ABDUL SHAKURUL SALAM, J.-This order will dispose of R. F. A. No. 2 of 1970 and R. F. A. No. 5 of 1970 as these challenge the same judgment and decree of the learned Senior Civil Judge, Lahore dated 31- 7-1969.
2. Relevant facts for the disposal of the aforesaid appeals are as follows :-
3. Mr. A. R. Azar, plaintiff-appellant, was born on 10th June, 1907. He took his B. Sc. Degree in Civil Engineering from the Edinburgh University in 1929 and after having been selected in All India Competitive Examination conducted by the Federal Public Service Commission joined Indian Railway Service of Engineers in 1931. In due course of time while he was working as Deputy Chief Engineer hr was asked on 19-5-1958 to "intimate immediately if you would be prepared to be considered for appointment to the post of Government Inspector of Pakistan Railways on permanent basis. In the event of your reply being in the affirmative and provided, of course, you are selected for the post of Government Inspector of Pakistan Railway, you will have to forego all chances and rights of appointment or promotion to posts in your own cardre as well as to any other post on the Pakistan Railways (Exh. P. 1). Apparently after affirmative answer and selection, the plaintiff was appointed Govern--ment Inspector of Pakistan Railways on 8-7-1958 and confirmed in that post on 9-1-1959. Confidential Report for the year ending on 31-12-1959 given by the Chairman of the Railway Board (Exh. D. 10) speaks very highly of the plaintiff as "very intelligent", "reliable", "takes keen interest in his work and is capable of sustained effort", "trustworthy and straight--forward", "incorruptible", "can act without guidance", "can lead when the situation demands" etc. Etc. He was selected for study abroad and sent to Japan on 27-2-1960. On the completion of the study tour, he was appointed Chief Engineer on 23-7-1960. He does not seem to have liked the post as he felt that was against the undertaking given to him and would be embarrassing to work under officers whom he had criticized and overruled as Government Inspector of Railways. He protested repeatedly but in vain (Exh. D. 11). He took over as Chief Engineer on 23-7-1960. He seems to have expressed some views on the working of the Railways and, then, read a paper in a high powered meeting on 19-9-1960 (Exh. P. 6) quite critical of the working of the Engineer Branch of the Railways. Mr. S. B. Azid, Member Engineering of the Railway .Board, whose depart--ment had been criticized in connection with an accident at Sibi Station on 12-10-1958 by the plaintiff as Government Inspector about which more will be said latter, wrote a D. O. Letter on 28-10-1960 (Exh. P. 7) to the General Manager critical of his Chief Engineer i.e. The plaintiff. The latter submitted his explanation on 29-11-1960 justifying the views expressed in the meeting (Exh. P. 8). At the same time, he tried to get out of the direct administrative hierarchy and volunteered to be appointed to the Sore Depart--ment at a lesser salary (by five hundred rupees) as would appear from Confidential Report (Exh. D. 11). His request was acceded to and he was appointed as a Chief Controller of Stores on 7-2-1961. However, he was administered a warning all the same about the D.
O. Explaining his conduct dated 29-11-1960 that that amounted to insubordination. The warning is dated 29-3-1961. The plaintiff submitted a reply on 6-6-1961 that he had expressed his view "in good faith in the interest of the Administration and it is indeed unfortunate that my statement should have been found as tantamount to insubordination which I, at no time, intended."
4. According to the case of plaintiff, he met Mr. G. Moeenuddin, the then Establishment Secretary of the Government of Pakistan in Gymkhana Club in June, 1961 and was apprised that case fot his compulsory retirement was finalized and on query was informed that no show-cause notice was necessary under C. S. R. 465-A. It was suggested that if he applied for leave preparatory to retirement his case would be considered. It is stated that in these circumstances the plaintiff applied for leave preparatory to retirement on 26-8-1961. He was asked to give a declaration that he would not withdraw his request for permission to retire nor request for resumption of duty which he did on 22-12-1961. On 3-1-1962, Mr. G. Moeenuddin sent letter (Exh. P. 11) to the plaintiff to the following effect: "1n connection with your conversation with me on the telephone, Government has decided to sanction the leave preparatory to retirement, permissible to you under the rules, as soon as you have signed and returned the enclosed letter." The enclosed letter referred to termination of service on six months' notice under Service Agreement. The plaintiff was informed vide Mr. G. Moeenuddin's letter dated 19-1-1962 (Exh. P. 14) "I hope there will be no further delay in the signing for the letter as the Railway Board is becoming somewhat disturber) about this delay."
The plaintiff' ride covering letter dated 23-1-1962 (Exh. P. 12) in supercession of previous correspondence signed the enclosed letter and sent to the Secretary, Railway Board on 23-1-1962 (Exh. P. W. 1/1) which is to the following effect:- "I have the honour to state that according to Article 3, of my service agreement with the Secretary of State for India, I can get my services terminated at six months' notice. As I do not desire to serve any longer, I hereby give notice of my intention to get my services terminated with effect from any date in January 1963 or a subsequent date as convenient to the Railway Administration.
(2) I also hereby apply for leave preparatory to retirement for one year from 1st January 1962, or from a subsequent date as convenient to the Railway Administration.
(3) Permission may also kindly be accorded to me to take up other employment in or outside Pakistan during the period of leave and after retirement."
5. On 25-1-1962, the plaintiff was "granted Leave Preparatory to Retirement for one year with effect from 1-2-1962 subject to verification by Financial Advisor and Chief Accounts Officer. On expiry of leave he will finally retire from Railway Service with effect from 31-1-1963." This notification was forwarded "for insertion in Gazette of Pakistan Part I". Eventually the notification No. 99 dated 2-11- 1962 was inserted in the Gazette of Vilest Pakistan, November 23, 1962 whereby the plaintiff was "granted premature leave preparatory to retirement for one year, with effect from 1st February 1962 to 31st January 1963 under the prescribed Leave Rules as under :-
(i) Leave on average pay for 4 months or 6 months if a period not less than 2 months is ex- Pakistan; and
(ii) Leave on half average pay for 8 months or 6 months if not less than 2 months' leave on average pay ex-Pakistan is availed of."
