Khem Chand vs Union of India

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

Court: supreme-court

Case Number: Not extracted

Decision Date: December 13, 1957

Coram: B.P. Sinha, J.C. Shah, K.C. Das Gupta, K.N. Wanchoo, P.B. Gajendragadkar

In this case, the Supreme Court considered an appeal filed by special leave which raised the issue of the validity of Rule 12(4) of the Central Civil Service (Classification, Control and Appeal) Rules, 1957. Those rules had been framed by the President and came into force by a notification dated 28 February 1957. Rule 12(4) reads as follows: where a penalty of dismissal, removal or compulsory retirement imposed upon a Government servant is set aside, declared or rendered void by a decision of a court of law, and the disciplinary authority, after considering the circumstances of the case, decides to conduct a further inquiry on the same allegations, the Government servant shall be deemed to have been placed under suspension by the appointing authority from the date of the original order of dismissal, removal or compulsory retirement and shall remain under suspension until further orders are issued. The factual sequence began on 1 July 1949 when the appellant, who was then a permanent Sub‑Inspector of Co‑operative Societies in Delhi, was suspended by the Deputy Commissioner of Delhi. On 9 July 1949 the appellant was served with a charge‑sheet under Rule 6(1) of the Rules that had been framed by the Chief Commissioner of Delhi. After the officers who conducted an inquiry prepared a report on the several charges, the Deputy Commissioner of Delhi issued an order on 17 December 1951 dismissing the appellant from service.

The appellant challenged the dismissal by filing a suit on 20 May 1953, seeking a declaration that the dismissal order was illegal because it violated Article 311 of the Constitution of India, and also seeking a declaration that he continued to be in Government service. The trial court disposed of the suit on 31 May 1954, holding that the dismissal was void and inoperative and that the appellant remained a servant of the State of Delhi as of the date the suit was instituted. The Government of India appealed the trial court’s decree, but the Senior Subordinate Judge of Delhi dismissed that appeal on 31 December 1954. The appellant then obtained a second appeal before the Punjab High Court, which on 1 November 1955 set aside the trial court decree and dismissed the suit. Dissatisfied with the High Court’s decision, the appellant sought special leave to appeal to this Court. Upon review, this Court found that the procedural safeguards guaranteed by Article 311(2) had not been fully observed, and that the appellant had not enjoyed the full spectrum of constitutional protections; consequently, the dismissal could not be sustained. The Court therefore issued an order overturning the High Court’s decision and granting relief to the appellant.

The Court accepted the appeal and set aside the order of the Single Judge. It declared that the dismissal order issued by the Deputy Commissioner on December 17, 1951, which purported to terminate the appellant’s service, was inoperative. Consequently, the appellant was held to have remained a member of the service on the date the suit, which gave rise to the present appeal, was instituted. The Court also ordered that the appellant be awarded costs in all courts throughout the litigation. In accordance with Order XIV Rule 7 of the Supreme Court Rules, the Court directed that the appellant’s legal fees be paid, fixing the amount at Rs. 250.

The judgment of the Court was delivered on December 13, 1957 and is reported in the 1958 Supreme Court Reports at page 1080. Earlier, on April 20, 1955, shortly after the Government’s appeal had been dismissed by the Senior Subordinate Judge, the appellant filed a suit before the Court of the Senior Sub‑Judge, Delhi, from which the present appeal originated. The defendants in that suit were the Union of India, the State of Delhi, and the Collector and Registrar, Co‑operative Societies, Delhi. In the suit the plaintiff sought, on the basis of the decree obtained in the earlier suit, arrears of salary and allowances amounting to Rs. 14,042‑8/‑.

The Trial Court stayed the hearing of the suit on December 26, 1955, because the appellant’s appeal before this Court against the Punjab High Court’s decision dismissing the earlier suit was still pending. As noted, this Court delivered its judgment in that appeal on December 13, 1957. On December 26, 1957, the appellant applied to the Trial Court requesting that the suit be taken up for hearing. Before the suit could be disposed of, the defendants filed an application on August 7, 1958, before the Subordinate Judge. They asserted that the disciplinary authority, after considering the circumstances, had decided to conduct a further enquiry into the allegations that originally led to the appellant’s dismissal, and therefore the appellant should be deemed to have been placed under suspension by the appointing authority from December 17, 1951, the date of the original dismissal order. The defendants contended that, on that basis, the plaintiff’s claim in the present suit was untenable.

