1. HAMOODUR RAHMAN, C. J.-This appeal, by special leave, arises out of a suit filed by the respondent herein against the Federation of Pakistan for the following reliefs :--
(a) for a declaration that the order discharging her from service as a nurse passed on the 18th of March 1949, was not passed in due course of law and was wrongful, void, illegal, inoperative and ultra vires,
(b) for recovery of arrears of pay and allowances from August 1948 to 15th November 1949, amounting to Rs. 3,135-3-6 at Rs. 202-3-0 per mensem,
(c) average pay for the remaining period of 21 years of service at the above rate, and
(d) Rs. 5,000 as compensation for vexation, mental worry, loss of special status, economic distress and wreck of physical health caused by the illegal acts of the department.
2. This suit was dismissed by the trial Court but in appeal the High Court set aside the order of the trial Court and remanded the suit for retrial on merits with a further direction that the question relating to the claim for arrears of salary should also be determined according to the law applicable to the agreement between the parties. The State came in appeal to the Supreme Court of Pakistan on the strength of a certificate granted by the High Court. The Supreme Court took the view that the order of discharge was, in effect, an order passed against the plaintiff by way of disciplinary action of dismissal and removal from service and not a mere termination of service under the terms of the agreement of service. The provisions of section 240 of the Government of India Act, 1935, were, accordingly, held to be attracted. The appeal of the Government was dismissed and the case was remanded back to the trial Court for determining as to whether the provisions of section 240 of the Government of India Act, 1935 had been complied with and for determining the plaintiff's claim for arrears of salary from August 1948 to 15th of November 1949, (vide Federation of Pakistan v. Mrs. A.
3. Y. Issacs (PLD 1956 SC (Pak.) 431)).
4. On remand, the trial Court framed the following issues :-
(i) Had the provisions of section 240 of the Government of India Act, 1935, been complied with by the defendant before passing the order in dispute?
(ii) Is the plaintiff entitled to recovery of salary for the period from August 1918 to 15th November 1949? If so, at what rate and on what account?
(iii) Relief.
5. The trial Court found that the provisions of section 240 of the Government of India Act, 1935, had not been complied with and that the total monthly pay of the respondent was Rs. 202-3-0 but it did not grant a decree for arrears of salary for the period from August 1948 to 15th November 1949, in view of the fact that the supreme court itself had not, in the case of Noorul Hassan and others v. The Federation of Pakistan (PLD 1956 SC (Pak.) 331), allowed any decree for arrears of salary or damages, and Munir, C. J. Had actually observed therein that all that the appellants in that case were entitled to do was "to represent to the Government for payment of about two months' pay, because, no suit for the recovery of salary would lie".
6. PLD 1955 FC 522) where also Munir, C. J had quoted with approval the Privy Council's observations in the case of I. M. Lall (PLD 1948 P C 150) to the effect that "there is a rule of public policy applicable to every public servant which prevents them from suing the Crown for their pay, on the assumption that their only claim is on the bounty of the Crown and not for a con--tractual debt and consequently their only remedy under that contract lies in an appeal of an official or political kind".
7. Finally, reliance was also placed on the decision of this Court in the case of State of Pakistan v.
8. Mehrajuddin (PLD 1959 SC (Pak.) 147) where it was observed that "there is an implied condition in every contract between the State and a public servant that in point of remuneration, the claim of a public servant is not for a contractual debt, but is on the bounty of the State and that it must be deemed to be a term of the contract of service of every public servant that he has no right to remuneration, which can be enforced in a civil Court of justice, and that for the purpose of recovering his remuneration from the State, his only remedy, by necessary implication from his contract, lies in an appeal of an official or political kind".
9. The respondent was, accordingly, granted only a declaration to the effect that the order passed on the 12th March 1969, discharging her from service was illegal, inoperative, ineffective, null and void.
10. From this order she went up in appeal to the High Court of West Pakistan and it was urged on her behalf that the doctrine of the bounty of the State no longer holds good and that, in any event, since the Supreme Court itself while remanding the case had directed the trial Court to determine as to whether she was entitled to her arrears of salary between August 1948 and November 1949, the trial Court was wrong in disallowing her arrears of salary for the said period.
11. The High Court did not accept the contention that the Supreme Court while remanding the suit had given any direction which would indicate that arrears of salary were recoverable, but the High Court did take the view that the doctrine of the bounty of State was no longer applicable, since the Supreme Court itself, in the subsequent case of Pakistan v. Muhammad Hayat (PLD 1962 SC 28), had taken the view that the constitutional status of the Government of Pakistan was not the same as the position of the Crown in England and had actually upheld the order of the High Court whereby a writ of mandamus had been directed to be issued against the Government of Pakistan to fix the scale of pay of the said Muhammad Hayat up to the 15th of April 1953, according to the scale in which he had been fixed under an order of the 1st of May 1948.
12. The High Court treated this as a departure from the view taken in the case of Mehrajuddin, for, it was argued, if a mandamus could be issued to fix a public servant's salary at a certain rate, "it would not be logical to say that a mandamus could not issue for payment of that salary".
