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Dewan Shamsher Jang Vs. State of Madhya Pradesh - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMadhya Pradesh High Court
Decided On
Case NumberFirst Appeal No. 59 of 1961
Judge
Reported inAIR1966MP161; (1967)ILLJ327MP
ActsLimitation Act, 1908 - Schedule - Article 102; Constitution of India - Article 300
AppellantDewan Shamsher Jang
RespondentState of Madhya Pradesh
Appellant AdvocateG.P. Singh, Adv.
Respondent AdvocateK.K. Dubey, Dy. Govt. Adv.
DispositionAppeal partly allowed
Cases ReferredMadhav v. State of Mysore
Excerpt:
.....the power of choice which may or may not be exercised' (67 corpus juris secundum 511) 5. we are clearly of the view that where the new state gives a servant, taken on by it, the option to chose between two sets of service conditions and he opts for one of them, then the new state is bound to pay him all emoluments under the conditions opted for......in accordance with those service conditions for which he opted. he, therefore, represented to the state government, but his representation was turned down. while resisting the suit, the defendant-state of madhya pradesh admitted all material facts. it is not in dispute that there was continuity, all through, of the plaintiff's services, but the contention is that he is not entitled to the same terms and conditions on which he was in the service of the alipura state. the learned trial judge disallowed the plaintiff's claim merely on the ground that the terms and conditions on which the plaintiff was initially appointed, did not continue to be operative on the formation of the union of vindhya pradesh states and that as a result of integration, the plaintiff must be deemed to have elected.....
Judgment:

Shiv Dayal, J.

1. This is plaintiff's appeal from the dismissal of his suit for recovery of the difference between the salary paid to him and the salary and perquisites which he claimed to be entitled to, for the period from 1st November 1947 to 15th April 1959. He was initially employed as Diwan in the erstwhie Alipura State under an order dated 1st October 1945. On the merger of that State and certain other States in 1948, he was taken on in the service of the newly constituted United State of Vindhya Pradesh. Eventually, he was absorbed in Vindhya Pradesh (Part C) State. His services were continuous right from 1st October 1945 and were recognised as such by the new State of Vindhya Pradesh. In 1955, he was given an option to accept the Pre-absorption (Ex-States) Terms and Conditions as a whole. He opted for the service conditions as a whole under which he was in the service of the Alipura State, but the pay slip, which he received, was not in accordance with those service conditions for which he opted. He, therefore, represented to the State Government, but his representation was turned down. While resisting the suit, the defendant-State of Madhya Pradesh admitted all material facts. It is not in dispute that there was continuity, all through, of the plaintiff's services, but the contention is that he is not entitled to the same terms and conditions on which he was in the service of the Alipura State. The learned trial Judge disallowed the plaintiff's claim merely on the ground that the terms and conditions on which the plaintiff was initially appointed, did not continue to be operative on the formation of the Union of Vindhya Pradesh States and that as a result of integration, the plaintiff must be deemed to have elected to serve the new State on such terms and conditions as the new Stale chose to impose.

2. The real controversy in this appeal is whether, on an option having been given to the plaintiff and the plaintiff having exercised the option, he acquired a right to be remunerated according to the service conditions for which he opted. We shall now state the material facts. (1) By an order dated 1st October 1945 (Ex. P-1), the plaintiff was appointed Diwan of Alipura State in the grade of Rs. 500--50--800, with the following perquisites : (i) free furnished house for residence; (ii) a motor car at State expense for his use; (iii) fuel and light free of charge; and (iv) two domestic servants at State expense. The services were not terminable except for defalcation of Stale money or for gross negligence of duly. The period of service was 20 years to be computed from 2nd November 1944. The other terms and conditions are not relevant for this suit. By a letter, dated 11th October 1947, his services were terminated. He made a representation to the Regional Commissioner, Bundelkhand States, which remained pending till the States of Bundelkhand were integrated into the United State of Vindhya Pradesh in March 1948. The new Government accepted his representation and held that his removal from Alipura State Service was irregular and inoperative. The order of the Government was communicated to the plaintiff by a letter of the Chief Secretary, dated 3rd July 1948 (Ex. P-2 or Ex. D-4), the relevant portion of which reads thus :