Prior to the aforesaid Gazette Notification, in reply to the plaintiff's letter, Mr. G. Moeenuddin wrote to the plaintiff on 24th May 1962 (Exh. P. 22) that- "Government could have passed orders retiring you compulsorily with immediate effect but in view of your long service, it was decided to permit you to apply for leave and ask for voluntary retirement after the expiry of the leave.
I cannot, of course, object to your applying to the Provincial Government for a revision of the decision to retire you compulsorily.
I would, however, suggest that you should not take advantage of the fact that immediate orders for your retirement were not issued. In case you decide to make a representation, Government would be reluctant to give similar concessions to other officers."
Rules governing compulsory retirement known as Government Servants (Further Usefulness in Public Service) Rules, 1962 were promulgated on 24th May 1962.
6. On 20-7-1962, the plaintiff made a representation to the Railway Board (Exh. P. W. 1/ 4) that under rule 2108E (F. R. 69) one has inherent eight to resume duty during L. P'. R. And that he sought to do so, therefore, orders for leis posting may be issued. Request appears to have been repeated when lie was informed on 18-8-1962 (Exh. P. W. 1/2) that "your case has been considered very carefully and sympathetically by the Chair--man Railway Board but there is no justification to alter the decision already communicated to you vide Secretary's U. O. No. E61-LE-1/9-III dated 31st July 1962.
It is regretted that your request to permit you to return to duty cannot be acceded to."
7. The plaintiff made another representation on 30-10-1962 to which he was sent the following reply oil 12-11-1962 (Exh. P. W. 1/3).
"Your attention is drawn to your letter dated 23-1-1962 according to which you desired to have your services terminated and retire from any date in January 1963 or a subsequent date as convenient to the Railway Administration. In addition, you requested for permission to take up other employment in or outside Pakistan during the period of leave prior to your retirement which was granted. Consequently, your case is covered by para 2108 of the Pakistan Railway Establishment Code Volume Il according to which you are precluded from with--drawing your request for permission to retire and from returning to duty save with the specific consent of the President. Your attention is also drawn to your letter dated 22-12-1961 in which you declared that you would not withdraw your request for permission to retire or make a request for return to duty during your L. P.
R."
8. Plaintiff appears to have submitted a representation to the Minister of Communication to which he was replied that the matter was under consideration vide Memo. Dated 7-1-1963 (Exh. P. 15).
Then, he made a representation to the President on 9-8-1963 (Exh. P. 17) on which he was informed on 11-12-1963 (Exh. P. 16) that certain papers were called for from the Railway Board and a reply will be communicated when decision is taken on the representation. On 8th May 1964, he was informed by the Section Officer, Ministry of Communication that "'the petition dated 9-8-1963 submitted by you has been withheld time barred. Moreover, you have not complied with the provisions of Part II of the Petition Instructions. The petition is accordingly withheld." After another futile representation to the President of Pakistan, the plaintiff filed a suit on 6-12-1965 for declaration that the orders of the Railway Board refusing permission to the plaintiff to resume duty applied for by him on 20-8- 1962 and 30-12-1962 while he was on leave preparatory to retirement were mala fide, void, arbitrary, malicious, inoperative and of no legal effect and that the plaintiff was legally entitled to resume duty and still continues to be member of Railway service. With the permission of the learned trial Court plaint was amended to include relief for arrears of salary to the extent of Rs.
72,800.
9. Numerous issues were framed by the learned trial Court which are to the following effect :-
(1) Whether the plaint does not disclose any cause of action? O. P. D.
(2) Is the plaint properly stamped? O. P. P.
(3) Whether defendants 2 to 6 are not necessary parties and if they have been wrongly impleaded as such? O. P. D.
(4) Is defendant No. 2 non-existent and if so what is its effect? O. P. P.
(5) Whether the suit is within time? O. P. P.
(6) Whether the civil Court has no jurisdiction to try the suit? O. P. D.
(7) Whether the suit is vexatious, mala fide and what is its effect? O. P. D.
(7-A). Whether the suit is barred by res judicata? O. P. D.
(7-B). Whether the suit is not maintainable in the present form? O. P. D.
(8) Whether the prayer with regard to the recovery of arrears of salary is incompetent'? O. P. P.
(9) Whether the claim with regard to the arrears of salary is barred under the provisions of Order 2, C. P. C. ? O. P. D.
(10) Whether the plaintiff was made to sign notice dated 23-1-1962 and make an application for leave preparatory to retirement by the defendants under coercion, undue influence and by inducement or misstatement and what is effect? O. P. P.
(11) If Issue No. 10 is decided in favour of the plaintiff, was he not entitled legally to resume duty during the period of leave preparatory to retirement? O. P. D.
(12) Whether the impugned orders of the Railway Board refusing permis--sion to resume duty during the period of leave preparatory to retirement were mala fide, void, arbitrary, malicious, inoperative and of no legal effect ? O. P. P.
(13) Whether the plaintiff could not be legally proceeded against under the rules governing retirement of Government servants who had completed 25 years of service'? O. P. D.
(14) Whether the plaintiff was not legally entitled to reasonable oppor--tunity to defend himself during the proceedings of his retirement and what is its effect? O. P. D.
(15) Whether the plaintiff is entitled to the recovery of a sum of Rs. 72,800 as arrears of salary? O. P.
P.
(16) Relief.