13. The High Court was further of the view that, in any event, the law declared by this Court in Mehrajuddin's case was no longer applicable by reason of the change brought about in the latest constitutional provisions themselves by the inclusion of "remuneration" in Article 178(3) of the Constitution of 1962 as one of the specific terms and conditions of service of a Govern--ment servant guaranteed by the Constitution. The provisions of clause (3) of Article 178 were construed by the High Court "as something in the nature of a legal right for services rendered." Salary was, therefore, held to be no longer merely a bounty of the State.
14. Although this constitutional guarantee came to be incorporat--ed into the Constitution long after the respondent had been discharged from service and filed her suit, yet the High Court thought that in view of the trend of law as explained by M. R. Kayani, C. J. In the case of Muhammad Anwar v. The Government of Pakistan (PLD 1962 Lah. 443) the respondent would be entitled to a decree for the payment of arrears of her salary for the period in question.
15. Leave was granted in this case to consider as to whether the pronouncements of this Court had been correctly understood by the High Court and whether the specified provisions of the Constitution of 1962 had been correctly interpreted.
16. At the first hearing of this appeal before us, the learned counsel for the respondent made it clear that he would contend that even apart from the provisions of clause (3) of Article 178 of the Constitution of 1962 a Government servant was, so far as India and Pakistan were concerned, entitled to recover his arrears of salary by a suit and the decisions of this Court to the contrary needed re-consideration. In this view of the matter, since the decision in this case was likely to affect Government servants in general, notices were directed to be issued on the Attorney---- General, Government of Pakistan, and the Advocate-General of the Government of East Pakistan, to represent their respective Government's views on this question. Permission was also granted to Sheikh Aftab Hussain, learned counsel appearing for the appellant in Civil Appeal No. 19 of 1968 (Ghulam Sarwar v. The Government of Pakistan) to appear as amicus curiae, even though the said appeal had been disposed of on other grounds.
17. We have now heard the learned counsel for the three Govern--ments as well as Sh. Aftab Hussain and the learned counsel for the respondent and I musk confess that I have been agreeably surprised at the attitude of extreme fairness adopted by the learned counsel for the Government.
18. They have, besides placing their respective Government's points of view, also placed before us all the relevant decisions on the subject.
19. I must also at this stage, record that the learned Advocate---General of East Pakistan, has informed us that his definite instructions are to submit that since there is no royalty in Pakistan, no question of bounty at all arises and the Government of East Pakistan does not subscribe to the theory that the salary of a Government servant is in the bounty of the State.
20. So far as the Courts in Pakistan are concerned, the first authoritative judicial pronouncement on the subject is in the case of the Federation of Pakistan v. A.I Ahmad Hussain Shah, where Cornelius, J. (as he then was) towards the end of his judgment referred to the money part of the decree in that case representing arrears of salary and upheld the contention of the Government that A.I Ahmad Hussain Shah was only entitled to a. Declaration that on the 10th of August 1930, and thereafter until the date when he was validly dismissed by an order which he had not thought fit to challenge, he was still in service, and his further remedy was by a petition to the Government in the appropriate department. This contention was advanced on the basis of the observations of the Judicial Committee in the case of I. M. Lall, and Cornelius, J. Himself gave no other reason of his own. None of the other learned Judges constituting the Bench dealt with this question.
21. Then comes the decision of this Court in the case of the State of Pakistan v. Mehrajuddin. The main judgment in that case was delivered by Cornelius, J., but there too he contended himself by quoting in extenso the observations of the Judicial Committee in I. M. Lall's case and approving of the same. It was on the basis of this authority alone that it was held that at the time when the High Court made the orders under appeal in that case "the law was that remuneration cannot be claimed against the State by a servant in a civil Court of justice." After this exposition of the legal position this Court has consistently followed it in all subsequent cases so far. Vide Government of West Pakistan v. Fazle Haq Mussarat (PLD 1960 SC 203), Pakistan v. Naseem Ahmad (PLD 1961 SC 445), Pakistan v. Muhammad Hayat, Ghulam Mustafa Shah v. Pakistan (PLD 1963 SC 268) and Divisional Superintendent, N. W. R, Lahore v. Muhammad Sharif (PLD 1963 SC 340).
22. It would thus appear that the Federal Court of Pakistan and this Court have treated the pronouncement of the Judicial Committee of the Privy Council in I. H. Lall's case as the last word on the subject, more or less, binding upon them, although Munir, C. J. Had, in the case of Noorul Hassan itself, pointed out that the decisions of the Privy Council are no longer binding on us, although entitled to the highest respect being expositions of the law by one of the highest Judicial Tribunals in the world. Its views were, therefore, not to be disregarded merely on the ground of changed conditions. Cornelius, C. J. Himself in several subsequent cases has not hesitated to depart from the views of the Privy Council where it was founded necessary. Vide Muhammad Akram v. State (PLD 1963 SC 37 1) and Ghulam Gilani v. Government of West Pakistan (PLD 1967 SC 373).
23. I would respectfully agree with Munir, C. J. That the decisions of the Privy Council, though no longer binding on us, are entitled to be treated with the highest respect and that they should A not be departed from merely on the ground of changed conditions, but I cannot subscribe to the view that the Privy Council was infallible or that it never made mistakes. I propose, therefore, to examine, in all humility, the exposition of the law and the reasons therefore as given by the Privy Council in the case of I. M. Lall with regard to this subject.
24. It appears that Lord Thankerton, who delivered the opinion of the Board, considered it unnecessary to cite authority to establish that no action in tort could lie against the Crown, but he did concede that, therefore, any right of action must either be --based on contract or be conferred by statute.
