 13 March 1958

Coram: S.R. DAS (CJ), T.L.V. AIYYAR, S.K. DAS, A.K. SARKAR, VIVIAN BOSE

In this appeal, the Union of India sought review of a judgment rendered by the Judicial Commissioner of Ajmer on 15 February 1954. That judgment had set aside the earlier decision of the lower courts and had declared that the order of removal from service dated 16 March 1949, which had been passed against the respondent, was illegal and ineffective. The present appeal was instituted on a certificate issued by the Judicial Commissioner, and it challenged both the judgment and the decree that had been issued by that authority.

The respondent, who had been the plaintiff in the original suit, had been appointed as an assistant booking clerk in the B. B. and C. I. Railway system at Ajmer on 15 July 1947 and had been confirmed in that position on 26 May 1948. On 7 February 1949, the Station Master of Ajmer sent the respondent a memorandum indicating that he was being placed under suspension from that date on the orders of the Traffic Superintendent of Ajmer. The memorandum alleged that the respondent had refused to issue forty‑eight third‑class tickets for Makrana to a passenger unless the passenger paid Rs 2‑1‑0 per ticket, whereas the correct fare was Rs 1‑15‑0, and that he had further refused to issue any of the forty‑eight tickets for that station. Consequently, a charge sheet was drawn up against the respondent on 21 February 1949 under Regulation 1702 of the Indian Railway Establishment Code, Volume 1, relating to dismissal from service. The charge sheet was served on 22 February 1949, and the respondent was directed to submit a written explanation within seven days. He furnished his explanation on 28 February 1949, denying all the allegations made against him.

Subsequently, on 16 March 1949, an order was passed removing the respondent from service. The order provided that he would receive one month’s pay in lieu of notice of removal, with effect from 18 March 1949. The text of that order, which formed the subject of the respondent’s suit, read in full as follows:

“B. B. & C. I. Railway. Notice of imposition of the penalty of removal from service under item (8) of Rule 1702. From D. T. S. BKI. To Jeewan Ram, Y 2093 R. A. B. C. AII No. EY. 2093A. You are hereby informed that in accordance with the orders passed by me you are given one month’s pay in lieu of notice of removal from service with effect from 18‑3‑1949. A/N. Date 16‑3‑49. Sd. D. T. S. BKI.”

The respondent appealed the order, but the appeal was dismissed on 3 August 1949. He then served a notice under Section 80 of the Code of Civil Procedure on the General Manager of the B. B. & C. I. Railway on 17 October 1949, and on 9 January 1950 he instituted a suit against the Dominion of India. In that suit, the respondent sought a declaration that his discharge from service was illegal and arbitrary, and he claimed the reliefs that were set out in his plaint.

The order dated 16‑3‑1949 provided that the respondent would receive one month’s pay in lieu of notice of removal from service, with effect from 18‑3‑1949, and it was signed by D. T. S. BKI. The reverse side of the notice contained several additional instructions. First, it directed that the settlement of the respondent’s dues would be made at Ajmer through S. M. Second, it stated that a subsistence grant would be paid at a rate of one‑half of his pay for the period of suspension, namely from 8‑2‑1949 to 18‑3‑1949 inclusive. Third, it informed the respondent that, under Rule 1717, an appeal against the order could be filed with the Tribunal at Ajmer. The respondent exercised this right and filed an appeal, which was dismissed on 3 August 1949. Subsequently, on 17 October 1949, the respondent served a notice on the General Manager of B. B. & C. I. Railway invoking Section 80 of the Code of Civil Procedure. On 9 January 1950, he instituted a suit against the Dominion of India seeking several remedies: a declaration that his discharge was illegal and arbitrary and that he was entitled to the compensation claimed; payment of Rs. 1120‑9‑7; payment of any amount due from the date of the suit to the date of his reinstatement; and costs of the suit. The learned Additional Subordinate Judge at Ajmer dismissed the suit on 5 November 1952, holding that the notice served under Section 80 was not in accordance with law, that the order of removal was not illegal, and that the respondent was not entitled to reinstatement or damages. The respondent appealed, and the learned District Judge of Ajmer affirmed the lower court’s findings by a judgment dated 24 March 1953. The respondent then filed a second appeal before the learned Judicial Commissioner, who reversed the decisions of the lower courts. The Commissioner held that the notice under Section 80 was valid, that the order dated 16 March 1949 was clearly a punitive order, and that it was illegal and ineffective because it contravened Section 240(3) of the Government of India Act, 1935. Counsel for the appellant challenged the Commissioner’s principal finding that the order of 16 March 1949 was illegal and ineffective. He referred to sub‑rules (3) and (4) of Rule 148 of the Indian Railway Establishment Code, Volume I, and argued that the respondent’s service had been terminated in accordance with the terms and conditions of his service contract, thereby rendering Section 240(3) of the Government of India Act, 1935 inapplicable to the case.

