RUSHIBHAI JAGDISHBHAI PATHAK VS BHAVNAGAR MUNICIPAL CORPORATION

RUSHIBHAI JAGDISHBHAI PATHAK VS BHAVNAGAR MUNICIPAL CORPORATION

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4134 OF 2022

(ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 2946 OF 2020)

RUSHIBHAI JAGDISHBHAI PATHAK ..... APPELLANT

VERSUS

BHAVNAGAR MUNICIPAL CORPORATION ..... RESPONDENT

W I T H

CIVIL APPEAL NO. 4136 OF 2022

(ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 2947 OF 2020)

CIVIL APPEAL NO. 4137 OF 2022

(ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 2948 OF 2020)

A N D

CIVIL APPEAL NO. 4135 OF 2022

(ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 2949 OF 2020)

J U D G M E N T

SANJIV KHANNA, J.

Leave granted.

2. This common judgment decides the afore-stated appeals filed by

the employees of the Bhavnagar Municipal Corporation1

 who have

1 Hereinafter the ‘respondent-Corporation’.

Civil Appeal a/o. of SLP (C) No. 2946 of 2020 & Ors. Page 1 of 15

challenged the judgment dated 13th June 2019 of the Division

Bench of the High Court of Gujarat at Ahmedabad, whereby the

appeal filed by the respondent-Corporation was partially allowed,

in view of delay and laches on the part of the appellants in

approaching the court, by restricting the grant of higher pay-scale

of Rs.5,000-8,000/-2

 with consequential benefits from the date of

the judgment of the Single Judge on 31st July 2018. Prayer of the

appellants for recovery of arrears from 2010 was declined. The

respondent-Corporation, it has been held, would not be required

to refund any amount that they have recovered from the

appellants pursuant to the order dated 28th October 2010.

3. The appellants, who were initially appointed to the post of ‘Junior

Clerk’ on an ad hoc basis, were made permanent on the post of

‘Data Entry Operator’ in the Computer Department of the

respondent-Corporation in the pay-scale of Rs.4,000-6,000/- on

different dates.

4. On 19th February 2007, the respondent-Corporation, vide order

no. Mahekam/1/223, adopted and implemented in a modified form

the Scheme of the Government of Gujarat3

to, inter alia, deal with

the problem of ... ‘absence or restricted chances of promotion to

2 Revised to 9,300-34,800 in terms of the 6th Pay Commission

3 Scheme of Higher Grade Scale dated 16th August 1994 (Government resolution No. PAY-1194/

(44)/M), hereinafter referred to as the ‘Scheme’

Civil Appeal a/o. of SLP (C) No. 2946 of 2020 & Ors. Page 2 of 15

the Government employees’. The Scheme, inter alia, envisaged

grant of pay-scale of the next promotional post on completion of 9,

18 or 27 years of service. The Scheme had also stipulated that in

case of ‘employees on posts having more than one promotional

post in different scales of pay, their pay of Higher Grade Scale

shall be considered the pay of the pay-scale of the lowest of the

promotional posts’.

5. The appellants were granted the higher pay-scale of the next

promotional post of Rs.5,000-8,000/- from different dates upon

furnishing undertakings in favour of the respondent-Corporation.

One of the clauses in the undertaking stipulated that the

appellants shall give up the benefit made available under the

Scheme in case of denial of regular promotion accessible to the

employee. In such a scenario, the employee shall accept the

original downgraded pay and salary in the original pay-scale.

Further, the appellants had agreed that the arrears were payable

to them only from 1st January 2006.

6. However, pursuant to the order dated 28th October 2010, the

benefit provided under the Scheme was revised by the

respondent-Corporation observing that the appellants and others

employees were erroneously granted benefit of the higher grade

pay-scale of the next promotional post instead of the next stage in

Civil Appeal a/o. of SLP (C) No. 2946 of 2020 & Ors. Page 3 of 15

the hierarchy of pay-scales, that is, the first higher pay-scale.