25. So far as the contractual basis of the right was concerned, the noble Lord considered it sufficient to refer only to the judgment of Lord Blackburn in the Scottish case of Mulvenna v. The Admiralty ((1926) Scot. Cas. 842) and from that to declare that the law had always been settled that arrears of salary could not be recovered by action against the Crown but only by petition, memorial or remonstrance.
26. As to whether any such right to recover salary had been conferred by statute, it was opined that no such statutory right was derived from any of the provisions of the Government of India Acts. The attempt made to invoke in aid the provisions of section 32 of the Government of India Act of 1915 (wrongly) mentioned in the reports as (1919) was repelled by saying that it had been settled ever since the decision in the case of Gibson v, The East India Company ((1839) 132 E R 1105) that pay could not be recovered by action against the company. No other statute was referred to nor were the provisions of section t 0 or Order XXI, rule 48 of the Civil Procedure Code noticed.
27. It will thus appear that Lord Thankerton himself relied mainly on the view expressed by Lord Blackburn in the Mulvenna's case. It was the view of Lord Blackburn alone. Two of the other Judges sitting with him on the Bench based their decisions on other grounds, and it seems that it has been trenchantly criticised by Lord Mackay in a subsequent Scottish case of Cameron v. Lord Advocate ((1952) Scot. Cas. 165).
28. "(i) The case was a Scottish case not binding on the English Courts and no more persuasive than decisions of the Common--wealth Courts;
(ii) It was not even the grounds of the decision of the majority of the Judges in that case, which has, itself, since been disapproved in that particular respect by the Court of Session;
(iii) A false analogy was drawn between military and civil servants of the Crown;
(iv) Order XLV, rule 1, under which the proceedings were taken, did not bind the Crown and the same result could have been reached simply on that ground, and
(v) earlier authority and dicta were not brought to the attention of the Court and the decision was reached after an inadequate consideration of the law on the subject."
29. The only other case, in which it has been held in Great Britain that a servant of the Crown cannot maintain an action in respect of wages due for his services against the Crown or a superior Crown servant, is the case of Lucas v. Lucas and another ((1943) 2 A E R 110). That also was a case in which the wife of an Indian Civil Servant had obtained a garnishee order nisi against the High Commissioner for India with respect to her husband's oversea's pay for the arrears of alimony awarded to her. Pilcher, J., who decided this case, also relied upon the views of Lord Blackburn in Mulvenna's case.
30. This decision has not been noticed by the Privy Council in the case of I. M. Lall, presumably because Pilcher, J. Gave no reason of his own and considered it sufficient to say that Lord Black--burn's view of the effect of the English authorities commended itself to him, even though Pitcher, J. Was conscious of the fact that the majority of the Court had decided the case of Mulvenna upon grounds rather different from these given by Lord Blackburn.
31. The decision of Pilcher, J. In the case of Lucas v. Lucas has been examined in the Law Quarterly Review, Volume 61 (1945), rather exhaustively from all points of view and the learned commentator, Mr. D. W. Logan, Ph. D., seems to be of the view that the ratio decidendi selected by Pitcher, J. Is open to doubt, as the question regarding the right of a civil servant to sue for arrears of salary was never adequately presented before him and the authority upon which it is based itself requires careful scrutiny.
32. It is unfortunate that Scottish decisions are not available in this country and all that we have before us regarding the views of Lord Blackburn in Mulvenna's case is the passage quoted by the Privy Council in I. M. Lall---s case which has been re-quoted in extenso again in Mehrajuddin's case. The main reasons which, it appears, impelled Lord Blackburn to come to this conclusion were: "(1) That the terms of service of a public servant are subject to certain qualifications dictated by public policy, no matter to what service the servant may belong, whether it be naval, military or civil, and no matter what position he holds in the service, whether exalted or humble, and
(2) that these qualifications are to be implied in the engage--ment of a public servant, no matter whether they have been referred to in the agreement or not".
33. Upon these principles he concluded as follows :-- "If these conclusions are justified by the authorities to which I have referred, then it would seem to follow that the rule based on public policy, which has been enforced against military service of the Crown and which prevents such servants suing the Crown for their pay on the assumption that their only claim is on the bounty of the Crown and not for a contractual debt, must equally apply to every public servant."
34. The authorities to which he had referred were authorities which, as he himself says, "deal only with the power of the Crown to dismiss a public servant."
35. The power to dismiss at pleasure, as has been pointed out by Lord Atkin in Reilly v. Rex ((1934) A C 176) "is not inconsistent with the existence of a contract until so determined", but it is a doubtful question as to whether the position of a civil servant in England was ever the same. As that of a military servant. In a very illuminating article published in the Law Quarterly Review, Volume 66 (1950), regarding the Armed Forces of the Crown, it has been pointed out by Mr. Zelman Cowen that so far as a person employed in the Armed Forces of the Crown is concerned, "it rests solely in the breast of the Crown to determine whether the pay of an individual officer or soldier shall not be issued to him. No suit or action, therefore, can be brought against the Crown or its ministers for the recovery of pay, pension or other grant for military service, "for, the relationship between the Crown and the members of the Armed Forces is such that it is of paramount importance that nothing should be permitted which would be prejudicial to the maintenance of discipline. A person, who joins the Armed Forces, acquires a particular legal status. He lives a life apart subject to strict discipline and governed by a special Code. Even his private life is subordinated to the overriding claims of the Crown, and his services must at all times be at its disposal. It is for this reason that the Crown takes interest also in his domestic responsibilities. The Crown can even, under the Army Act, make deductions from the pay of a soldier who has deserted or left in destitute circumstances his wife or any of his legitimate children under the age of 16.
