Khem Chand vs Union of India

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

Court: supreme-court

Case Number: Civil Appeal No. 124 of 1962

Decision Date: 25 September 1962

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

Khem Chand filed a petition before the Supreme Court of India against the Union of India, and the judgment was delivered on 25 September 1962. The matter was heard by a bench consisting of Justice K.C. Das Gupta, Chief Justice Bhuvneshwar P. Sinha, Justice P.B. Gajendragadkar, Justice K.N. Wanchoo and Justice J.C. Shah. The case is reported as 1963 AIR 687 and also appears in the Supreme Court Supplement 1 229, with subsequent citations including R 1964 SC 72 (46), R 1977 SC 1466 (35), R 1983 SC 803 (19), RF 1986 SC 1168 (9,10) and 1992 SC 1981 (7,11). The statutory provision under consideration concerned the Public Servants‑Dismissal‑Order, specifically the validity of the Central Civil Services (Classification, Control and Appeal) Rules, 1957, rule 12(4), in light of Articles 14, 19(1)(f), 31(1), 142 and 144 of the Constitution of India.

The petitioner, a public servant, had been served with a charge‑sheet and, after an enquiry, was dismissed from service. He instituted a suit seeking a declaration that the dismissal order was invalid and that he continued to be in service. The Supreme Court ultimately granted the declarations sought. While this suit was pending, the petitioner lodged a second suit for recovery of arrears of salary and allowances, which was stayed pending the disposal of the appeal before the Supreme Court. After the Supreme Court’s judgment, the authorities elected to conduct a fresh enquiry on the original allegations. Invoking rule 12(4) of the 1957 Rules, the trial court ordered that the fresh proceedings remain stayed until the suspension order arising from the original dismissal was revoked or set aside. Rule 12(4) provides that when a penalty of dismissal, removal or compulsory retirement is set aside by a court of law and the authorities decide to hold a further enquiry on the same allegations, the public servant shall be deemed to have been placed under suspension from the date of the original order of dismissal, removal or compulsory retirement.

The petitioner contended that rule 12(4) contravened Articles 14, 19(1)(f), 31, 142 and 144 of the Constitution and was therefore void. The Court examined each constitutional provision. It held that rule 12(4) did not offend Article 14 because it applied uniformly to all public servants whose dismissal orders were set aside by a court. Regarding Article 19(1)(f), the Court observed that while the right to receive salary constituted property, the restrictions imposed by rule 12(4) were justified in the public interest and did not constitute an unreasonable deprivation. The Court further noted that Article 31, which deals with protection of property, was not violated as the rule merely placed the servant under suspension without extinguishing the right to salary, which remained subject to the Supreme Court’s decree. Articles 142 and 144 were also considered; Article 142 mandates that Supreme Court decrees are enforceable throughout India, and Article 144 requires all authorities, civil and judicial, to act in aid of the Supreme Court. The Court concluded that rule 12(4) did not conflict with the decree of the Supreme Court and therefore did not contravene Articles 142 and 144.

Consequently, the Court affirmed the validity of rule 12(4) of the Central Civil Services (Classification, Control and Appeal) Rules, 1957. It held that the declaration by the Supreme Court that the petitioner remained a member of the service at the date of institution of the suit was not affected by his suspension under rule 12(4). The only aspects altered by the suspension were the petitioner’s salary and allowances, matters on which the Supreme Court decree gave no specific directions. The Court therefore dismissed the petitioner's claim that rule 12(4) was unconstitutional and upheld the rule as lawful.

The Court observed that the salary and allowances due to the appellant fell within the scope of Rule 12(4), and that the decree issued by the Supreme Court did not make any specific direction concerning those amounts. Consequently, the Court held that Rule 12(4) did not violate Article 19(1)(f) of the Constitution. The Court acknowledged that the entitlement to receive arrears of salary formed part of the appellant’s property, and although Rule 12(4) imposed significant limits on the exercise of that entitlement, those limits served the public interest. It further noted that imposing disciplinary measures on public servants for reasons such as inefficiency or dishonesty was essential and justified in order to protect the general public. The Court also held that placing a public servant under suspension while an inquiry is pending is a necessary and reasonable component of the disciplinary procedure. The earlier decision in Devendra Pratap v. State of U.P., reported in 1962 Sapp. 1 S.C.R. 315 at 1334, was distinguished. The Court rejected the contention that discrimination existed between a public servant whose penalty of dismissal or similar sanction had been set aside by a court and another public servant whose comparable penalty had been set aside on appeal by the departmental disciplinary authority. Rule 12(3) stipulates that even in the latter situation, the suspension of the public servant would be deemed to have continued from the date of the original order of dismissal, removal or compulsory retirement. The Court observed that Rule 12(3) would not apply only where a public servant had not been placed under suspension pending the enquiry, and that such circumstances were uncommon. Finally, the Court held that Rule 12(4) did not violate Article 31(1) of the Constitution, and any deprivation of property that resulted from the operation of Rule 12(4) was authorized by law.

