B.J. Divan, J.
1. The appellant in this appeal is the original defendant and the respondents are the heirs and legal representatives' of the original plaintiff. The plaintiff was a Government servant and the defendent is the original State of Bombay and now the State of Gujarat. The suit was instituted in 1957 against the State of Bombay. The appeal against the decision of the learned trial Judge was heard and disposed of by the learned Assistant Judge, Kaira, on September 14, 1960; and thereafter this appeal was filed after bifurcation of the bilingual State of Bombay; and the litigation has continued with the State of Gujarat as the defendant.
2. The plaintiff's case as set out in the plaint was that he had joined service in the Education Department of the erstwhile Baroda State on June 26, 1935; and he was confirmed as a teacher in that Department on August 1, 1939. After his confirmation, he continued to serve Baroda State as a teacher and on May 1, 1949, when the Baroda State was merged with the State of the Bombay, he was still working as a teacher. As the plaintiff was a permanent servant of the State of Baroda, he was absorbed by the State of Bombay as Assistant Teacher in the scale of Rs. 61-3-85-4-125-5-140. At the time of the merger the salary of the plaintiff in Baroda State service was Rs. 75/- p.m. and in the State of Bombay in the above scale that plaintiff's salary was adjusted at the stage of Rs. 73/- and Rs. 2/- p.m. were allowed to him as personal pay, with effect from May 1, 1945. After the merger of the State of Baroda, the plaintiff was given his annual increments in this grade till be was discharged from service under the circumstances set out horeinbelow.
3. At the time of the merger of the State of Baroda i.e. on May 1, 1949, the plaintiff was serving as an Assistant Teacher in N.K. High School, Petlad, and he continued in the same posting till 1953. In that year N.K. High School, Petlad was handed over by the State Government to the Petlad Municpality and at that time the Municipality was not prepared to retain the services of the plaintiff as a guaranteed teacher and, therefore, the State Government transferred the plaintiff to the Government English School at Tarapur in the vicinity of Petlad and this transfer to Tarapur was effected in December 1953. The plaintiff continued to serve as an Assistant Teacher in the Tarapur School till Nth June 1954. The Educational Inspector, Kaira District, wrote a latter to the plaintiff, dated March 6, 1954, informing the plaintiff and two of his other colleagues that the Tarapur School was being handed over to the Kelvani Mandal of Tarapur and that Mandal was not willing to retain the plaintiff's services and of his two colleagues as guaranteed teachers and that therefore their services would not be required and that they would be discharged from service with effect from the opening day of the next acadamic year and that they would be duly given their pension and gratuity according to the rules. After the receipt of this letter, the plaintiff immediately objected to the proposed action but nothing fruitful transpired and by his letter, dated June 7, 1954, the Head-Master of Tarapur English School, asked the plaintiff to hand over his charge. The plaintiff also objected to the handing over the charge but ultimately he was compelled to hand over charge and was discharged from service with effect from June 14, 1954. On that date, the plaintiff was drawing a salary of Rs. 89/- per month in the abovementioned grade of the Bombay State, and having been born on June 3, 1909, was 45 years of age on June 14, 1954. The date of his superannuation was still not due and according to the Superannuation Rules of the Baroda State, his superannuation age was 58 years; and hence, according to the plaintiff, he was entitled to continue in service till he completed the age of 58 years. The plaintiff has stated in his plaint that he had represented all these points as also the point about his wrongful and unlawful discharge to the Collector of Kaira and also to the Education Department and to the Government of Bombay but to no avail. The plaintiff further contended that in addition to his pay, he was being paid Rs. 45/- p.m. as Dearaess Allowance and the plaintiff further disclosed in the plaint that after he was discharged from the Government English School at Tarapur, N.K. High School, Petlad, again employed him as a teacher but he was discharged and his salary was not fixed; and later on the Education Inspector, fixed his salary at Rs. 56/- p.m. The plaintiff, therefore, contended that he had suffered a great loss by the discharge order, which, he contended, was illegal, ultra vires, improper and invalid. The plaintiff, therefore, filed the suit in the Court of the Civil Judge, Sr. Dn., Nadiad, claiming compensation for the loss and damage caused to him.
