Sita Ram Goel vs The Municipal Board, Kanpur Andothers

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 149 of 1958

Decision Date: 19 August 1958

Coram: Natwarlal H. Bhagwati, S.K. Das, J.L. Kapur

In this matter, the Supreme Court of India reported the judgment rendered on 19 August 1958. The case was titled Sita Ram Goel versus the Municipal Board, Kanpur and others. The bench that heard the appeal comprised Natwarlal H. Bhagwati, S. K. Das and J. L. Kapur. The petitioner, Sita Ram Goel, had been appointed as an overseer by the Municipal Board of Kanpur on 5 March 1937 and he remained in service until 19 March 1951, when he received a copy of a resolution dated 5 March 1951 that purported to dismiss him from his position. Following the dismissal, the petitioner filed an appeal to the Government on 7 April 1951, seeking to contest the Board’s order. The Government communicated to the petitioner on 8 April 1952 that his appeal had been rejected. Subsequently, on 8 December 1952, the petitioner instituted civil suit No. 257 of 1953, challenging the legality of the dismissal order on various grounds. The central issue that arose before the Court was whether the suit had been filed within the period prescribed by the Uttar Pradesh Municipalities Act, 1916, particularly sections 58, 69 and 326, which dealt with the limitation period for actions relating to dismissal of municipal employees and the procedural requirements for commencing a suit.

The petitioner's argument was that the cause of action had accrued on 8 April 1952, the date on which the rejection of his appeal to the Government was communicated to him, and that the suit, being filed within eight months of that date, fell within the permissible time limit. He relied on sections 58(1) and 58(2) read together with section 69 of the Act, which granted a dismissed officer a right to appeal to the Government within thirty days of the communication of the dismissal order. The Court examined the provisions of section 326 of the Act, noting that sub‑section (1) required that no suit be instituted against a municipal board until the expiration of two months after a written notice stating the cause of action had been left at the board’s office, and sub‑section (3) stipulated that such an action could not be commenced later than six months after the cause of action accrued. The Court held that although the dismissal order dated 5 March 1951 was subject to a right of appeal to the Government, the filing of the appeal did not suspend the operation of the order. The order became effective on 19 March 1951, the date it was communicated to the petitioner. Consequently, the cause of action accrued on that date, not on 8 April 1952. Accordingly, the suit filed on 8 December 1952 was beyond the six‑month limitation period prescribed by section 326 and was therefore barred. The Court concluded that the petitioner's suit was filed out of time and dismissed it on the ground of limitation, affirming the principle that the filing of an appeal does not stay the operative effect of a dismissal order.

Civil Appeal No 149 of 1958 was lodged by special leave from the judgment and order dated 2 September 1957 of the Allahabad High Court in First Appeal No 474 of 1956, which itself emanated from the judgment and order dated 30 July 1956 of the First Additional Civil Judge, Kanpur, in Civil Suit No 257 of 1953. The appellant appeared in person. Counsel for respondent No 1 consisted of three lawyers, while counsel for respondent No 4 was represented by two lawyers. The appeal was decided on 19 August 1958, and the judgment was delivered by Justice Bhagwati. The matter before the Supreme Court concerned a question of limitation arising out of the appellant’s dismissal from municipal service. The appellant had been appointed an Overseer by the Municipal Board, Kanpur, on 5 March 1937, with the approval of the Superintending Engineer of the Public Health Department, Lucknow. His appointment was confirmed by a special resolution of the Board dated 2 July 1938, and he remained in continuous service until 19 March 1951, when a copy of the Board’s resolution No 1723, passed on 5 March 1951 and purporting to dismiss him, was handed to him. Against that dismissal order the appellant lodged an appeal to the Uttar Pradesh Government on 7 April 1951. He was later informed, by a Government order dated 7 April 1952, that his appeal had been rejected; this information reached him on 8 April 1952. Subsequently, on 8 December 1952, the appellant instituted Suit No 257 of 1953 before the Additional Civil Judge, Kanpur, the suit from which the present Supreme Court appeal arose. The suit named as defendants the Municipal Board, Kanpur, the Municipal Engineer, Shri S B Gupta, the then Chairman of the Municipal Board, Shri Brahmanand Misra, and the Government of Uttar Pradesh. The appellant challenged the legality of his dismissal on several grounds: that the required prior approval of the Superintending Engineer, Public Health Department, had not been obtained; that he had been denied a personal hearing before the Board; that no notice‑to‑show‑cause had been issued and that the Board had not framed any charges; that the dismissal order failed to specify the charges; that some grounds relied upon for dismissal were not the subject‑matter of any charge; and that, even if charges had been framed, they were false and malicious. Accordingly, he prayed for a declaration that the dismissal order was ultra vires, illegal and void, and he claimed a total sum of Rs 10,951 for damages, allowances for officiating work, bonus, arrears of salary and provident fund. The Board mainly contested the suit, maintaining that the dismissal order was not vitiated by illegality or irregularity and, in any event, that the suit was barred by the applicable limitation period. The trial court, after considering the material, found that the appellant’s substantive appointment was that

