P.K. Gupta vs Delhi State Mineral Development ...
2005 Latest Caselaw 570 Del

JUDGMENT

S. Ravindra Bhat, J.

1. In this petition under Article 226 of the Constitution the order of the first respondent dated 19.2.1990, terminating the petitioner's services has been impugned; consequential relief by way of direction to reinstate him with continuity of service, arrears of salary etc. have been sought.

2. The petitioner joined the service of the first respondent, a Public Limited Company, which was originally a unit of the Delhi State Industrial Development Corporation (DSIDC). Initially the petitioner was appointed on daily wage basis w.e.f. 30.7.1985. Some time in the year 1989 the first respondent advertised for recruitment to the post of Accounts Assistant. The petitioner applied for the same. He was called for an interview by letter dated 13.2.1999. The petitioner was selected and offered appointment on 17.3.1989, he accepted the post and reported for duty on 20.3.1989. The recruitment to the post of Accounts Assistant was on regular basis and the appointment letter does not indicate it to be a temporary or adhoc appointment.

3. On 11.11.1989 the first respondent advertised for recruitment to the post of Assistant Commercial Accountant. The petitioner who was eligible and held the necessary qualifications applied, since the post was in respect of the a direct recruitment vacancy. His application dated 17.11.1989 was processed by the first respondent, who called him for interview on 1.12.1989. The petitioner was found suitable and selected to the post. The first respondent-Corporation issued an appointment letter on 14.12.1989. One of the conditions of appointment was that the post was governed by the provisions of the DSIDC Ltd., Staff Service Rules, 1978. The petitioner jointed duties as Assistant Commercial Accountant on 15.12.1989. When he had hardly worked for a month, the respondent issued an order to terminating the services on 9.2.1990. That order (hereinafter called the impugned order) purports to be under Rule 5(1) of the Central Civil Services (Temporary Service) Rules, 1965. The petitioner represented to the respondent on 13.12.1990 and stated that he had been working earlier after regular appointment as Accounts Assistant and that his termination from the higher post of Assistant Commercial Accountant, ought to be revoked. He also addressed an appeal to the Chairman-cum-Managing Director on 2.4.1990. These efforts went unheeded. As a result, he filed the present writ petition.

4. The petitioner has alleged that Central Civil Services (Temporary Service) Rules, 1965 were not applicable to the first respondent. Hence, there is no legal foundation for the termination of his services. The impugned order is also arbitrary and not ased on any rationale. It is also alleged that the removal or termination amounts to punishment since it casts a stigma and has an adverse consequence on the petitioner. It is also alleged that services of at least four of the petitioners junior were retained whereas his services have been terminated. The petitioner has also alleged mala fides.

5. The first respondent in its response has averred that the DSIDC Rules are applicable to its staff. It has not denied the basic facts of the petitioners' recruitment to the posts of Accounts Assistant, advertisement for direct recruitment to the post of Assistant Commercial Accountant (ACA), the petitioner being found fit and selected for that post and his subsequent appointment. It, however, avers that upon the petitioner's appointment as ACA he had to forgo his earlier appointment to the post of Accounts Assistant.

6. The first respondent has justified the impugned order on the ground that two posts of ACA was earlier held by Shri Sudarshan Kumar and Sh. S.S. Tokas, appointed to that post on 31.3.1989. They were appointed as Vigilance Inspectors on 22.9.1989. The order appointing those two persons as Vigilance Inspectors has been produced. It indicates that the appointment is on ad hoc basis. Upon their subsequent appointment as Vigilance Inspectors, the posts of ACA fell vacant and the same were advertised as direct recruit vacancies, in respect of one of which the petitioner was appointed. The first respondent avers that on 6.2.1990 pursuant to a decision taken by the Board the said two persons namely, Sh. Sudarshan Kumar and Sh. S.S. Tokas were reverted on account of abolition of posts. The specific averments in that regard is as follows :

"That, in the meantime, the Respondent Corporation had taken decision to abolish certain posts of Vigilance Inspector. The decision in this respect is attached as Annexure 'R-6'. As a result of the abolition of the posts, Shri S.S. Tokas was reverted as A.C.A. On 6.2.1990 and Shri Sudershan Kumar was reverted as A.C.A. On 6.2.1990. The orders to this effect are annexed and marked as Annexures 'R-7' and 'R-8' respectively. Thus, as a result of the aforesaid reversion, two persons including the petitioner, who were appointed as A.C.A. w.e.f. 14.12.1989 became surplus. Since they were junior-most and there was no post against which they could be retained any more, the Respondent Corporation was left with no alternative, but to terminate the services of these persons."