On February 14, 1959, the Trial Court issued an order stating that the proceedings would remain stayed until the suspension order was either revoked under Rule 5 of the Central Civil Service (Classification, Control and Appeal) Rules, 1957, or set aside by a competent tribunal or authority, whichever occurred first. The Court further ordered that the hearing of the suit be adjourned sine die and that the proceedings could be revived only upon an application by the plaintiff after the occurrence of either of the two specified events.

The trial court had stayed the suit until either the order of suspension was revoked under Rule 5 of the Central Civil Service (Classification, Control and Appeal) Rules, 1957, or the order was set aside by a competent tribunal, whichever occurred first. In response to that stay order, the appellant filed a revisional application before the Punjab High Court, challenging the legality of Rule 12(4) of those Rules. A Division Bench of the High Court dismissed the revision petition, holding that Rule 12(4) was valid and rejecting the appellant’s contention that the rule was invalid. After obtaining special leave to appeal from this Court, the appellant filed the present appeal against the High Court’s decision.

The Court observed that, if Rule 12(4) of the Central Civil Service (Classification, Control and Appeal) Rules, 1957, is indeed valid, the appellant must be considered to have been placed under suspension from 17 December 1951. This follows because, although the appellant’s dismissal was declared void by this Court, the disciplinary authority subsequently decided to conduct a further enquiry on the very allegations that had originally led to the dismissal. Consequently, if the appellant is deemed to have been under suspension from that date, the trial court’s order staying the suit and the High Court’s order dismissing the revisional application cannot be challenged. Thus, the only issue that remained for determination was whether Rule 12(4) is lawful.

Rule 12(4) forms part of the regulations made by the President exercising the authority granted by the proviso to Article 309 and by Clause 5 of Article 148 of the Constitution. Article 309 provides that, subject to the Constitution, the appropriate Legislature may enact laws regulating recruitment and conditions of service for persons appointed to public services and posts connected with the Union or any State. The proviso to that article authorises the President, or any person he designates, to make rules governing recruitment and conditions of service for Union services and posts until a legislative provision is made. Similarly, Clause 5 of Article 148 allows the President, after consulting the Comptroller and Auditor‑General, to prescribe conditions of service for personnel of the Indian Audit and Accounts Department, subject to the Constitution and any parliamentary statutes.

The appellant’s counsel, Mr Janardan Sharma, correctly argued that the President’s power to make such rules is subject to all constitutional provisions. Accordingly, if the rule‑making authority contravenes any constitutional requirement while formulating the rule, the rule is invalid to the extent of that contravention. Sharma contended that Rule 12(4) breaches the provisions of Articles 142, 144, 19(1)(f), 31 and 14 of the Constitution. The Court therefore had to examine whether Rule 12(4) stands in conflict with any of those constitutional guarantees.

The Court observed that whenever a rule breaches any provision of the Constitution, that rule becomes invalid to the extent of the breach. Counsel for the petitioner, Mr. Sharma, contended that rule 12(4) violated several constitutional provisions, namely Articles 142, 144, 19(1)(f), 31 and 14. The argument advanced by the petitioner was that the alleged conflict with Articles 142 and 144 was essentially identical. Article 142, the Court noted, provides that any decree issued by the Supreme Court in the exercise of its jurisdiction shall be enforceable throughout India in a manner prescribed by law made by Parliament, or, until such law is enacted, in a manner that the President may prescribe by order. Article 144, on the other hand, mandates that all civil and judicial authorities in the territory of India shall act in assistance of the Supreme Court. According to the petitioner’s understanding, these articles impose a duty on the President to take all necessary steps to give effect to the decree issued by this Court in the earlier appeal, and that by framing rule 12(4) the President effectively contravened the directions contained in that decree.

The Court held that there was no merit in this contention. It explained that if the decree of the Supreme Court had directed the payment of arrears of the appellant’s salary and allowances, and if rule 12(4) had the effect of depriving the appellant of that right, then an argument could perhaps be raised that the rule conflicted with Article 144. However, the decree did not contain any direction concerning the payment of salary or allowances. The only direction in the decree was that the appellant would be awarded costs in all courts. The Court found that the impugned rule did not affect this particular right. The other relief granted by the decree was a declaration that the order of dismissal dated 17 December 1951, issued by the Deputy Commissioner, Delhi, was inoperative and that the appellant remained a member of the service at the date the suit was instituted. The Court concluded that rule 12(4) did not contradict this declaration. The provision in the rule stating that a government servant shall be deemed to have been placed under suspension from the date of the original dismissal order does not alter the fact that the earlier dismissal order was held to be inoperative and that the appellant was a member of the service on 25 May 1953, when the first suit was filed. The Court further clarified that an order of suspension does not terminate a servant’s service; the servant continues to be a member of the government service despite being suspended.

