MIRZA VIQAS RAUF, CHAIRMAN.---This appeal in terms of Section 5 of the Punjab Subordinate Judiciary Service Tribunal Act, 1991 arises out of order dated 31st May, 2018, whereby representation of the appellant claiming back benefits was rejected.
2. Facts in brief forming background of this appeal are that the appellant was appointed as Civil Judge in the District Judiciary, however, he was terminated from service on 10th November, 2003.
Against his termination the appellant preferred Service Appeal No. 16 of 2003 which was accepted by way of judgment dated 16th May, 2014 by this Tribunal and he was reinstated in service. The appellant then moved a representation before the competent authority for grant of back benefits from date of dismissal till date of reinstatement. The appellant since remained gainfully employed throughout the intervening period, so he also filed an affidavit along with other supporting material demonstrating the amount earned by him. The representation was, however, declined by way of order dated 20th April, 2016, which was called in question through Service Appeal No. 4 of 2016. The appeal was ultimately accepted by way of order dated 2nd March, 2018 with the following observations:- "5. This appeal is accordingly allowed and order/letter dated 20.04.2016 is set aside. In the result, the representation filed by the appellant shall be deemed to be pending before the competent authority which shall decide the same afresh after taking into consideration the documents submitted by the appellant along with his affidavit."
In the above backdrop representation of the appellant was again attended but was declined by way of order dated 31st May, 2018 on the ground that the appellant since has worked gainfully during the period of his termination as a practicing lawyer and he has also worked as solicitor with Senior Associates, so he is not entitled for any back benefits.
3. In the case of Muhammad Sharif and others v. Inspector General of Police, Lahore and others (2021 SCMR 962) the Supreme Court of Pakistan outlined the principles for the grant of back benefits. The relevant extract from the same is reproduced below:- "Back Benefits
7. At the very outset, it is important to underline that the term back benefits has not been mentioned in the service laws of Punjab or Pakistan, however, the term has a wide usage in the sub-continental jurisprudence, including ours, for a longtime. According to Black's Law Dictionary, Back Pay is the salary that an employee should have received but did not because of an employer's unlawful action. Back Pay Award is a judicial decision that an employee or ex-employee is entitled to an accrued but uncollected salary or benefits. The purpose of a back pay award is to make the employee whole i.e., restore the economic status quo that would have obtained but for the wrongdoing on the part of the employer. Back pay is a compensation for the tangible economic loss resulting from an unlawful employment practice. Back, pay largely translates into back benefits under our jurisprudence. "Back benefits" are, therefore, retroactive payments. Even though the term back benefits is wider than back pay as it includes other benefits but for the purposes of this case we restrict the meaning of back benefits to arrears of pay or back pay.
8. Reinstate in service means to place again in a former state or position from which the person had been removed. Reinstatement is effected from the date of dismissal with back pay from that date. A reinstated employee is to be treated as if he had not been dismissed and is therefore entitled to recover any benefits (such as arrears of pay) that he has lost during his period of unemployment. However, pay in lieu of notice, ex gratia payments by the employer, or supplementary benefits, and other sums he has received because of his dismissal or any subsequent unemployment will be taken into account.
9. An employee, i.e., civil servant in this case, whose wrongful dismissal or removal has been set- aide goes back to his service as if he were never dismissed or removed from service. The restitution of employee, in this context, means that there has been no discontinuance in his service and for all purposes he had never left his post. He is therefore, entitled to arrears of pay for the period he was kept out of service for no fault of his own. No different is the position where an employee has been served with a penalty like reduction in rank or withholding of increment(s) or forfeiture of service etc. and the penalty has been set-aside. The employee stands restored to his post with all his perks and benefits intact and will be entitled to arrears of pay as would have accrued to him had the penalty not been imposed on him. This general principle of restitution fully meets the constitutional requirements of fair trial and due process (Articles 4 and 10-A) besides the right to life (Article 9) which includes the right to livelihood ensuring all lawful economic benefits that come with the post.
Reinstating an employee but not allowing him to enjoy the same terms and conditions of service as his colleagues is also discriminatory (Article 25). All this snowballs into offending the right to dignity (Article 14) of an employee for being treated as a lesser employee inspite of being reinstated or, restored into service.