Consequently, the employees who were in the pay-scale of

Rs.4,000-6,000/- had been wrongly granted the higher pay-scale

of Rs.5,000-9,000/-, in accordance with the pay-scale of the next

promotional post, instead of the pay-scale of Rs.4,500-7,000/- ,

the next stage in the hierarchy of pay-scales. The order dated 28th

October 2010 states that the anomaly had arisen as the

respondent-Corporation had not appropriately fixed the pay-scales

and thereby, excessive and unintended benefits had been given to

the employees. As a result, the respondent-Corporation had to

bear improper and excessive financial burden of the higher payscales. Pursuant to the order, the pay-scales of the appellants

were appropriately revised to the first higher pay scale and the

excess payments made were recovered from the appellants.

7. After nearly seven years, in September 2017, the appellants filed

Writ Petitions before the High Court of Gujarat at Ahmedabad

challenging the order dated 28th October 2010 whereby the higher

pay-scales of the promotional post granted to them were

withdrawn and a direction was sought against the respondentCorporation to avail the pay-scale of the next higher promotional

post and to pay the arrears. In support of their contention, the

appellants had relied upon the interpretation of the Scheme

Civil Appeal a/o. of SLP (C) No. 2946 of 2020 & Ors. Page 4 of 15

rendered in the judgment dated 16th August 2016 passed in a Writ

Petition, SCA No. 14370 of 2011, that was preferred by one

Mukeshbhai Jaswantrai Joshi, an employee of the respondentCorporation. In this case, on interpretation of the relevant clauses

of the scheme, it has been held that on financial upgradation,

Mukeshbhai Jaswantrai Joshi would be entitled to the pay-scale

applicable to the next promotional post of Rs.8,000-13,500/-,

notwithstanding the fact that it was not the next higher pay-scale

in the hierarchy of pay-scales. The respondent-Corporation was

further directed to recompense the difference of arrears of pay

with interest at the rate of 9% per annum from the date on which

the benefit was withdrawn until the date of payment. This

interpretation of the Scheme has been accepted and not

challenged by the respondent-Corporation.

8. By way of background, it is noted that Mukeshbhai Jaswantrai

Joshi had challenged the impugned order dated 28th October 2010

in a Writ Petition, SCA No. 14857 of 2010, which was filed in the

year 2010. He had partly succeeded as the respondentCorporation was directed to pass a fresh reasoned order in

accordance with law after affording an opportunity of personal

hearing to Mukeshbhai Jaswantrai Joshi. However, on 12th

September 2011, the respondent-Corporation issued a second

Civil Appeal a/o. of SLP (C) No. 2946 of 2020 & Ors. Page 5 of 15

order reiterating their earlier decision that Mukeshbhai Jaswantrai

Joshi was entitled to the higher pay-scale of Rs.6,500-10,500/-

only, and not the pay-scale of the next promotional post of

Rs.8,000-13,500/-. It can be seen that Mukeshbhai Jaswantrai

Joshi, unlike the appellants before us, approached the court with

diligence and without any delay.

9. The doctrine of delay and laches, or for that matter statutes of

limitation, are considered to be statutes of repose and statutes of

peace, though some contrary opinions have been expressed.4

 The

courts have expressed the view that the law of limitation rests on

the foundations of greater public interest for three reasons,

namely, (a) that long dormant claims have more of cruelty than

justice in them; (b) that a defendant might have lost the evidence

to disapprove a stale claim; and (iii) that persons with good

causes of action (who are able to enforce them) should pursue

them with reasonable diligence.5 Equally, change in de facto

position or character, creation of third party rights over a period of

time, waiver, acquiesce, and need to ensure certitude in dealings,

are equitable public policy considerations why period of limitation

is prescribed by law. Law of limitation does not apply to writ

4 See Nav Rattanmal and Others v. State of Rajasthan, AIR 1961 SC 1704

5 State of Kerala and Others v. V. R. Kalliyanikutty and Another, (1999) 3 SCC 657 relying on

Halsbury’s Laws of England, 4th Edn., Vol. 28, para 605; Halsbury’s Laws of England, Vol. 68 (2021)