'The Vindhya Pradesh Government examined your representation thoroughly and came to the conclusion that 'your removal from Alipura State service was irregular and could not be held to be operative'. It was, therefore, decided by the V. P. Government that 'you will be regarded as having all this time been in Alipura State service, i.e., V. P. Government service from the time the charge was taken over by this Government from the Alipura State.' As a result this decision of Government you were paid Rupees two thousand six hundred eighty three, annas five and four pies (Rs. 2,683-5-4) on account of the arrears of your pay from 1st January 1948 till llth June 1948 and you were posted as Additional Deputy Secretary in the Government from I2th June 1948.

'It is obvious therefore that your service in the V. P. Government is in continuation of your previous service'.' (Underlined (here into ' ') by us)

2. On 23rd September 1948, the plaintiff was placed under suspension, but was reinstated on llth September 1953. The notification No. 88, dated llth September 1953 (Ex. P-10). reads thus :

'Shri Shamsher Jang, Additional Deputy Secretary to Government (under suspension) is reinstated with effect from 15-9-1953.

Orders regarding his posting as also about the regularisation of the period from the date of suspension to the date of joining will be issued shortly. '

Then the Government order dated 19th July 1955 (Ex. P-11 or Ex. D-15) reads thus :

'In continuation of Appointment Department Notification No. 88 dated, the 11th September 1953, the Lieut. Governor is pleased to order under F. R. 54 (2) and (4) that the period of suspension of Shri Shamsher Jung, who has been fully exonerated from 23rd September 1948 to 6th October 1953 be treated as duty for all purposes and that he may be paid full pay and allowances to which he would have been entitled had be not been placed on suspension. ' 3. In the meantime, the Rulers of the covenanting States of the United State of Vindhya Pradesh and the Rajpramukh of that United Slate entered into an agreement with the Governor-General of India, by virtue of which the Union ceased to exist with effect from 1st January 1950 and a Chief Commissioner was appointed by the Government of India to administer the State. And, on 26th January 1950, it became a Part C State under the Constitution. The Chief Commissioner's Secretariat (General Administration Department) issued the following order on 11th or 12(h December 1950 (Ex. P-3 or D-7) to the Comptroller:

'It has been decided that in the absence of any order from Vindhya Pradesh Government to the contrary, the scale of pay of an employee of the Integrating State continues to be the same as it was at the time of the integration under the orders of the integrating State which he was serving before integration. ' 4. By his letter dated, 15th January 1954 (Ex. P-4 or Ex. D-11) the plaintiff wrote to the Chief Secretary, Vindhya Pradesh :

'With reference to your memo No. 332-XVI of 1953, dated, the 9th November 1953. I submit that I shall opt out for my old scale of pay Rs. 500-60-800, as I do not get any benefit from the new scale under F. R. 23, which is also my due vide Article IX of the agreement dated 26th December 1949. ' In reply to that letter, the Government of Vindhya Pradesh addressed the following letter dated 4th February 1955 (Ex. P-5 or Ex. D-13), which is very significant :

'With reference to your letter dated 15th January 1954 regarding option to retain your old scale of pay, I am to say that the Government of India have not allowed the employees of Vindhya Pradesh the option under F. R. 23 to retain the old scales of pay. They have, however, no objection to the permanent staff taken over from the former State Administration exercising an option for the pre-absorption (ex-States) Terms and Conditions of Service as a whole but not for any part or parts thereof.

Will you please intimate whether you are prepared to accept Pre-absorption (ex-States) Terms and Conditions of Service as a whole.'

The plaintiff's response is contained in his letter dated 24th March 1955 (Ex. P-6 or Ex. D-14) :

'Please refer to your letter No. 302-11-55 dated the 4th February 1955.

