1. We are concerned in this second appeal with questions of some importance in connection with the conditions of service of Municipal employees and the right of the Municipality to discharge its employees.
2. The plaintiff who is now the respondent was a school teacher in the service of the Gokak Municipality. He was appointed in 1920, apparently for one year in the first instance though the evidence as to this is not very clear. He was, however, allowed to continue in service until the year 1933. On April 29, 1933, there was a resolution of the School Committee to the effect that the plaintiff should be served with a notice to show cause why his services should not be dispensed with. The reason for the resolution purported to be that he had not passed his B. T. (Bachelor of Teaching) and was not able to teach Kanarese. On April 30, the next day, there was a special general meeting of the Municipality at which it was resolved to give the plaintiff one month's notice and remove him from service. The reasons for this resolution as stated in the minutes of the meeting were that the plaintiff had been directed to learn Kanarese in the year 1926 and had failed to do this and had, therefore, obtained increments of pay illegally, that his services were considered unnecessary inasmuch as many Kanarese knowing graduates were available and that it was in the interest of retrenchment that he should be removed from service. This special general meeting had been summoned by a notice dated April, 25. The plaintiff's case was not mentioned in the agenda, but item 9 of the agenda before the meeting was ' Subjects to be taken up with the permission of the President.' It appears that at the meeting the President gave permission for this matter to be discussed. A notice dispensing with the plaintiff's services was issued on May 3 and his services were dispensed with from June 30.
3. On November 28, he filed a suit claiming Rs. 2,000 as damages for wrongful dismissal. The basis of his claim as stated in the plaint was that he was a permanent teacher and that the Municipality was under a legal obligation to continue his services till he was at least fifty-five years of age. The defendant Municipality in their written statement relied on Rule 156 of the rules made under Section 46 of the Bombay District Municipal Act of 1901. This rule is as follows:
Every Municipal officer or servant is liable to discharge at one month's notice, but, except, with the concurrence of the President and the sanction of the Municipality, no officer or servant whose salary exceeds Rs. 10 shall be discharged before he has reached the age of fifty-five. Explanation: Discharge does not include dismissal.
4. The trial Court raised an issue-
Does plaintiff prove that the defendant Municipality was under a legal obligation to continue his services till plaintiff was fifty-five years of age ?
A finding was given on that issue in favour of the plaintiff and damages were awarded to the amount of Rs. 1,584. This decree was confirmed in appeal by the Assistant Judge of Belgaum.
5. In this second appeal by the Municipality the first point that has been argued is that the plaintiff on the facts alleged and proved could have, no cause of action. Reliance was placed on a decision of the Allahabad High Court, Municipal Board of Shahjahmpur v. Sukha Singh  All. 434. That was a rase in which the Secretary of a Municipality brought an action for a declaration that he had not been legally dismissed and that he was still the servant of the Board and entitled to continue drawing his salary. It was found that there had been certain irregularities in the proceedings because three of the members of the Board had not received timely notice of the meeting at which the services of the Secretary were dispensed with. It was held by the High Court that failure by the Municipality to observe strictly the rules and regulations in the conduct of its business did not afford the plaintiff a ground for maintaining his suit. This case, however, is no authority for the proposition that a breach of the rules would not have entitled the plaintiff to bring a suit for damages for wrongful dismissal. That point was expressly left open in the judgment (see p. 442 of the report). I may note that the Court also declined to make any pronouncement one way or the other on the question whether the plaintiff in that case, who was the Secretary of a Municipality, stood in the same position as a civil servant i.e. a servant of the Crown in respect of liability to be dismissed at pleasure with no right to maintain a suit for damages.
6. The question of the right of a dismissed servant of a local authority to sue for damages was also considered in Prabhu Lal Upadhya v. District Board, Agra 1938 All. 252. The facts there were that the Secretary of a District Board was dismissed contrary to the provisions of Section 71 of the local District Boards Act which provided that the Secretary could only be dismissed by a special resolution passed by a vote of not less than two-thirds of the total number of members of the Board. The dismissal was also alleged to be contrary to a rule made under the Act which provided that no officer or servant should be dismissed without a reasonable opportunity being given him of being heard in his own defence. It was held by the High Court that the breach of the statutory provision gave a cause of action for damages for wrongful dismissal but that the breach of the rule would give no cause of action. The reason for the distinction made appears to be this. The general rule is that servants of the Crown hold office at pleasure. But where the statute under which they are appointed itself places a limitation upon the Crown's right to dismiss and contains provisions for the protection and benefit of an officer, a breach of such a statutory provision gives a cause of action. On the other hand a mere non-compliance with rules does not give a cause of action because such rules are framed for the guidance of officers of the Government or the public authority and can be changed from time to time.
