Jai Chand Sawhney Vs. Union of India
 INSC 322 (31 October 1969)
Limitation Act (9 of 1908), Art.
102-Applicability to Government Servants-Order of dismissal of Government
servant set aside-Salary of such servant when 'accrues due' under the article.
The appellant, a railway employee, was
dismissed from service on October 13, 1949. On October 13, 1955, he filed a
suit, against the respondent, for setting aside the order of dismissal and for
arrears of salary. The order of dismissal was set aside on the ground of
failure to afford the constitutional protection provided under s. 240 of the
Government of India Act, 1935.
On the question of the period for which he
was entitled to arrears of ,salary,
HELD : A suit by a servant of the Crown for
arrears of salary is governed by Art,. 162 of the Indian Limitation Act, 1908.
[223 F] Shri Madhav Laxman Vaikunthe v. The State of Mysore.  1 S.C.R.
The period of limitation under Art. 102 is 3
years, and commences to run when the salary accrues due. The salary acrues due
when, in law, the servant becomes entitled to it.
[224 C-D] In, the present case, when the
order of dismissal was set aside, the appellant was deemed to be in service
throughout the period during which the order of dismissal remained operative.
Therefore the appellant's right to sure for his salary arose at the end of
every month in which be, was unlawfully prevented from earning it. Hence, his
claim for salary for the period prior to 3 yeas from the date of the suit was
barred. Rule 2042 of the Railway Establishment Code which provides that the pay
and allowances of a dismissed railway servant cease from the date of dismissal
does not operate to make the salary accrue due. on the date of the institution
of the suit for setting aside the order of dismissal. [224 D-F] In computing
the period of limitation the period of statutory notice of two months should be
excluded under s. 15 of the Limitation Act. Therefore, the appellant was
entitled to salary for three years and two months prior to the data of the
CIVIL APPELLATE JURISDICTION : Civil Appeal
No. 561 of 1967.
Appeal by special leave from the judgment and
decree dated May 22, 1962 of the Punjab High Court, Circuit Bench at Delhi in
Regular First appeal No. 92-D of 1959.
B. C. Misra, Urmila Kapoor and B. Ram
Rakhiani, for the appellant.
Jagadish Swarup, Solicitor-General and S. P.
Nayar, for the respondent.
223 The Judgment of the Court was delivered
by Shah, J.-Jai Chand Sawhney-hereinafter called 'the plaintiff -was removed
from service under the East Punjab Railway, by order dated October 13, 1949. He
sued the Union of India in the Court of the Subordinate Judge, Hissar, for
setting aside the order of removal on the grounds-(i) that the order was made
by an authority subordinate to the appointing authority; and (ii) that he was
not given an opportunity to show cause against the action proposed to be taken
in regard to him as required by s. 240 of the Government of India Act, 1935.
The plaintiff also claimed a decree for Rs.
20,399/9/- being the amount of arrears of
salary and damages for wrongful termination of employment. The Trial Court
declared that the dismissal was "illegal and void" and decreed the
claim for Rs. 9,335-35 for arrears of salary.
Against the decree passed by the Trial Court
the plaintiff and the Union of India appealed to the High Court of Punjab.
The plaintiff's appeal was dismissed. The
Union's appeal was also dismissed. The plaintiff was awarded arrears of salary
for three years prior to the date of the suit. With special leave, the
plaintiff has appealed to this Court.
It was held by the Federal Court in The
Punjab Province v. Pandit Tarachand(1) that the expression "wages" in
Article 102 in the Schedule to the Limitation Act includes salary, and
therefore a suit by a-servant of the Crown for arrears of salary is governed by
Art. 102 of the Indian Limitation Act. That view was reiterated by this Court
in Shri Madhav Laxman Vaikunthe v. The State of Mysore (2) it was held that the
claim in a suit for arrears of salary due to a servant of the State who is
reverted to his substantive rank is governed by Art. 102 of the Indian
Counsel for the plaintiff contended that the
period of three years under Art. 102 commences to run from the date on which
the order of dismissal is set aside, either by a departmental authority or by
the Civil Court in a suit or other proceeding. Counsel also contended that the
cause of action in a suit by a dismissed employee,arises on the date of the
institution of the suit, if the Court sets aside the order of dismissal or
removal. In support of his contention counsel relied upon a judgment of the
Madras High Court in State of Madras v. A. V. A nantharaman. (3) In that case
the Madras High Court observed that the pay and allowances of a public servant
dismissed or removed from service cease from the date of such dismissal or
removal and his right to recover the arrears arises because of Fundamental Rule
52 not before the date (1)  F.C.R. 89.
(2)  1 S.C.R. 886.
(3) I.L.R.  Mad. 1014.
224 on which the result of the subsequent
proceeding setting aside dismissal or removal is declared. Counsel for the
plaintiff says' that the terms of Fundamental Rule 52 are the same as the terms
of r. 2042 of the Railway Establishment Code, and according to the principle of
the judgment of the madras high Court the plaintiffs right to sue must be
deemed to have accrued on the date on which the suit was instituted . In our
judgment, the contention cannot be accepted. When the order of dismissal or
removal is set aside by the Court on the ground of failure to afford the
constitutional protection, the order is declared invalid ab initio, i.e. as if
it in law never existed and the public servant concerned was unlawfully
prevented from rendering service. If that @ the correct view, salary due to the
public servant concerned deemed to have accrued month after month because he
had been wrongfully prevented from rendering service. The period of limitation
under Art. 102 commences to run when the wages "accrue due" and wages
accrue due when in law the servant becomes entitled to wages. Rule 2042 of the
Railway Establishment Code merely provides that "the pay and allowances of
a railway servant who is removed or dismissed from service cease from' the date
of the order of removal or dismissal". That rule does not operate to make
the wages accrue due on the date of the institution of the suit. If the order
of dismissal is set aside the public servant is deemed to be in service
throughout the period during which the order of dismissal remained operative,
and his right to sue for salary arises at the end of every month in which he
was unlawfully prevented from earning the salary which he could, but for the
illegal order of dismissal, have earned.
The High Court was, in our judgment, right in
holding that the plaintiff's claim was governed by Art. 102 of the Limitation
Act, that the remuneration payable to him accrued due month after month, and
that the plaintiff's claim for salary beyond. the period provided by the third
column of Art. 102 was barred by the law of limitation.
A slight modification must, however, be made
in the decree of the High Court. Under s. 15 of the Indian Limitation Act,
1908, where a statutory notice has to be served by the plaintiff before
instituting any action, in computing the period of limitation, the period of
the, notice in accordance with the requirements of the enactment must be
excluded. There is no doubt that the plaintiff had given such a notice. He was,
therefore, entitled to salary for three years and two months prior to the date
of the suit.
Subject to that modification, the appeal is
There, will be no order as to costs.