4. The plaintiff has stated in his plaint that he had signed his pension papers under protest and that he was entitled to be retained in service till his superannuation and that he was ready and willing to serve the Government on any post at any place. He further stated that he was willing to give a set-off to the Government for the salary that he bad earned by service after the impugned order of discharge. The plaintiff further contended that at the time of his discharge, there were many persons in the employment of the State, who were junior to him in the same cadre and, therefore, if it became necessary to discharge anyone, persons junior to him in the cadre were liable to be discharged rather than the plaintiff. After serving a notice to the Government under Section 80, Civil Procedure Code, the plaintiff filed the suit on July 27, 1957, asking for a declaration that he had continued in service and be deemed to have continued in his permanent pest under the defendant State and further that the defendant State be restrained permanently from withholding the emoluments and benefits accruing to the plaintiff and that would accrue to the plaintiff by his continuous employment; and the plaintiff asked for a decree for Rs. 443625 p. with running interest, being the amount of salary and deamess allowance due to the plaintiff upto June 25, 1957, after deducting the salary received by the plaintiff from his employer at that stage.
5. It may be pointed out that after the trial Court decided the suit in favour of the plaintiff on November 28, 1958, the State filed an appeal to the District Court at Nadiad and the plaintiff himself also filed an appeal as be was dissatisfied with a part of the decree. During the pendency of these two appeals before the District Court, the original plaintiff died; and thereafter his heirs and legal representatives were brought on the record of the two appeals. Both the appeals were heard together by the learned Assistant Judge, Kaira, at Nadiad; and by a common judgment he disposed of both the appeals. The learned Assistant Judge dismissed the appeal of the State with costs and allowed the plaintiff's appeal so far as the amount of the monetary decree was concerned. During the pendency of the appeals before the appellate Court, a pursis was filed by the legal representatives of the plaintiff claiming the amount of salary and remuneration till the date of the death of the original plaintiff. The learned Assistant Judge passed a decree for the sum of Rs. 5903. 88 p. in favour of the heirs and legal representatives, that being the amount to which the plaintiff would have been entitled till the date of his death after adjustment of the different amounts. The learned Assistant Judge passed a decree accordingly on condition that the legal representatives of the plaintiff should pay the additional court fee on the additional amount within a month. Thereafter the figure of Rs. 5903. 88 p. was worked out. The condition of payment of additional court fee has been complied with and the heirs and legal representatives of the plaintiff paid the additional court fee of Rs. 107. 50 p. on October 13, 1960. Under these circumstances, the dispute between the parties is now confined to Rs. 5903. 88 p. awarded by the learned Assistant Judge to the heirs and legal representatives of the plaintiff.
6. Though various other contentions were taken in the Courts below, before me at the time of arguments, the learned Government Pleader, on behalf of the appellant State confined his arguments to the question of abolition of a permanent post substantially held by a Government servant. His contention has been that if a permanent post, which has been subs tantially held by a Government servant, is abolished, then the provisions of Article 311(2) of the Constitution are not attracted and hence the services of a Government servant, even though confirmed and even though substantially holding that permanent post, can be terminated without following the procedure laid down under Article 311(2) of the Constitution.
7. The learned Government Pleader relied in this connection on certain observations made by a Division Bench of our High Court in G.L. Shukla v. State VIII G.L.R. 833. The passage which has been relied upon in this connection is in para 7 at page 843 of the report and is in these terms:
Now it is well-settled and in view of the decision of the Supreme Court in Motiram Deka v. North East Frontier Railway : (1964)IILLJ467SC , there can be no doubt or dispute about it, that if the service of a public servant holding substantively a permanent post is terminated otherwise than by operation of the rule of superannuation or the rule of compulsory retirement, such termination would amount to removal within the meaning of Article 311(2). It is clear from the Bombay Civil Service Rules that a civil servant who substantively holds a permanent post has a right to hold the post until he reaches the age of superannuation or until he is compulsorily retired under the relevant rule. If for any other reason that right is invaded and he is asked to leave his service, the termination of his service must inevitably mean the defeat of his right to continue in service and as such it is in the future of a penalty and amounts to removal. Of course, if the post itself is abolished, the termination of his service in consequence of the abolition of the post cannot be regarded as removal (vide Purshottamlal Dhingra v. Union of India but if the post continues to exist, the civil se : (1958)ILLJ544SC rvant substantively holding the post cannot be asked to go and termination of his service otherwise than on the ground of superannuation or compulsory retirement would per se amount to his removal within the meaning of Article 311(2).
