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  • Article 102 of the Limitation Act
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  • Article 102 of the Limitation Act
Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

The respondent was employed as a Sub-Inspector of Police at Orathanad in Tanjore District until 6-11-1948, when seven charges of corruption were framed against him and he was placed under suspension. An enquiry found the charges proved and the Deputy Inspector General of Police passed an order dated 9-4-1950 dismissing him from service. The respondent exhausted departmental remedies (appeal to the Inspector General of Police and a memorial to the Government) without success and initiated writ proceedings under Article 226. His writ petition (W.P. No. 844 of 1951) and an appeal from the judgment (W.A. No. 51 of 1955) were dismissed; the order in the appeal was passed on 1-8-1955.

Subsequently, by a review petition, the respondent pointed out that the officer who submitted the report on the charges lacked jurisdiction. This Court granted review of its judgment in the writ appeal and on 22-4-1957 quashed the order of dismissal on jurisdictional grounds (the quashing was not an exoneration on the merits of the charges). The Government then passed an order reinstating the respondent; after an intervening government order was cancelled, the respondent rejoined duty on 11-7-1957. The original charges had been dropped on 7-6-1955. The respondent retired on 31-10-1957, but he was not paid salary for the period between 6-11-1948 (suspension) and 11-7-1957 (rejoining).

The Inspector General treated the period as leave without pay and declined to pay salary. The respondent challenged that decision in W.P. No. 126 of 1959, which was dismissed and an appeal also failed; the Court left open whether other remedies were available. Thereafter the respondent filed the suit (8-6-1960) claiming arrears of salary, dearness allowance and house rent allowance (less subsistence allowance paid), and interest. The learned District Judge granted a partial decree (Rs. 12,398.40 nP for basic salary arrears) but dismissed claims for dearness allowance and house rent allowance. The State Government appealed; the respondent filed cross-objections seeking dearness allowance and interest that the lower court had disallowed.

Legal Issues Presented

  1. When does the right to recover arrears of salary accrue under Article 102 of the Limitation Act in the case of a public servant whose dismissal was set aside after the fact (i.e., whether accrual is monthly as salary becomes payable, or only upon reinstatement / setting aside of the dismissal)?
  2. Whether F.R. 52 (which provides that pay and allowances cease on dismissal or removal) disentitles a public servant from recovering salary for the period of dismissal even where the dismissal is later held invalid or void ab initio, and whether a legal distinction should be drawn between dismissals set aside for irregularity and those declared void for lack of jurisdiction.
  3. Whether the memorandum of cross-objections challenging the dismissal court's refusal to award dearness allowance can be entertained where the respondent's advocate conceded that claim before the trial court.
  4. Whether the respondent is entitled to interest (claimed as damages) on the arrears, and from which date.

Arguments of the Parties

Appellant's (State's) Arguments — as presented by the learned Government Pleader

  • The primary contention advanced related to limitation: the appellant argued that the respondent's suit was time-barred unless the right of action accrued within the period prescribed by Article 102.
  • The Government Pleader challenged the correctness of the decision in Union of India v. Akbar Sheriff (which held that the right to claim salary accrued only after reinstatement), arguing it was inconsistent with subsequent Supreme Court authority.
  • He further contended that F.R. 52 should disentitle an aggrieved public servant from recovering salary except where dismissal is set aside for irregularity by departmental authorities; but if the dismissal is void ab initio (for example, for lack of jurisdiction or breach of natural justice), then the public servant should be treated as never having been lawfully dismissed and thus entitled to salary as it accrued monthly while the wrongful order was in force.
  • The appellant relied on an observation of Lord Asquith in East End Dwellings Co., Ltd. v. Finsbury Borough Council (1952 AC 109) (as approved in Venkatachalam v. Bombay Dyeing) to support the argument that once an order of dismissal is found invalid one must regard the employee as if in continuous service and therefore salary would have accrued every month.