10. Wasim Muzafar P. W. 1 and Muhammad Amin Sabir, P. W. 2 brought the documents whose, copies have been produced by the plaintiff. The plaintiff himself appeared as P. W. 3 and narrated the circumstances, in which he applied for leave preparatory to retirement and, then, signed the notice dated 23-1-1962 for termination of his services and produced various documents. Relevant portion of the testimoney and substance of the documents have been called out from the long narrative and scattered documents which had consumed lot of time because no Paper Book was prepared and have been given in the statement of facts in paragraphs from 1 to 8. On behalf of the defendants, P. W. 1 was produced as D. W. 1 to produce some of the Annual Confidential Reports about the plaintiff. These are Exhs. D. 1 to D. 13.
11. After a lengthy trial, the learned trial Court found in favour of the plaintiff oil the material issues and granted the decree prayed for except that it rejected the claim of the plaintiff for arrears of salary holding that to be bounty of Government. This is vide judgment and decree dated 31-7-1969.
The plaintiff has filed R. F. A. No. 2 of 1970 claiming that arrears of salary are no bounty of the Government but right of its servants. The Provincial Government of the Punjab has also filed R. F. A.
No. 5 of 1970 claiming drat the findings in favour of the plaintiff recorded by the learned trial Court are not sustainable.
12. The learned counsel for the plaintiff, besides supporting the findings of facts with reference to the circumstances narrated in the evidence of the plaintiff in which he had acted, as supported by documents on record, has submitted that the learned trial Court erred in law in not decreeing the plaintiff's suit for arrears of salary. He has placed reliance on Pakistan through General Manager, P.
W. R., Lahore v. Messrs A. v. Issacs (PLD 1970 SC 415).
13. Learned counsel for the defendant Government challenging the findings of facts has submitted that the plaintiff had acted voluntarily in applying for leave preparatory to retirement and then in serving a notice for termination of his service in accordance with the service agreement and apply--ing for leave preparatory to retirement. There was no question of coercion or undue influence exerted by Mr. G. M. Moeenuddin or any other authority. He placed reliance on Kazi Noor Muhammad v. Pir Abdul Sattar Jan (PLD 1959 Kar. 348), and Mst. Hamida Begum v. Mst. Murad Begum and others (PLD 1975 SC 624). He, secondly, submitted that during the leave preparatory to retirement, the plaintiff had no right to ask for resumption of duty. Therefore, the defendant committed no wrong in not allowing him to resume duty. He, thirdly, submitted that discharge in accordance with a term in contract of service is valid and does not amount to removal or dismissal from service. He placed reliance on .The Federation of Pakistan through the General Manager, N. W.
Railway, Lahore v. Fayyaz Ahmad (PLD 1958 Lah. 500). Lastly, lie submitted that retirement at the age of 55 years or 25 years service is not a punishment requiring any show-cause notice. Reliance was placed on Malik Muhammad Khalil v. Government of West Pakistan etc. (PLD 1959 Lah. 229).
Referring to the Note under C. S. R. 465-A, the learned counsel contended that it was for the defendant to decide whether it was in the "public interest" to retire or not. He relied on A. M. Khan Leghari, C. S. P., Member Board o f Revenue, West Pakistan v. Government of Pakistan through Secretary to Government of Pakistan Establishment Division, Rawaipindi and 3 others (PLD 1967 Lah. 227).
14. Crux of the controversy between the parties is whether the plaintiff applied for retirement voluntarily or was forced by the circumstances prevalent and on the advice of the then Establishment Secretary of the Government of Pakistan who obviously held de facto if not de jure power over the services of Pakistan. From education, high office held by the plaintiff and his status in society, it did not appear in the first instance that he acted not voluntarily when he first applied for leave preparatory to retirement on 26-8-1961 (Exh. P. 10) and then gave notice for termination of his service after six months on 23-1-1962 (Exh. P. W.-1,/1). It seemed that having applied for retirement and having been granted leave preparatory to retirement, he got second thoughts and applied to resume duty which was declined and then he filed the suit. In these circumstances, it was felt that the plaintiff was not entitled to any decree. But on reflection it occurred as to why the plaintiff who had been given wonderful report of his abilities and especially "in--corruptibility" just before his actions, should chose to retire prematurely? It was felt that there might be some truth in what the plaintiff said that he acted under threat of compulsory retirement before which he was not even to be heard and when it was suggested to him by the Establishment Secretary that if he applied for retirement leave the same would be considered, he grasped the opportunity to go with grace. This would have also, probably, depending on the circumstances, amounted to a voluntary act disentitling the plaintiff from any relief. All this demanded deeper appraisal of evidence and clearer conception of what had happened leading to abrupt termination of service of a high Government officer who had rendered thirty years' service with ability and report of "incorruptibility" of character.
15. Before that is done, it may be recapitulated that the plaintiff's service has been terminated on the basis of his letter dated 23-1-1962 (Exh. P. W. 1/1) in which he said that "I have the honour to state that according to Article 3 of my service agreement with the Secretary of State for India, I can get my services terminated at six months' notice. As I do riot desire to serve any longer, 1 hereby give notice of my intention to get my services terminated with effect from any date in January 1963 or a subsequent date as convenient to the Railway Administration." It was so stated also by the defendant in reply to plaintiff's representation for resumption of duty vide memo. Dated 12-11-1962 (Exh. P. W. 1/3). There--fore, the case of the parties is that the plaintiff's services were terminated in accordance with the Service Agreement with the Secretary of State for India. Besides that the notice was given by the plaintiff under the said agreement in circumstances when he apprehended compulsory retire--ment and was asked to sign the same to avoid that, vide D. O.