In this connection I have to submit that I am prepared to accept pre-absorption (Ex-States) terms and conditions of service as a whole. In fact I have been pressing for the same ever since integration took place and the Ministry at Nowgong had accepted the position.

A copy of the terms and conditions of my service is enclosed for ready reference. I shall be grateful if you will kindly pass orders at an early date so that the Comptroller may issue my pay slip in accordance with the conditions of my service. Cash allowances may also be granted in lieu of conditions laid down in paras two and three of the order under reference. '

5. When all this was said and done, the plaintiff received a pay slip which is referred to in paragraph 23 of the plaint (admitted in the written statement) :

'23. That the plaintiff received a pay slip No.GA-8026 dated 21st February 1956 showing his substantive pay from 23rd September 1948 to 31st March 1951 at Rs. 500 per month and from 1st April 1951 at Rs. 520 and thereafter at an annual increment of Rs. 20 per year upto 600--600-EB--620 per month and thereafter an annual increment of Rs. 25 per month upto Rs. 750. ' From here started the dispute. The plaintiff made a representation dated, 12th March 1956 (Ex. P-15), which was rejected by the Government as communicated in the letter dated 20th April 1956 (Ex. D-29) :--

'I am to inform you that since you have already accepted the new service conditions you cannot claim to revert to the old conditions of your service of the former Alipura State. ' The plaintiff then made a fresh representation dated 6th May 1956 (Ex. P-16) :

'There is no question of accepting the new service conditions when I have already exercised the option to retain my pre-absorption (Ex-States) terms and conditions of service under which I was serving in the former Alipura State vide my letter No. 1188-A 55 dated 23rd -24th March 1955.

The Government has no discretion to refuse the option as exercised by the Government servant.......

Therefore, I am entitled to continue in my old scale of pay of Rs. 500-50-800 ........ ... besides other emoluments and advantages . . .'

This representation was finally rejected vide Government memo dated 25th October 1958 (Ex. P-7).

3. We have stated all these facts and have reproduced the relevant documents because they speak for themselves. The following points clearly emerge from them:

(1) The plaintiff was employed as Diwan of Alipura State on a monthly salary in the scale of Rs. 500-50-800 and certain other per-quisities (Ex. P-1). His services were taken on by the United State of Vindhya Pradesh States and eventually by the Vindhya Pradesh (Part C) State.

(2) Continuity was recognised to the plaintiff's service right from the inception when he was an employee of the Alipura State, i.e., under order dated 1 October 1945 (See Ex. P-2 or Ex. D-4).

(3) Under the General Administration Department memo (Ex. P-3 or Ex. D-7), the scale of pay of the plaintiff would have been the same as it was at the time of the integration (i.e. on 1 May 1948).

(4) The plaintiff desired to opt for his old scale of pay, Rs. 500-50-800, without mating any mention of the perquisites (Ex, P-4 or Ex. D-11).

(5) In the significant letter dated 4th February 1955 (Ex. P-5 or Ex. D-13) it was left to the plaintiff to exercise an option for the pre-absorption (Ex-States) terms and conditions of service as a whole but not for any part or parts thereof.

(6) The plaintiff exercising the option, accepted pre-absorption (Ex-States) terms and conditions of service as a whole. This he did unequivocally, and, further emphasised that in fact he had been pressing for the same ever since the integration took place. In consequence, he requested for an order to be given to the Comptroller to issue a pay slip in accordance with the terms and conditions of his service, and he demanded cash allowances in lieu of conditions laid down in paras 2 and 3 of the order under reference. (See Ex. P-6 and Ex. D-14).

(7) The pre-absorption terms and conditions were contained in the order dated 1 October 1945 (Ex. P-1).