Respondent's Arguments

The opinion does not contain a detailed account of the respondent's legal arguments beyond asserting the respondent's entitlement to sue for arrears of salary on the basis that his dismissal had been quashed and the proposition that Article 102 applies to such claims.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Punjab Province v. Tarachand, AIR 1947 FC 23 (1947-2 Mad LJ 389) That Article 102 of the Limitation Act applies to claims for arrears of salary by public servants (the Article is expressed as one "for recovery of wages"). The Court cited this case to confirm that Article 102 governs recovery of salary by a public servant. It noted that applicability of F.R. 52 was not considered in that case.
Shri Madhav Laxman Vaikunthe v. State of Mysore (cited) Acceptance by the Supreme Court that Article 102 applies to such claims (as referenced in the opinion). The Court relied on the acceptance of Article 102's applicability as supporting the principle that claims for salary fall under Article 102.
Union of India v. Akbar Sheriff (cited) Held that while a dismissal order is in force the dismissed employee has no right to claim salary; only after reinstatement can he sue for recovery of salary for the period of dismissal. The Court considered this decision and its reasoning; the learned Government Pleader challenged its correctness, and the Court discussed it in relation to F.R. 52 and the accrual question.
East End Dwellings Co., Ltd. v. Finsbury Borough Council, 1952 AC 109 (Lord Asquith) Observation relied upon by appellant to support treating an unlawfully dismissed person as in service for the whole period so that salary would be deemed to have accrued monthly. The Court quoted the observation but rejected the second fiction the appellant sought to import (i.e., that salary accrues monthly during the period of an invalid dismissal). The Court held that the fiction of continuous service does not justify treating salary as having accrued every month while the dismissal order stood.
Venkatachalam v. Bombay Dyeing and Mfg. Co., Ltd. (cited) Cited as a case in which the East End Dwellings observation was approved. The Court mentioned the approval but used the underlying principle only to note the appellant's reliance on it; ultimately the Court did not accept that principle as supporting monthly accrual of salary during an invalid dismissal.
Davendra Pratap v. State of Uttar Pradesh (cited) An authority where a claim by a public servant whose dismissal had been set aside by a court was allowed without objection as to Article 102's bar. The Court relied on this decision to support its view that where dismissal is set aside by a court, the right to recover arrears accrues on setting aside and such suits have been entertained without being treated as time-barred under Article 102.

Court's Reasoning and Analysis

The Court began from the premise that claims for salary by a public servant fall under Article 102 of the Limitation Act (a three-year period from accrual), as established in the cited authorities. It then analysed the effect of F.R. 52, which provides that pay and allowances cease from the date of dismissal or removal.

The Court reasoned that because of F.R. 52 the right to salary ceases the moment an order for dismissal or removal is made; consequently an employee cannot recover salary earned during that period unless the dismissal is set aside. Thus the question becomes: when does the right to recover arrears "accrue" where the dismissal has later been set aside?

The appellant's contention that where the dismissal was void ab initio (for example for lack of jurisdiction or breach of natural justice) the employee should be deemed to have been continuously in service and therefore entitled to salary as it accrued monthly, was considered and rejected. The Court explained that this deeming is a legal fiction and does not justify a second fiction — that salary accrued monthly while the dismissal order stood. The Court emphasized that no principle of law warranted treating salary as having accrued during the period the dismissal was in force merely because the dismissal was later declared invalid.

The Court observed that it could not appreciate any meaningful distinction, for the purposes of accrual, between an order of dismissal set aside for irregularity or misappreciation of evidence by departmental authorities and one declared invalid by a civil court on jurisdictional grounds. The Court therefore held that in cases of dismissal subsequently set aside, the right to recover arrears of salary accrues only when the order of dismissal has been set aside (whether in departmental appeal or by a Civil Court).

The Court reviewed the authorities: it accepted that Union of India v. Akbar Sheriff supported the view that the right to claim salary accrues only after reinstatement; it noted that earlier Federal Court authority applied Article 102 but did not consider F.R. 52; and it noted Davendra Pratap where a similar claim was allowed without Article 102 being raised as a bar. On balance, the Court concluded that the claim in the instant case accrued only upon the setting aside of the dismissal and was therefore within the limitation period.

On the cross-objection for dearness allowance, the Court declined to entertain it because the respondent's advocate had conceded that portion of the claim before the trial judge and the memorandum of cross-objections did not state otherwise.

Regarding interest, the Court held that interest had been claimed only as damages and that the respondent was entitled to interest from the date of demand on the amount of arrears of basic salary.

Holding and Implications

Core Ruling: The appeal is dismissed. (The Court held that the right to recover arrears of salary by a public servant whose dismissal has been subsequently set aside accrues only when the order of dismissal is set aside.)

Consequences and practical effects on the parties:

  • The Court held the respondent's claim for arrears of basic salary to be within time because the cause of action accrued upon the quashing of the dismissal order; the appeal by the State therefore fails.
  • The memorandum of cross-objections is allowed in part; specifically, the cross-objection regarding dearness allowance cannot be entertained because the claim had been conceded before the trial court (so that part is not reopened), and the respondent is entitled to interest (as damages) from the date of demand on the arrears of basic salary.
  • The appeal is dismissed with costs. There will be no order as to costs on the memorandum of cross-objections, and the respondent must pay the court-fee due to the Government on the memorandum of cross-objections.

The opinion's ruling directly resolves the limitation question for the parties and clarifies that for the purpose of accrual under Article 102, pay and allowances do not accrue during the period an order of dismissal is in force; the right to recover such arrears arises only upon the setting aside of the dismissal order. The opinion does not state that it is creating a broader new precedent beyond its application to the facts before the Court.