36. As against this, the position of a civil servant under the law in England is entirely different. The concept of office under the Crown up to the second half of nineteenth century, when the civil service in the real sense of the term came into existence, was that offices lay in grant, with the result that the grant of an office in medieval England was, as Mc Ilwain puts it in his book on the `Tenure of English Judges, Constitutionalism and the Changing World', page 295, "in effect the same as a grant of land : it conferred on the grantee an estate in the office and (usually more important) in its emoluments". The term of the grant specified the estate conferred. Sometimes it was an inheritable estate but normally it was for life. If it was durante bene placito, then the King could dismiss the officer at will without infringing any right of property but where the tenure of office was quamdiu se bene gesserit, the holder of the office obtained a free-hold in his office.
37. Indeed, the concept of an office being tied up with a grant was so well-established in medieval England that even Blackstone in his Commentaries dealt with "offices" under the head of "Property" and regarded them as a species of incorporeal hereditament which could be held in fee simple, fee tail, for life or for a term of years. It followed from this that such offices could be inherited, sold and. Acquired by purchase, and usually the incumbent of the office reimbursed himself from the fees and other emolu--ments attaching to the office. Seldom was a salary paid by the King. The reforms up to the middle of the nineteenth century consisted principally in the abolition of sinecures, the prohibition of the sale of offices, the overhaul of administrative machinery, the abolition of payment by fees and the substitution of salaries which were voted by Parliament and not charged on the civil list. (For a fuller discussion see Law Quarterly Review, Volume 61, pages 240 to 267). There was, therefore, in Great Britain little or no similarity in principle between service in the Armed Forces and service in the civil offices of the State.
38. Even with regard to military officers it appears that there are some decisions which seem to indicate that if the office was saleable it was also assignable for the benefit of creditors vide Flarty v. Odlum (100 E R 3 T R 801). It was held there that the office of a life guardsman being a saleable object would be assignable for the benefit of his creditors but the future half pay of such an officer could not be sold by the officer concerned and, therefore, could not be assigned in favour of his creditors in his bankruptcy.
39. The same principle has not, however, been accepted in note by the Courts of the Commonwealth which have taken the view that so far as the Commonwealth is concerned the terms and conditions of service of both civil and military servants of the State are controlled by statutes and the statutes may well change the common law position, vide Allpike v. The Commonwealth and others (77 C L R 62).
40. So far as civil servants are concerned it is interesting to note that in 1923 the House of Lords in England, in the case of Sutton v. Attorney-General (39 T L R 294), actually allowed Mr. Sutton's petition of right claiming 81-10s as damages for an alleged breach of contract by the Postmaster- General. This amount was claimed as a war bonus which was afterwards granted in accordance with certain awards of the Conciliation and Arbitration Board for Government Employees to Post Office servants who continued to be employed as such. All the law Lords participating in this decision treated the claim of Mr. Sutton as being "purely contractual" and "based upon the failure of Government to implement the agreement with him". Lord Atkinson actually observed: "I think the evidence shows it is part of the pay for the time being, not a present or a gratuity or something external to pay to which a person receiving civil pay has no right under his contract of service."
41. Lord Phillimore concluded his judgment by saying that he would prefer to rest his judgment "on the language of the contract".
42. The next and the most important decision on this subject in England is in the case of C. B. Reilly v.
43. The King which came to the Privy Council from the Supreme Court of Canada. Mr. Reilly had been appointed in 1928 a member of the Federal Appeal Board of Pensions in Canada for a term of five years, but during the currency of his tenure, on May 13, 1930, the Canadian Legislature repealed the Pensions Act and set up a Pensions Tribunal and a Pensions Appeal Court. As a: result of this new Act the old Federal Pensions Appeal Board was abolished and neither Mr. Reilly nor any of his other co-members was re--appointed to the new Tribunal or Court nor was any compensa--petition paid to them. Indeed, in October 1930, Mr. Reilly was even requested to vacate the premises he had occupied in pursuance of his office. He applied by petition of right for compensation, as on a breach of contract between him and the Crown but failed before the Courts in Canada on the ground that the relation between the holder of a public office and the Crown is not contractual.
44. One of the learned Judges of the Supreme Court of Canada had taken the view that even if there was a contract, one of the necessary implied terms of the contract was that the Crown could dismiss at pleasure. Lord Atkin delivering the opinion of the Board observed as follows :- "Their Lordships are not prepared to accede to this view of the contract, if contract there be. If the terms of the appoint--ment definitely prescribe a term and expressly provide for a power to determine `for cause' it appears necessarily to follow that any implication of a power to dismiss at pleasure is excluded. This appears to follow from the reasoning of the Board in Gould v. Stuart 1896 A C 575. That was not the case of a public office, but in this connection the distinction between an office and other service is immaterial. The contrary view to that here expressed would defeat the security given to numerous servants of the Crown in judicial and quasi---judicial and other offices throughout the Empire, where one of the terms of their appointment has been expressed to be dismissal for cause.