7. The minutes of the Board's meeting dated 30.01.1990 are enclosed with the counter affidavit. The same reads as follows :-

"Item No.16 (....... under Employment Exchanges Compulsory Notification Vacancies) Act :

The matter was discussed by the Board in detail and the following decisions were taken :

a) that the Corporation should write to the Director of Employment with the request to condone the irregularities, it should be made clear that care will be taken in future not to repeat these irregularities.

b) The Board took note of the facts that the merit list prepared by the Selection Board in case of Vigilance Inspectors has been ever looked while making the appointments. This fact was not brought to the notice of the Board when this matter was considered in the meeting held on 12.10.89. Keeping in view this serious lacuna in the appointments of Vigilance Inspectors particularly the full facts were not brought to the notice of the Board earlier, the Board rescinded its decision dated 12.10.89 and it was decided that the decision of the appointment of Vigilance Inspectors be and is hereby set aside and the recruitment procedure should be initiated denovo taking care to ensure that the prescription of the recruitment rules for the posts should be strictly followed specially with regard to the need for 50% of the posts to be filled up from the Corporation and 50% by direct recruitment and/or on deputation.

c) That in other cases in which Rrs' and procedure have not been followed while making the appointments should also be looked into by the Competent Authorities viz. The General Manager or the Chairman-cum-Managing Director and necessary action be taken by them in the matter

d) Responsibility in the matter be also fixed, if possible."

8. During the course of proceedings it transpires that the first respondent had advertised for recruitment to the post of ACA on 11.5.1990. This was, however, was disclosed by the respondents in their affidavit dated 28.1.1991. The petitioner also brought this development to the notice of the Court in the rejoinder, which was filed on 8.4.1991. It was also averred that the age limit indicated in the advertisement of 15.5.1990 was 25 years and no provision for relaxation for general candidates was provided for, unlike in the case of the advertisement where the petitioner had been recruited (11.11.1989). These were urged as additional submissions in support of the complaints of malafides levelled against the first respondent in the writ petition. The proceedings of 27.5.1991 indicate that counsel for the respondents had sought time to obtain instructions whether there could be relaxation in age requirement of the petitioner, for appointment as ACA since he was already serving in that post. The subsequent proceedings do not indicate any willingness; apparently the respondents did not want to accommodate the petitioner and rule was issued in the matter on 23.9.1991.

9. The matter was heard on various dates of hearing have been concluded on 29.10.2005. During the course of these hearings the counsel for the respondents had indicated that the instructions were not forthcoming. Subsequently, certain documents were file by counsel for the petitioner on 17.11.2004 which indicated that the first respondent company had been taken over by the DSIDC. In view of this, the matter was placed for directions on 10.12.2004 when it was indicated that the amalgamation with the DSIC had not taken effect. The matter was, therefore, subsequently heard again and reserved for orders. Counsel for the respondent, in addition to the oral hearing, has also filed written submissions.

10. Mr. Harvinder Singh, learned counsel for the petitioner submits that the impugned order terminating the services of the petitioner is arbitrary. Having been directly recruited to the post of ACA, pursuant to an advertisement which never indicated that the post in question was a temporary one, the first respondent could not have acted to the petitioner's determent. It is submitted that even if the power to terminate an employee without assigning reasons existed, the recourse to such powers in the present case was completely unwarranted. Had the petitioner being made known that the post of ACA, to which he applied and was appointed in December, 1989, was in fact a temporary one, he would not have taken his chance. Without prejudice to this submission, counsel also submitted that the stand taken by the respondent about petitioner having lost his lien or right to the post of Accounts Assistant is without any factual basis. He submits that there is no rule to support such a plea; in fact he never resigned from that post. Indeed if the appointment to the post of ACA was temporary, the petitioner could never said to have lost his right or lien to the post of Accounts Assistant.