In the trial court’s findings the judge held that the appellant held the position of an Overseer rather than that of a Drainage Overseer as the Board had claimed, and consequently the approval of the Superintending Engineer of the Public Health Department in Lucknow was not required for his dismissal. The court further concluded that the dismissal order was ultra vires because the appellant had not been afforded a personal hearing by the Board. It was also observed that the Board had failed to issue any notice to show cause before imposing the contemplated punishment. Moreover, the court noted that the grounds cited for dismissal were not the same as the matters charged, and that the Chairman of the Board lacked the jurisdiction to try the appellant. Despite these substantive observations, the court ultimately held that the appellant’s suit was barred by limitation and therefore dismissed the suit, ordering the appellant to pay costs. The appellant then filed a first appeal, numbered 474 of 1956, before the High Court of Judicature at Allahabad, contending that his suit against the Board was filed within the period prescribed by law. Relying on Section 326 of the Uttar Pradesh Municipalities Act (U. P. 11 of 1916), the appellant argued that the six‑month period stipulated in sub‑section (3) of Section 326, together with the two‑month notice period required under sub‑section (1), should be counted from 8 April 1952—the date on which the Government of Uttar Pradesh communicated the order of dismissal of his appeal—rather than from 5 March 1951, when the Board passed the dismissal order, or from 19 March 1951, when the Board conveyed that order to him. The High Court held that the resolution dated 5 March 1951, issued by the Board, became effective immediately because it was a complete and self‑executing order whose operation was not delayed or suspended pending any further order by the State Government. Accordingly, the High Court concluded that the appellant’s suit was barred by the limitation provision of Section 326 and, without addressing any other issues between the parties, dismissed the appeal and awarded costs. An application by the appellant for a certificate of leave to appeal to the Supreme Court proved futile, leading him to obtain special leave to appeal the High Court’s judgment. The sole issue before this Court was whether the appellant’s suit was indeed barred by limitation, a determination that would decide the appeal. Section 326 of the Act provides, in sub‑section (1), that no suit shall be instituted against a Board, or against a member, officer, or servant of a board in respect of an act done in official capacity, until after the expiration of two months following the delivery of a written notice stating the cause of action, the relief sought, the amount of compensation claimed and the plaintiff’s name and address; the plaint must state that such notice has been delivered or left.