para 1005

Civil Appeal a/o. of SLP (C) No. 2946 of 2020 & Ors. Page 6 of 15

petitions, albeit the discretion vested with a constitutional court is

exercised with caution as delay and laches principle is applied

with the aim to secure the quiet of the community, suppress fraud

and perjury, quicken diligence, and prevent oppression.6

Therefore, some decisions and judgments do not look upon pleas

of delay and laches with favour, especially and rightly in cases

where the persons suffer from adeptness, or incapacity to

approach the courts for relief. However, other decisions, while

accepting the rules of limitation as well as delay and laches, have

observed that such rules are not meant to destroy the rights of the

parties but serve a larger public interest and are founded on public

policy. There must be a lifespan during which a person must

approach the court for their remedy. Otherwise, there would be

unending uncertainty as to the rights and obligations of the

parties.7

 Referring to the principle of delay and laches, this Court,

way back in Moons Mills Ltd. v. M.R. Mehar, President,

Industrial Court, Bombay and Others,

8 had referred to the view

expressed by Sir Barnes Peacock in The Lindsay Petroleum

Company AND. Prosper Armstrong Hurd, Abram Farewell, and

John Kemp,

9

in the following words:

6 See Popat and Kotecha Property v. State Bank of India Staff Association, (2005) 7 SCC 510

7 See N. Balakrishnan v. M. Krishnamurthy, (1998) 7 SCC 123

8 AIR 1967 SC 1450

9 (1874) LR 5 PC 221

Civil Appeal a/o. of SLP (C) No. 2946 of 2020 & Ors. Page 7 of 15

“Now the doctrine of laches in Courts of Equity is not

an arbitrary or a technical doctrine. Where it would be

practically unjust to give a remedy, either because the

party has, by his conduct, done that which might fairly

be regarded as equivalent to a waiver of it, or where

by his conduct and neglect he has, though perhaps

not waiving that remedy, yet put the other party in a

situation in which it would not be reasonable to place

him if the remedy were afterwards to be asserted, in

either of these cases, lapse of time and delay are most

material. But in every case, if an argument against

relief, which otherwise would be just, is founded upon

mere delay, that delay of course not amounting to a

bar by any statute of limitations, the validity of that

defence must be tried upon principles substantially

equitable. Two circumstances, always important in

such cases, are, the length of the delay and the nature

of the acts done during the interval, which might affect

either party and cause a balance of justice or injustice

in taking the one course or the other, so far as relates

to the remedy.”

10. At the same time, the law recognises a ‘continuing’ cause of

action which may give rise to a ‘recurring’ cause of action as in the

case of salary or pension. This Court in M.R. Gupta v. Union of

India and Others,

10 has held that so long as the employee is in

service, a fresh cause of action would arise every month when

they are paid their salary on the basis of a wrong computation

made contrary to the rules. If the employee’s claim is found to be

correct on merits, they would be entitled to be paid according to

the properly fixed pay-scale in future and the question of limitation

would arise for recovery of the arrears for the past period. The

10 (1995) 5 SCC 628

Civil Appeal a/o. of SLP (C) No. 2946 of 2020 & Ors. Page 8 of 15

Court held that the arrears should be calculated and paid as long

as they have not become time-barred. The entire claim for the

past period should not be rejected.

11. Relying upon the aforesaid ratio, this Court in the case of Union

of India and Others v. Tarsem Singh,

11 while referring to the

decision in Shiv Dass v. Union of India and Others,

12 quoted the

following passages from the latter decision:

“8...The High Court does not ordinarily permit a

belated resort to the extraordinary remedy because it

is likely to cause confusion and public inconvenience

and bring in its train new injustices, and if writ

jurisdiction is exercised after unreasonable delay, it

may have the effect of inflicting not only hardship and

inconvenience but also injustice on third parties. It was

pointed out that when writ jurisdiction is invoked,

unexplained delay coupled with the creation of thirdparty rights in the meantime is an important factor

which also weighs with the High Court in deciding

whether or not to exercise such jurisdiction.

xx xx xx

10. In the case of pension the cause of action actually

continues from month to month. That, however, cannot

be a ground to overlook delay in filing the petition. … If

petition is filed beyond a reasonable period say three

years normally the Court would reject the same or

restrict the relief which could be granted to a

reasonable period of about three years.”

In Tarsem Singh (supra), reference was also made to

Section 22 of the Limitation Act, 1963, and the following passage

from Balakrishna Savalram Pujari Waghmare and Others v.