It was necessary to refer to certain provisions of the Indian Railway Establishment Code. The relevant provisions were sub‑rules (3) and (4) of Rule 148, which dealt with termination of service for non‑pensionable railway servants. Sub‑rule (3) stated that the service of such servants could be terminated on notice by either party for the periods specified, but that notice was not required in cases of summary dismissal or discharge under the service agreements, retirement on attaining superannuation age, or termination due to mental or physical incapacity. The sub‑rule further specified that a permanent non‑gazetted employee was entitled to one month’s notice. Sub‑rule (4) provided that, in place of the notice prescribed, the Railway Administration was authorized to terminate the servant’s service by paying him the salary that would have been due for the notice period. On behalf of the appellant it was submitted that the respondent, being a permanent non‑gazetted employee, fell within the category described in sub‑rule (3) and therefore his service could be terminated by giving one month’s notice, or alternatively by paying the amount equivalent to one month’s salary in lieu of such notice, as permitted by sub‑rule (4). In addition to these termination provisions, the Code contained a separate set of rules governing disciplinary matters, which were located in Chapter XVII. Rule 1702 enumerated the various penalties that could be imposed on railway servants for justified reasons, including item (8) “removal from service” and item (9) “dismissal from service”. Rule 1706 defined the circumstances in which dismissal could be imposed, while Rule 1707 prescribed the procedure to be followed when a servant was charged with an offence for which dismissal was the maximum penalty. Likewise, Rule 1708 outlined the circumstances that would lead to removal from service, and Rule 1709 set out the procedural steps to be taken for removal. Rule 1712 prescribed the procedure for imposing other penalties, and Rule 1717 provided for an appeal against any order imposing penalties listed in Rule 1702. It was noteworthy that Clause (b) of Rule 1709 required that where a railway servant proposed for removal had not completed seven years of service, the procedure laid down in Rule 1712 would apply. Rule 1712 itself read that before an order imposing any of the penalties specified in items (2) to (6) of Rule 1702, or before removal under the circumstances mentioned in Clauses (b) and (c) of Rule 1709, could be made, the servant had to be informed of the specific offences or failures upon which the penalty was based and was to be asked to show cause why that penalty, or any lesser penalty, should not be imposed. The servant was also to be given three days to submit an explanation and to be provided with reasonable facilities for preparing a defence.

The Court observed that Rule 1712 envisages a two‑stage disciplinary enquiry. In the first stage the railway servant must be informed of the specific offences or failures that form the basis for the contemplated penalty. In the second stage the servant must be called upon to show cause why the proposed penalty, or any lesser penalty, should not be imposed. The appellant’s counsel argued that, when the order dated 16‑3‑1949 is properly interpreted, it is not an order that imposes a penalty under Rule 1702. Rather, the counsel contended, the order merely terminated the respondent’s service in accordance with the terms of his employment contract, and consequently neither Section 240(3) of the Government of India Act, 1935 nor Rule 1712 should apply to the respondent. The Court was unable to accept this contention. It noted that Article 311(2) of the Constitution is expressed in terms that are analogous to Section 240(3) of the Government of India Act, 1935. Those provisions had been examined closely by the Court in two recent decisions, namely Parshotam Lal Dhingra v. Union of India, Civil Appeal No. 65 of 1957 (AIR 1958 SC 36), and Khem Chand v. Union of India, Civil Appeal No. 353 of 1957 (AIR 1958 SC 300), decided on 1 November 1957 and 13 December 1957 respectively.

In the Dhingra case the Court held that the protection accorded to government servants by Article 311 is available only when the Government intends to impose one of three forms of punishment: dismissal, removal or reduction in rank. Whenever the Government seeks any of those punishments, the servant must be given a reasonable opportunity to show cause against the proposed action. The Court further explained that if the termination of service is effected by a means other than punishment, the servant whose service is terminated cannot invoke the protection of Article 311(2). The Court then addressed the question of when a termination of service constitutes punishment. It observed that not every termination amounts to dismissal, removal or reduction in rank. A termination that arises from the exercise of a contractual right does not, per se, amount to dismissal or removal, as earlier decided in Satish Chander Anand v. Union of India (1953 SCR 655; AIR 1953 SC 250). Similarly, termination by compulsory retirement pursuant to a specific rule governing service conditions does not amount to punishment and therefore does not attract Article 311(2), a principle also affirmed in Shyam Lal v. State of Uttar Pradesh (1955 (1) SCR 26; AIR 1954 SC 369). In either of

In the two cases previously cited, the Court observed that the termination of service did not involve the penal consequences of loss of pay or allowances prescribed under Rule 52 of the Fundamental Rules. The Court acknowledged that misconduct, negligence, inefficiency or other disqualification might motivate the Government to act under the employment contract or a specific service rule. However, the Court quoted Chief Justice Chagla’s remark in Shrinivas Ganesh v. Union of India, stating that the motive of the Government is wholly irrelevant when the contract or the rules expressly authorize termination. Consequently, when a termination is based on a right derived from the contract or the service rules, it is prima facie not a punishment and does not attract Article 311 of the Constitution. Nevertheless, the Court warned that even if the contract or the rules give the Government the power to terminate employment without following the procedure required for dismissal, removal or reduction in rank, the Government may still choose to punish the servant. If the termination is intended to punish the servant for misconduct, negligence, inefficiency or any other disqualification, then it constitutes a punishment and the safeguards of Article 311 must be observed.