JUDGMENT – CIVIL APPELLATE JURISDICTION. Civil Appeal No. 124 of 1962 was filed by special leave against the judgment and order dated 14 November 1960 of the Punjab High Court (Circuit Bench), Delhi, in Civil Revision Case No. 224‑D of 1959. For the appellant, counsel Janardan Sharma appeared; for the respondents, counsel R. Ganapathy Iyer and P. D. Menon appeared. The judgment was delivered on 25 September 1962 by Justice Das Gupta. The appeal raised the question of the validity of Rule 12(4) of the Central Civil Services (Classification, Control and Appeal) Rules, 1957, which had been framed by the President and notified on 28 February 1957. Rule 12(4) reads: “12(4). Where a penalty of dismissal, removal or compulsory retirement from service imposed upon a Government servant is set aside or declared or rendered void in consequence of or by a decision of a court of law and the disciplinary authority, on consideration of the circumstances of the case, decides to hold a further inquiry against him on the allegations on which the penalty of dismissal, removal or compulsory retirement was originally imposed, 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 continue to remain under suspension until further orders.” The factual background presented in the appeal was that on 1 July 1949 the appellant, who was a permanent Sub‑Inspector of Co‑operative Societies in Delhi, had been suspended by the Deputy Commissioner.

In Delhi, on July 9 the appellant received a charge‑sheet issued under rule 6(1) of the Rules framed by the Chief Commissioner, Delhi. After the officers who conducted an inquiry prepared their report on the several charges, the Deputy Commissioner, Delhi, issued an order dated 17 December 1951 dismissing the appellant. The appellant then instituted civil proceedings on 20 May 1953, seeking a declaration that the dismissal order was legally invalid because it contravened Article 311 of the Constitution of India, and also seeking a declaration that he remained in government service. The Trial Court rendered a decree on 31 May 1954, holding that the plaintiff’s dismissal was void and inoperative and that the plaintiff continued to be in the service of the State of Delhi as of the date the suit was filed. The Government of India appealed, but the Senior Subordinate Judge, Delhi, dismissed that appeal on 31 December 1954. Subsequently, the Punjab High Court reversed the trial court’s decree on 1 November 1955 in a second appeal filed by the State, and dismissed the suit. The appellant then obtained special leave to appeal to the Supreme Court. The Supreme Court examined the matter and found that the requirements of Article 311(2) had not been fully complied with and that the appellant had not received the full spectrum of constitutional safeguards; consequently the Court concluded that the dismissal could not be sustained. The Court therefore issued the following order: “We, therefore, accept this appeal and set aside the order of the Single judge and decree the appellant’s suit by making a declaration that the order of dismissal passed by the Deputy Commissioner on 17 December 1951 purporting to dismiss the appellant from service was inoperative that the appellant was a member the service at the date of the institution of the suit out of which, this appeal has arisen. The appellant will get costs throughout in all courts.‑ Under Order XIV Rule 7 of the Supreme Court Rules, we direct that the appellant should be paid his fees which we assess at Rs. 250”. The judgment of this Court was delivered on 13 December 1957 and is reported in the 1958 Supreme Court Reports at page 1080. On 20 April 1955, shortly after the Government’s appeal had been dismissed by the Senior Subordinate Judge, the appellant filed a separate suit in the Court of the Senior Subordinate Judge, Delhi, which became the subject of the present appeal. The respondents in that suit were the Union of India, the State of Delhi, and the Collector and Registrar of Co‑operative Societies, Delhi. In that suit the plaintiff, relying on the decree obtained in the earlier suit, claimed arrears of salary and allowances amounting to Rs 14,042 8/‑. However, the Trial Court stayed the hearing of this suit on 26 December, pending the outcome of the appellant’s appeal before this Court.