11 (2008) 8 SCC 648

12 (2007) 9 SCC 274

Civil Appeal a/o. of SLP (C) No. 2946 of 2020 & Ors. Page 9 of 15

Shree Dhyaneshwar Maharaj Sansthan and Others,

13 which

had explained the concept of continuing wrong in the context of

Section 23 of the Limitation Act, 1908, corresponding to Section

22 of the Limitation Act, 1963, observing that:

“31...It is the very essence of a continuing wrong that it

is an act which creates a continuing source of injury

and renders the doer of the act responsible and liable

for the continuance of the said injury. If the wrongful

act causes an injury which is complete, there is no

continuing wrong even though the damage resulting

from the act may continue. If, however, a wrongful act

is of such a character that the injury caused by it itself

continues, then the act constitutes a continuing wrong.

In this connection, it is necessary to draw a distinction

between the injury caused by the wrongful act and

what may be described as the effect of the said injury.”

Accordingly, in Tarsem Singh (supra) it has been held that

principles underlying ‘continuing wrongs’ and ‘recurring/successive

wrongs’ have been applied to service law disputes. A ‘continuing

wrong’ refers to a single wrongful act which causes a continuing

injury. ‘Recurring/successive wrongs’ are those which occur

periodically, each wrong giving rise to a distinct and separate

cause of action. Having held so, this Court in Tarsem Singh

(supra) had further elucidated some exceptions to the aforesaid

rule in the following words:

“To summarise, normally, a belated service related

claim will be rejected on the ground of delay and

laches (where remedy is sought by filing a writ

13 AIR 1959 SC 798

Civil Appeal a/o. of SLP (C) No. 2946 of 2020 & Ors. Page 10 of 15

petition) or limitation (where remedy is sought by an

application to the Administrative Tribunal). One of the

exceptions to the said rule is cases relating to a

continuing wrong. Where a service related claim is

based on a continuing wrong, relief can be granted

even if there is a long delay in seeking remedy, with

reference to the date on which the continuing wrong

commenced, if such continuing wrong creates a

continuing source of injury. But there is an exception to

the exception. If the grievance is in respect of any

order or administrative decision which related to or

affected several others also, and if the reopening of

the issue would affect the settled rights of third parties,

then the claim will not be entertained. For example, if

the issue relates to payment or refixation of pay or

pension, relief may be granted in spite of delay as it

does not affect the rights of third parties. But if the

claim involved issues relating to seniority or promotion,

etc., affecting others, delay would render the claim

stale and doctrine of laches/limitation will be applied.

Insofar as the consequential relief of recovery of

arrears for a past period is concerned, the principles

relating to recurring/successive wrongs will apply. As a

consequence, the High Courts will restrict the

consequential relief relating to arrears normally to a

period of three years prior to the date of filing of the

writ petition.”

12. In Tarsem Singh (supra), the delay of 16 years in approaching

the courts affected the consequential claim for arrears and thus,

this Court set aside the direction to pay arrears for 16 years with

interest. The Court restricted “the relief relating to arrears to only

three years before the date of writ petition, or from the date of

demand to date of writ petition, whichever was lesser”. Further,

the grant of interest on arrears was also denied.

Civil Appeal a/o. of SLP (C) No. 2946 of 2020 & Ors. Page 11 of 15

13. The aforesaid ratio in Tarsem Singh (supra) has been followed by

this Court in State of Madhya Pradesh and Others v. Yogendra

Shrivastava14 and Asger Ibrahim Amin v. Life Insurance

Corporation of India.

15

14. In the facts of the present case, it is accepted that the respondentCorporation had accepted the interpretation rendered by the High

Court of Gujarat to the Scheme whereby the appellants, on

financial upgradation, would be entitled to the higher grade payscale of the next promotional post, which is Rs.5,000-8,000/- in

the present case. As noted above, the impugned judgment of the

Division Bench accepts the said position and grants the appellants

the said pay-scale but restricts the benefit from the date of the

judgment of the Single Judge in the Writ Petitions filed by the

appellants, that is, with effect from 31st July 2018. The Division

Bench should not have taken the date of the decision/judgment of

the Single Judge for grant of the said benefit in view of the

decision and ratio in Tarsem Singh (supra) which has been

followed in several other decisions. That apart, the date of the

decision of the Single Judge is a fortuitous circumstance. Only the

date of filing of the writ petition is relevant while examining the

question of delay and laches or limitation. The appellants would, in

14 (2010) 12 SCC 538

15 (2016) 13 SCC 797

Civil Appeal a/o. of SLP (C) No. 2946 of 2020 & Ors. Page 12 of 15

consonance with the case law referred to above, be entitled to the

arrears for three years before the date of filing of the Writ

Petitions.