Letter of Mr. G. Moeenuddin (Exh. P. 11) about which more will be said latter, the Service Agreement with the Secretary of State for India itself had gone under a metamorphosis on grant of Independence to India and Pakistan by the Indian Independence Act, 1947. Thereafter, the relationship of the Govern--ment servants serving in the two Dominions were regulated by the Constitutional and other legal provisions prevalent in the two Dominions. Reference may be made to the case of Mr. Zafar-ul-Ahsan who relied on the similar Service Agreement with the Secretary of State for India as against the Government of Pakistan and failed. The case in, the High Court is reported as Zafar-ul-Ahsan v. Republic of Pakistan (PLD 1959 Lah. 879). The argument was not even urged on appeal which failed in the Supreme Court reported as Zafar-ul-Ahsan v. The Republic of Pakistan (PLD 1960 SC 113). If the employee could not rely on the said Agreement for his benefit as against the Government, how can the latter rely on the same as against the employee? Therefore, asking of Mr. G. Moeenuddin to sign a notice in accordance with the Service Agreement with the Secretary of State for India and doing that by the plaintiff and acting thereon by the defendant-Government are all based on misconceptions. Actions under illusions do not furnish foundation for legal consequences. It is obvious enough.
16. At this stage, two of the last submissions of the learned counsel for the defendant may be adverted to viz., that the plaintiff could be retired after having put in 25 years of service, as he did, without notice "in public interest", and the latter question can only be determined by the authority concerned. Assuming these to be correct, though not conceding, the question arises whether any act or acts can be sustained which are adminis--trative in nature as distinct from Legislative-if those are invalid in circum--stances and according to the procedure prescribed even if those could be validly taken in different circumstances and under different powers. Reference may be made to an American decision in Viterally v. Seaton (U S Led 2d 1012). An officer was liable to removal without any enquiry. However, the Secretary who had the power to remove him ordered a statutory enquiry and in the conduct of that enquiry some irregularities were committed, so vital and fundamental that they vitiated the result of the enquiry. The officer having brought a suit to challenge the legality of his dismissal, the Secretary replaced the previous order of dismissal which was based on the result of the statutory enquiry by a fresh order, retrospective in effect, purporting to exercise the power under which he could discharge the plaintiff without any enquiry whatsoever.
The Supreme Court of United States unanimously held that the irregularities vitiated the earlier order of dismissal, though the Judges differed on the question whether the subsequent order of discharge had the effect of prospectively terminating the services of the plaintiff. Mr. Justice Harland, who delivered the unanimous judgment of the Court, made the following part observation: "Having chosen to proceed against petitioner on security grounds, the Secretary, here as in Service, was bound by the regulations which he himself had promulgated for dealing with such cases, even though without such regulations he could have discharged petitioner summarily."
Mr. Justice Frankfurter, who read a dissenting judgment on another aspect of the case made, in the approving words of the Chief Justice Muhammad Munir in Zafar-ul-Ahsan v. Republic of Pakistan "the epigram--matic remark that `He that takes the procedural sword shall perish with that sword'. "
Therefore, the defendant having acted on the notice-served under the Service Agreement and the latter having no efficacy, must find itself acting on mirage, thus without any basis on fact or law.
This should clinch the matter in favour of the plaintiff.
17. Now, we may turn to tire voluntariness of the acts of the plaintiff in first applying on 26-8-1961 for leave preparatory to retirement (Exh. P. 10) his letter dated 22-12-1961 which he declared that he would not withdraw his request for permission to retire or make a request for return to duty during leave preparatory to retirement and then, giving the notice for termination of service under the Service Agreement with the Secretary of State for India (Exh. P. W. 1/1). The case of the plaintiff as deposed to as P. W. 3 is that he was informed by Mr. G. Moeenuddin in June 1961 that case for his compulsory retirement had been finalized and that if he were to apply for leave preparatory to retirement that will be considered. In order to save his honour, he applied for leave preparatory to retirement on 26-8-1961. The authorities apprehending that he might withdraw his request or ask for resumption of duty during leave asked him to give . a declaration that he would not do so, the plaintiff submits that the authorities were keen to get rid of him for good. Even when he gave the declaration, the authorities were not satisfied and sent him draft notice for termination of service under the Service Agreement for signature and insisted that the plaintiff signs the same quickly as would appear from Exh. P.
11. The plaintiff signed the same in these circumstances and the plaintiff states that he did so not voluntarily but under compul--sion to save his honour otherwise he would have been compulsorily retired entailing dishonour and disgrace. The plaintiff urged that a highly qualified person who had served thirty years with a record of incor--ruptibility, what would he not do to avoid public disgrace and humiliation tarnishing his image at the fag end of life with consequential embarrassm ent and dishonour to the entire family and friends in the society as it exists? I am quite clear in my mind and sure of conviction that a gentleman would do anything to avoid public disgrace and dishonour. If he acts in such circumstances, it cannot be said that he is acting freely and voluntarily and not under the compulsion of circumstances and if the latter are not valid under the law, the action of the person concerned under the threat of illegalities to be committed against him would be neither voluntary nor free nor that would form basis of any legal act. These are matters of essence and basic to all laws, norms, principles of justice and fair dealings between man and man, and man and State. Reference may be made to classic work on Contract by Chitty, 24th Edition, Volume I, also for the reason that the plaintiff' has not been allowed to resume duty because of a term in the Agreement of Service (Exh. P. W. 1/1 and P. W. 1/3). At page 201 of the Book, it is stated:- "Common law and equity.-To give validity to a contract the law requires the free assent of the party who is to become liable under it. This does not mean that contracts entered into under any form of pressure are void or voidable, "for in life, including the life of commerce and finance, many acts are done under pressure, some--times overwhelming pressure, so that one can say that the actor had no choice. But to act." Consequently the law has to distinguish between legitimate and illegitimate forms of pressure. Violence to the person, and threats of such violence have long been recognised as illegitimate forms of pressure. The law therefore allows a party to avoid any promise extorted from him by terror or violence, whether on the part of the person to whom the promise is made or that of his agent. Contracts made under such circumstances are said to be made under duress, a term derived from the common law, which took a narrow view as to the facts which would establish the absence of free consent. At common law, duress consisted of actual or threatened violence or imprisonment. Courts of equity, however, administered the wider doctrine of undue influ--ence, which was applied chiefly to cases where some fiduciary relation existed between the parties, but was not in any way limited to them. Equity might therefore grant relief where the compulsion complained of was something less than that required by the common law. Since the Judicature Act, 1873 it has been the duty of all Courts to administer both doctrines concurrently and cases of coercion must be dealt with in the light of their combined effect."