In 1955, the trial of the suit was stayed because the appellant’s appeal before this Court against the Punjab High Court’s dismissal of an earlier suit remained pending, and this Court later delivered its judgment on that appeal on 13 December 1957. After the Supreme Court’s decision, the appellant approached the Trial Court on 26 December 1957 and filed an application requesting that the hearing of the suit be resumed. Before the Trial Court could dispose of the matter, the defendants filed their own application before the Subordinate Judge on 7 August 1958. In that application they asserted that, after reconsidering the circumstances of the case, the disciplinary authority had decided to conduct further inquiries into the allegations that had originally led to the appellant’s dismissal, and that, as a result, the appellant should be treated as having been placed under suspension by the appointing authority from 17 December 1951, which was the date of the original dismissal order. Consequently, the defendants argued that the plaintiff’s claim in the present suit could not succeed. On 14 February 1959, the Trial Court issued an order stating, “It is hereby ordered that the proceedings in the case shall remain stayed until the time the order of suspension is revoked under Rule (5) of the Central Civil Service (Classification, Control and Appeal) Rules, 1957 referred to above or its being set aside by a competent tribunal or authority whichever event occurs earlier. The hearing of the suit is adjourned sine die and the proceedings shall be revived on the application of the plaintiff after the occurrence of any of the two events referred to above.” The appellant challenged this order by filing a revisional application in the Punjab High Court, questioning the validity of rule 12(4) of the Central Civil Service (Classification, Control and Appeal) Rules, 1957. A Division Bench of that High Court dismissed the revision petition and rejected the appellant’s contention that rule 12(4) was invalid. After obtaining special leave from this Court, the appellant filed the present appeal against the High Court’s decision. It follows that, if rule 12(4) of the Central Civil Service (Classification, Control and Appeal) Rules, 1957, is upheld as valid, the appellant must be considered to have been under suspension from 17 December 1951, because it is not contested that, although the earlier dismissal penalty was rendered void by this Court’s judgment, the disciplinary authority subsequently opted to conduct a further inquiry into the same allegations that had formed the basis of the original dismissal. Moreover, if the appellant is deemed to have been suspended from that date, then both the Trial Court’s order staying the suit and the High Court’s order dismissing the revision cannot be questioned. Therefore, the only remaining issue for determination is whether rule 12(4) is legally valid, a rule that forms part of the regulations made by the President exercising the powers conferred by the Constitution.

The Constitution granted the President the authority to make rules through the proviso to Article 309 and clause 5 of Article 148. Article 309 primarily provides that, subject to the Constitution, statutes enacted by the appropriate legislature may govern the recruitment and conditions of service of persons appointed to public services and posts that relate to the affairs of the Union or any State. The proviso to this article further empowers the President, or any person he may designate, to formulate rules regulating recruitment and service conditions for Union‑related services and posts until a legislative provision is made by, or under, an Act of the appropriate legislature. Clause 5 of Article 148 contains a comparable provision concerning the conditions of service in the Indian Audit and Accounts Department. It states that, subject to the Constitution and any law made by Parliament, the service conditions of personnel in that department may be prescribed by rules issued by the President after consultation with the Comptroller and Auditor‑General.

The counsel for the petitioner argued that the President’s power to make such rules is subordinate to every provision of the Constitution and that any rule that contravenes a constitutional provision must be held invalid to the extent of that breach. The counsel specifically asserted that Rule 12(4) violates Articles 142, 144, 19(1)(f), 31 and 14 of the Constitution. The contention that the impugned rule conflicts with Articles 142 and 144 is essentially identical. Article 142 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, and until such a law is enacted, the President may prescribe the manner of enforcement by order. Article 144 obliges all civil and judicial authorities in India to act in aid of the Supreme Court. According to the counsel, these provisions impose a duty on the President to take all steps necessary to give effect to the Supreme Court’s decree in the earlier appeal, and that by promulgating Rule 12(4) the President effectively disregarded the Court’s directions contained in that decree.

In the Court’s view, the argument lacks merit. The decree issued by the Supreme Court did not mandate payment of the appellant’s salary arrears or allowances; it only directed that the appellant receive costs in all courts. Consequently, Rule 12(4) does not interfere with that right, and the contention that the rule contravenes Article 144 is unsupported. The Court therefore concluded that the counsel’s submission concerning the invalidity of Rule 12(4) on the basis of Articles 142 and 144 is unfounded.