    State Of Madras v. A.V. Anantharaman

    1. This appeal raises a question of limitation. The facts necessary for a due consideration of that question are these. The respondent was employed as a Sub-Inspector of Police at Orathanad in Tan-jore Dt. till 6-11-1948, on which date seven chargeg-of corruption were framed against him by the appropriate authority and he was placed under suspension. As a result of the enquiry that followed the charges were held proved and the Deputy Inspector General of Police passed the order dated 9-4-1950 dismissing him from service. After exhausting the remedies available to him by way of appeal to the Inspector General of Police and a memorial to the Government, both of which proved futile, the respondent initiated proceedings in this Court under Article 226 of the Constitution. Initially that met with no success as the petition (W. P. No. 844 of 1951) as well as an appeal from the judgment therein (W. A. No. 51 of 1955) were dismissed. The order in the appeal was passed on 1-8-1955. Sometime later, the respondent brought to the notice of the Court by means of a review petition that the officer who submitted the report on the charges did not have the necessary jurisdiction. This Court granted a review of its judgment in the writ appeal as a result of which the order of dismissal was quashed. It may be mentioned that the quashing of the order terminating the services of the respondent was not the result of exoneration of the charges laid against him, but purely on the ground that the order was vitiated by lack of jurisdiction in the particular authority that submitted the report. The judgment of this Court on the review petition was rendered on 22-4-1957. The Government then passed an order reinstating the respondent in service. But the respondent could not join duty forthwith owing to an intervening order of the Government which however was subsequently cancelled. He did so on 11-7-1957.

    The charges originally laid against him which were pending were finally dropped on 7-6-1955. By that time the respondent had reached the age of superannuation and he retired from service on 31-10-1957. He was not, however, paid his salary for the period between 6-11-1948, when he was placed under suspension at the commencement of the enquiry and 11-7-1957, when he rejoined duty. The Inspector General of Police, informed him that the period in question would be treated as leave without pay and declined to grant him any salary. That order was challenged in this Court by means of W. P. No. 126 of 1959. That petition was dismissed. An appeal therefrom also failed. But the Court left open the question whether the respondent could resort to any other remedy under the law to recover the emoluments he had lost. The respondent then filed the suit out of which this appeal arises on 8-6-1960, claiming the arrears of salary, dearness allowance and house rent allowance after deducting therefrom the subsistence allowance paid to him by the Government. He also included in his claim the interest on the amounts due.

    2. It is unnecessary to refer to the various grounds on which the claim was resisted as the only point argued before us by the learned Government Pleader on behalf of the appellant related to limitation. The learned District Judge decreed the claim in part by granting the respondent a decree for Rs. 12,398.40 nP. the arrears of basic salary, and dismissed his claim in regard to the dearness allowance, house rent allowance etc. The State Government has now filed the appeal against that decree. The respondent has followed it up with a memorandum of cross objections claiming the dearness allowance and also the interest on the plaint claim which had been disallowed by the lower Court.

    3. It is beyond question that the respondent had the right to institute the suit for recovery oi arrears of salary as he had been dismissed illegally. A claim for salary by a public servant against the Government will be governed by Article 102 of the Limitation Act notwithstanding the fact that the- provision is expressed as one "for recovery of wages". That Article 102 will apply to such a case has been held in Punjab Province v. Tarachand, AIR 1947 FC 23 : 1947-2 Mad LJ 389. That decision has been accepted by the Sup-reme Court in Shri Madhav Laxman Vaikunthe v. State Of Mysore., . The Article provides for a period of three years from when the salary accrues due. Normally the salary for every month will be payable at the beginning of the next month. But where a public servant had been dismissed or removed, his pay and allowance would cease from the date of such dismissal or removal. That is what is provided in F. R. 52. The question then will arise as to when in such cases, that is, where there has been a dismissal or removal which has been later on set aside as a result of subsequent proceedings the right to recover arrears of salary will accrue or arise. In neither of the two cases cited above was that question raised or considered.

    4. In Union of India v. Akbar Sheriff, it has been held that so long as the dismissal order was in force against the plaintiff, he had no right to claim the salary and it was only after reinstatement that he could sue for recovery of salary for the period for which that dismissal was in force. Learned Government Pleader has challenged the correctness of this decision contending that it is inconsistent with the subsequent decision of the Supreme Court in . We shall consider that contention after a reference to the third column of Article 102.