Nearly a hundred years ago, a marriage contracted, under threat of writs and bankruptcy summons, before the Registrar was annulled in the case of Scott v. Sebright ((1886) 12 PD 21). It was observed at page 24 of the report that "Whenever from natural weakness of intellect or from fear- whether reason--ably entertained or not-either party is actually in a state of mental in-- competence to resist pressure improperly brought to bear, there is no more consent than in the case of a person of stronger intellect and more robust courage yielding to a more serious danger".
It was observed at page 25 that "In the present instance it is alleged that the worry and distress to which the petitioner was subjected resulted in such a degree of prostration, bodily and mental, as to render her, if not incapable of exercising her reason, at all events unable to resist constraint and pressure brought to bear on her by others for their own ends," and finding on facts in favour of the then plaintiff, the marriage was declared as null and void.
Instead of quoting individual cases, a longish excerpt from the judgment of Lord Denning M. R. In the Court of Appeal In re: Lloyd Bank v. Bundy (1975 Q B 326), which refers to numerous decisions may be quoted with advantage: "The general rule.-Now let me say at once that in the vast majority of cases a customer who signs a bank guarantee or a charge cannot get out of it. No bargain will be upset which is the result of the ordinary interplay of forces. There are many hard cases which are caught by this rule. Take the case of a poor man who is homeles. He agrees to pay a high rent to a landlord just to get a roof over his head. The common law will not interfere. It is left to Parlia--ment. Next take the case of a borrower in urgent need of money. He borrows it from the bank at high interest and it is guaranteed by a friend. The guarantor gives his bond and gets nothing in return. The common law will not interfere. Parliament has intervened to prevent money-lenders charging excessive interest. But it has never interfered with banks.
Yet there are exceptions to this general rule. There are cases in our books in which the Courts will set aside a contract, or a transfer of property, when the parties have not met on equal terms-when the one is so strong in bargaining power and the other so weak-- that, as a matter of common fairness, it is not right that the strong should be allowed to push the weak to the wall. Hitherto those exceptional cases have been treated each as a separate category in itself. But I think the time has conic when we should seek to find a principle to unite them. I put on one side contracts or transactions which are voidable for fraud or misrepresentation or mistake. All those are governed by settled principles. I go only to those where there has been inequality of bargaining power, such as to merit the intervention of the Court.
The categories.-The first category is that of "duress of goods". A typical case is when a man is in a strong bargaining position by being in possession of the goods of another by virtue of a legal right, such as by way of pawn or pledge or taken in distress. 7 he owner is in a weak position because he is in urgent need of the goods. The stronger demands of the weaker more than is justly due; and he pays it in order to get the goods. Such a transaction is voidable. He can recover the excess: see Astley v. Reynalds (1731) 2 Stra.915 and Green v. Duckett (1883) Q B D 275. To which may be added the cases of "colore officii", where a man is in a strong bargaining position by virtue of his official position or public profession. He relies upon it so as to gain from the weakers-who is urgently in need--more than is justly due: see Pigott's case cited by Lord Kenyon, C. J. In Cartwright v. Rowely (1799) 2 Esp. 723, 723-724; Parker v. Bristol & Exter Railway Co. (1851) 6 Exch. 702 and Steele v.
Williams (1853) 8 Exch. 625. In such cases the stronger may make his claim in good faith honestly believing that he is entitled to make his demand. He may not be guilty of any fraud or misrepresentation. The inequality of bargaining power-the strength of the one versus the urgent need of the other-renders the transac--tion voidable and the money paid to be recovered back: see Maskell v. Hornor (1915) 3 K B 106.
The second category is that of the "unconscionable transaction". A man is so placed as to be in need of special care and protection and yet his weakness is exploited by another far stronger than him--self so as to get his property at a gross undervalue. The typical case is that of the "expectant heir". But it applies to all cases where a man comes into property, or is expected to come into it- and then being in urgent need-another gives him ready cash for it, greately below its true worth, and so gets the property transferred to him: see Evans v. Llewellin (1787) 1 Cox 333. Even though there be no evidence of fraud or misrepresentation, nevertheless the transaction will be set aside: see Fry v. Lane (1888) 40 Ch. D 312, 322 where Kay, J. Said:- `The result of the decisions is that where a purchase is made from a poor and ignorant man at a considerable undervalue, the vendor having no independent advice, a Court of equity will set aside the transaction.'
This second category is said to extend to all cases where an unfair advantage has been gained by an unconscientious use of power by a stronger party against a weaker: see the cases cited in Halsbury's Laws of England, 3rd ed. Vol. 17 (1956), p. 682 and, in Canada, Morrison v. Coast Finance Ltd. (1965) 55 D L R (2d) 710 and Knupp v. Bell (1968) 67 D L R (2d) 256. The third category is that of "undue influence" usually so called. These are divided into two classes as stated by Cotton, L. J. In Allcard v. Skinner (1887) 36 Ch. D 145,
171. The first are those where the stronger has been guilty of some fraud or wrongful act-expressly so as to gain some gift or advantage from the weaker. The second are those where the stronger has not been guilty of any wrongful act, but has, through the relationship which existed between him and the weaker, gained some gift or advantage for himself.