Section 326 of the Act provides that no suit may be instituted against a Board, or against a member, officer or servant of a Board for an act done or purported to have been done in his official capacity, until two months have passed after a written notice is given. In the case of a Board, the notice must be left at the Board’s office; in the case of a member, officer or servant, the notice must be delivered to the person or left at his office or residence. The notice must expressly state the cause of action, the nature of the relief sought, the amount of compensation claimed and the name and place of abode of the intending plaintiff, and the plaint must contain a statement that such notice has been so delivered or left. Sub‑section (3) further provides that, unless the action is for the recovery of immoveable property or for a declaration of title to it, the suit must be commenced within six months after the accrual of the cause of action. The six‑month period in sub‑section (3) would, on its face, begin to run once the cause of action arises, and the cause of action for the appellant was his wrongful dismissal from employment by the Board. Even if the two‑month notice period is added, the appellant’s suit was filed more than eight months after the resolution dated 5 March 1951 that dismissed him, a resolution which was communicated to him. Consequently, the notice requirement under section 326(1) could not save the suit from the limitation bar. The appellant therefore relied on sections 58(1) and (2) of the Act, contending that the cause of action accrued on 8 April 1952 when the order of dismissal of his appeal by the Government of Uttar Pradesh was communicated to him, and that his suit filed on 8 December 1952 was therefore timely. Section 69 of the Act, which applied to the appellant, states that a board may, by special resolution, punish or dismiss any officer appointed under section 68, subject to the conditions prescribed in section 58 regarding punishment or dismissal of an Executive Officer. Section 58(1) provides that a board may punish, dismiss or remove its Executive Officer by a special resolution supported by at least two‑thirds of the members, subject to the officer’s right to appeal to the State Government within thirty days of communication of the order of punishment or dismissal. Section 58(2) further provides that the State Government may suspend the Executive Officer pending the decision of the appeal under sub‑section (1) and may allow, disallow or vary the order of the board. The appellant argued that, because the special resolution was subject to his right of appeal within thirty days, the resolution would be held in abeyance and would not become operative until the State Government decided the appeal; therefore, his cause of action would accrue only when the State Government communicated its decision, and the suit filed within eight months of that communication, including the two‑month notice period, would be within the prescribed time limit.

In this case, the appellant contended that the special resolution passed by the Board remained suspended and did not become effective until the State Government decided the appeal that the appellant could file within the prescribed thirty‑day period after receiving notice of the dismissal. He argued that, if this interpretation were correct, the dismissal would only take legal effect on the date the State Government communicated its decision, and that date would mark the moment when his cause of action for wrongful dismissal arose. Consequently, the suit he filed within eight months of that communication, which included the two‑month notice period, would be timely. To support this view, the appellant relied on section 58(2), which authorises the State Government to suspend an employee pending the appeal decision. He maintained that this power implied that a dismissal order, although passed in accordance with section 58(1), could not become operative until the appeal was resolved, because only then could the State Government exercise its suspension authority. He further asserted that if a dismissal took immediate effect upon the passage of the special resolution, there would be no purpose for the State Government’s power to suspend an already dismissed officer, rendering that provision useless. Hence, he concluded that the statutory power granted to the State Government necessarily meant that the dismissal order would stay in abeyance until the appeal was decided, provided the employee filed an appeal within the stipulated time.

However, on a plain reading of sections 58(1) and 58(2), the Court found the appellant’s contention untenable. The Court explained that one essential condition for a valid dismissal order is that the special resolution must be supported by at least two‑thirds of the Board members. Once that requirement is satisfied, the Board’s duty is complete. The only right that then accrues to the officer is the statutory right to appeal to the State Government within thirty days of receiving notice of the dismissal. The officer may either exercise that right of appeal or, without pursuing the statutory appeal, may directly challenge the legality of the resolution in civil court on any ground available under law, such as violation of natural‑justice principles. Section 58(1) does not prohibit the officer from taking such an action, and the Court noted that filing a suit without first using the appeal right does not render the suit premature. The Court therefore held that the appellant could approach the civil court to contest the ultra vires or illegal character of the Board’s resolution even if he had not yet appealed to the State Government.

