1. The applicant was appointed as assistant teacher in the primary school by the Jhansi District Board in the year 1948 in a temporary vacancy and was confirmed in July, 1951. As an assistant teacher he was paid a salary of Rs. 35/- plus Rs. 12/- as dearness allowance. In September, 1952, he was appointed head masterand was paid Rs. 45/- as basic pay plus Rs. 13/-p.m. as dearness allowance. He was entitled to an increment of Re. 1/- per year.
In 1954 he was drawing the basic salary of Rs. 47/- plus Rs. 13/- as deamess allowance. In March, 1955, the applicant was informed by the District Board, Jhansi through its President that he had been reverted to the post of an assistant teacher from 1-2-1955 on account of some financial stringency in the Board.
The petitioner alleges that he made several efforts with the Board to pay him his salary as head master but it has had no effect and consequently he filed the present petition under Article 226 of the Constitution praying that a writ of certidrari be issued quashing the order demoting the petitioner from his substantive post of head master's scale to that of an assistant teacher.
2. Notice was issued to the District Board, Jhansi and a counter-affidavit has been filed on behalf of the Board. In the counter-affidavit it is stated that the petitioner has not been reduced by way of any punishment but it had been done as a measure of economy to reduce the expenditure of the Education Department of the District Board.
The expenditure of the Board increased due to the recommendations of the Pay Committee and the Government grant was not increased with the result that the financial resources of the District Board were greatly depleted and it was not possible for the Board to meet its liabilities and, as a measure of economy, the applicant along with other head masters was reverted to the post of an assistant teacher.
The petitioner, according to the Board, was not entitled to any notice to show cause against the order proposed as he was reverted on account of financial stringency and not as a result of disciplinary proceedings.
3. The petition was originally based on the ground that the order of demotion was passed without giving any opportunity to the petitioner to show cause against the order. It was, however, subsequently amended and a further ground was ordered to be added that the services of the applicant had been determined in violation of Rule 3A printed at page 189 of the District Board Manual.
Both these points have been strenuously pressed by the applicant. Firstly, it is contended by the applicant that the District Board, Jhansi is a statutory body. It has to act in accordance with the provisions of the statute and unless there is any power given to the President to terminate the services of an employee or to demote him, he has no power to do so.
It was further contended that if it be accepted that the Board or its President has power to remove an employee from its services, then such a power of removal must carry with it the corresponding obligation to give an opportunity to an employee to show cause against the proposed order of removal or reduction in rank.
The argument of the petitioner, in effect, is that the words 'removal or reduction' in the rule printed at page 193 of the District Board Manual cannot be given a restricted meaning. They must be given their literal meaning having regard to the scheme of the Act and the Rules framed thereunder.
4. The Standing Counsel has strenuously contended that Section 82, District Boards Act, gives power to the Board to reduce an employee and even if there is no such power conferred on the Board under Section 82, the Board as an employer has a general power of dismissal or reduction in rank unless the employee can claim the protectionafforded to an employee under the Rules printed at page 193 of the District Board Manual.
It is urged that the words 'removal or reduction' in the rules should be given a restricted meaning. The protection given under the rules printed at page 193 is available to an employee only if he is removed, dismissed or reduced as a measure of punishment and not otherwise.
In my opinion the general law of master and servant cannot be made applicable to the statutory bodies. The District Board, Jhansi is a statutory body and the powers possessed by such la body or the President of the Board are to be found in the Act or the Rules framed thereunder. Unless there is a power given to the Board, to remove, dismiss or reduce an employee, either under the Act or under the Rules framed thereunder, any exercise of such power by the Board or its President, will be ultra-vires. Section 82, District Boards Act provides that-
'Except in cases provided for by Sections 70, 71 and 72, the power to decide all questions arising in respect of the service, leave, pay, allowances and privileges of servants of the board, who are employed whether temporarily or permanently, on a monthly salary of more than Rs. 40/- and the power to appoint, grant leave of absence to, punish, dismiss, transfer and control such servants of the board, shall vest in the President, and the said powers in the case of all other servants of the Board shall vest in the Secretary:
Provided first, that in case the President in the exercise of his powers under this section dismisses a servant of the Board or imposes a fine exceeding in amount one month's pay of the person fined or orders suspension for a period exceeding one month or orders reduction by way of punishment or supersedes any such servant in the matter of promotion, the said servant shall have a right of appeal to the State Government within one month from the date on which the order of the President is communicated to him.'
5. An order of demotion does amount to a punishment and only as a punishment the power is given to the President to demote an employee under Section 82 of the Act. The fact that the Board had demoted him on account of financial stringency does not make any difference so far as the nature of the order is concerned.
The order of demotion has deprived the petitioner of the advantage of a higher salary and as such it does amount to la punishment even though the reduction is not on account of any misconduct on his part but due to financial stringency. If the reduction is to be regarded as a punishment, in my opinion, the applicant is entitled to the protection granted under the Rule printed at page 193 of the District Board Manual.
Section 82 of the Act gives power to the President to punish an employee. The punishment may be either dismissal, removal or reduction in rank and if any of these punishments are awarded to an employee, he is entitled to the protection granted under the Rule.
