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Civil Appeal No. 40 of 1958, decided on 14th December, 1959.

(On appeal from the judgment and decree of the High Court of West Pakistan, Lahore, dated the 30th April, 1956, in Regular First Appeal No. 143 of 1955).

Government of India Act, 1935, S. 265-Punjab and N.-W. F. P. Joint Public Service Commission (Conditions of Service) Regulations, Reguls. 2 (b) & 4-Chairman and Members of Commission-Appointments to be conceived of as having been made "differentially"-"Contract" appointments-Appointment of person, already Member, as Chairman for period of three years--- Not illegal-Unaffected by term served as Member-Premature examination of appointment by Government-Breach of contract-Government's liability.

Held, that it is nowhere stated in the Constitution Act of 1935, or the Regulations made thereunder that the Commission shall consist of so many members, one of whom shall be appointed the Chairman. In section 265 of the Constitution Act of 1935, and under Regulation 2 (b), Punjab and N.-W. F. P. Joint Public Service Commission (Conditions of Service) Regulations, where reference the appointments is made, the reference is made differentially as to the Chairman and as to the members.

The appointments should be viewed in the light of a contract appointment, and not as amounting to a service appointment. The appointments of the Chairman and the members of a Commission, each with a different tenure peculiar to himself settled by the appointing authority, bear no resemblance to appointments to a service. It is simpler and more correct in law to regard these as ad hoc appointments; having all the characteristics of contract appointments, and bearing little resemblance to appointments to a civil service.

In such appointments the governing instrument is the Government of India Act, read with the Regulations made thereunder, and there is no difficulty in conceiving of an appointment being -made under contract within the statutory terms.

There can be no doubt of the legal liability of the Government should it be found to have committed a breach of the contract.

Where a Member of the Commission, who had already served a certain term as Member, was appointed Chairman for a period of three years with effect from a certain date, but the Government, by an order, reduced the period to one year on the plea of illegality of appointment which Government sought to base on their interpretation of Regulation 4 read with Regula tion 2 (b);

Held, that the original appointment for three years was in itself a valid order, and constituted an absolute undertaking by the Government to maintain the appointee in that office until the full period of three years had expired. By the termination of that appointment after the expiry of a year, the Government committed a breach of contract, and the breach was incapable of justification even upon the Government interpretation of the wording of Regulation 4, in view of the fact that it was within the power of the Government to implement the contract on their side, under the express terms of that Regulation, and that the Government expressly refused to exercise its powers for that purpose.

The appointment as Chairman for three years was unaffected by any previous term served by the appointee as a member.

Lloyd v. Crisne 14 Rev. R 744 and Societe 'D' Avances Commerciales v. A. Besse & Co. 1952 I T L R 644 ref.

Mushtaq Husain and M. Z. Kitchlew, Advocates Supreme Court, instructed by Ijaz Ali, Attorney for Appellant.

Muhammad Iqbal, Advocate Supreme Court, instructed by Kamal Mustafa, Attorney for Respondent.

Date of hearing : 14th December, 1959.

.-This certificated appeal from an appellate judgment of a Division Bench of the High Court is brought by the Provincial Government of West Pakistan to call in question the affirmation by that judgment of a decree passed in favour of the respondent Ch. Namr Husain by a First Class Civil Judge of Lahore. The decree is in the following terms :----

"The plaintiff's suit is decreed with cost against the defendant and it is declared that the termination of the plaintiff's service as Chairman of the Punjab and N.-W. F. P. Joint Public Service Commission before 21st November, 1955, was illegal and the plaintiff has a right to assume himself to be the Chairman of the said Commission and has also the right to receive all the emoluments, allowances, privileges and amenities which attach to the said office."

The following statement of facts will suffice to clarify the case. On the 9th December, 1952, the Government of the Punjab issued a notification in the following terms :----

"In exercise of the powers conferred by section 265 of the Government of India Act, 1935, . . . the Governor of the Punjab is pleased to appoint Ch. Nazir Husain as Chairman of the Punjab and N.-W. F. P. Joint Public Service Commission for a period of three years with effect from the afternoon of the 22nd November, 1952."

Ch. Nazir Husain was originally appointed a member of the same Commission for a period of five years with effect from the 10th November, 1947, and had received an extension of a few days in that capacity by virtue of a notification publishing an order of the Governor of the Punjab dated the 20th October, 1952. In other words from the 10th November, 1952, up to the 22nd November, 1952, Ch. Nazir Husain had been enjoying an extended period of membership by virtue of the order of the 20th October, 1952, when he was appointed to be Chairman of the Commission for a period of three years from the 22nd November, 1952, onwards.