45. The appeal was, however, dismissed because it was felt that in this case the contract, if any, between Mr. Reilly and the Government had become impossible of performance by reason of the new legislation enacted by the Canadian Parliament, abolishing by statute the office held by Mr. Reilly.
46. The case of Terrell v. The Secretary of State for the Colonies ((1953) 2 Q B 482) was a case of puisne Judge of the Supreme Court of Malaya. He was, under a letter written on behalf of the Secretary of State, to hold office till he attained the age of 62, but after the occupation of Malaya by the enemy he was informed that he was to be treated as having been pensioned off on the abolition of the office with effect from 7th July 1942-17 months before the attainment of his 62nd birthday. He disputed the validity of his retirement and his case was referred to an arbitrator. The arbitrator awarded that the claimant was liable in law to be required to retire from his office before reaching the age of 62. The case came before the Queens Bench Division as a special case stated by an arbitrator. Lord Goddard, C. J. Agreed with the arbitrator that he was liable to be retired before attaining the age of 62, since under the Letters Patent his service was during the pleasure of the Crown, but in the course of his judgment the learned Chief Justice observed, while discussing the effect of the decision of the Privy Council in the case of Reilly v. The King as follows :- "Thus if a servant is engaged, whether by the Crown or an individual, at a salary but on the terms that he may be dismissed at will, if he is dismissed he may recover his salary for the time that he has served."
47. The learned Chief Justice, therefore, conceded that a Government servant could sue to recover arrears of salary.
48. Lastly in the case of Inland Revenue Commissioners v. Hambrook ((1956) A E R 807), the same learned Chief Justice, while reviewing all the earlier decisions, added the following comment :- "If I may be bold enough to express a conclusion on a matter on which the Judicial Committee hesitated in Reilly v. Rex, it is that an established civil servant is appointed to an office and is a public officer, remunerated by moneys provided by Parliament so that his employment depends not on a contract with the Crown but on appointment by the Crown, though there may be, as indicated in Reilly v. Rex, exceptional cases, as for instance, the engagement for a definite period where there is a contractual element in, or collateral to, his employment."
49. So far as the Judicial Committee of the Privy Council itself is concerned, it seems that in 1898 in the case of Smyth v. The Queen (1898 A C 782) in an appeal from the Supreme Court of Victoria, it took the view that a person who held the office of prosecutor for the Queen, was entitled, under the Public Service Act, 1890, to recover superannuation allowance, notwithstanding the fact that he held office during pleasure. Here, the implied term of public policy was treated as having been' excluded by the express provisions of the statute.
50. To the same effect is the decision in Wigg and another v. Attorney-General for the Irish Free State (1927 A C 674), on appeal from the Supreme Court of the Irish Free State, where it was held that under the Constitution of Irish Free State Act, 1922, civil servants of the Crown, who had retired, upon being transferred to the service of that State, were entitled to recover compensation under that Act as a legal right even by an action against the Attorney General.
51. It would thus appear that the law in England on the subject was neither settled nor was there even in principle and similarity between the position of persons serving in the Armed Forces and civil servants. Apart from the observations in the case of Mulvenna and the case of Lucas v. Lucas, there is no other authority to support the view that a civil servant in England could not recover his arrears of salary by a petition of right. No Court in England also appears to have fully subscribed to the view that the relationship between the Crown and its civil servants could never be contractual.
52. Even Lord Blackburn in the concluding portion of his observations quoted in the case of I. M. Lall had to concede that the "qualifications dictated by public policy" had to be read "as an implied condition into every contract between a Crown and a public servant".
53. It has, with respect, to be pointed out that once it is conceded that this is only an "implied conditions" then it must follow from this that there is a contract into which this condition can be implied and that such a condition can like all other implied conditions be excluded by an express stipulation to the contrary or by a statutory provision.
54. The position in this Sub-continent was, however, substan--tially different. The Crown enjoyed no immunity in litigation. It could sue and be sued subject only to this that notice under section 80 of the Code of Civil Procedure had to be given to the Crown before filing a suit against it. Section 32(2) of the Government of India Act, 1915, also provided that "every person shall have the same remedies against the Secretary of State in Council as he might have had against the East India Company if the Government of India Act, 1858, and this Act (of 1915) had not been passed". The Privy Council had observed with regard to this that since it had been held by the Common Pleas Division of England in the case of Gibson and others v. East India Company that arrears of pay could not be recovered, the provisions of section 32 of the Government of India Act, 1915, were of no assistance.
55. With profound respect it has to be pointed out that the case of Gibson was a case in which certain assignees in bankruptcy of the effects of one, John Mallandaie, who had served in India as a Military Officer under the East India Company and was entitled to a pension payable as a Lt.-Col., had sued to recover his half yearly pension. The suit failed. The ratio of the decision in that case, however, was, as given in the penultimate paragraph of the judgment, to the following effect :- "It is enough, ho a ever, to say, that though the company undoubtedly might, if they had thought proper, have made a grant under their common seal for the payment of this pension, but which they would have rendered themselves liable to an action in a Court of law, yet they have not done so : and it appears to us that grant, not under seal, does not fall within the principle of exception which has been above adverted to, and consequently, that it must be governed by the general rule of law, that a corporation aggregate cannot be sued upon a contract not being under their common seal."