Sometimes the relationship is such as to raise a presumption of undue influence, such as parent over child, solicitor over client, doctor over patient, spiritual adviser over follower. At other times a relationship of confidence must be proved to exist. But to all of them the general principle obtains which was stated by Lord Chelmsford L. C. In Tate v. Williamson (1866) 2 Ch. App. 55, 61: `Wherever two persons stand in such a relation that, while it continues, confidence is necessarily reposed by one, and the influence which naturally grows out of that confidence is possessed by the other, and this confidence is abused, or the influence is exerted to obtain an advantage at the expense of the confiding party, the person so availing himself of his position will not be permitted to retain the advantage, although the transaction could not have been impeached if no such confidential relation had existed.
Such a case was Tufton v. Sperm (1952) 2 T L R 516.
The fourth category is that of "undue pressure". The most apposite of that is Williams v. Bayley (1866) L R 1 H L 200, where a son forged his father's name to a promissory note and, by means of it, raised money from the bank of which they were both customers. The bank said to the father, in effect: "Take your choice-give us security for your son's debt. If you do take that on yourself, then it will all go smoothly: if you do not, we shall be bound to exercise pressure". Thereupon the father charged his property to the bank with payment of the note. The House of Lords held that the charge was invalid because of undue pressure exerted by the bank. Lord Westbury said, at pp. 218-219: "A contract to give security for the debt of another, which is a contract without consideration, is above all things, a contract that should be based upon the free and voluntary agency of the individual who enters into it."
Other instances of undue pressure are where one party stipulates for an unfair advantage to which the other has no option but to submit. As where an employer-the stronger party-has employed a builder-- the weaker patty-to do work for him. When the builder askedfor payment of sums properly due (so as to pay his workmen) the employer refused to pay unless he was given some added advantage. Stuart V. C. Said: "Where an agreement, hard and inequitable in itself, has been exacted under circumstances of pressure on the part of the person who exacts it, this Court will set it aside": see Ormes v. Beadel (1860) 2 Giff. 166, 174 (reversed on another ground, 2 De G F & J 333) and D. & C. Builders Ltd. v. Rees (1966) 2 Q B 617, 625.
The fifth category is that of salvage agreements. When a vessel is in danger of sinking and seeks help, the rescuer is in a strong bargaining position. The vessel in distress is in urgent need. The parties cannot be truly said to be on .Equal terms. The Court of Admiralty have always recognised that fact. The"fundamental rule" is "if the parties have made an agreement, the Court will enforce it, unless it be manifestly unfair and unjust; but if it be manifestly unfair and unjust; the Court will disregard it and decree what is fair and just."
See Akerblom v. Price (1881) 7 Q B D 129, 133, per Brett L. J. Applied in a striking case The Port Caledonia and The Anna (1903) P. 184, when the rescuer refused to help with a rope unless he was paid -- 1,000.
The general principles.-Gathering all together, I would suggest that through all these instances there runs a single thread. They rest on "inequality of bargaining power". By virtue of it, the English law gives relief to one who., without independent advice, enters into a contract upon terms which are very unfair or transfers property for a consideration which is grossly inadequate, when his bargaining power is grievously impaired by reason of his own coeds or desires, or by his own, ignorance or infirmity, coupled with undue influence or pressure brought to bear on him by or for the benefit of the other. When I use the word "undue" I do not mean to suggest that the principle depends on proof of any wrongdoing. The one who stipulates for an unfair advantage may be moved solely by his own self-interest, unconscious of the distress he is bringing to the other. I have also avoided any reference to the will of the one being "dominated" or overcome" by the other. One who is in extreme need may knowingly consent to a most improvident bargain, solely to relieve the straits in which he finds himself. Again, I do not mean to suggest that every transaction is saved by independent advice. But the absence of it may be fatal."
The basis of decisions, I may say so with respect, is the principle that an act not done freely and voluntarily but under pressure impermissible in law, does not bind the doer. It is elementary law seeking justice that circumstances cannot be such nor created thus that a person finds himself losing his honour or surrendering to the demands of another. If he chooses honour to surrender his right, the choice is obviously neither free nor voluntary but under the compulsion of the circumstances. In the present case if we recollect that the times were when Martial Law was imposed in the country, the Establishment Secretary of the Government of Pakistan was informing the plaintiff that his case for compulsory retirement was finalized and that he would not be issued any notice or heard in his defence, he better apply for leave to retirement, what could the plaintiff hope but to act as suggested? Nobody with long service of incorruptible character would prematurely like to go voluntarily, except for some private reasons which is not. The case of either party. In the background of circumstances and events, there is no doubt whatsoever that the plaintiff applied for leave preparatory to retirement and signed the notice for termination of service under threat of compulsory retirement which was hollow as there was nothing to form the basis of the action because the Confidential Reports filed by the defendants do not call for such action.
18. Of course, the threat of compulsory retirement could not have been carried out under the relevant rules, namely: The Railway Servants (Efficiency and Discipline) Rules, 1961 and Government Servants (Further Usefulness in Public Service) Rules, 1962 without show-cause notice, about which the plaintiff was misguided by the Establishment Secretary of the Government of Pakistan that was not necessary under C. S. R. 465-A. Note (1) to the Rule which is relevant, provides that: "Government retains an absolute right to any officer after he has completed twenty-five years' qualifying service without giving any reason and no claim to special compensation on this account will be entertained. This right will not be exercised except when it is in public interest to dispense with the further services of an officer."