The Court observed that the suit instituted by the employee was premature because the employee had not first exhausted the remedies that the statute affords him. It further held that the well‑known principle that superior courts will not, in their discretion, issue prerogative writs unless the applicant has first exhausted every remedy under the special Act does not extend to a civil suit. Accordingly, there is nothing in section 58(1) that expressly or by implication bars the employee from invoking the jurisdiction of the civil courts. The Court also examined the provisions of section 58(2) and concluded that those provisions could not be relied upon to support a claim that the employee must first obtain a suspension from the State Government before filing suit. The reason is that the power vested in the State Government to suspend an employee pending the decision of an appeal is not a condition attached to the Board’s order itself. In any event, that power is intended to afford relief to an employee who has appealed against the harshness of a dismissal order issued by the Board. The Court explained that if the Board has dismissed the employee, a preliminary assessment of the matter may lead the State Government to stay the operation of the dismissal and to order the employee’s suspension, thereby granting him a subsistence allowance while the appeal is pending. Should the appeal be dismissed, the original dismissal order of the Board would stand; if the appeal is allowed, the employee would be reinstated, would enjoy all the benefits and privileges of his position, and would not be left without support during the period that the appeal was before the State Government. The Court emphasized that section 58(2) must be read in conjunction with section 58(1) and that it cannot be argued that the State Government’s power of suspension may be exercised in any case other than where the Board has dismissed or removed the employee. In situations involving a punishment other than dismissal, a suspension ordered by the State Government while the appeal is pending would amount to imposing a harsher penalty than that already imposed by the Board, a consequence the legislature could not have intended. The only consistent interpretation of section 58(1) with section 58(2) is therefore to limit the State Government’s suspension power to those cases where the Board’s order amounts to a punishment more severe than suspension. Section 58(2) merely delineates the powers that the State Government may exercise in relation to an appeal filed by the employee against the Board’s order. The mere filing of an appeal does not, by itself, suspend the Board’s order or postpone its operation until the appeal is decided. A construction that would render the Board’s order ineffective merely because an appeal has been lodged would be contrary to the legislative scheme.

In this case the Court observed that interpreting the provisions to allow an employee, who had been dismissed or removed by a special resolution of the Board, to continue in his position and receive his salary until the appeal to the State Government was decided would be unreasonable. The Court noted that neither section 58(1) nor section 58(2) contained any language indicating that the operation of a Board order should be suspended or rendered ineffective because an appeal had been filed or while the appeal remained pending. By contrast, the legislature had expressly provided for such a suspension in section 61(3) of the same Act, which dealt with the right of appeal of an executive officer. Section 61(3) stated that when an appeal was filed within the prescribed period, the order would remain suspended until the appeal was decided. The Court therefore compared sections 58(1) and 61(3) and concluded that the absence of a similar provision in section 58(1) demonstrated that the legislature had not intended the order to be suspended by the filing of an appeal.

The Court further referred to a comparable provision in the proviso to section 71 of the Uttar Pradesh District Boards Act, 1922. That proviso gave a Secretary or Superintendent of Education the right to appeal a Board resolution within one month of receiving it, and it provided that the resolution would not take effect until either the one‑month period had elapsed or the State Government had made a decision on the appeal. The Court held that because section 58 of the Act lacked any such proviso, it likewise did not intend to suspend the effect of a Board order on the basis of an appeal. The wording of section 58(1) granted the employee only a right to appeal to the State Government within thirty days of receiving the Board’s order and did not contain any provision for suspension or postponement of the order’s operation. Consequently, the Court found that the legislature had not contemplated that the mere filing of an appeal would halt or delay the execution of the Board’s decision.

The Court noted that the appellant had relied on a decision of the Allahabad High Court in District Board, Shahjahanpur v. Kailashi Nath, which involved the construction of section 71 of the Uttar Pradesh District Boards Act. However, the Court pointed out that the provisions of section 71 were materially different from those of section 58(1) of the present Act, and the High Court had correctly distinguished the two cases in its judgment.