56. It will thus be observed that this decision had nothing to do with the question of bounty at all. The assignees in bankruptcy were defeated merely on the ground that the grant by the East India Company was not under their common seal and, as such, the grant could not be enforced by action against a corporation aggregate like the East India Company. Had the grant been under seal, it would have been enforceable.
57. Whatever might have been the position in England, it appears that prior to Partition in this Sub- continent the position of a civil servant was, from even before the Government of India Act, 191.5, regulated by statutes and a certain portion of the salary B of a civil servant was attachable both under the Presidency Towns Insolvency Act, 1909, and the Civil Procedure Code, vide section 60(l), clauses (i), (j) and (l) and Order XXII, rule 48 thereof. The relevant provisions of section 60(1) and sub-rule (3) of rule 48 are as follows:- "60.-(1) The following property is liable to attachment and sale in execution of a decree, namely, lands, houses or other buildings, goods, money, bank-notes, cheques, bills of exchange, hundis, promissory notes, Government securities, bonds or other securities for money, debts, shares in a corpora--petition and, save as hereinafter mentioned, all other saleable property, movable or immovable, belonging to the judgment---debtor, or over which, or the profits of which, he has a disposing power which he may exercise for his own benefit, whether the same be held in the name of the judgment-debtor or by another person in trust for him or on his behalf: Provided that the following particulars shall not be liable to such attachment of sale, namely :- (a)
58. (b)
59. (c)
60. (d)
61. (e)
62. (f)
63. (g)
64. (h)
(i) salary to the extent of the first hundred rupees and one---half the remainder Provided that where such salary is the salary of a servant of the State of a servant of a railway or local authority, and the whole or any part of the portion of such salary liable to attachment has been under attachment, whether continuously or intermittently for a total period of twenty-four months, such portion shall be exempt from attachment until the expiry of a further period of twelve months and, where such attachment has been made in execution of one and the same decree, shall be finally exempt from attachment in execution of that decree;
(j) the pay and allowances of persons to whom the Pakistan Army Act, 1952, applies, or of persons other than Commissioned officers to whom the Naval Discipline Act as modified by the Pakistan Navy (Discipline) Act, 1934, applies (k)
(l) any allowance forming part of the emoluments of any servant of the State or of any servant of a railway or local authority which the appropriate Government may by notifica--petition in the official Gazette declare to be exempt from attach--ment, and any subsistence grant or allowance made to any such servant while under suspension;
(m) to (P)
65. "48.-(3) Every order made under this rule, unless it is returned in accordance with the provisions of sub-rule (2), shall, without further notice or other process, bind the appropriate Government or the railway company or local authority, as the case may be, while the judgment-debtor is within the local limits to which this Code for the time being extends and while he is beyond those limits if he is in receipt of any salary or allowances payable out of the revenues of the Central Govern--ment or a Provincial Government or the funds of a railway company carrying on business in any part of Pakistan or local authority in Pakistan and the appropriate Government or the railway company or local authority, as the case may be, shall be liable for any sum paid in contravention of this rule."
66. Under clause (i) of subsection (1) of section 60 except for the first one hundred rupees the half of the remainder of the salary of a Government servant is attachable. Similarly under clause (1) of the said subsection any allowance forming part of the emoluments of a Government servant is attachable unless it has, by a notification in the official Gazette, been declared to be exempt from attachment. The distinction between a civil servant and a defence personnel has also been maintained by clause (j) of this subsection. While the pay and allowances of persons to whom the Pakistan Army Act applies are not attachable the pay and allowances of Commissioned Officers of the Navy are attach able.
67. Under the main provisions of subsection (1) of section 60 of the Code of Civil Procedure what is attachable is a debt due to the judgment-debtor and if a portion of the salary of a public servant is attachable then it is manifest that attachability depends upon whether the salary of a Government servant is a debt or not, for, it will be liable to attachment only if it is a debt. Therefore if the Civil Procedure Code has made the attachable portion of the salary a debt, it is not a mere bounty, for, the notion of a debt connotes a right in the creditor to recover the debt from the debtor, if necessary, by action.
68. Under section 60 of the Presidency Towns Insolvency Act, 1909, also, the Official Assignee is entitled to receive for distribution amongst creditors of an insolvent Government servant such portion of his pay or salary as is liable to attachment in execution of a decree.
69. It is clear, therefore, that so far as salary, which has accrued due, is concerned, substantial portion of it, is attachable as a debt by virtue of the provisions of the Code of Civil Procedure and the Provincial Insolvency Act and that portion cannot be treated as )a bounty.
70. Again under sub-rule (3) of rule 48 of Order XXI of the Civil Procedure Code it will be noticed that the disbursing officer of a Government department is bound to obey a proper order of attachment served upon him and to remit the attached amount to the Court issuing the order for payment to the judgment-creditor. If he fails to do so, the Government itself will be liable to make good the amount to the decree-holder. The inference from the above is, in view, irresistible that a portion of the Government servant's salary, which is attachable, is not, by any means, in the bounty of the State. The State is bound under the relevant Statutes to make over the same to the attaching creditor. Can it then be argued that while a creditor of a Government servant may attach and recover a substantial portion of the salary accrued due to a public servant from the Govern--ment as of right, the Government servant himself has no right to recover the same from the State, as it is in the bounty of the State?