In G.L. Shukla's case (supra) the Division Bench was concerned with the proposed allotment of certain Government servants working in the Public Works Department of the State of Gujarat to the service of the District Panchayats, which were proposed to be set up under the Gujarat Panchayats Act of 1961. Class III and Class IV servants of the Public Works Department, who approached the High Court, apprehended that the State Government would immediately proceed to allocate them under Section 206(1)(i) of the Gujarat Panchayats Act, 1961; and the State Government took a step in that direction by issuing a Notification, dated March 22, 1963. That Notification was issued under Section 321(1) of the Act authorising the Superintending Engineers of various Circles to exercise the power of the State Government under Section 206(1) in respect of Class III and IV servants.
8. The petitioners before the High Court who were clerks belonging to Class III service preferred a petition on behalf of themselves and other clerks of the Roads and Buildings and Irrigation Wings of the Public Works Department; and the petitioners who were class III and IV servants preferred another petition on behalf of themselves and other Class III and IV servants, except clerks, belonging to the said two Wings of the Public Works Department; and both these petitions were heard together by the Division Bench consisting of Bhagwati J. (as he then was) and Bakshi I. In para 7 of the judgment of the Division Bench from which I have just now quoted the above passage, the Division Bench was dealing with the contention as regards the invalidity of the impugned sections by reason of contravention of the constitutional safeguard guranteed to a public servant under Article 311(2); and at page 844 of the report, it has been pointed out that the learned Advocate General, appearing on behalf of the State, had argued that when an order is made by the State Government under Section 157 allotting Government servants necessary for the discharge of functions transferred to the District Panchayat under that section, the posts held by such Government servants In the State service are abolished and, therefore, the subsequent allocation of such Government servants to the Panchayat service under Section 206 would not amount to removal within the meaning of Article 311(2). On an examination of the relevant provisions of the Act, this argement was rejected by the Division Bench; and Bhagwati J. (as he then was) pointed out at page 844 of the report as follows:
The Government servants who are allotted continue to be members of the State service holding substantively their respective posts in the State service and the said posts are not abolished as a result of the order of allotment. The main pivot of the argument of the State was that when the powers, functions and duties attached to the posts are transferred, there would be no point in keeping the posts in existence and the posts must be deemed to be abolished by necessary implication. But this contention suffers from several infirmities.
Therefore, before the Division Bench, the question of examining the legal implications when a permanent post substantively held by a Government servant is abolished did not arise directly for consideration. On an analysis of the relevant provisions of the Gujarat Panchayats Act, it was held by the Division Bench that there was no abolition of posts either on allotment under Section 157 or under Section 206 on allocation. Therefore, I will now proceed to examine the legal position arising under Article 311(2) of the Constitution in the light of two decisions of the Supreme Court. It was necessary for me to analyse this decision of the Division Bench because in the view that was taken by the Division Bench it was not necessary for the Division Bench to examine the fuller implications of the observations made in Purshottamlal Dhingra's case (supra) and the observations made in the subsequent case of Motiram Deka (supra).