7. No doubt this case does afford some support for the argument put forward by Mr. Shah in this case. But it is to be observed that the learned Judges who decided the case treated the Secretary of the District Local Board as though he was on the same footing as a servant of the Crown and therefore prima facie subject to the rule that servants of the Crown hold office at the pleasure of the Crown. In Municipal Borough of Dhulia v. Ramchandra Bapuji 1937 Bom. 867: it was, pointed out by this Court, after a discussion of various authorities, in particular certain English cases, that it may well be doubted whether the rule in question applies to the employees of local bodies who are not properly speaking servants of the Crown at all. I may point out that the Bombay District Municipal Act of 1901 itself differentiates, between servants of the Government and Municipal servants, for instance in Section s 10 and 15. In Municipal Borough o} Dhulia v. Ramchandra Bapuji, we held in effect that the conditions of service of the employees of local bodies must be ascertained from the special laws under which they1 were appointed. It is true as Mr. Shah pointed out that in the particular case we were dealing with the breach of a statutory provision not the breach of a rule. But we are not prepared to accept Mr. Shah's argument that the case can be distinguished on that ground. In the case of Crown servants the prerogative of the Crown comes into play. It is quite reasonable to say in such a case that the general rule is that Crown servants can be dismissed at pleasure without giving a cause of action, and if any one alleges an exception to that rule, he must show that there is an exception in a statute which is binding on the Crown. But if there is no general overriding principle of liability to dismissal at pleasure, if you have to look to the special law to ascertain; what the condition of service are, it is difficult to see why a distinction should be made between a statutory provision and a provision made by a statutory rule. Of course if there has merely been a breach of some rule dealing with matters of formality or procedure, it is reasonable to hold that the breach gives no cause of action against the local body. That was the case in Municipal Board of Shahjahan-pur v. Sukha Singh. But in the case of a rule like Rule 156 with which we are concerned, which clearly affects the conditions of service of Municipal employees, on what principle can one say that it is immaterial whether the Municipality observes the rule or not? Rule 156 as well as the other rules which have been referred to in the argument has been made under Section 46 of the Act of 1901 by which the Municipality has power to make rules not inconsistent with the Act, among other things for the guidance of their officers and servants and determining the mode and conditions of appointing, punishing or dismissing any officer or servant. Why should one say that this rule which purports to confer important rights on the employees of the Municipality is merely framed for the guidance of the officers of the Municipality or of the Municipality itself? It is worthy of note that the Municipality itself relied on this rule as the main defence to the suit. It hardly lies in the mouth of the appellant therefore to argue that a breach of the rule would not give a discharged employee a cause of action. In our view in the case of the discharge or dismissal of an employee of a local body a cause of action for ''damages for wrongful dismissal arises when there has been a breach of any provision, whether contained in a statute or rule made under the statute, which may fairly be regarded as forming one of the conditions of service, and affecting the tenure of office of the employee concerned. In the present case therefore if we had held that there had been a breach of this Rule 156, we should have held that the plaintiff had a cause of action for damages.
8. But it is contended on behalf of the appellant, and we think rightly, that there has not in fact been any breach of the rule. The rule means that the plaintiff was liable to be discharged provided it was done with the concurrence of the President and the sanction of the Municipality. Now there is no doubt that the President concurred. He presided at the meeting and he voted in favour of the proposal that the plaintiff's services should be dispensed with. It is also perfectly clear in our opinion that the sanction of the Municipality was duly given in accordance with law. It was suggested at the trial that there had been some irregularities in the matter of giving notice of the meeting of the Municipality. The trial Judge said that the notice was not signed by one of the members and that another member said that he only saw the notice on the morning of April 30. Whether he meant to say that the member who had not signed had not received the notice is not clear. It appears that this member attended the meeting and there is nothing to show that he complained of want of notice. The Assistant Judge was satisfied that there was no irregularity in the matter of notice of the meeting. He says that the evidence showed that three days' clear notice was given.
9. The question of dispensing with the plaintiff's services was not mentioned in the agenda. But if the relevant provisions of the Act are examined, it is clear that this did not constitute any breach of the law. Section 26, Sub-section (3), provides in the case of special general meetings that the notice calling the meeting shall include any motion or proposition mentioned in any written request made for such meeting. Sub-Section (8) provides that no proposition shall be discussed at any special general meeting unless it has been mentioned in the notice convening such meeting except with the permission of the presiding authority. Now in the present case it appears that the special general meeting was summoned by the President himself. So that there was no question of a written request being made for convening the meeting. It was therefore perfectly in order that this matter of the dispensing with the plaintiff's services should be discussed at the meeting. Even if there had been a written request for the calling of a special general meeting in connection with this matter and even if there had been an omission to include the matter in the agenda, nevertheless the permission of the presiding authority would have regularised the matter and given the Municipality the right to consider and deal with it. The evidence shows that the presiding authority i.e. the President himself, did give permission. He was examined as a witness and has stated so in so many words. I may also refer in this connection to Section 38 of the Act which' provides that until the contrary is proved every meeting of the Municipality in respect of the proceedings whereof a minute has been made and signed in accordance with the Act shall be deemed to have been duly convened and held. The minutes in this case have been duly made and signed. Under these circumstances it is hardly possible to argue and quite impossible to hold that the Municipality was guilty of any breach of the provisions of Rule 156,
10. For some reason which we have found ourselves unable to understand the lower Courts persuaded themselves that Rule 156 did not apply to the case and that the relevant rule was 157 which is this:
Every Municipal officer and servant is entitled to and may be required to retire on completion of 30 years' Municipal service and shall in no case be permitted to remain in Municipal service if he has become physically, morally or mentally unfit for the due discharge of his duties.