In this case the Court observed that an argument could have been raised that the rule might have violated the provisions of Article 144 if it had taken away the appellant’s entitlement to salary and allowances. However, the decree issued by the Court did not contain any instruction concerning the payment of the appellant’s salary or allowances. The decree did order that the appellant should be awarded his costs in every court in which the litigation proceeded. The Court therefore concluded that the rule under challenge does not, in any manner, affect that entitlement to costs. The other relief granted by the decree was a declaration that the order of dismissal issued by the Deputy Commissioner of Delhi on 17 December 1951, which purported to remove the appellant from service, was inoperative and that the appellant remained a member of the service at the date the suit was instituted. The Court considered whether the impugned rule conflicted with this declaration and answered in the negative. The provision in the rule 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 legal position that the earlier dismissal order was ineffective and that the appellant was still a member of the service on 25 May 1953 when he first filed the suit. The Court explained that suspension does not terminate a servant’s service; the servant continues to belong to the service despite the suspension. The appellant’s service had terminated only when the dismissal order of 17 December 1951 was issued. Once that order was set aside, the appellant’s service was revived, and, unless another dismissal order is made or his service is otherwise terminated, he remains a member of the service. The suspension merely prevented him from performing his duties and entitled him only to a subsistence allowance, which is ordinarily lower than his regular salary and allowances. While the suspension undoubtedly injures the servant financially, it does not terminate his membership in the service. Accordingly, the rule’s provision that, in certain circumstances, a government servant shall be deemed suspended from the date of the original dismissal order and shall remain so until further orders does not contradict the Court’s declaration. The Court therefore rejected the contention that the rule violated the declaration made by the Court.

It was held that the appellant’s argument that the impugned rule violated Article 19 (1)(f) of the Constitution was untenable. The appellant argued that, because the Court had decreed that he was entitled to his arrears of salary and allowances, he possessed a property right under Article 19 (1)(f), and that Rule 12 (4) prevented him from receiving those arrears for a period, thereby restricting his constitutional right. The Court acknowledged that the right to arrears of pay and allowances could indeed be characterised as property within the meaning of Article 19 (1)(f), and that the operation of Rule 12 (4) imposed a substantial limitation on that property right. However, the Court then examined whether the limitation was a reasonable one in the public interest. It observed that disciplinary action against government employees for inefficiency, dishonesty or other proper reasons is essential for the effective functioning of the government machinery, which exists to serve the general public. Suspension of an employee while an enquiry is pending is a necessary stage in such disciplinary procedures. Consequently, when a dismissal order has been set aside but the disciplinary authority wishes to conduct a fresh enquiry based on the same facts, a new suspension order issued in accordance with law is a reasonable procedural step. The Court therefore concluded that the restriction imposed by Rule 12 (4) on the appellant’s Article 19 (1)(f) right was reasonable in the interest of the public, that Rule 12 (4) fell within the saving clause of Article 19 (6), and that no constitutional violation occurred.

The Court also noted that counsel had drawn its attention to the decision in Devendra Pratap v. State of Uttar Pradesh, wherein the effect of Rule 54 of the Fundamental Rules framed under Article 309 was examined. In that case the Court held that while Rule 54 authorised the State Government to fix the salary of a public servant when a dismissal was set aside by a departmental appeal, the rule did not apply where a civil court had declared the dismissal invalid and the servant was reinstated; in such circumstances the authority could not deprive the servant of the remuneration he would have earned had he been allowed to work. The Court clarified that the reasoning in Devendra Pratap was not applicable to the present case, because here the operation of Rule 12 (4) of the Central Civil Service (Classification, Control & Appeal) Rules of 1957 deemed the servant to be under suspension from the date of the original dismissal order, a situation distinct from the scenario considered in the Uttar Pradesh decision.

In this case, the Court noted that, pursuant to the 1957 provision, a public servant is treated as being under suspension from the date of the original dismissal order. The discussion then turned to the challenge to that rule on the ground of violation of Article 14. The counsel for the petitioner argued that the effect of the impugned rule is that when a penalty of dismissal, removal or compulsory retirement imposed on a government servant is set aside or declared void by a court of law, and the disciplinary authority decides to conduct a fresh enquiry on the same allegations, the servant is deemed to have been under suspension from the date the penalty was originally imposed. By contrast, the counsel asserted that no such suspension consequence follows when a similar penalty is set aside not by a court but by the departmental disciplinary authority itself. Accordingly, the counsel contended that the rule creates a discrimination between a servant whose penalty is set aside by a judicial decision and a servant whose penalty is set aside on appeal before the departmental authority.

