1. The question in this letters patent appeal is whether an employer of a District School Board has a right of action against the Board for damages by reason of his having been compulsorily retired before reaching the age' of fifty-five.
2. The respondent entered Government service as a primary school teacher on December 1, 1897. After the Bombay Primary Education Act IV of 1923 came into force, his services were transferred to the District Local Board of North Kanara. Section 8 of the Act in question provides :
8. (1) A local authority shall take over and employ such primary school teachers employed under the Educational Department of the Government as the Government may direct, on the same terms and conditions on which such persons were employed under the said department.
(2) The existing and future rights, liabilities, duties and powers of the Government in respect of such teachers shall vest in and be exercised or performed by the local authority :
Provided (a) that any such teacher shall have a right of appeal to the Government against any order of dismissal;
(b) that the scales of pay and allowance applicable to such teachers at the time at which they are taken over and employed by the local authority shall not be altered without the previous sanction of the Government.'
3. Section 3 of the Act constitutes a body called a School Board for every local authority and Section 4(2) provides that the School Board shall exercise the powers and perform the duties of the local authority for which it is constituted in respect of primary education.
4. Owing to retrenchment, which was rendered necessary by a reduction of the Government grant, the Chairman of the School Board of the North Kanara District Local Board, acting with the sanction of the local authority, gave the respondent three months' notice and required him to retire on pension with effect from April 15, 1932. He had on that date thirty four years four months service and was fifty three years and eight months of age. He brought an action against the District School Board for damages which he assessed at the difference' between the salary he would have received if he had continued in service until the age of fifty five and the amount which he drew as pension for that period. He claimed to be entitled to remain in service till the age of fifty five by reason of Rule 55(2) of the Bombay Primary Education Rules made under Section 27 of the Bombay Primary Education Act. This provides :
A primary teacher shall ordinarily retire at the age of 55 years. An extension of service of not more than one year at a time up to the age of 60 years may be granted by the School Board on public grounds only subject to the sanction of the local authority. No extension of service after this age shall be permitted without the sanction of Government in the case of teachers taken over by a local authority under Section 8(1) of the Act, or the local authority in the case of teachers appointed after such date.
The claim was decreed by the trial Court and the District Judge in first appeal, and Mr. Justice Divatia in second appeal has confirmed the decree.
5. There was a question of limitation argued in the Courts below which is no longer pressed. The District School Board, the appellant before us, relies simply on the proposition that Government, in whose service the respondent originally was, had power to terminate his service at pleasure, that by reason of Section 8(2) of the Bombay Primary Education Act the District Local Board has all the powers of Government and that therefore there is no right of action against the District School Board which acted under powers delegated to it by the local authority and with the sanction of that authority.
6. That the respondent would have had no right of action against Government if he had remained in Government service is a proposition which the authorities make abundantly clear and which has not been disputed before: us. I need only mention three cases, Shenton v. Smith (1895) A.C. 229 the decision of this Court in Secretary of State v. Yadavgir : AIR1936Bom19 and the Privy Council judgment in R. Venkata Rao v. Secretary of State (1936) 39 Bom. L.R. 699. The learned advocate who appears for the respondent argues that these were all cases of dismissal of an employee, whereas we are concerned with the case of compulsory retirement, not of dismissal. But the general rule, which is expressly recognised by Section 240 of the Government of India Act of 1935, as it was by Section 96B of the Act o:f 1919, and which exists independently of statute, is that Government servants hold office during His Majesty's pleasure, which means in effect at the pleasure of Government. That of course implies the power to dismiss and we think must also include the power to require a Government servant to retire at any time on pension.
7. The rule in question, according to the decisions of our High Court at any rate, does not apply in the case of the employees of local bodies : see Dhulia Municipality v. Ramchandra : AIR1938Bom137 and Gokak Municipality v. Rajaram Shridhar. : AIR1940Bom386 In the latter case it was held that in the case of the; discharge or dismissal of an employee of 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. But in those cases the Court was dealing with Municipalities and there is no provision in the Municipal Act corresponding to Section 8 (2) of the Bombay Primary Education Act. This provision is very wide in its terms, and so far as the relations between the local authority and its employees are concerned, it places the local authority in the same position as Government. Mr. Justice Divatia saw this difficulty, but he thought it could be got over by saying that there was no transfer to the local authority of the Crown's prerogative of dismissal. But the rule that Government servants hold office at pleasure is not based on the prerogative of the Crown. As Lord Hobhouse said in Shenton v. Smith :
Unless in special cases where it is otherwise provided, servants of the Crown hold their offices during the pleasure of the Crown; not by virtue of any special prerogative of the Crown, but because such are the terms of their engagement, as is well understood throughout the public service. If any public servant considers that he has been dismissed unjustly, his remedy is not by a law-suit, but by an appeal of an official or political kind.