4. There can be no doubt that if no option had been given to the plaintiff to accept his pre-absorption (Ex-States) Terms and Conditions as a whole, he could not claim from the new State those terms and conditions. The law has been settled by the Supreme Court that when one State is absorbed in another, whether by accession, conquest, merger or integration, all contract of service made between the prior Government and its servants automatically terminate and thereafter the persons who elect to serve the new State and are taken on by it, serve on such terms and conditions as the new State may choose to impose. (See State of Madras v. K. M. Rajagopalan, 1955-2 SCR 541 at p. 562 : ( (S) AIR 1955 SC 817 at p. 827) and Amar Singh v. State of Rajasthan, AIR 1958 SC 228 at p. 230). It follows undeniably that it rests entirely with the new State to lay down new service conditions for a servant taken on by it from a former Slate administration, or to give him an option to choose between two sets of service conditions. In the latter case, when the servant exercises his option and elects to be governed by one of the two sets of service conditions. it is his right to be remunerated accordingly. The learned Deputy Government Advocate strenuously urges that where a servant is given an option even if he exercises that option, the discretion still remains with the Government to reject his option. We are unable to accept this contention. Indeed, this was not the defendant's case in the trial Court. No rule has been placed before us in support of the contention. In the absence of any rule to the contrary, when a choice is given to a servant to opt either to the scale of pay of the present post, or his previous scale of pay, the option rests exclusively with the servant and the Government cannot subsequently deny him remuneration according to the opted terms and conditions. Otherwise to call it an option will be misnomer. 'Option' means:

'A right to act or not as the optionee may choose, and in this sense the word has been variously defined as meaning the right of choice; right of election to exercise a privilege; power or right of election; right of choice between two things, courses or propositions and the choice of one excludes the choice of the other called alternative power of choosing; liberty to elect between alternatives; right, power or liberty of choosing between alternatives, or the exercise of such right, power or liberty; exercise of the power of choice which may or may not be exercised' (67 Corpus Juris Secundum 511)

5. We are clearly of the view that where the new State gives a servant, taken on by it, the option to chose between two sets of service conditions and he opts for one of them, then the new State is bound to pay him all emoluments under the conditions opted for.

6. In the present case the new State gave the plaintiff choice to opt for 'the pre-absorption (Ex-States) terms and conditions of service as a whole but not in part or parts thereof.' IN fact this was a blessing in disguise for the plaintiff. He had, (in his memo dated 11/12 December 1950, Ex. P-3 or Ex. D-7), only asked for the old scale of pay which he was to get as servant of the Vindhya Pradesh i.e. scale of pay Rs. 500-50-800 vide Premier's letter dated 6th July 1948 (Ex. P-22), and nothing more. To put it differently, he did not demand anything in lieu of the perquisites which were included in the terms and conditions of his service in the Alipura State. But when the Government insisted on his opting for the Pre-absorption (ex-States) terms and conditions of service 'as a whole', or not at all, naturally he accepted them at once, and, in consequence further demanded cash allowances in lieu of the perquisities, as per the terms arid conditions of the order dated 1 October 1945 (Ex. P-1). The question of perquisites we shall deal with fully later on. So far as the scale of pay is concerned, the conclusion which cannot escape is that the plaintiff was given an option, exercising which he opted for his pre-absorption (Ex-States) scale of pay, 500-50-800. The plaintiff's contention must then be accepted that the Government was bound to pay him according to that scale. The finding of the trial Court on issue No. 7 that the plaintiff cannot demand the same terms and conditions on which he was employed by the Alipura State is misconceived as it is in disregard to the facts stated above.

The learned trial Judge stopped after stating the dictum in Amarsingh's case AIR 1958 SC 228 (supra). He did not further examine the consequences of the option having been given to the plaintiff and the plaintiff having exercised it. Paragraphs 21 and 22 of the plaint read thus:

'21. That in reply to the plaintiffs letter mentioned in para above he received a letter from the Under Secretary to the V. P. Govt., No. 302-II-55 dated 4-2-55 saying that the Govt. of India have allowed the option to retain Pre-absorption (Ex-States) terms and conditions us a whole, but not for any part or parts thereof.

22. That the plaintiff by his letter bearing the Collector of Panna's endorsement No. 1188/ A/55 dated 24th March 1955 agreed to opt for all the service conditions as a whole as laid down in order No. 101 dated 1-10-45.'