The circumstances of the appointment have been stated by the then Chief Minister of the Punjab, Mian Mumtaz Muhammad Khan Daultana, appearing as a witness for the plaintiff. They were that in the middle of 1952, a proposal had reached the Chief Minister for nomination of a person from the Punjab to the Central Public Service Commission which was being reconstituted. Ch. Nazir Husain was the senior member of the Provincial Public Service Commission, and Mr. Daultana thought it right that the first offer of the post should be made to him. About the same time, the chairmanship of the local Public Service Commission fell vacant, to which also Ch. Nazir Husain could claim a preferential right. The Chief Minister accordingly sent for him and placed the options before him and he chose not to go to Karachi, whereupon Mr. Daultana offered him the appointment as Chairman of the local Public Service Commission for three years. This offer was accepted by him and he was appointed. After this had been done, another person was appointed to the post at Karachi, which carried higher salary, and moreover was not subject to any absolute disqualifications for other appointments under "the Crown in Pakistan" such as those attaching to the chairmanship of a Provincial Commission.

Mr. Daultana was candid enough to say that before making the appointment of Ch. Nazir Husain which means before issuing the orders which resulted in the notification reproduced above, he did not get legal opinion as to the competency of his order, but he added that if there had been any legal difficulty, his Secretary would have brought it to his notice. Ch. Nazir Husain in his statement amplified the matter by saying that if he had not been offered and had not accepted the chairmanship of the local Commission, he "must have gone to the Central Public Service Commission" where the term of office was, so far as he knew, four years. These circumstances, which have not been refuted by the Provincial Government, are sufficient for holding that in accepting the offer which was made to him. Ch. Nazir Husain stood to lose something of at least equivalent value if not better, and this circumstance serves to enhance the consideration he gave for the promise which he accepted, i.e., an appointment of three years' duration.

Before the expiry of the first year of his tenure, he received a letter from the Chief Secretary, dated the 24th September, 1953, which directed his attention to Regulation 2 (b) of the Punjab and N.-W. F. P. Joint Public Service Commission (Conditions of Service) Regulations, "laying down" that the members of the Commission included the Chairman, to Regula tion 3 prescribing that there shall be four members of the Commission including the Chairman, and to Regulation 4 which fixes the normal period of tenure of the post of a member at 5 years, though a proviso permits the Governor for special reasons to extend the period of the tenure of a member in a particular case year by year up to a maximum period of five years. Relying upon these provisions in the Regulations, the Chief Secretary expressed the opinion that it was clear;

"that the appointment of a member as Chairman does not confer on him the right to an indefinite extension of his period of service 'though within that period he can be appointed as Chairman for any length of time,"

By way of example it was said that;

"if a member is appointed Chairman at the outset he may continue in that capacity for the period of five years and his term of appointment may be extended thereafter but only from year to year."

Basing upon this argument, it was communicated that Government were of the view that Ch. Nazir Husain's term of five years as member had expired on the 29th November, 1952, and as the period of his membership could only be extended for one year in the first instance, his appointment as Chairman for a period of three years by the order dated the 4th November, 1952, violated the Regulations and accordingly "the period has now been reduced to one year." On the same day, an order of the Governor was issued directing that in the previous order of appointment, the words "three years" should be replaced by the words "one year."

No opportunity having been given to him to reply to the argument upon which the change in the terms of his appointment had been made, Ch. Nazir Husain had no option but to serve a notice under section 80 of the Civil Procedure Code, in which he stated that he had "really not been able to follow the argument in the explanation" which had been sent to him and put forward his own argument which was briefly to the following effect :-

(1) The post of Chairman if separate and distinct from that of a member, in regard to the terms of the appointment, the procedure of the appointment and the status of the post, and also in view of the disabilities from further Government employment which it carries ;

(2) The Government of India Act, 1935, by making distinct reference to the chairmanship, constitutes it a different post from that of a member ;

(3) If the expressions "Chairman" and "Member" were differentially used then it would seem that the normal period of tenure of the post of Chairman should be 5 years, subject to the power of Governor to fix a shorter period ; and

(4) That even if it be assumed that the interpretation of the Government was right, yet there was an estoppel in view of the disabilities which he had incurred, and the argument of legality perhaps was not available since the Government was capable of extending his appointment from year to year and thus to carry out its undertaking.

