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Jai Chand Sawhney v. Union Of India .
Factual and Procedural Background
Jai Chand Sawhney (“the plaintiff”) was removed from service on the East Punjab Railway by order dated 13 October 1949. He instituted a suit before the Subordinate Judge, Hissar, seeking (i) a declaration that the removal order was void because it was issued by an authority subordinate to the appointing authority and because he had not been given the notice required under Section 240 of the Government of India Act, 1935, and (ii) recovery of Rs 20,309/9 as arrears of salary and damages for wrongful termination. The trial court declared the dismissal “illegal and void” and awarded Rs 9,735.35 as arrears of salary.
Both parties appealed to the Punjab High Court. The plaintiff’s appeal was dismissed; in the Union of India’s appeal the decree was modified, limiting arrears to three years preceding the suit. The plaintiff then obtained special leave and appealed to the Supreme Court of India.
Legal Issues Presented
- Whether a claim for arrears of salary by a dismissed public servant is governed by Article 102 of the Indian Limitation Act, 1908.
- When the period of limitation under Article 102 begins to run—on the date of dismissal, on the date the dismissal is set aside, or month-by-month as salary would ordinarily accrue.
Arguments of the Parties
Appellant’s (Plaintiff’s) Arguments
- The three-year limitation period in Article 102 should begin only after the order of dismissal is set aside, because salary becomes recoverable only then.
- Relying on State of Madras v. A.V. Anantharaman and the similarity between Fundamental Rule 52 and Railway Establishment Code Rule 2042, counsel contended that the right to sue arises on the date of the suit, not earlier.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Punjab Province v. Pandit Tarachand (1947 FCR 89) | “Wages” in Article 102 of the Limitation Act includes salary; therefore arrears of salary suits are governed by Article 102. | Relied upon to affirm that Article 102 applies to claims for salary by Crown servants. |
| Shri Madhav Laxman Vaikunthe v. State of Mysore (1962 1 SCR 886) | Reiterated that Article 102 governs suits for arrears of salary of State employees. | Cited as reaffirmation of the Tarachand principle, supporting application of Article 102 in the present case. |
| State of Madras v. A.V. Anantharaman (ILR 1963 Mad 1014) | Held that a dismissed servant’s right to pay accrues when dismissal is set aside. | Appellant relied on this decision, but the Supreme Court rejected its reasoning, distinguishing it from the correct interpretation of Article 102. |
Court's Reasoning and Analysis
The Court held that once an order of dismissal is declared invalid for failure to afford constitutional protection, it is void ab initio; the employee is deemed to have been in continuous service. Consequently, salary “accrues due” month by month as it would have been earned but for the unlawful order. Article 102’s limitation period therefore commences at the end of each month when salary would ordinarily become payable.
Rule 2042 of the Railway Establishment Code, providing that pay ceases from the date of dismissal, does not alter the accrual of wages for limitation purposes once the dismissal is found invalid. Hence, the plaintiff could recover only those arrears falling within three years immediately preceding the suit.
The Court further applied Section 15 of the Limitation Act, 1908, observing that the statutory notice served by the plaintiff required exclusion of the two-month notice period from the calculation of limitation. This marginally extended the recoverable period to three years and two months prior to the suit.
Holding and Implications
APPEAL DISMISSED subject to a minor modification. The plaintiff is entitled to salary for three years and two months preceding the date of suit; no order as to costs.
Implications: The decision reaffirms that (a) Article 102 governs suits for arrears of salary of public servants and (b) limitation runs month-by-month from when salary would have been payable, not from the later date on which a wrongful dismissal is set aside. The ruling narrows the recoverable period in similar future claims and clarifies that departmental rules like Rule 2042 cannot defer accrual of salary for limitation purposes.