8. The power to terminate the services of an employee as and when it thinks fit, subject to the statutory exceptions which have been explained in R. Venkata Rao v. Secretary of State, is part of the ordinary powers of Government, and we can see no warrant for the view that it could not be or has not been transferred by Section 8(2) of the Bombay Primary Education Act. The Courts below and the respondent's learned advocate in this appeal have all relied on the terms of Rule 55 (2) to which reference has already been made. But this is not a statutory exception to the general rule. Rules made under the Act must be construed consistently with the Act. No rule could validly be made which would override the provisions of Section 8 (2). Moreover the rule is not in fact inconsistent with those provisions. In our view it does not give a right of service till the age of fifty five or imply, as Mr. Justice Divatia says, that an employee cannot be dismissed or retired before that age except for misconduct. The rule is certainly no more a term of the contract of employment than were the rules and regulations in Shenton v. Smith, the breach of which was held not to give the employee any cause of action.
9. Mr. Jahagirdar for the respondent sought to found an argument, that the power to terminate service at pleasure cannot be delegated, on certain observations of their Lordships in R.T. Rangachari v. Secretary of State (1936) 39 Born. I. R. 688 The plaintiff in that case, who was a Police officer, had been dismissed by an official lower in rank than the Inspector-General who had appointed him to his office. That was contrary to the provisions of Section 96B of the Government of India Act, 1919, corresponding to Clause (2) of Section 240 of the Act. No member of a civil service of the Crown is to be dismissed from the service of His Majesty by any authority subordinate to that by which he was appointed. The power to dismiss purported to have been delegated by rules to the person who purported to exercise it. But as to that their Lordships said :
It is manifest that if power to delegate this power could be taken under rules it would wipe out a proviso and destroy a protection contained not in rules but in the section itself. Their Lordships are clearly of opinion that the dismissal purporting to be thus ordered was by reason of its origin bad and inoperative.
We are unable to see, however, that these observations assist the plaintiff in the present case. In the first place the delegation of Government's powers to the local authority is not by rule but by statute. In the second place there has been no breach of the statutory provision that a civil servant cannot be dismissed by an authority subordinate to that by which he was appointed. As has been already pointed out, although the notice calling upon the plaintiff to retire emanated from the Chairman of the School Board, that was done with the sanction of the local authority. If, as we hold, the local authority possesses all the powers of Government by reason of Section 8 (2), it is obvious that it cannot be regarded as subordinate to that department of Government by which the plaintiff was originally appointed.
10. Mr. Jahagirdar also referred us to one of the rules under the Bombay Primary Education Act which was in force up till 1937 but which it seems is no longer in force, It gave the School Board power to recommend to the local authority the dismissal of any teacher taken over under the Act. Under Section 4 (2) of the Act the School Board exercises the powers and performs the duties of the local authority for which it is constituted. Therefore, Mr. Jahagirdar argues, if the local authority has power to dismiss at pleasure, the School Board itself must have the power, whereas this rule to which he draws attention indicates according to him that the School Board had not the power. It is rather difficult to base any argument upon a rule which has been abrogated, but in any case a rule providing that the School Board should make a recommendation) to the local authority to dismiss at any rate implies that the local authority has power to dismiss, and it seems therefore to be completely at variance with the proposition which Mr, Jahagirdar is attempting to make.
11. We are satisfied that the result of Section 8(2) of the Bombay Primary Education Act must be that the local authority possesses all the powers of Government including this power to terminate the service of an employee at pleasure, subject only to the recognised statutory exceptions, none of which has been shown to have been contravened in the present case.
12. There is no doubt that the respondent may reasonably have expected that:, apart from misconduct or inability to perform his duties, he would have been permitted to continue in service until he reached the age of fifty-five. We are not to be understood as deciding that he has no grievance and no moral right to compensation. The only question before us is whether he has a right of action in the Courts. On the authorities we feel no hesitation in holding that he has not. We must therefore allow the appeal and dismiss the suit. But in the circumstances we think that it will be reasonable to order that the parties do bear their own costs throughout.