9. In Purshottam Lal Dhingra v. Union of India : (1958)ILLJ544SC , S.R. Das C.J., delivering the judgment of the majority of the learned Judges, who heard the appeal, has stated at page 42, in para 11 of his judgment as follows:
The appointment of a Government servant to a permanent post may be substantive or on probation or on an officiating basis. A substantive appointment to a permanent post in public service confers normally on the servant so appointed a substantive right to the post and he becomes entitled to hold a 'lien' on the cost. This 'lien' is defined in Fundamental Rule S. III, ch. II, Rule 9(13) as the title of a Government servant to hold substantively a permanent post, including a tenure post, to which he has been appointed substantively. The Government cannot terminate his service unless it is entitled to do so (1) by virtue of a special term of the contract of employment, e.g. by giving the requisite notice provided by the contract or (2) by the rules governing the conditions of his service, e.g. on attainment of the age of superannuation prescribed by the rules, or on the fulfilment of the conditions for compulsory retirement or, subject to certain safeguards, on the abolition of the post or on being found guilty, after a proper enquiry on notice to him, of misconduct, negligence, inefficiency or any other disqualification.
In Para 12 of the report, the position has been summarized by S.R. Das C.J. as follows:
In the absence of any special contract the substantive appointment to a permanent post gives the servant so appointed a right to hold the post until, under the rules, he attains the age of superannuation or is compulsorily retired after having put in the prescribed number of years' service or the post is abolished and his service cannot be terminated except by way of punishment for misconduct, negligence, inefficiency or any other disqualification found against him on proper enquiry after due notice to him.
It Is thus clear that according to the majority view in Purshotam Lal Dhingra's case (supra), in the case of a Government servant holding substantively a permanent post in public service, the abolition of that permanent post was a sufficient ground for terminating the service of that Government servant without invoking the procedure laid down in Article 311(2) of the Constitution, It must be pointed out that in Purshotam Lal Dhingra's case (supra) the Supreme Court was concerned directly with the question of a Government servant temporarily appointed to a permanent post.
10. The above case of Purshotam Lal Dhingra was considered by the Supreme Court in Moti Ram v. N.E. Frontier Railway : (1964)IILLJ467SC ; and there the judgment of the majority was delivered by Gajendragadkar J. (as he then was), and Shah & Das Gupta JJ. dissented from the majority view. The discussion of the case of Purshotam Lal Dhingra has been set out in Para 39, at page 618 of the report and after discussing the relevant passages from the judgment of the majority in Purshotam Lal Dhingra's case, at the end of para 43, it was observed by Gajendragadkar J. (as he then was) as follows:
Therefore, we do not think, the learned Addl. Solicitor-General is justified in contending that all the observations made in the course of this judgment in regard to permanent servants considered together support his contention. Besides, if we may say so, with respect, these observations are in the nature of obiter dicta and the learned Solicitor-General cannot relv solely upon them for the purpose of showing that Rule 148(3) or Rule Rule 149(3) should be held to be valid as a result of the said observations.
At page 612 of the report in para 33, Gajendragadkar J. (as he than was) has set out the contention of the learned Additional Solicitor General. It was urged before the Supreme Court in Moti Ram's case that the termination of services permissible under the impugned Rules really proceeded on administrative grounds or considerations of exigencies of service. It was contended that if, for instance, the post held by a permanent servant is abolished, or the whole of the cadre to which the post belonged is brought to an end and the railway servant's services are terminated in consequence, that cannot amount to his removal because the termination of his services Is not based on any consideration personal to the servant. It was this argument of the learned Additional Solicitor General, partly based on the observations of Das C.J. in Purshotam Lal Dhingra's case (supra) that was rejected by the majority in Moti Lai's case and in terms the majority declined to accept the observations in Purshotam Lal Dhingra's case as laying down the correct law, so far as the permanent Government servants were concerned; and the majority view is that the observations in Purshotam Lal Dhingra's case relating to permanent Government Servants are in the nature of obiter dicta! and the majority in Moti Ram's case (supra) have held that a person who substantively holds a post has a right to hold the post until, of course, he reaches the age of superannuation, or until he is compulsorily retired under the relevant rule. If for any other reason that right is invaded and he is asked to leave his service, the