Besides that it is doubtful whether under a Note to a Rule right can be claimed contrary to Constitutional and 'other legal instruments, the Note itself provides that "this right shall not be exercised except when it is in public interest to dispense with the further services of an officer". In the present case, there is nothing on the record brought by the defendants that there was public interest in dispensing with the services of the plaintiff who had got excellent report about his ability, capacity for work and incorrup--tibility of character just before the ensuing events. Therefore, the Rule neither appears to be applicable nor was in fact applied by the defendant. The latter had relied on the Service Agreement about which already lot has been said.
19. Thus we are left with the facts that on 23-1-1962 the plaintiff signed "the enclosed letter" sent by Mr. G. Moeenuddin to the plaintiff to the effect that his services may be terminated from any date in January, 1963 or a subsequent date convenient to the defendant and that he may be granted leave preparatory to retirement from Ist January, 1962 or any subsequent date. On 25-1-1962 the plaintiff was granted leave preparatory to retirement for one year w. e. f. 1-2-1962 subject to verification by the Financial Advisor and Chief Accounts Officer. On expiry of leave he was finally to retire from the Railway service w. e. f. 31-1-1963. Notifica--tion to this effect was forwarded for insertion in Gazette of Pakistan, Part I but eventually the Notification No. 99 dated 2-11-1962 was inserted in the Gazette of West Pakistan November 23, 1962. Prior to the Gazette Notification, it may be recalled the Constitution of Islamic Republic of Pakistan had come into force on 8-6-1962. On 20-7-1962, the plaintiff made a representation (Exh. P. W. 1/4) to the Railway Board to resume duty and for his posting. The request was repeated but was rejected on 18-8-1962 (Exh. P. W. 1/2). He made another representation on 20-10-1962 which too was rejected on 12-11-1962 (Exh. P. W. 1/3).
These facts would show that before the Notification No. 99 dated 2-11-1962 was gazetted in the Gazette of West Pakistan, November 23, 1.962, the petitioner had withdrawn his request for leave preparatory to retirement. There are two points which may be noted here ; firstly, that at best the petitioner was on leave preparatory to retirement, that is to say, he was on leave in preparation to retirement, secondly, the retirement was to take place per the aforesaid Notification from 31-1-1963.
Before the date of retirement, the plaintiff made it quite clear through various representations that he wanted to resume duty and did not want to retire. Therefore, before he could be retired on 31-1- 1963 against his will, that could only be done in accordance with the Constitutional provisions and the relevant law. The procedure under these, of course, has not been admittedly, followed.
Therefore, in the eyes of law the retirement could not take place from 31-1-1963 and the plaintiff having applied to resume duty during the leave before his retirement, was entitled to resume his duty and could not be kept out from service without any lawful justification which was neither there nor pleaded by the defendants except in relation to the voluntary nature of retirement about which much has already been said.
20. In truth and substance, the plaintiff has been compulsorily retired from service. The signing of notice by him for termination of his service in accordance with the Service Agreement under threat of compulsory retirement cannot camouflage the reality. When a Clerk in Bank for having endorsed a promissory note of a customer for consideration which was discounted was asked to resign forthwith, which he did, it was held by the House of Lords in Stephenson v. The London Joint Stock Bank (Ltd.) (20 T L R 8) that "they had to look at the whole of the facts, and, doing so, there could be no doubt but that the plaintiff was dismissed. The use of polite instead of peremptory language did not alter the fact." In Addis v. Gramophone Company Ltd. ((1909) A C 489) "the plaintiff was employed as the Manager of the defendants' business at Calcutta at 15 L. Per week as salary, and a commission on the trade done. He could be dismissed by six months' notice. In October 1905, the defendants gave him six months' notice, whilst at the same time they took steps to prevent him from acting any long as manager. They did not, however, intend to discontinue his salary.
Thereupon, the plaintiff relinquished his post, went to England, and sued damages. The majority of the Law Lords in the House of Lords regarded the conduct of the defendant as a repudiation of the contract and, therefore, as constituting a wrongful dismissal. Upon such footing, the plaintiff succeeded in recovering substantial damages, although it was held that vindictive or punitive damages could not be awarded in such a case." This is what is stated about the case in Rubel Bronze and Metal Company Limited and Vos: In re (1918 K B 315). In the last mentioned case, "in November, 1915. By an agreement in writing, the defendants, a company carrying on an establishment controlled, under the Munitions of War Act, 1915, appointed the then plaintiff the General Manager of its works for three years at a fixed salary and a commission upon the net profits of the business available for dividend upon a rising scale, and the net profit for the second and third year together for a further period of three years upon the same terms and conditions: In January, 1917, the defendants purported to "suspend" the plaintiff from the exercise of his duties pending an investigation as to his efficiency ; they also compelled him to deliver up the badge he held as a person engaged in munition work at a controlled establishment on the ground that he was no longer "indispensable", and they appointed another person to take charge of the works instead of the plaintiff, and on the following day they took from his business keys and informed him that he must not return to the works as he was not wanted, and required him to deliver up all cash belonging to them. As a result of these acts the plaintiff elected to treat the contract as repudiated by the defendants and claimed damages for wrongful dismissal". The Kings Bench held that "the defendants had wrongly repudiated their contract, and the plaintiff was therefore, entitled to damages, inasmuch as the defendants absolutely forbade him to fulfil any of his duties, they prevented him from exerting his opportunities as a manager to gain commission upon the net profits of the company, and they decisively ended his attendance at the premises." In Abrahim Reuben v. The Karachi Muncipality (AIR 1929 Sind 69) the facts were that the plaintiff, a Surveyor, had rendered 27-- years service and was commended many times. On a report of the Corruption Committee, the Managing Committee of the Municipality resolved that the plaintiff should be asked to resign Municipal Service. The plaintiff wrote back "I am quite prepared to defend and prove that the allegations made were quite false and without foundation. However, I shall feel obliged if you kindly let me know the terms on which the Managing Committee want me to resign the Municipal Service." He was informed "the. Managing Committee will not enter. Into discussion with him. He must resign within one week of the receipt of notice and he must understand that if he fails to do so the Managing Committee will take such action as it deems fit". To this the plaintiff replied "under protest I am prepared to obey the Managing Committee's order and hand over charge of my office from the end of the concurrent month pending my appeal to the Municipality which will be submitted in due course. Charge was consequently handed over and appeal in due course filed. The plaintiff came to Court. On these facts, the learned Court held at page 74 of the report that "I am of opinion that the only inference to be drawn is that the plaintiff did not resign his appointment but was dismissed by the Managing Committee of the Municipality. It has been argued that the plaintiff's latter (Exh. 18) amounts to a voluntary resignation, that the Managing Committee gave the plaintiff an opportunity to resign and the plaintiff availed himself of that opportunity. I think the argument is unsubstantial. Exh. 18 is surely not to be read by itself but in the light of the fact and circumstances immediately preceding and following it, and so read cannot by any stretch of imagination be regarded as evidencing a voluntary resignation." From these precedents, it is quite clear that what has to be seen is whether the termination of Service is voluntary proceeding from the employee or he is put out of service by the acts of the employer. If the latter, whether it is lawful or wrongful ? In view of what has been stated above on facts of this case, it is quite clear that the termination proceeded on the initiative of the employer with a clear threat of compulsory retirement and it was insisted upon that the plaintiff sign the "enclosed" notice of termination sent to him by the Establishment Secretary of the Government of Pakistan.