The averments in these paragraphs are not disputed (vide paragraph 5 of the written statement). It is also remarkable that the suit was not resisted on the ground that notwithstanding the plaintiff having exercised the option given to him, the State was not bound by it, or that it was subsequently revoked. The stand taken in the written statement was essentially as follows;

'.. .. .. .. The consequence of the absorption was that the contracts of services which the princely States had with their servants automatically terminated on and from the date of merger of the States into the Dominion of India and, thereafter, those members of the services of the old States, who elected to serve the Dominion of India and were taken over by it served only on such terms and conditions as the Dominion of India might impose.'

(Paragraph 15) '.... . . .Since he was absorbed as a Deputy Collector in the State of Vindhya Pradesh, he is governed by the terms applicable to this post. Even on absorption in the post of Deputy Collector, the last pay drawn by him, while in the service of Alipura State was protected while fixing his pay in the Deputy Collector's scale of pay and in addition he has been granted dearness allowance, which was not available to him in the former State of Alipura and it would not be admissible to him if Alipura State terms were to be continued' (Paragraph 13)

While setting out the facts of this case, we have said that the plaintiffs representation (Ex. P-15) was rejected under Government memo dated 20th April 1950 (Ex. D-29). This last mentioned memo contains a wrong statement of fact that he (Plaintiff) had already accepted the new service conditions so that he could not 'claim to revert to the old conditions' of his service of the former Alipura State. The two significant documents, Ex. P-5 (which is also Ex. D-I3) and Ex. P-6 (which is also Ex. D-14) bear out that the said statement in Ex. D-29 was diametrically opposed to the real fact. And, it seems to us that this wrong statement contained in Ex. D-29 has been responsible for the the present litigation.

7. We would desire to say a word about the expression 'Pre-absorption (ex-Slates) Terms and Conditions of Service' used in the Government letter, dated 4th February 1954 (Ex. P-5, or Ex. D-13), where it was said that the Government of India agreed to the 'permanent staff taken over from the former State administration exercising option for the Pre-absorption (ex-Slates) Terms and Conditions of Service as a whole but not in part or parts thereof.' The political developments were that the princely State of Alipura merged with certain other States to form a new State administration called the 'United State of Vindhya Pradesh.' Secondly, on 1st January 1950, it was formed a Chief Commissioner's province under the Government of India Act, 1935. Thirdly, it became a Part C State under the Constitution on 20 January 1950. (The final stage when it became a part of the new State of Madhya Pradesh on 1 November 1950 is not relevant to the present point). In the relevant context, we read the expression 'former State administration' to mean the United State of Vindhya Pradesh as constituted on 1 May 1948, because that was the immediately preceding State administration taken over by the Chief Commissioner under the Government of India Act, 1935, and continued under the Constitution, and, the expression 'pre-absorption (Ex-States)' to mean the princely States, which in relation to the plaintiff was the Alipura Slate. Reading as a whole, the letter (Ex. P-5 or Ex. D-13) means to say that the Government of India did not allow an employee who was taken on by the new Vindhya Pradesh (Part C State) the option under F.R. 23 to retain his scale of pay fixed by the United State of Vindhya Pradesh but agreed to give him those terms and conditions under which he was in service of the princely state.

8. If we are right in this interpretation of the letter (Ex. P-5), as we think we are, the plaintiff was also entitled to cash allowances in lieu of the perquisites for the previous years. As it was not possible to offer perquisites in kind retrospectively, he could only be compensated by cash allowances, (a) in Schedule B, attached to the plaint, the plaintiff claims Rs. 75/- per month in lieu of a free furnished house. In our opinion, it is fair and reasonable, (b) In lieu of a car, Rs. 100/- per month has been claimed. We would allow him Rs. 50/- per month, having regard to his status, (c) for fuel and light, he has claimed Rs. 20/- per month. We allow him Rs. 15/- per month, (d) For two domestic servants, he has claimed Rs. 100/- per month. We allow him Rs. 60/- per month, (e) The total comes to Rs. 200/-. These cash allowances in lieu of the perquisites have been fixed by us as we think them to be reasonable. Having regard to the fact that the plaintiffs suit has been pending for more than six years, we are of the opinion that it will not be just and proper to send back the case for framing issues on these questions and for recording evidence. Moreover, precise evidence can hardly be expected on those points. The defendant State is right : that the plaintiff was not entitled to dearness allowance drawn by him as there was no provision for dearness allowance in Ex. P-1.