termination of his service must inevitably mean the defeat of his right to continue in service and as such, it is in the nature of a penalty and amounts to removal. In other words, termination of the services of a permanent servant otherwise than on the ground of superannuation or compulsory retirement, must per se amount to bis removal within the meaning of Article 311 of the Constitution; and if by Rule 148(3) or 149(3) of the Railway Establishment Code, 1959, such a termination is brought about, the rule clearly contravenes Article 311(2) and must be held to be invalid. The learned Judges who constituted the majority in Moti Ram's case (supra) have only considered two circumstances when the termination of the services of a permanent government servant can be brought about otherwise than in a manner provided for in Article 311(21 of the Constitution; and those circumstances are-superannuation and compulsory retirement, where the rules so provide. Barring the grounds of superannuation and compulsory retirement, the termination of the services of a permanent servant cannot be brought about on any other ground without following the procedure laid down in Article 311(2) of the Constitution. In Moti Ram's case (supra), the Supreme Court was directly concerned with the case of a permanent servant as distinguished from the case of a temporary servant that arose for consideration before to Supreme Court in Purshottam Lal Dhingra's case. In view of the observations made by Gajendragadkar J. about the observations of S.R. Das C.J. in Purshotam Lal Dhingra's case regarding terminating of service being obiter dicta, and in view of the clear-cut conclusion of the majority of the learned Judges as set out in para 26 at page 610 of the' report in Moti Ram's case, it is clear that removal of a permanent Government servant in consequence of the abolition of a permanent post substantively held by the permanent servant must be carried out in accordance with the procedure prescribed under Article 311(2), if such abolition is to result in the termlnatation of service of such a permanent Government servant.
11. There is no dispute before me that in the Instant case, there was no inquiry held as required by Article 311(2). Furthermore, it is not In dispute before me that the original plaintiff was a permanent Govern ment servant holding substantively a permanent post in the State Government service; and the protection of Article 311(2) must, therefore, be made available to him and since the procedure laid down under that article was not followed, it is clear that the order discharging the original plaintiff from service was in violation of Article 311(3) and was, therefore, illegal and void.
12. The learned Assistant Judge was, therefore, right in deciding in favour of the plaintiff and against the State Government.
13. It was also urged on behalf of the State Government before me by the learned Government pleader that under the provisions of the Bombay Reorganisation Act, 1960, the liability for meeting the claim of the original plaintiff was that of the State of Maharashtra; but this point is covered by a decision of our High Court in Bhaishanker v. State IV G.L.R. 1001. There it was held on a construction of the Bombay Reorganisation Act, 1960, that if the action is based upon the commission of an actionable wrong, then, the liability of one or the other State, Gujarat or Maharashtra, will depend upon whether the cause of action in respect thereof wholly arose within the State of Gujarat, or the State of Maharashtra, and if an action is based on a breach of contract, then the State of Gujarat will be liable only if the purpose of the contract from the appointed day, is exclusively the purpose of the State of Gujarat, otherwise the liability will be that of the State of Maharashtra; and in the light of this decision the liability would be that of the State of Gujarat in the instant case and it was not necessary to join State of Maharashtra at all as a party to the present appeal.
14. In State of Bombay v. Ishverlal Nandlal Maula I.L.R. (1964) Gujarat 1116, a Division Bench of our High Court consisting of Miabhoy J. (as he then was) and Vakil J. also took the same view. Vakil J. delivering the judgment of the Division Bench has observed:
The effect of Section 61 of the Bombay Reorganisation Act, 1960, is that if a liability of the State of Bombay accrued in respect of an actionable wrong done before the appointed day, and the cause of action for such wrong can be said to have arisen wholly within the territory of one of the two States specifically, then, the liability will be of that particular State.
15. In view of these two decisions, one of a Single Judge of this High Court and the other of a Division Bench of this High Court, it is clear that in the instant case, the liability in respect of this actionable wrong, which was complained of by the original plaintifi, was that of the State of Gujarat, since the liability arose wholly within the territory of the State of Gujarat.
16. The result, therefore, is that the conclusion reached by the learned Assistant Judge was right and this Second Appeal must fail. In the result, this Second Appeal fails and is dismissed with costs.