71. The fallacy of this argument was well brought out by the Federal Court of India in the case of the Punjab Province v. Tarachand (AIR 1947 FC 23), where it was aptly pointed out that to lend support to this concept would be an "absurd proposition against which we must guard ourselves," particularly, since section 292 of the Government of India Act, 1935, had itself expressly preserved and continued in force the provisions of the Code of Civil Procedure and the Insolvency Act. In the view of the Federal Court, therefore, the provisions of subsection (1) of section 240 of the Government of India Act had, of necessity, to be read not only along with the other subsections of the said section but also along with the relevant provisions of the Code of Civil Procedure.
72. It has again to be pointed out that unfortunately neither this decision of the Federal Court of India nor the provisions of the Code of Civil Procedure were brought to the notice of the Privy Council when it decided the case of I. M. Lall.
73. It is, therefore, not without interest that, in the subsequent case of North-Western Frontier Province v. Suraj Narain Anand (75 I A 343), when the provisions of section 60 of the Code of Civil Procedure, the decision of the Federal Court of India in the case of Punjab Province v. Pandit Tara Chand and the decision of the Privy Council itself in the case of Reilly v. The King were placed before the Privy Council by Mr. Anand himself, at the review stage, the Privy Council affirmed the judgment and decree of the Federal Court, which had, after declaring Mr. Anand's dismissed void, remanded the case to the Court of the Judicial Commissioner for consideration of the claim for arrears of pay, with the follow--ing observations:-- "If, in accordance with their Lordships humble advice; the declaratory judgment of the Federal Court is restored, it will be open to the respondent to pursue any remedy which flows from that declaratory judgment in the appropriate Court. Their Lordships must not be understood, however, as expressing an opinion that the respondent was entitled, as of right, to recover the sum of Rs.
74. 2,283 which was awarded to him or that he has any claim to a further sum in respect of arrears of pay.
75. It is not without significance that the Privy Council was careful enough not to re-affirm its decision in I. M. Lall---s case, but to leave the matter open by saying that they were expressing no opinion upon the right of Mr. Anand to recover the amount of arrears of pay even though it was left open to Mr. Anand to pursue any remedy which flowed from the declaratory judgment of the Federal Court.
76. Can it. In the face of this expression of opinion of the Privy Council itself, still be maintained that the law on the subject was settled by the decision in I. M. Lall---s case? I would respectfully suggest that it was not.
77. Since the partition of this sub-continent, the Courts in India, which is also governed by similar laws, have preferred to follow the decision in Tara Chand's case rather than the pronouncement of the Judicial Committee in the case of I. H. Lall. Thus in the case of State of Behar v. Abdul Majid (AIR 1954 SC 245), the Supreme Court of India, after examining, the above-mentioned decisions of the Federal Court and the Privy Council, took the view that "on a consideration of the reasons given in the two judgments we think that the rule of England law that a civil servant cannot maintain a suit against the State or against the Crown for the recovery of arrears of salary, does not prevail in this country and that it has been negatived by the provisions of the statute law in India".
78. The provisions of the statute referred to are section 60 and rule 48 of Order XXI of the Code of Civil Procedure.
79. With respect to the judicial committee of the Privy counsel my analysis of the decisions above referred conclusion that so far as the salary of a Government servant, which has accrued due, is concerned, even the Courts in England did not treat it as being in the bounty of tae State, for, the salary of a Government servant there was attachable for debt (See Treasury Control of the Civil Service 1854-1874 by Maurice Wright, pages 302-303). There too, the general view, apart from the decisions in the cases of Mulvenna and Lucas v. Lucas, was that the relationship between a civil servant and the Crown was essentially contractual though the contract was qualified by an implied term based on public policy that his services would be terminable at the pleasure of the employer, but as long as that pleasure was not exercised, there was a binding contract which determined the other terms and conditions of service and these could be enforced, if necessary, by the method available in that country, namely, by a petition of right. The procedure by way of a petition of right made only this difference that before initiating the proceedings one had to obtain the fiat of the Attorney-General. Once a fiat was granted, the action proceeded like any other action in the Courts of law. In our own country too, this safeguard is provided by the requirement of notice under section 80 of the Code of Civil Procedure. After this notice has been given, the action proceeds like any other action and, at any rate, there being no procedure similar to the procedure by way of a petition of right available in this Sub--continent, the only remedy that a subject has, is by way of an r action against the Government which enjoys no immunity so fart as actions at law are concerned. This, as already pointed out, was clearly provided by section 32 of the Government of India Act, 1915, and section 176(1) of the Government of India Act, 1935. These provisions made the Crown in India liable to be sued in respect of acts which in England could be enforced only by way of petition of right.
80. The concept that it is in the prerogative of the Crown to dismiss its servants at its pleasure was never really asserted even in England, for, the Courts there preferred to base this claim on firmer grounds of public policy, but so far as the Indian sub continent was concerned there was never any scope for invoking such a prerogative. The prerogative of the Crown in India was controlled by the various Government of India Acts and, at any rate, after the enactment of the Act of 1935 it was, by reason of section 2(1) thereof, to prevail "except in so far as may be otherwise provided by or under" the said Act. The prerogative of the Crown is only such as the law allows and if the law had' curtailed that right then the law should prevail.