The Court observed that this argument overlooks the operation of Rule 30(2) and Rule 12(3) of the Central Civil Service (Classification, Control and Appeal) Rules. Rule 30(2) provides that, in an appeal against an order imposing any penalty listed in Rule 13—including dismissal, removal or compulsory retirement—the appellate authority may: (i) set aside, reduce, confirm or enhance the penalty; or (ii) remit the case to the authority that imposed the penalty or to any other authority with such direction as it deems appropriate in the circumstances. Rule 12(3) further states that when a penalty of dismissal, removal or compulsory retirement imposed on a government servant who is under suspension is set aside on appeal or review under these rules, and the case is remitted for further enquiry or any other direction, the order of suspension is deemed to have continued in force from the date of the original dismissal, removal or compulsory retirement and shall remain in force until further orders are issued.

The Court explained that whether a penalty is set aside by the departmental authority on appeal or by a court of law, the authority may or may not order a further enquiry. When the appellate authority, after setting aside the penalty, exercises the power under Rule 30(2)(ii) to remit the matter to the original imposing authority for further enquiry, Rule 12(3) automatically applies, resulting in the suspension order being deemed to continue from the date of the original penalty. Consequently, the purported distinction advanced by the counsel for the petitioner does not give rise to any real difference in legal effect, because the same suspension consequence follows regardless of whether the penalty is set aside by a court or by the departmental disciplinary authority, provided the case is remitted for further enquiry under the stipulated rules.

The Court explained that suspension is ordinarily ordered when a disciplinary proceeding is either contemplated or already pending, and that under rule 12(3) such suspension is deemed to have continued in force from the date of the original dismissal order and to remain effective until further orders are passed. The Court observed that there is no substantive distinction between the operation of rule 12(4) when a government servant’s 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 when a similar penalty is set aside on appeal or on review by the departmental authority and a further enquiry is ordered. In both situations, the servant is considered to be under suspension from the date of the original dismissal order, except where, in a departmental enquiry, the servant was not placed under suspension before the penalty was imposed; in such a case rule 12(3) would not operate. The Court noted that it is highly unlikely for a government servant not to have been placed under suspension prior to dismissal, as rule 12(1) empowers the appointing authority, any subordinate authority, or any authority empowered by the President to place a servant under suspension when (a) a disciplinary proceeding against him is contemplated or pending, or (b) a criminal case against him is under investigation or trial. The Court observed that no argument was advanced showing that, in ordinary practice, a penalty of dismissal, removal or compulsory retirement is imposed in a departmental proceeding without a preceding order of suspension under rule 12(1), and the Court shared that view. Accordingly, the effect of rule 12(3) on a servant whose penalty is set aside on appeal by the departmental authority is the same as the effect of rule 12(4) on a servant whose penalty is set aside by a court decision. The Court rejected the contention that rule 12(4) violates Article 14 of the Constitution. Since all the challenges to the validity of rule 12(4) were found wanting, the subsequent challenge to the rule on the basis of Article 31(1) of the Constitution also failed, because any deprivation of property resulting from rule 12(4) occurs by authority of law, namely rule 12(4) itself. Consequently, the Court concluded that the High Court was correct in holding that rule 12(4) is valid and in rejecting the appellant’s revisional application. The appeal was dismissed, though no order as to costs was made in view of the circumstances.

In the final analysis of the matter, the Court expressly declined to make any order concerning costs, meaning that no party was required to bear the legal costs of the proceeding. The appellant, who had been permitted to pursue the appeal as a pauper, was nevertheless unsuccessful in his challenge. Despite the appellant’s failure to obtain a favorable adjudication, the Court specifically refrained from imposing upon him the liability to pay the court‑fee that ordinarily would have been demanded if he had not been allowed to proceed under the pauper status. In other words, the Court chose not to require the appellant to reimburse the fee that would have been payable by a litigant not enjoying pauper status. Consequently, the Court concluded the procedural posture by dismissing the appeal in its entirety. The dismissal therefore terminated the appellant’s request for relief, while leaving the cost aspects untouched and preserving the appellant’s exemption from the ordinary court‑fee obligation.