9. This brings us to the question of the amount for which a decree should be passed in favour of the plaintiff. The suit is for recovery of Rs. 63,000/- odd on account of the difference in the salary paid and the salary and perquisites claimed by him for the period from 1 November 1947 to 15 April 1959 (see Schedules A, B and C, to the plaint). It is quite clear to us that a suit by a civil servant for the recovery of his salary is governed by Article 102, Limitation Act, The term 'wages' in that Article includes arrears of salary, and it is not used in a restricted sense for mechanical or manual labour; it is used in a larger sense for remuneration for services of an employee. Therefore, the word 'wages' in this Article covers 'salary' also. It is the residuary Article intended to cover all claims for wages, salary or pay, irrespective of the class to which the servant belongs, not expressly provided for in any other article of the Limitation Act. See Punjab Province v. Tara Chand, (1947) FCR 89: AIR 1947 FC 23. That view has been maintained in Madhav v. State of Mysore 1961-1 SCR 886 : AIR 1902 SC 8. Thus the plaintiff is entitled to no more than what fell due during the three years immediately preceding the suit, plus two months for statutory notice. It is also clear to us that, in the absence of any law or rule, the salary of a civil servant falls due on the first day of every month according to the Gregorian calendar. That being so, the suit for the salary for the whole of the previous month which falls due within the said period of 38 months, will also be within limitation, irrespective of a part of that month being beyond the preceding 38 months. In the present case, the suit was instituted on 15 April 1959. The first day from which the said period of 38 months is to be computed falls on 15th February 1956. The first 14 days of February 1956 would be beyond 38 months, yet, as the salary for the whole month of February 1956 fell due on 1 March 1956 only, the claim for the salary for the whole month of February is also within limitation.

10. The conclusion is that the plaintiff is entitled to the following amounts:

(a)

Difference in salary for the months of February and March 1956. at Rupees 200/- per month

Rs. 400/-

(b)

Difference in salary from 1-4-56 to 31-1-59

Rs. 6000/-

per Schedule A to the plaint. (c)

Difference in salary from 1-2-59 to 15-4-59 at Rs. 150/-permonth

Rs. 375/-

(d)

Cash allowances in lieu of perquisites for 38 monthsat Rs. 200/-

Rs. 7700/-

Total. . .Rs. 14,475/-

less the amount admittedly received by the plaintiff as dearness allowance for the period 1-2-1956 to 15-4-1959 at Rs. 85/- per month, i.e., Rs. 3272/-. The net amount payable to the plaintiff is Rs. 11,203/-.

11. The plaintiff, while in service of the defendant-State, claimed from the latter what be thought was his due and then commenced this action. The defendant resisted the suit on certain grounds as advised. The plaintiff retired from service during the pendency of this litigation. If, on the one hand, the Slate Government did not victimise the plaintiff, nor entertained any displeasure by reason of this litigation and, on the other hand, the plaintiff did not allow himself to be influenced by this litigation in the discharge of his official duties, each party keeping the litigation in a separate compartment altogether such conduct of both sides is commendable and exemplary.

12. The appeal is partly allowed. The judgment and decree of the trial Court are set aside. The plaintiff is held entitled to recocer from the defendant-State Rs. 11,203/- and a decree shall accordingly be passed in his favour against the defendant-State of Madhya Pradesh. The rest of the claim is dismissed. The plaintiff shall also get proportionate costs from the defendant on Rs. 11,203/- in this Court and in the trial Court.


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