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

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