The Court then referred to the judgment in Khem Chand’s case (B), where it held that the “reasonable opportunity” contemplated by Section 240(3) of the Government of India Act, 1935 and Article 311(2) of the Constitution comprises three distinct rights. First, the government servant must be given an opportunity to deny guilt and to establish innocence, which requires that the charges and the basis of those charges be communicated to him. Second, the servant must be allowed to defend himself by cross‑examining the witnesses produced against him and by producing his own witnesses. Third, after the enquiry, the competent authority must consider the gravity of the proven charges, tentatively propose one of the three punishments, and communicate that proposal to the servant, thereby giving him a chance to make a representation as to why the proposed punishment should not be imposed.

Applying these principles to the present matter, the Court noted that the appellant’s counsel did not dispute that the respondent was denied an opportunity to make a representation against the proposed punishment. In other words, the Court found that the requirements of Section 240(3) of the Government of India Act, 1935 were not complied with in this case. The appellant’s counsel, however, submitted that Section 240(3) was inapplicable altogether.

In the present appeal, the counsel for the appellant contended that the provision of Section 240(3) of the Government of India Act, 1935, was not applicable to the order that was under review. The judgment earlier quoted the entire impugned order dated 16 March 1949, which bore the heading “Notice of imposition of the penalty of removal from service under item (8) of Rule 1702.” The appellant’s counsel argued that this heading did not accurately describe the true character of the order. He emphasized that the order mentioned a payment of one month’s salary in lieu of notice and, on that basis, asserted that the order should be treated as an order made under Rules 148(3) and 148(4) of the Indian Railway Establishment Code. This line of argument, however, overlooks several material facts contained in the order itself. Clause (c) of the order expressly stated that the respondent’s pay was reduced by one half for the period of his suspension, namely from 8 February 1949 to 18 March 1949, both dates inclusive. Such a deduction of pay clearly indicates that the order imposed a penal consequence, because if the order were merely a termination of service exercised as a contractual right, there would be no question of withholding a portion of the respondent’s salary for that period. The appellant’s counsel further attempted to draw a distinction between a suspension that constitutes a substantive punishment and a suspension that is pending an enquiry. That distinction is irrelevant to the issue before the Court, which is whether the order dated 16 March 1949 imposed any penal consequences. The order unquestionably did so, as it deducted a part of the respondent’s remuneration during the suspension. Moreover, clause (d) of the impugned order provided that the respondent had a right of appeal under Rule 1717, a provision that is applicable only to penal orders. This further confirms the punitive nature of the order. In the plaint, the respondent also detailed additional penal repercussions that he suffered, including the non‑payment of dearness allowance and house‑rent allowance from 8 February 1949 to 18 April 1949. All these circumstances lead to the conclusion that the order of 16 March 1949 was a penal order, i.e., an order issued solely as punishment. Consequently, the principles laid down in the earlier decisions of the cases of Parshotam Lal Dhingra and Khem Chand are applicable. Since the impugned order clearly violated the requirements of Section 240(3) of the Government of India Act, 1935, it was illegal and ineffective, a view that was correctly adopted by the learned Judicial Commissioner.

The next submission made by the appellant’s counsel related to the validity of the notice issued under Section 80 of the Civil Procedure Code. The counsel argued that the relief specified in the notice did not correspond to the relief actually claimed in the plaint. The Court, however, agreed with the Judicial Commissioner that there was no substantial difference between the two. The notice, in paragraph 18, expressed the relief sought as follows: “That my said client is entitled to be reinstated on his former post, and to be paid the amount due to him on the basis of his being treated as if he was not discharged from the date of his discharge upon the date of re‑instatement.” In the plaint, the principal relief claimed was a declaration that the order of discharge or removal of the respondent was illegal and arbitrary. The Court found that these two statements are essentially the same in substance, and therefore the notice under Section 80 of the Civil Procedure Code cannot be held invalid on the ground raised by the appellant. As a result, the appeal was dismissed. The Court ordered that the appeal fail and that the costs of the proceedings be awarded against the appellant.

The Court observed that the notice filed under Section 80 of the Civil Procedure Code specifically set out the relief as follows: the petitioner claimed entitlement to be reinstated to his former post and to receive the amount due to him, calculated on the basis that he should be treated as if he had never been discharged from the date of his original discharge up to the date of his reinstatement. In contrast, the plaint presented by the petitioner mainly sought a declaration that the order effecting his discharge or removal was illegal and arbitrary. The Court reiterated its earlier finding that there is no substantial difference between the relief described in the Section 80 notice and the relief pleaded for in the plaint. Because the two formulations of relief amount to the same substantive demand, the Court concluded that the notice cannot be held invalid on the ground raised by the appellant. Consequently, the Court determined that the appeal raised by the appellant fails. As a result, the appeal was dismissed, and the appellant was ordered to bear the costs of the proceedings.