10. The "concept of reinstatement into service with original seniority and back benefits" is based on the established principle of jurisprudence that "if an illegal action/wrong is struck down by the Court, as a consequence, it is also to be ensured that no undue harm is caused to any individual due to such illegality/wrong or as a result of delay in the redress of his grievance." If by virtue of a declaration given by the Court a civil servant is to be treated as being still in service, he should also be given the consequential relief of the back benefits (including salary) for the period he was kept out of service as if he were actually performing duties. A civil servant once exonerated from the charges would stand restored in service as if he were never out, of it and would be entitled to back benefits. A five Member Bench of this Court in Inspector-General of Police, Punjab v. Tariq Mahmood authoritatively reiterated: "[T]he grant of back benefits to an employee who was reinstated by a Court/Tribunal or the department is a rule and denial of such benefit is an exception on the proof of that such a person had remained gainfully employed during such period."
11. It follows that where the order of dismissal, removal or reduction in rank is set aside unconditionally, back benefits are to be paid necessarily. The grant of back benefits to an employee who has been illegally kept away from his employment is a rule and denial of service benefits to such reinstated employee is an exception. When a civil servant is reinstated in service and his dismissal from service is held to be illegal, and for no fault of his, then his reinstatement in service would mean that he has always been in service and as a consequence be paid salary from the day he was illegally removed or dismissed from service. One of the exceptions of not granting full back benefits is that if the reinstated employee had accepted another employment or engaged in any, profitable business during the intervening period; in such a case, the said amount would be set off against the salary. This is now available as an instruction under Sl. No. 155, Vol-II, Esta Code, 2007 edition.
12. This principle of restitution and payment of back benefits also finds its presence tinder the second proviso to section 16 of the Punjab Civil Servants Act, 1974 ("Act") which deals with back benefits in the shape of arrears of pay in the event that the order of dismissal or removal or reduction in rank is set-aside in the following manner:- Provided further that where a civil servant has been dismissed or removed from service or reduced in rank, he shall, in the event of the order of dismissal, removal from service or reduction in rank being set aside, be entitled to such arrears of pay as the authority setting aside the order may determine.
13. In the past, the concept of arrears of pay was dealt with by Fundamental Rule 54 ("FR") and Civil Service Rule (Punjab) 7.3 ("CSR") issued by the Federal Government and the Punjab Government, respectively. The said Rules provide as follows; F.R. 54.-Where a Government Servant has been dismissed or removed is reinstated, the revising or appellate authority may grant to him for the period of his absence from duty:-
(a) if he is honourably acquitted, the full pay to which he would have been entitled if he had not been dismissed or removed and, by an order to be separately recorded, any allowance of which he was in receipt prior to his dismissal or removal; or
(b) if otherwise, such portion of such pay and allowances as the revising or appellate authority may prescribe. In a case falling under clause (a), the period of absence from duty will be treated as a period spent on duty.
In a case falling under clause (b), it will not be treated as a period spent on duty unless the revising or appellate authority so directs.
Explanation:-In this rule, "revising authority" means the "authority" or "Authorised Officer" as defined in the Government Servants (Efficiency and Discipline) Rules, 1973, who passes the final order on the case and not the authority who passes an order on appeal. , CSR 7.3. When a Government Servant who was dismissed or removed from service is reinstated, the revising or appellate authority may grant to him for the period of his absence from duty: a) If he is honourably acquitted, the full, pay to which he would have been entitled if he had not be dismissed or removed and by an order to be separately recorded any allowances of which he was in receipt prior to his dismissal or removal; or b) If otherwise, such proportion of such pay and allowances as the revising or appellate authority may prescribed"
In a case falling under clause (a) the period of absence from duty will be treated as a period spent on duty. In a case falling under clause (b) it mill not be treated as period spent on duty unless the revising or appellate authority so directs.
Note 1.--This rule is absolute and unconditional and so the question of lien does not arise in the case of Government Servant who is dismissed from service and reinstated on appeal when the period of unemployment between the date of dismissal and reinstatement is declared by the appellate authority as duty.
Administrative Instruction.--Post vacated by a dismissed Government Servant may be filled substantively subject to the condition that the arrangements thus made will be reverse if the dismissed Government Servant is reinstated on appeal.
Note 2.-The term 'revising authority' as used in this rule includes an authority revising its own orders.
14. FR and CSR predate the Constitution and the Act. After the promulgation of the Constitution in 1973, FR and CSR were given protection under Article 241 of the Constitution, albeit subject to their consistency with the Constitution and till, such time that a law was made under Article 240 by the appropriate legislature. Further, section 23(2) of the Act provided that any rules, orders or instructions already in force before the commencement of the Act shall in so far as they were not inconsistent with the provisions of the Act, be deemed to be the Rules made under the Act. Thus, the position emerging post 1973 is that Fundamental Rules, Civil Service Rules (Punjab) and other orders or instructions in respect of terms and conditions of service shall remain subject to the Act and in case of any inconsistency, the provisions of the Act shall prevail. Therefore, for the purposes of back benefits, we give primacy to the proviso to section 16 of the Act and examine and interpret it keeping the spirit and wisdom of FR 54 and CSR 7.3 in view.