81. Apart from the Government of India Acts, there are various other statutes which deal with the right of some Government servants to recover the salary already earned, such as the Industrial Disputes Acts, 1947 to 1969, the Payment of Wages Act, 1936 and the Workmen's Compensation Act, 1923. This Court has in, the case of the Divisional Superintendent, N. W. Railway v. Muhammad Sharif, already held that, notwithstanding the decision of this Court in the case of Mehrajuddin, a railway employee, to whom the Payment of Wages Act was applicable, was entitled to claim his arrears of salary from the Government Department employing him under the provisions of the said Act.
82. Whatever might have been the implied conditions of a contract between a Government servant and his employer, it seems that, so far as this Sub-continent is concerned, even the framers of the Government of India Act of 1935 were not oblivious of the Act that "remuneration" is a part of its terms and conditions of service. Thus in subsection (3) of section 242 the word "remuneration" attaching to posts is expressly mentioned so far as the question of safeguarding the rights of "Anglo Indians" are concerned.
83. PLD 1964 SC 17), Cornelius, C. J. Himself took the view that terms and conditions of service enjoyed by a Government servant must be understood in a narrow and limited sense "so as to refer to concrete matters, such as the actual post occupied, actual salary enjoyed and the same age of superannuation". Why is it not then possible to say that the conditions of service referred to in section 241 of the Government of India Act, 1935 also included pay?
84. The Indian Independence Act of 1947, however, by sec--petition 10, clearly guaranteed the same conditions of service as regards "remuneration, leave and pension" so far as civil servants of the Crown in India appointed by the Secretary of State were concerned.
85. The position, therefore, that emerges from the examination of the decisions above referred to is that a civil servant has ands always had the right to recover from the Crown salary already accrued due to him, in spite of the fact that he held service; during the pleasure of the Crown. The theory of the bounty of the State never applied either in England or in pre-Independence India as regards arrears of pay. I am, therefore, with great respect, unable to agree with the views of the Judicial Committee of the Privy Council in I. M. Lall's case that a civil servant had no right to arrears of pay nor could he recover the same. It will follow from this that I am also unable to agree with the law propounded by this Court in the case of Mehrajuddin, which appears to be based solely upon the decision of the Privy Council in I. M. Lall's case.
86. Having said this, however, I must make it clear that so far as an action for damages in tort is concerned, that will still not be maintainable against the State, except where allowed by nor will a Government servant have any right to claim future salary.
87. The next question that arises is as to what is to happen in cases where a person is dismissed from service but subsequently the dismissal is held to be unlawful. Should a Government servant be entitled to recover his pay for the full period he was kept out of service? It seems to me that if the dismissal was wrongful, then it was due to no fault of the servant that he was prevented from serving the State. If he is to be treated by virtue of the declaration given by the Court as being still in service, then I see no reason why he should not also be given by way of consequential relief the salary for the period as if he was actually rendering service. This is the basis on which arrears of pay were allowed to Suraj Narain Anand by the Federal Court. If during this period he has accepted other employment or engaged in other profitable business, then by amount earned by way of salary from such employment or as profits of such business would, of course, have to be set off against the salary due for two reasons. Firstly, because a Government servant cannot without the permission of Government serve any other master or engage in any other business and secondly, because on general principles too, a person cannot be allowed to reap a double advantage.
88. Upon the view I have taken as regards the applicability of the doctrine of bounty to the case of salary already accrued due under the law prevailing at the time the respondent filed her suit, the respondent's appeal in the High Court was bound to succeed even without invoking in aid the provisions of the Constitution of 1962. The general rule is that the rights of the parties to a suit must be adjudicated upon on the basis of the law prevailing at the date of the institution of the suit. This is what the High Court has done. Its reference to Article 178(3) of the Constitution of 1962 was only for the purpose of pointing out that the makers of the Constitution had expressly included "remuneration" therein as a term and condition of service guaranteed by the Constitution to negative the effect of the decision in the case of Mehrajuddin. I am inclined to agree with this view.
89. Thus sub---Article reads as follows:- "178.-(3) Rules made for the purposes of clause (2) of this Article shall be so framed as to ensure-
(a) that the terms and conditions of service of a person (in so far as those terms and conditions relate to remuneration or age fixed for superannuation) are not varied to his dis--advantage; and
(b) that where an order is made which-
(i) punishes or formally censures a person;
(ii) alters or interprets to the disadvantage of a person any rule affecting his terms or conditions of service; or
(iii) terminates the employment of a person otherwise than upon his reaching the age fixed for superannuation, he shall, except where the order is made by the President or a Governor, have at least one appeal against the order and, where the order is made by the President or a Governor, he shall have the right to apply to the President or the Governor for a review of the order."
90. It seems clear from this that now remuneration is one of the terms of service guaranteed by the Constitution. It cannot be varied to a Government servant's disadvantage. This is thus a guaranteed right. In this view of the matter it has now set the controversy at rest and sounded the death knell of the bounty theory.
91. For the reasons given above I would dismiss this appeal but would make no order as to costs, as difficult questions of law were involved.
92. MUHAMMAD YAQUB ALI, J.-I agree.
93. SAJJAD, AHMAD, J.-I agree.
94. M. R. KHAN, J.-I agree.
95. WAHIDUDDIN AHMAD, J.-I agree.
…and 25 more citing cases