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Issues Involved:
1. Whether the reversion of a public servant to his substantive rank constitutes a reduction in rank under Section 240(3) of the Government of India Act, 1935. 2. Whether the appellant is entitled to arrears of salary and allowances due to the wrongful reversion. Issue-wise Detailed Analysis: 1. Reduction in Rank under Section 240(3) of the Government of India Act, 1935: The main issue in this appeal was whether the reversion of a public servant, who had been officiating in a higher post but was reverted to his substantive rank due to an adverse finding in a departmental enquiry for misconduct, amounted to a reduction in rank under Section 240(3) of the Government of India Act, 1935. The Trial Court held that it did, while the High Court held to the contrary. The appellant was holding the rank of Mamlatdar in the First Grade and was officiating as a District Deputy Collector. Due to discrepancies in his travelling allowance bills, a departmental enquiry was held, resulting in his reversion to Mamlatdar for three years. The appellant challenged this order, claiming it was void, inoperative, wrongful, illegal, and ultra vires. The Trial Court found that the appellant had not been given the opportunity to show cause against the punishment, thus not complying with Section 240(3). It held that the order of reversion amounted to a penalty and was void. The High Court, however, dismissed the appellant's claim, stating that the reversion was not a punishment under Section 240(3). In this Court, the appellant argued that his case was covered by the observations in Parshotam Lal Dhingra v. Union of India [1958] S.C.R. 826. The Court noted that the real test for determining whether a reduction in rank is by way of punishment is if the order entails penal consequences, such as forfeiture of pay, loss of seniority, or the stoppage of future promotions. The Court found that the appellant's reversion resulted in the loss of seniority and adversely affected his emoluments and future promotions. Therefore, the reversion was not merely for administrative convenience but had penal consequences, satisfying the second test in Dhingra's case. The Court concluded that the High Court was not right in holding that the reversion was not a punishment under Section 240(3). The decision of the High Court was reversed, and the Trial Court's declaration that the reversion was void was restored. 2. Entitlement to Arrears of Salary and Allowances: The appellant claimed arrears of salary, dearness allowance, and daily allowance, amounting to Rs. 12,886, plus interest. The Trial Court dismissed this claim, stating that it was based on tort and not on contract, relying on the case of the High Commissioner for India and Pakistan v. I. M. Lall (1948) L.R. 75 IndAp 225. The High Court dismissed the suit in its entirety. The appellant contended that his suit for arrears of salary should not be governed by the three-year limitation rule under Article 102 of the Indian Limitation Act, 1908, and that the Federal Court's decision in The Punjab Province v. Pandit Tarachand [1947] F.C.R. 89 was incorrect. However, the Court found no good reasons to deviate from the Federal Court's decision. The Court allowed the appellant's claim for arrears of salary and allowances in part, from June 2, 1951, until his retirement. The claim for interest before the date of the suit was denied, but the decretal sum was to bear interest at 6% per annum from the date of the suit until realization. The appellant was entitled to three-fourths of his costs throughout, as his entire claim was not allowed. Conclusion: The appeal was allowed in part. The declaration by the Trial Court that the order of reversion was void was restored, and the appellant's claim for arrears of salary and allowances was allowed in part from June 2, 1951, until his retirement. The appellant was awarded three-fourths of his costs throughout.
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