15. Coming back to the second proviso to section 16 of the Act, it is important to structure the discretion to be exercised by the authority or court in granting arrears of pay after the order of dismissal, removal or reduction in rank has been set-aside. This discretion is to be structured keeping in mind the constitutional provisions discussed above, the wisdom handed down by the jurisprudence evolved till date and the administrative and financial oversight envisaged under FR, CSR and the Esta Code. The reinstatement or restoration of an employee to the post may be due to the following different reasons: (a) purely on merits; (b) on technical grounds without touching the actual merits of the case and (c) on the ground of leniency where the actual order is either converted into a lesser penalty or totally set-aside.
16. An employee on reinstatement on merits cannot be deprived of back benefits. Any such deprivation would be against the constitutional rights (discussed above) guaranteed to an employee. Besides CSR 7.3 (a) also points in this direction. In case of reinstatement or restoration to a post on merits, the employee is entitled to full back benefits and there is no discontinuity of service, thus the question of intervening period does not arise in such a case. The discretion under the second proviso to section 16 of the Act is to be exercised in favour of the employee by granting him all the back benefits.
17. However, the above principle of grant of back benefits is qualified by a situation where the order of, reinstatement is conditional; either civil servant's dismissal from service is declared illegal for a defect in disciplinary proceedings or the penalty is modified to be on the lower side with the result that the civil servant is reinstated. In the former situation, the merits of the case and the determination of the fault of the employee go untouched, even though he stands reinstated. Here, an inquiry could still be made into the employee's conduct or his conduct may be considered such as to call for a departmental inquiry. The de novo proceedings could be initiated from the where the defect had crept in. In such a situation, the entitlement with regard to back benefits is put off till the final, determination with regard to the civil servant's conduct. If he is found at fault the competent authority could justifiably deny him part of the back benefits. And, in the latter situation, the civil servant is not declared blameless; rather, his penalty is reduced and, therefore, part of back benefits; as necessitated by the implications of reduced penalty, may justifiably be denied to him.
18. We also feel inclined to underscore that a civil servant cannot be burdened with the lose of service benefits without attributing any charge to him. Appellate authorities, without saying a word about the charge, often, as in two of these petitions, reinstate a civil servant taking a lenient view or on compassionate ground or on the ground of proportionality. This view usually becomes the ground to deny back benefits to the reinstated civil servant. It is underlined for the sake of clarity that the matter of 'leniency' or 'compassion' or 'proportionality' does not erode the charge rather it does not consider the award of penalty to be appropriate in the case. It may so happen that the charge stands established yet the authority or the court, applying leniency or compassion or proportionality as standard, feels inclined to extend concession of reinstatement to the civil servant. Notably the civil servant in such a case is not reinstated unconditionally and, therefore, he may be denied a portion of pay-while maintaining a proportion between the gravity of the fault of the civil servant and special/extenuating circumstances of the case he would otherwise get on reinstatement. It would be in step with the second proviso to section 16 of the Act and would also be consistent with the spirit of FR 54(b) and CSR 7.3(b). If an employee is reinstated in such an eventuality, the authority or the court needs to clearly state that though the charge ascribed to the employee stood proved, concession is being shown to him to avoid the rigors of major penalty, which would otherwise be unwarranted in view of peculiar circumstances of the case."
After having an overview of the above referred principles laid down by the Supreme Court of Pakistan, there remains no cavil that if the officer has worked for gain for certain period of tune he should not be allowed the back benefits in full rather the amount which he has earned for working gainfully shall be excluded froth his entitlement. We thus entertain no doubt in our mind that in order to determine the actual benefits in the case when the officer worked for gain a thorough inquiry and probe is required, which has not been done in this case and representation of the appellant was rejected summarily on the sole ground that he has worked for gain for the intervening period. Needless to reiterate that for calculating the back benefits it is not the period which matters rather it is the amount, which the employee has earned during that period, plays a pivotal role for such determination.
4. For the foregoing reasons we are inclined to allow this appeal while setting aside impugned order dated 31st May, 2018, resultantly, representation of the appellant shall be deemed to be pending before the competent authority, who shall decide the same afresh after holding a thorough inquiry and probe into the matter in the light of observations recorded hereinabove with no order as to costs.