J.C Shah, J.— Jai Chand Sawhney — hereinafter called “the plaintiff” — was removed from service under the East Punjab Railway by order, dated October 13, 1949. He sued the Union of India in the Court of the Subordinate Judge, Hissar for setting aside the order of removal on the grounds: (i) that the order was made by an authority subordinate to the appointing authority; and (ii) that he was not given an opportunity to show cause against the action proposed to be taken in regard to him as required by Section 240 of the Government of India Act, 1935. The plaintiff also claimed a decree for Rs 20,309/9 being the amount of arrears of salary and damages for wrongful termination of employment. The trial court declared that the dismissal was “illegal and void”, and decreed the claim for Rs 9735.35 for arrears of salary.
2. Against the decree passed by the trial court the plaintiff and the Union of India appealed to the High Court of Punjab. The plaintiff's appeal was dismissed, and in the Union's appeal the decree passed by the trial court was modified. The plaintiff was awarded arrears of salary for three years prior to the date of the suit. With special leave, the plaintiff has appealed to this Court.
3. It was held by the Federal Court in Punjab Province v. Pandit Tarachand 1947 FCR 89 that the expression “wages” in Article 102 in the Schedule to the Limitation Act includes salary, and therefore a servant of the Crown for arrears of salary is governed by Article 102 of the Indian Limitation Act. That view was reiterated by this Court in Shri Madhav Laxman Vaikuntha v. State of Mysore (1962) 1 SCR 886 it was held that the claim in a suit for arrears of salary due to a servant of the State who was reverted to his substantive rank is governed by Article 102 of the Indian Limitation Act.
4. Counsel for the plaintiff contended that the period of three years under Article 102 commences to run from the date on which the order of dismissal is set aside, either by a departmental authority or by the civil court in a suit or other proceeding. Counsel also contended that the cause of action in a suit by a dismissed employee arises on the date of the institution of the suit, if the Court sets aside the order of dismissal or removal. In support of his contention counsel relied upon a judgment of the Madras High Court in State of Madras v. A.V Anantharaman ILR (1963) Mad 1014. In that case the Madras High Court observed that the pay and allowances of public servant dismissed or removed from service cease from the date of such dismissal or removal and his right to recover the arrears arises because of Fundamental Rule 52 not before the date on which the result of the subsequent proceeding setting aside the dismissal or removal is declared. Counsel for the plaintiff says that the terms of Fundamental Rule 52 are the same as the terms of Rule 2042 of the Railway Establishment Code, and according to the principle of the judgment of the Madras High Court the plaintiff's right to sue must be deemed to have accrued on the date on which the suit was instituted. In our judgment, the contention cannot be accepted. When the order of dismissal or removal is set aside by the Court on the ground of failure to afford the constitutional protection, the order is declared invalid ab initio i.e as if it in law never existed, and the public servant concerned was unlawfully prevented from rendering service. If that be the correct view, salary due to the public servant concerned must be deemed to have accrued month after month because he had been wrongfully prevented from rendering service. The period of limitation under Article 102 commences to run when the wages “accrue due”, and wages accrue due when in law the servant becomes entitled to wages. Rule 2042 of the Railway Establishment Code merely provides that “the pay and allowances of a Railway servant who is removed or dismissed from service cease from the date of the order of removal or dismissal”. That rule does not operate to make the wages accrue due on the date of the institution of the suit. If the order of dismissal is set aside the public servant is deemed to be in service throughout the period during which the order of dismissal remained operative, and his right to sue for salary arises at the end of every month in which he was unlawfully prevented from earning the salary, which he could, but for the illegal order of dismissal, have earned.
5. The High Court was, in our judgment, right in holding that the plaintiff's claim was governed by Article 102 of the Limitation Act that the remuneration payable to him accrued due month after month, and that the plaintiff's claim for salary beyond the period provided by the third column of Article 102 was barred by the law of limitation.
6. A slight modification must however be made in the decree of the High Court. Under Section 15 of the Indian Limitation Act, 1908, where a statutory notice has to be served by the plaintiff before instituting any action, in computing the period of limitation, the period of the notice in accordance with the requirements of the enactment must be excluded. There is no doubt that the plaintiff had given such a notice. He was, therefore, entitled to salary for three years and two months prior to the date of the suit.
7. Subject to that modification, the appeal is dismissed. There will be no order as to costs.
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