It is manifest, we think, that this rule relates to superannuation and has nothing to do with discharge which is dealt with in Rule 156. The learned advocate who appears for the respondent did not argue that Rule 157 should be applied to the case but did suggest that it was really a case of dismissal under Rule 145 rather than discharge under Rule 156. Rule 145 says:
(1) No officer or servant shall be dismissed without a reasonable opportunity being given him of being heard in his defence. Any written defence tendered shall be recorded and a written order passed thereon. (2) Every order of dismissal or confirming a dismissal shall be in writing and shall specify the charge or charges brought, the defence and the reasons for the order.
We think, however, that it is sufficiently clear from the proceedings that the plaintiff was not dismissed for misconduct under this rule but that his services were dispensed with under Rule 156. The failure to establish that there has been any breach of the provisions of Rule 156 is therefore fatal to the plaintiff's claim,.
11. We do not think it necessary to say very much on the question whether plaintiff can be regarded as a permanent servant. The lower Courts have taken the view that he was and had a right to be continued in service until the age of fifty-five, but as far as we can see the conclusion has been arrived at on grounds which are entirely unjudicial. There is no contract between the plaintiff and the Municipality fixing the terms of his employment. All that Mr. Gumaste was able to point out in favour of his alleged permanency was that in his service book he has been described as permanent. But this is obviously merely in contradistinction to a person temporarily engaged for some short period. The description in the service book clearly does not give the plaintiff any contractual right to continue in service till fifty-five or for any period. In fact Rule 156 is entirely inconsistent with any plea to permanency of tenure in a strict legal sense. No person can put forward a claim to remain in service until he is superannuated if one of the conditions of his service is that contained in this rule, viz. that he is liable to be discharged at a month's notice provided that certain formalities are complied with.
12. The learned Assistant Judge has expressed the view that elementary principles of natural justice demand that an employee of a public body should be secured in his post so long as he conducts himself with proper decorum, discipline, and efficiency in the discharge of his duties. He thinks that it is extremely necessary and desirable that a public servant discharging his duties conscientiously and efficiently should be protected from the vagaries of a high-handed body of Municipal Councillors or the Municipal President. There are observations of a similar tenor in the judgment of the trial Court. We think that the dangers of the present system have been exaggerated. In the ordinary way a public body can probably be trusted to treat its employees with fairness. But anyhow the question before the Court is not what the conditions of service ought to be or what the Judge may think they ought to be but what they are in fact. It is simply a question of the construction of the rules and the. rules negative the plaintiff's claim to damages on the basis that he was a permanent servant. I may say that this point is dealt with also in Municipal Borough of Dhulia v. Ramchandra Bapuji, The reasson-ing in this case clearly applies and it cannot be distinguished as the learned Assistant Judge thought.
13. It follows that the plaintiff has no claim to any damages at all. Even if the lower Courts had been right in their view, that is to say, even if it could have been held that the terms of the plaintiff's service were that he was to be employed till the age of fifty-five, the damages have been assessed on a wrong basis. The sum of Rs. 1,584 has been arrived at by taking the pay which the plaintiff would have earned if he had continued in service and deducting from it the amount which the Municipality paid for the services of the plaintiff's successor. The measure of damages in such a case is the actual loss incurred. In actions for wrongful dismissal the plaintiff may recover the wages for the whole unexpired period of service, though if he has obtained or might reasonably have obtained other occupation, this is to be taken into account (see Mayne on Damages, p. 253, Halsbury's Laws of England, 2nd edn., Vol. X, para. 169). Here, of course, as we hold that there was no contract to employ the plaintiff for any definite period, those principles do not apply, and if we had awarded damages we should probably have held, as in Municipal Borough of Dhulia v. Ramchmdra Bapuji, that plaintiff would have been entitled to damages for the period of notice only.
14. The result of our findings is that the appeal is allowed and the suit is dismissed with costs throughout.
15. It may be a hardship to the plaintiff that he should have to pay all the costs of this litigation. But as we find that there was no justification whatever for the action which he brought against the Municipality, we think that the ordinary rule about costs must apply.
16. The plaintiff put in cross-objections claiming to be entitled to a gratuity. This claim fails as the appeal has been allowed, and the cross-objections are also dismissed with costs.
17. I concur.