The Court explained that an order of suspension does not terminate a government servant’s membership in the service. The appellant’s service had been terminated by the dismissal order dated 17 December 1951. When that dismissal order was set aside, the appellant’s service was revived, and so long as no further dismissal order is issued or the service is otherwise terminated, the appellant remains a member of the service. The suspension order does not alter this status. The practical effect of a suspension is that, although the servant continues to belong to the government service, he is not allowed to perform his duties. During the period of suspension he receives only a modest subsistence allowance, which is normally lower than his regular salary and allowances, rather than the full remuneration he would have earned had he not been suspended. The Court acknowledged that suspension certainly injures a government servant, but it rejected any suggestion that suspension causes loss of service membership. The provision in rule 12(4) stating that, in certain circumstances, a government servant shall be deemed to have been placed under suspension from the date of the original dismissal order and shall remain under suspension until further orders does not conflict with the Court’s earlier declaration. Consequently, the argument that the impugned rule violates Articles 142 or 144 of the Constitution was found to be untenable.

The Court also rejected the appellant’s contention that the rule breaches Article 19(1)(f). The appellant argued that, following the Court’s decree, he acquired a right to arrears of pay and allowances, which constituted his property, and that rule 12(4) temporarily prevented him from receiving those arrears, thereby restricting his property right. The Court agreed that the right to arrears of pay and allowances qualifies as property under Article 19(1)(f), and that rule 12(4) imposes a substantial restriction on that right. However, the Court examined whether this restriction is reasonable in the public interest. It emphasized that proper disciplinary action against government servants for inefficiency, dishonesty, or other valid reasons is undeniably important and necessary. While such action may be adverse to the individual servant’s immediate interests, it serves the broader public interest, which underlies the purpose of the governmental machinery. The suspension of a servant pending an enquiry is an essential step in the disciplinary process. Accordingly, when a dismissal has been set aside but the disciplinary authority chooses to conduct a fresh enquiry on the same facts, a new suspension order pending the completion of that enquiry is a reasonable procedural measure. The Court thus concluded that the restriction imposed by rule 12(4) is a reasonable limitation under Article 19(6) and does not contravene the constitutional provisions.

In the present case, the Court observed that ordering a fresh suspension of the appellant while a further enquiry on the same facts proceeded was a reasonable procedural step, provided the suspension remained in force until the enquiry could be completed in accordance with law. The Court expressed no hesitation in holding that, to the extent Rule 12(4) of the Central Civil Service (Classification, Control & Appeal) Rules, 1957, restricted the appellant’s right to acquire arrears of pay and allowances under Article 19(1)(f) of the Constitution, such restriction was reasonable in the interest of the general public. Accordingly, the Court concluded that Rule 12(4) fell within the protective saving clause of Article 19(6), and therefore did not contravene any constitutional provision.

The Court then turned to the argument raised by counsel concerning the precedent set in Devendra Pratap v. State of Uttar Pradesh [1962] Supp. 1 S.C.R. 315, wherein the effect of Rule 54 of the Fundamental Rules framed by the State of Uttar Pradesh under Article 309 had been examined. The earlier decision held that although Rule 54 authorised the State Government to fix the salary of a public servant when a dismissal was set aside in a departmental appeal, the rule could not be applied in cases where a civil court declared a dismissal invalid and reinstated the servant, because in such circumstances the authority could not withhold the remuneration the servant would have earned had he been allowed to work. The Court clarified that this precedent did not apply to the present case, because under Rule 12(4) of the Central Civil Service Rules the public servant was deemed to be under suspension from the date of the original dismissal order, irrespective of any later departmental or judicial determination.

Subsequently, the Court addressed the challenge to Rule 12(4) on the ground of violation of Article 14. Counsel argued that the impugned rule created a disparity: when a penalty of dismissal, removal or compulsory retirement was set aside by a court of law and the disciplinary authority ordered a further enquiry, the servant was deemed suspended from the date of the original penalty; however, when the same penalty was set aside by the departmental disciplinary authority on appeal, no such suspension was deemed to arise. This, according to counsel, amounted to discrimination between a servant whose penalty was vacated by a judicial decree and another whose penalty was vacated by an internal departmental decision. The Court observed that this argument overlooked the effects of Rule 30(2) and Rule 12(3) of the same Rules. Rule 30(2) provides that, in an appeal against an order imposing any penalty specified in Rule 13, the appellate authority may set aside, reduce, confirm or enhance the penalty, or remit the case to the original authority or any other authority with such directions as it deems fit. Rule 12(3) further stipulates that when a penalty of dismissal, removal or compulsory retirement imposed on a servant under suspension is set aside on appeal or review, and the case is remitted for further enquiry or other action, the suspension is deemed to have continued from the date of the original order and to remain in force until further orders. In this way, the statutory framework already accounted for the continuation of suspension irrespective of whether the penalty was set aside by a court or by the departmental authority.