15. We are also inclined to grant interest to the appellants on the

arrears at the rate of 7% per annum, which would be payable with

effect from 1st September 2017. We have fixed the said date for

grant of interest as the respondent-Corporation has accepted the

interpretation of the Scheme rendered on 16th August 2016 in the

Writ Petition preferred by Mukeshbhai Jaswantrai Joshi. Normally,

and as a model employer, on accepting the said decision, the

respondent-Corporation should have uniformly applied and

granted the benefit to all its similarly situated employees affected

by the order dated 28th October 2010. This would have avoided

unnecessary litigation before the courts, as was held in State of

Uttar Pradesh and Others v. Arvind Kumar Srivastava and

Others:

16

“22.1. The normal rule is that when a particular set of

employees is given relief by the court, all other

identically situated persons need to be treated alike by

extending that benefit. Not doing so would amount to

discrimination and would be violative of Article 14 of

the Constitution of India. This principle needs to be

applied in service matters more emphatically as the

service jurisprudence evolved by this Court from time

to time postulates that all similarly situated persons

should be treated similarly. Therefore, the normal rule

16 (2015) 1 SCC 347

Civil Appeal a/o. of SLP (C) No. 2946 of 2020 & Ors. Page 13 of 15

would be that merely because other similarly situated

persons did not approach the Court earlier, they are

not to be treated differently.

22.2. However, this principle is subject to wellrecognised exceptions in the form of laches and

delays as well as acquiescence. Those persons who

did not challenge the wrongful action in their cases

and acquiesced into the same and woke up after long

delay only because of the reason that their

counterparts who had approached the court earlier in

time succeeded in their efforts, then such employees

cannot claim that the benefit of the judgment rendered

in the case of similarly situated persons be extended

to them. They would be treated as fence-sitters and

laches and delays, and/or the acquiescence, would be

a valid ground to dismiss their claim.

22.3. However, this exception may not apply in those

cases where the judgment pronounced by the court

was judgment in rem with intention to give benefit to all

similarly situated persons, whether they approached

the court or not. With such a pronouncement the

obligation is cast upon the authorities to itself extend

the benefit thereof to all similarly situated persons.

Such a situation can occur when the subject-matter of

the decision touches upon the policy matters, like

scheme of regularisation and the like (see K.C.

Sharma v. Union of India). On the other hand, if the

judgment of the court was in personam holding that

benefit of the said judgment shall accrue to the parties

before the court and such an intention is stated

expressly in the judgment or it can be impliedly found

out from the tenor and language of the judgment,

those who want to get the benefit of the said judgment

extended to them shall have to satisfy that their

petition does not suffer from either laches and delays

or acquiescence.”

16. In view of the aforesaid discussion, the prayer of the appellants

that they should be given arrears right from 2010 has to be

rejected. We also reject the prayer of the appellants that they

Civil Appeal a/o. of SLP (C) No. 2946 of 2020 & Ors. Page 14 of 15

should be refunded the entire amount which had been collected

by the respondent-Corporation in terms of the order dated 28th

October 2010.

17. Recording the aforesaid, we partly allow the present appeals with

a direction that the appellants would be entitled to arrears in the

pre-revised pay-scale of Rs.5,000-8,000/- for three years prior to

the date of filing of the Writ Petitions along with interest at the rate

of 7% per annum with effect from 1st September 2017. The

arrears, with interest, would be paid within a period of four months

from the date of pronouncement of this judgment. A computation

sheet/statement of accounts on the basis of which payment is

made by the respondent-Corporation shall be furnished to the

appellants. The impugned judgment is, accordingly, partly set

aside and the Writ Petitions filed by the appellants would be

treated as allowed in the aforesaid terms. There would be no

order as to costs.

......................................J.

(AJAY RASTOGI)

......................................J.

(SANJIV KHANNA)

NEW DELHI;

MAY 18, 2022.

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