This letter which is dated the 29th September, 1953, proved to be of no effect, for upon the completion of a year from the date of his appointment as Chairman, Ch. Nazir Husain was relieved of that post. It is necessary to point out by way of explanation, that in the interval since his appointment there had been a change in the-Government and Mr. Daultana was no longer the Chief Minister of the Punjab.

Ch. Nazir Husain sued for a declaration in the terms awarded. His main attack against the action of the Government was based upon his view of the meaning which the expressions used in section 265 of the Government of India Act, 1935, and the Regulations made thereunder with reference to the post of Chairman and of member of a Provincial Public Service Commission, should carry. He also contended that there had been a contravention of the provisions of section 240 of the Government of India Act, inasmuch as he had been dismissed from his office without being given an opportunity of showing cause. In their reply, the Government maintained the view which had been expressed in the letter of the 24th September, 1953. They repeated that the order appointing Ch. Nazir Husain as Chairman for a period of three years was made in violation of the Regulations and was "therefore illegal" and that it was in order to remove this illegality that the period of the appointment was altered from three years to one year by the order of the 24th September, 1953. It was denied that section 240 of the Government of India Act had any application to the case, and as to the point of estoppel the plea was raised that against statute there can be no estoppel. It was also contended that "service under the Crown is held at His Majesty's pleasure."

The first Court found that section 240 of the Government of India Act had no application, and dealt with the case only under section 165 of that Act. The basis for this conclusion was that appointments to Public Service Commissions were dealt with in a separate chapter, namely, Chapter III of Part X of the Government of India Act, from that dealing with the civil services which was Chapter II of the same part. It was the case for the Government also that section 265 and the Regulations made thereunder provide an exhaustive code applicable to a person in the position of Ch. Nazir Husain, and reference to section 240 for the purposes of his case was not competent. The trial Court further held that Regulation 4 which reads as follows :-----

"The normal period of tenure of the post of member shall be five years"

should be read with the definition of the term "member" in Regulation 2 (b) reading as follows :-----

" Member' means a Member of the Commission appointed by the Governor of the Punjab and includes the Chairman thereof."

The view taken by the learned Civil Judge was that to determine the tenure of the Chairman, for the word "member" in Regulation 4 the word "Chairman" should be substituted and then it would be plain that the normal term of the appointment of the Chairman was to be five years. To Regulation 4, there are four provisos, viz., firstly, that when making an appointment, the Governor may fix a shorter tenure for special reasons, secondly, he may also for special reasons extend the tenure "in a particular case year by year up to a maximum period of five years", thirdly, that he may terminate the appointment of any member at any time, if he is satisfied "that that member is for any reason unable or unfit to continue to perform the duties of his office," and lastly that a member may relinquish office by resignation. The learned Civil Judge thought that if the contention of the Government were correct, then it would be necessary expressly to provide that the tenure of office of a Chairman, for the purposes of the Regulations, should include any period of office served by him as member, and that there were no such words to be found in the Regulations. This dealt with the solitary reason given in the letter dated the 24th September, 1953, for curtailing the period of Ch. Nazir Husain's appointment, and it was pointed out that there was no allegation that he had been found unable or unfit to continue to perform his duties, which was the only ground permissible under the Regulations upon which his period of office could be curtailed by the act of the Governor. The plea of estoppel had been placed in issue and was decided against the plaintiff. A subsidiary point had been raised in the suit which was founded upon the fact that between the 4th November and the 22nd November, 1952, the plaintiff had been a member on extension. The effect was contended to be, although the argument in support is not plain, that he had a right to continue as Chairman up to the 10th November, 1954. This contention was repelled by the Civil Judge, and does not appear to have been repeated in the High Court, where the Government appealed from the decree granted by the trial Court.

In the High Court, it was held that the post of Chairman of a Public Service Commission is at least a civil post, and therefore section 240 of the Government of India Act would be applicable if the matter did not fall under section 265 of that Act. The view taken by the High Court appears to have been that since the reasons for the "removal" of Ch. Nazir Husain did not fall within the Regulations, it must necessarily be dealt with under section 240, i.e., as a dismissal, for which the necessary condition which had not been satisfied was that the person dismissed should be afforded an opportunity of showing cause. But the High Court then proceeded to say that even if section 240 had no application, and the Regulations under section 265 were treated as a complete code governing the case, since the reason given for "removal" was not one included in the Regulations, the order was illegal and inoperative. They upheld the view of the learned Civil Judge regarding the interpretation to be placed upon the Regulation fixing the tenure of the post of member. Accordingly the appeal was dismissed, and thereby the decree awarded by the trial Court was affirmed.