The Court explained that, under section 71 of the earlier statute, a dismissal did not become effective until either a full month had passed or the State Government had issued an order on any appeal filed by the employee. Accordingly, even though the Board’s order was subject to the employee’s right of appeal, the filing of the appeal did not suspend the order nor postpone its operation; the order took effect on the day it was communicated to the employee. The Court held that the employee’s cause of action, if any, arose at the moment of that communication, and the limitation period began to run from that date. Accepting this plain reading of sections 58(1) and 58(2) of the Act left the appellant without any other principle to rely upon to support his claim. The appellant attempted to liken the Board’s special resolution to a trial‑court decree and the State Government’s decision on the appeal to an appellate‑court decree. He argued that, just as a trial‑court decree merges into the appellate decree and ceases to exist, the State Government’s decision should replace the Board’s resolution, and only the government’s decision—if adverse—should give rise to a cause of action, with the limitation period starting from the date of that decision. In this view, although the cause of action originally arose when the Board’s order was communicated, filing an appeal within the prescribed time would suspend that cause of action, merging it into a new cause of action that would arise upon the State Government’s decision. The Board’s resolution would thus merge into the government’s decision, and only that decision would survive, either reviving the original cause of action or creating a fresh cause of action whose limitation period would begin from the date of the government’s decision. The Court noted, however, that departmental inquiries, even when they culminate in decisions on appeals or revisions, could not be treated as proceedings before regular courts. As observed by this Court in State of Uttar, departmental tribunals do not possess the same character as ordinary courts of law, and the analogy with court decrees was therefore unavailable to the appellant.

In State of Uttar Pradesh v. Mohammad Nooh (1), the Court observed that an order of dismissal issued in a departmental enquiry by an officer, followed by a dismissal of the appeal by a higher‑ranking officer, and subsequently a rejection of a revision application by the head of the department, cannot be compared with decrees rendered in a civil suit under the Code of Civil Procedure by a court of first instance, nor with the decree dismissing the appeal by an appellate court or the order dismissing the revision petition by a higher court. The Court explained that departmental tribunals, whether at the first instance, on appeal, or on revision, are not regular courts staffed by persons trained in law, even though they may possess the outward appearance of courts. Consequently, the analogy with decisions of courts of law is hardly available to the appellant. The Court then referred to decisions arising under section 144 of the Code of Civil Procedure which hold that the limitation period must be measured from the date of the original decree that created the right of restitution, and not from the date of the decision of the last appeal. The Court cited the authority [1958] S.C.R. 595 in support of this proposition. Further reliance was placed on observations of Justice B. K. Mukherjea in Bhabarajan Das v. Nibaran Chandra (1). Justice Mukherjea framed the issue as whether the time for filing an application for restitution should be calculated from the date of the decision of the last appeal or from the decree that first conferred the right to apply for restitution. The counsel for the appellant conceded that the appellant had the right to seek restitution at the moment the judgment was rendered by the Munsif. However, the appellant argued that it was not necessary to file the application immediately because an appeal had been filed against the trial judge’s decision, and the appellant could wait until the appellate court’s judgment was pronounced. The appellant further contended that after the appellate court’s decision, the trial court’s decree would cease to exist, and the right to restitution would be based on the appellate decree. The Court rejected this contention as untenable. It held that if the right to apply for restitution arose as soon as the first court rendered its judgment, the limitation period under Article 181 would commence from that date, and the mere fact that the judgment was challenged by an appeal does not, in the Court’s opinion, suspend the running of time. Moreover, the decree of the appellate court, into which the trial court’s decree merges, does not grant the party a fresh starting point for limitation.

The Court observed that the principle that a decree of a trial court merges into a decree of an appellate court does not apply to the present facts. It noted that the observations of Rankin C.T. in Hari Mohan v. Parameshwar Shau (A.I.R. 1939 Cal. 349) are relevant. The Court explained that an application under section 144 must be presented to the court of first instance, regardless of whether the decree was later varied or reversed by that court or by a higher court. The appellate court, therefore, has to decide whether the applicant is entitled to any relief, including restitution, based on the effect of the appellate decree that varied or reversed the earlier decree.

The matter was to be decided under Article 181 of the Limitation Act, which requires determining the date on which the applicant’s right accrued. The Court held that, in ordinary language, the right accrued at the moment the District Judge reversed the trial‑court decision and reduced the amount claimed by the plaintiff. Consequently, unless the nature of the dispute mandated ignoring the effect of that decision because it was confirmed on appeal, it would be incorrect to do so. Refusing to recognize the effect of the reversal does not imply that two decrees concerning the same issue may be executed simultaneously, nor does it endorse any proposition that is inconvenient or absurd.