The termination in the circumstances, is clearly compulsory retirement and the Constitution and law having not been admittedly followed, it was wrongful. The first two contentions of the learned counsel for the defendant about voluntariness of the acts of the plaintiff and his having no right to resume duty during leave preparatory to retirement have no force for the reasons already detailed above.
21. From all what has been stated above, it is quite clear that the judgment of the learned trial Court finding on merits in favour of the plaintiff calls for no interference. However, as regards non- granting the relief on account of the fact that the arrears of salary to which the plaintiff was entitled to, could not be decreed because of the thesis that the salary was a bounty from the Crown, it may better be said in the words of the great Chief Justice Mr. Justice M. R. Kiyani in Muhammad Nawaz v. Government of Pakistan through the Secretary, Communications and another (PLD 1962 Lah. 443) "we are fostering a concept of sovereignty which is alien to our genius.
We are chasing a will-o-the-wisp. " The matter has, finally, been settled by the Supreme Court of Pakistan in the case of Pakistan through General Manager P. W. R. Lahore v. Mrs. A. V. Issacs (PLD 1970 SC 415) wherein after exhaustive examination of numerous cases and concepts, their Lordships of the Supreme Court of Pakistan in the words of the noble Chief Justice Mr. Justice Hamoodur Rehman, found that in Pakistan the salary of a Government servant is by no means a bounty but is a "guaranteed right" of a Government servant. It was observed that it has now set the controversy at rest and sounded the death knell of the bounty theory." Therefore, the plaintiff would be entitled to the sum claimed as arrears of salary which figure had not been disputed in the trial Court by the defendants, nor in this Court by their learned counsel.
22. While preparing judgment it occurred as to whether Service Tribunals Act, 1973 (Act LXX of 1973) was applicable to these appeals. Section 4 thereof provided that "Any civil servant aggrieved by any final order, whether original or appellate, made by a departmental authority in thirty days of the com--munication of such order to him, prefer an appeal to the Tribunal having jurisdiction in the matter". In section 6 of the aforesaid Act it was provided that "All suits, appeals or applications regarding any matter within the jurisdiction of a Tribunal pending in any Court immediately before the commencement of this Act shall abate forthwith". Since the matter had not been argued on the point, the case was listed for rehearing. The learned counsel, if we may say so with respect, rendered valuable assistance, otherwise we might have made a mistake. They pointed out that the aforesaid provisions have been amended on the material point by Act XXXI of 1974 Service Tribunals (Amendment) Act, 1974, whereby in section 4 above-- quoted, paragraph (c) was added to the following effect "no appeal shall lie to a Tribunal against an order or decision of a departmental authority made at any time before the Ist July, 1969."
It was submitted that as the impugned orders in these appeals were passed much before Ist of July, 1.969, these orders were. Not appealable before the Tribunal under section 4 afore-quoted and, therefore, the appeals will not abate by virtue of section 6 quoted above. Reliance was placed on a decision of their Lordships of the Supreme Court of Pakistan in Khan Faizullah Khan v.
Government of Pakistan through the Establishment Secretary, Cabinet Secretariat and another (PLD 1974 SC 291) in support of their submissions. The joint submission of the learned counsel for the parties supported as it is by up-to-date statutory provisions and decisions of their Lordships of the Supreme Court of Pakistan clears all doubts and clinches the point that the appeals in hand have not abated and have to proceed to judgment.
23. In view of what has been stated above in the earlier paragraphs, the findings of facts recorded by the learned trial Court call for no interfer--ence and are hereby affirmed. However, the decree appealed against to the extent that it refused relief of arrears of salary to the plaintiff-appellant on account of a decision, which no longer holds the field in view of Pakistan through General Manager, P. W. R., Lahore v. Mrs. A. V. Issacs is set aside. We hold that the plaintiff-appellant was entitled to the dercee prayed for and we order accordingly by decreeing his suit for arrears of salary for two years and five months odd at Rs.2500 for Rs.72,800 to be satisfied within two months, per section 82, C. P.
C. From today. The result is that the appeal of the plaintiff R. F. A. No. 2/1970 is accepted and that of the defendants' R. F. A. No. 5/1970 is dismissed. As the appeals involved complicated questions, the parties shall bear their own costs.