Now, the terms of that decree were adapted to the circum stance that on the date when it was awarded, namely, the 23rd August 1955, there was still a short period left to run out of the full tenure which was being assured by the decree to Ch. Nazir Husain. That tenure was not to end until the 21st or perhaps the 22nd November 1955. But the decree of the High Court was made on the 30th April 1956, by which time the tenure period had expired, and therefore a modification in the terms of the decree was necessary. It does not appear that the point was brought to the notice of the learned Judges, who heard the appeal on the 12th and 13th April 1956, nor was it mentioned even in the hearing before us, 31 years later. The necessary modification will have to be made under the directions of this Court.

The argument presented on behalf of the appellant Govern ment followed precisely the same lines as those which had been placed before the Courts below. It was urged with emphasis that the Chairman and a member were not categorically different persons, but the case was that the Commission consisted of so many members, one of whom by appointment was the Chairman thereof. Consequently, it was urged that in computing the terms of office, a period spent as Chairman by a person who had previously been a member should be tacked on to the period of the membership for the application of the statutory maximum of five years. The argument has a superficial appeal, but its weakness lies in the fact that it is nowhere stated in the Constitution Act of 1935 or the Regulations made thereunder that the Commission shall consist of so many members, one of whom shall be appointed the Chairman. In section 265 of the Constitution Act of 1935, and under Regulation 2 (b), where reference to appoint ments is made, the reference is made differentially as to the Chairman and as to the members. It is impossible to refuse sympathy to the argument of the learned Civil Judge that the interpretation con tended for by the Provincial Government is one which requires that a number of words should be read into the Regulation first, and that, as correctly observed by him, was not permissible. If the words as they stand can reasonably bear the interpretation contended for by the Provincial Government, and equally reason ably, are not susceptible of the other interpretation which was placed before the Government at the first opportunity by Ch. Nazir Husain, then indeed the Government might be entitled to succeed. The question is not free from difficulty, but having considered with care the arguments advanced before us on both sides, we find ourselves unable to differ from the view which has found favour with the Courts below, and we are also unable to uphold the view expressed by the Provincial Government in the letter of the 24th September 1953 that the appointment of Ch. Nazir Husain to the post of Chairman for a period of three years was in itself illegal.

It appears to us that some of the indefiniteness which is apparent in the approach of the High Court to the question whether section 240 or section 265 of the Government of India Act had application to the case would have been eliminated if the appointment had been viewed in the light of a contract appointment, and not as amounting to a service appointment. The appointments of the Chairman and the members of a Commission, each with a different tenure peculiar to himself settled by the appointing authority, bear no resemblance to appointments to a service. It is simpler and more correct in law to regard these as ad hoc appointments, having all the characteristics of contract appointments, and bearing little resemblance to appointments to a civil service. Even to a civil post, a contract appointment may be made, and such a post may be governed for necessary purposes by the terms of a contract, which may or may not be subject to rules. In the case of the appointments here in question the governing instrument is the Government of India Act, read with the Regulations made there under, and there is no difficulty in conceiving of an appointment being made under contract within the statutory terms. There can be no doubt regarding the capacity of the Government to enter into a contract of this nature, and equally no doubt of the legal liability of the Government should it be found to have committed a breach of the contract.

Viewed in this light, the point raised by the Government by its letter of the 24th September 1953 could only prevail if it rested on proved impossibility or frustration, and if it did not fall within either category, and the termination effected by the amending order reducing the period of appointment from three years to one year, be not amenable to any provision in the Regulations, then it must clearly be a breach of the contract. Now, the appointment of Ch. Nazir Hussain as Chairman for three years was made in plain and unqualified terms, and in view of his reciprocal promise to serve for that period, and the further immediate consideration issuing from him, namely, his foregoing of a superior appointment in Karachi, and his assuming of certain appreciable disabilities regarding future employment, there need be no difficulty in concluding that the act of the Government constituted in the relevant respect an absolute promise by which the Government warranted the possibility of performance. Mr. Mushtaq Husain appearing for the Provincial Government was heard to lay stress on the fact that the Regu lations were within the cognizance of Ch. Nazir Hussain, but in our opinion that point is of no importance whatsoever. Ch. Nazir Hussain's view from the outset, and to the present day, has consistently been that the Regulations did not debar the Government from appointing a Chairman, and fixing his term of office independently of any consideration of previous service by him as a member. Any doubts which ever existed on this point were confined to the mind of the Provincial Government, and it is plain also that they arose only after Mr. Daultana ceased to be the Chief Minister. If he had remained in that office, we entertain no doubt that, having power to amend the Regulations, if he bad found it to be necessary in order to cover the order which had been made under his directions, he would have carried out the necessary amendment. In the alternative, on the presumption that he would certainly have felt it his duty to maintain the good faith of his Government by implementing the directions which had been made under his orders, if he chose not to amend the Regulations, he would certainly have granted the necessary extensions. In other words, all the circumstances conduce to the belief that the appointment of Ch. Nazir Husain conveyed an absolute promise by the Government, warranting the possibility of performance of that promise.