Rule 30(2) provides that, in an appeal against an order imposing any of the penalties listed in Rule 13—namely dismissal, removal or compulsory retirement and certain other penalties—the appellate authority may pass an order either (i) setting aside, reducing, confirming or enhancing the penalty, or (ii) remitting the case back to the authority that originally imposed the penalty or to any other authority, together with such directions as it considers appropriate in the circumstances of the case. Rule 12(3) further states that when a penalty of dismissal, removal or compulsory retirement that was imposed on a government servant while he was under suspension is set aside on appeal or on review under these rules, and the matter is remitted for further enquiry, further action or any other direction, the order of suspension shall be deemed to have continued in force from the date of the original order of dismissal, removal or compulsory retirement and shall remain in effect until additional orders are made.

Consequently, whether the penalty of dismissal, removal or compulsory retirement is set aside by the departmental disciplinary authority on appeal, or is set aside by a court of law, the authority may choose either to order a further enquiry or to forgo such an enquiry. If, after setting aside the penalty, the appellate authority exercises the power under Rule 30(2)(ii) and remits the case to the authority that imposed the original penalty for further enquiry, Rule 12(3) becomes operative. In that situation, the suspension order—normally issued when a disciplinary proceeding is contemplated or pending—will be deemed to have remained in force from the date of the original dismissal, removal or compulsory retirement and will continue until a subsequent order disposes of the matter.

Therefore, there is no substantive distinction between the operation of Rule 12(4) on a government servant whose penalty of dismissal, removal or compulsory retirement is set aside by a judicial decision and a further enquiry is ordered, and the operation of the same rule on another servant whose similar penalty is set aside by a departmental appeal and a further enquiry is ordered. In both scenarios the servant will be considered to be under suspension from the date of the original dismissal order, except in the rare circumstance where, during a departmental enquiry, the servant was not placed under suspension before the penalty was imposed; in such a case Rule 12(3) would not apply because there would be no prior suspension order to continue. However, it is highly unlikely that a government servant would face dismissal, removal or compulsory retirement in a departmental proceeding without having first been suspended under the provisions of Rule 12(1).

Rule 12(1) authorises the appointing authority, any subordinate authority, or any other authority empowered by the President, to place a government servant under suspension when (a) a disciplinary proceeding against the servant is contemplated or is pending, or (b) a case concerning any criminal offence involving the servant is under investigation or trial. This statutory framework ensures that the effect of a suspension continues consistently regardless of whether the penalty is set aside by a court or by the departmental authority, thereby negating the argument that Rule 12(4) creates an unconstitutional distinction.

The Court explained that under Rule 12(1) a government servant could be placed under suspension when a disciplinary proceeding against him was contemplated or pending, or when a criminal case against him was under investigation or trial. Counsel for the petitioner, Mr Sharma, did not argue that it was common for a departmental proceeding to impose dismissal, removal or compulsory retirement without first ordering suspension under Rule 12(1). The Court agreed that such a situation was, in practice, unlikely to occur. Accordingly, the Court held that the operation of Rule 12(3) on a servant whose penalty of dismissal, removal or compulsory retirement was set aside on appeal by the departmental authority would be the same as the operation of Rule 12(4) on a servant whose similar penalty was set aside by a decision of a court of law. The contention that Rule 12(4) violated Article 14 of the Constitution was therefore rejected. The Court further observed that because all attacks on the validity of Rule 12(4) had failed, the additional challenge based on Article 31(1) of the Constitution also failed; any deprivation of property that might result from Rule 12(4) was effected by a law, namely Rule 12(4) itself. Having reached this conclusion, the Court affirmed the High Court’s finding that Rule 12(4) was valid and that the appellant’s revisional application should be dismissed. Consequently, the appeal was dismissed. However, considering the circumstances, the Court made no order as to costs. Although the appellant, who had proceeded as a pauper, failed in his appeal, the Court did not order him to pay the court fee that he would have been liable for had he not been permitted to plead as a pauper.