Unless Section 82 is interpreted to give power to the Board to remove, dismiss or reduce an employee as a punishment, there is no other power given to the Board to dismiss, remove or reduce an employee. From the scheme of Section 82 it is clear to my mind that all dismissals, removals or reductions in rank, which affect the salary of an employee, cannot but be regarded as a punishment even though the reduction may not be based on a ground of misconduct.
If the reduction is to be regarded as a punishment for the purpose of Section 82, District Boards Act, it has to be given a wider meaning in the rule whichaffords protection to an employee and it cannot be argued by the opposite party that for the purpose of giving power, the word 'punish' in Section 82 should be interpreted to cover the case of a reduction in rank but for the purpose of affording protection granted under the rules, the word 'reduction' has to be confined to the cases where it has been made only on account of any misconduct on the part of an employee.
Reliance was placed by the counsel for the opposite party on the case of Satish Chandra v. Union of India, 1953 SC 250 (AIR V 40) (A). In that case, their Lordships were dealing with a case where an employee of the Government of India had been given an option, shortly before the expiration of the term of his service, to continue in service on the expiry of his contract, on certain terms specified in the letter of the Government of India
In that letter he was asked to intimate to the Ministry of Labour whether he was willing to continue in service on those terms and he accepted the offer to continue in service. As he was a temporary employee, the rules applicable to temporary employees were applicable to him. Under the rules, the service of a temporary Government servant was not quasi-permanent and could be terminated at any time by notice in writing by the Government.
On 25-11-1950, such a notice was given to the employee and his services were to terminate on the expiry of one month from the date of notice. On those facts a petition was filed under Article 32 of the Constitution and it was contended that the provisions of Article 311 of the Constitution had not been complied with in that case.
It was urged that under Article 311 no order of dismissal or removal or reduction in rank could be passed unless an opportunity had been given to the employee to show cause against the order proposed. In that case no such notice had been given. Their Lordships of the Supreme Court interpreted the words 'removal or dismissal' occurring in Article 311 of the Constitution.
After examining the provisions of the Civil Services (Classification, Control and Appeal) Rules, relating to conduct and disciplinary matters of civil servants, they held that termination of service under a contract was not covered by the words 'removal or dismissal' in Article 311. At page 252 of the report it is observed that:
'The distinction which is drawn between the two is explained in Rule 49. There is first removal from service 'which does not disqualify from future employment' and there is next dismissal from service 'which ordinarily disqualifies from future employment'. Then follows an Explanation:
(c) 'The discharge of a person engaged under contract, in accordance with the terms of his contract, does not amount to removal or dismissal within the meaning of this rule.' These terms are used in the same sense in Article 311. It follows that the article has no application here and so no question of discrimination arises, for the law.'
In my opinion what their Lordships of the Supreme Court laid down in this case was that a distinction has been drawn in Rule 49, Civil Services (Classification, Control and Appeal) Rules between removal and dismissal and further by the addition of the Explanation it has been made clear that any discharge in accordance with the terms of a contract would not amount to a removal or dismissal.
The same meaning is to be attached to the words 'removal and dismissal' in Article 341 of theConstitution. The necessary result of that interpretation was that the words 'removal or dismissal' would not apply to a case where services have been terminated in accordance with the terms of a contract. This case is no authority for the proposition that reduction in rank wherever it is used will necessarily mean reduction on account. of misconduct.
In the case of Shyam Lal v. State of Uttar Pradesh, 1954 SC 369 (AIR V 41) (B), the applicant was compulsorily retired after attaining the age of 55 and he challenged the order of compulsory retirement on the ground that it amounted to a reduction in rank or removal from service and as such he was entitled to a notice under Article 311 of the Constitution.
It was held by their Lordships of the Supreme Court affirming the decision of this Court that service in that case was terminated in view of the specific provisions of rules which gave power to the State Government to compulsorily retire an employee in certain conditions. It was not a case covered by Article 311 of the Constitution.
In the present case, the contention, as I have already stated, of the petitioner is that reduction in rank of the applicant amounted to a punishment within the meaning of Section 82 of the Act and if it was a punishment, the petitioner was entitled to the protection of the rule.
That such reduction was as a result of financial stringency will not make it other than a punishment and that the words 'reduction in rank' in the rules cannot be given a restricted meaning so as to cover cases only where an employee has been reduced in rank on account of some misconduct.
The Standing Counsel, as I have already observed, has argued very strenuously that the power to reduce in rank is not covered by the word 'punish' in Section 82 but is included- in the power 'to decide all questions arising in respect of the service, leave, pay, allowances and privileges of the servants of the Board.'
In my judgment, there is no force in this contention. An order of dismissal cannot be said to be the exercise of powers of deciding the questions arising in respect of the service, leave, pay, allowance and privileges. It is a distinct power to award punishment conferred upon the President.
6. I, therefore, allow this petition with costsand set aside the order of the President reducing.the rank of the petitioner. The Board may passan order of removal after complying with the provisions of the rules.