It is noteworthy that when after the change of Chief Minister, a different view was adopted, it was still not made out that the performance of the promise was impossible. The Government acted upon a plea of illegality which in our view, agreeing with the views expressed thereon at length by the Courts below, was not open to it. The contract was clearly not void ab initio even on the view taken by the Government. It was perfectly valid for the first year, which was duly served out. At that stage, the only legal bar to the continuation of the contract on this view was that there should have been a specific order of extension, for "special reasons". We can think of no better reason than the necessity of the Government keeping faith with the promises. The refusal to make such an order of extension at the end of the first year, which appears plainly from the letter of the 24th September 1953 and the amending order of the same date, must therefore be regarded as constituting repudiation of the contract, rendering the, Government liable in damages. Such repudiation is, of course, even more clear upon the basis that the appointment as Chairman for three years was valid, being unaffected by any previous term served by the appointee as a member.

The point is so clear that it does not require to be supported by citation of cases, but it will be of advantage to mention a few. The case of Lloyd v. Crisne (14 Rev. R 744), is to the effect that if the vendor of a lease, in which is a covenant not to assign without the licence of the lessor, should contract to assign his interest, it is incumbent upon him, and not on the purchaser, to procure the lessor's licence for the assignment, and it is no answer to say that the purchaser, having had the terms of the lease read to him and being cognizant of the restriction against alienation, should be thought to have assumed the duty upon himself to obtain the landlord's consent. Here, the "licence" required, namely, the extension order, was within the competence of the promisor, namely, the Government itself, and there was no necessity for such extension to be procured from any third party. The duty would clearly lie upon the promisor to give the necessary "licence" i.e. the extension order, to implement the contract. Other licence cases are those where the contract is for supply of goods subject to export or import licences. The case of Societe D' Avances Commerciales v. A Besse & Co. (1952 I T L R 644), relates to a contract for sale of gum arabic from the Sudan, which was subject to a licence to be issued by the Sudanese Government. The sellers being in the Sudan and the buyers in London, it was held that .--

"The contract being subject to the granting of an export licence, it is sufficient for the claim, if it is established, as it is here, that the sellers did not take reasonable and necessary steps to obtain it".

In order to bring the case at par with the facts of the present case it is sufficient to suppose that the exporters in that case were the Sudanese Government. Certainly, that Government could not be beard to say that the absence of a licence to be issued by itself was any answer to a claim based on breach of the contract.

We are satisfied that the order of appointment of Ch. Nazir Husain as Chairman of the Punjab and N.-W. F. P. Joint Public Service Commission for a period of three years with effect from the afternoon of the 22nd November 1952 was in itself a valid order, and constituted an absolute undertaking by the Provincial Government to maintain Ch. Nazir Husain in that office until the full period of three years had expired. We are satisfied also that by the termination of that appointment after the expiry of a year, the Government committed a breath of that contract, and that the breach is incapable of justification even upon the Government interpretation of the wording of Regulation 4, in view of the fact that it was within the power of the Government to implement the contract on their side, under the express terms of that Regulation, and that the Government expressly refused to exercise its powers for that purpose. The relief by way of a declaration which is all that was sought in the case, resting on the belief that it is the duty, and should also be the pleasure, of the Government, to comply with the decrees of the Courts, is the least relief which could have been claimed by the plaintiff.

The result is that except for a small modification to be made in the terms of the decree awarded by the trial Court and con firmed by the High Court, this appeal is dismissed with costs. The decree is modified to read as under:---

"It is declared that the termination of the plaintiff's service as Chairman of the Punjab and N.-W. F. P. Joint Public Service Commission after the expiry of one year from its commence ment on the afternoon of the 22nd November 1952, was illegal, and the plaintiff has the right to receive all the emoluments and allowances which attach to the said office up to and including the forenoon of the 22nd November 1955."

A. H. Order accordingly.

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