    5. The terminus a quo for a suit under that provision is the accrual of the salary. In other words, the cause of action is not any fixed point of time (e. g., on the 1st of the succeeding month) but when it accrues. By reason of F. R. 52 the right to salary ceases the moment an order for dismissal or removal is made. That is to say, the salary though payable prior to such dismissal at the beginning of next month, ceases to be so after the dismissal and it would not be open to the employee to recover the salary earned without having the order of dismissal set aside. The learned Government pleader however contended that F. R. 52 would disentitle an aggrieved public servant from recovering salary only in eases where the dismissal is set aside in a departmental appeal for reasons other than the invalidity of the order of dismissal, but where the order of dismissal is void ab initio like the one passed contravening the rules of natural justice or without jurisdiction, the case will be one where the public servant had not been lawfully dismissed from service and he should therefore be deemed to be in service entitled to salary as if no order of dismissal had been passed against him. In such a case it is contended that he would have the right to recover the salary as and when it accrued and that limitation for the recovery of arrears would be the same as in the case of a public servant who is in office. We are, however, unable to appreciate the distinction in this regard between the setting aside of an order of dismissal of a public servant for a mere irregularity or misappreciation of evidence by the departmental authorities and a case of more substantial error like an error of jurisdiction when set aside by a Civil Court. The only argument in support of the contention is that in the latter case, that is, where the disciplinary action taken was beyond the jurisdiction of the punishing authority, the concerned public servant is deemed to have been in actual service as the order of dismissal would have no legal existence.

    6. Learned Government Pleader recognises that this is a mere fiction and does not represent the actualities. But he relies on the following observation of Lord Asquith in East End Dwellings Co., Ltd. v. Finsbury Borough Council, 1952 AC 109, which has been cited with approval in Ven-katachalam v. Bombay Dyeing and Mfg. Co., Ltd., :

    It is argued that once the order of dismissal of the respondent is found to be invalid, one must imagine that he was in service right through without interruption and as a logical consequence of that fiction, the salary due to him must be held to have accrued every month. There is a fallacy in the argument. The fiction that a person who had been illegally dismissed continues to be in service, though one in law, is not a statutory fiction to warrant the application of the rule stated above. Again the purpose of the fiction is merely to regard a public servant as if he had not been legally removed or dismissed. But that cannot necessarily justify the importation of another fiction, namely, that while he was in such fictitious service, his salary also accrued every month. No principle of law warrants the second fiction. As we said, the terms of F. R. 52 are clear and no public servant who had been dismissed albeit only by an invalid order can ask the Government to pay him his salary. His right to it will flow only when the order of dismissal has been set aside. We are also of opinion that no distinction can exist between an irregular and improper order which had been set aside by the departmental authorities and one declared to be invalid by a Civil Court so far as this matter is concerned. It is true that in AIR 1947 FC 23, the Federal Court while applying Article 102 to a claim for arrears of salary of a dismissed public servant whose dismissal was held to be invalid, upheld the decision of the High Court only in respect of such period of service as fell within three years immediately preceding the institution of the suit. But the Applicability of F. R. 52 was not considered in that case. was not a case in which F. R. 52 prevented the accrual of salary, there the Government servant had been reverted from an officiating post to his substantive post resulting in loss of seniority in that post. Such reversion was later held to be one by way of punishment and the procedure under Article 311 of the Constitution not having been followed it was held to be invalid, The only point argued in that case was whether the salary due to the Government servant would come within Article 102 of the Limitation Act and that question was answered in the affirmative.

    7. In a later case before the Supreme Court reported in Davendra Pratap v. State of Uttar Pradesh, , the claim by a public servant whose dismissal had subsequently been set aside by a decree of Court was allowed without any question being raised as to its being barred by Article 102. We are therefore of opinion that in the case of the dismissal of a public servant which has been subsequently set aside as in the present case, the right to recover arrears of salary would accrue only when that order of dismissal has been set aside either in departmental appeal or by a Civil Court. Viewed in that light, the instant claim must be held to be in time. The appeal therefore fails.

    8. The memorandum of cross-objections which relates to the payment of dearness allowance is sought to be supported by the decision of the Supreme Court in . But we find from paragraph 9 of the judgment of the learned trial Judge that the respondent's advocate conceded that he could not press the portion of his client's claim in regard to the dearness allowance. It is not stated in the memorandum of cross-obfections that the advocate did not so concede. We are therefore unable to entertain the memorandum of cross-objections in relation to the claim for dearness allowance as the matter had been conceded before the lower Court.

    9. Interest has been claimed only by way of damages. The respondent will be entitled to the same from the date of demand on the amount of arrears of basic salary.

    10. The result is that the appeal will be dismissed with costs. The memorandum of cross-ojections will stand allowed in part. There will be no order as to costs. The respondent will pay the court-fee due to Government on the memorandum of cross-objections.

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    Comments

    State Of Madras v. A.V. Anantharaman
    (Mar 29, 1963)