The Court further considered the situation where the appellate decree merely affirms the trial‑court decree. It referred to the decision in State of U.P. v. Mohd. Noolt, which held that the original decree of the trial court remains operative. The Court quoted the earlier judgment at page 611, stating that although a decree of a court of first instance may be said to merge into a decree passed on appeal or in revision, such merging occurs only for limited purposes, such as computing the period of limitation for execution of the decree (as in Batuk Nath v. Munni Dei) or for calculating the limitation period for an application for a final decree in a mortgage suit (as in Jowad Hussain v. Gendait Singh). The Court also cited Sir Lawrence Jenkins’s observation in the Privy Council judgment of Juscurn Boid v. Pirthichand Lal, emphasizing that under Indian law and procedure an original decree is not suspended by the filing of an appeal, nor is its operation interrupted by the appellate proceedings.

The Court explained that the decree issued by the trial court remained operative despite the filing of an appeal, because an appeal does not itself annul or suspend the original decree. Indian law contains no provision that makes a decree or order of a first‑instance court final only after the termination of all appellate or revision proceedings. While the existence of an appeal or revision may place the decree in a state of uncertainty, the decree continues to have effect until it is expressly reversed or modified by a higher authority. Consequently, the principal issue for the Court was the moment at which the limitation period prescribed by the relevant statute began to run. The statute required that the limitation period commence from the date of accrual of the cause of action, and the Court could not disregard this rule despite any perceived harshness in its application. Referring to the observations of Justice Seshagiri Ayyar in Mathu Korakkai Chetty v. Madar Ammal (1), the Court held that, subject to the exemptions, exclusions, modes of computation, and excuses for delay provided in the Limitation Act, the language of the third column of the first schedule must be interpreted to reflect the legislature’s intention of dating the cause of action from the moment the remedy becomes available to the aggrieved party. In the present matter, the cause of action arose for the appellant at the instant the Municipal Board’s resolution of his dismissal was communicated to him, and that date marked the commencement of the limitation period. From that date onward, the appellant had the remedy of instituting a suit against the Board for wrongful dismissal, and he was therefore entitled to pursue that remedy within the period specified by section 326 of the Act.

The Court noted that it was unfortunate for the appellant that the trial court had ruled in his favor on the claim of wrongful dismissal, yet he failed to file his suit within the period prescribed by section 326 of the Act, as indicated in the citation (I) (1919) I.L.R. 43 Mad. 185, 213. Act. The appellant had elected to await the State Government’s decision on his appeal, thereby allowing the limitation period to expire to his own detriment. Accordingly, the Court found no alternative conclusion and dismissed the appeal. In view of the special circumstances, the Court refrained from awarding costs. The appellant had been permitted to proceed as a pauper and had pursued the appeal in a pauperis manner. Because the appeal was unsuccessful, the Court ordered that he pay the court fee that he would have been required to pay had he not been allowed to proceed as a pauper. The Registrar was directed to dispatch a memorandum of the payable court fees to the appellant in accordance with Order XIV, rule 12, of the Supreme Court Rules.

In this case the Court directed that the Attorney General for India shall prepare and file a memorandum setting out the court fees that are payable by him. This memorandum must be filed in accordance with the requirement contained in Order XIV, rule twelve, of the Supreme Court Rules. The order therefore obliges the Attorney General to state the amount of fees that are due under the applicable rules and to submit that statement to the Court. The Court further concluded the proceedings by ordering that the appeal be dismissed. The dismissal of the appeal means that the relief sought by the appellant was not granted and that the matter will not be taken any further in this Court. The instruction regarding the filing of the memorandum on court fees is a separate procedural direction and remains effective notwithstanding the dismissal of the appeal. Accordingly the Attorney General is required to comply with the rule by providing the required fee memorandum. The Court emphasized that compliance with Order XIV, rule twelve, is mandatory for all parties who are required to disclose fee obligations, and it clarified that failure to file the memorandum could result in further procedural consequences. The Court therefore set a clear deadline for the submission, indicating that the memorandum should be filed promptly to avoid any delay in the finalisation of the costs aspect of the case. No further relief was granted to the appellant, and the appellate proceedings were concluded with the dismissal order.