11. Learned counsel for the petitioner also submits that apart from being arbitrary, the impugned order amounts to legal mala fides, since it is an improper exercise of power. He submits that apart from the exertion that the post of Vigilance Inspectors were abolished, no material has been placed on record to show that the posts held by the earlier two incumbents were in fact abolished. He relied on the Minutes of the Meeting of the Board of Directors dated 30.1.1990 to state that they do not any where support the case of the first respondent.

12. Counsel for the petitioner further submits that the plea about their being no posts of ACA after February, 1990 and the creation of two posts in that cadre within three months thereafter, as admitted by the respondent itself in Para 19 of the counter affidavit supports the plea of mala fides. In fact the respondent even admitted that the said two posts though advertised on 15.5.1990 had not been filled; yet it denied employment to the petitioner who had been directly recruited firstly to the post of Accounts Assistant and later to the higher post of ACA, after being found suitable in all respects.

13. Counsel for the petitioner submitted that without prejudice to other submissions, in the absence of any material under the rules, the plea of loss of lien in respect of the post of Accounts Assistant is false and unsustainable. The petitioner never resigned from that post; he was appointed on probation to the higher post of ACA. His position could not have been verse after selection to a higher post, particularly when recruited on the basis of pure merit.

14. Counsel for the petitioner has also urged that there are other employees junior to him within the organization who were not terminated from employment. He has relied upon the averment in Para (n) of the grounds. It is submitted that there is no denial at all to this ground and in fact the counter affidavit has not even dealt with this allegation. Consequently, the retention of juniors and the termination of the petitioner, also proves malice on the part of the respondents.

15. Mr. V.K. Rao, learned counsel for the respondent submitted that even though the impugned order refers to Rule 5 of the CCS Temporary Service Rules, it was passed pursuant to the powers under the DSIDC Staff Service Rules. Rule 26(ii) of that provision empowers the Corporation to terminate the services of any employee who has not completed his probation without assigning any reasons.

16. It is submitted that the petitioner had to be terminated from employment since previous incumbents to the post of ACA stood reverted pursuant to the decisions of the Board to abolish the post of Vigilance Inspector, which they were holding. As a result, there were no posts of ACA and the petitioner became surplus. Counsel submits that Courts have consistently ruled that it is within the power of the employer, particularly Public Bodies and Organizations like the first respondent to abolish posts; thr termination consequent to such action cannot be termed arbitrary or illegal. The learned counsel has relied upon the judgments of the Supreme Court reported as Rajendran v. State of Tamil Nadu, AIR 1982 SC 1107 and Gurdeep v. Union of India, AIR 1982 SC 1176 and Kamra v. NIA, 1992(2) SCC 36.

17. Counsel for the respondent has also submitted that it is settled law that when a post is temporary, it cannot be faulted since appointment to a temporary post does not confer any right on the employee to hold the post. The judgment reported as P.L. Dingra v. Union of India, AIR 1958 SC 36 has been relied upon for this purpose.

18. The first issue requiring consideration in this case is whether the reference to the CCS (Temporary Service) Rules, 1965, in the impugned order rendered it illegal. Counsel for the respondent had candidly submitted submitted that such reference was not necessary since those rules do not apply to the first respondent. However, his submission was that a similar power existed under the DSIDC Staff Service Rules of 1978. Therefore, the reference to a wrong provision could not vitiate the action on the round of lack of power, as long as such power existed in some other provision. I find force in the submission. As long as power to do some thing exists with an administrative or superior authority, reference to a wrong provision will not vitiate the action, as long as it can be supported by some other provision.

19. The next issue which arises for consideration is whether the impugned order is justified. The basic facts are not in dispute. The petitioner was recruited to the post of Accounts Assistant, by direct recruitment. That was a regular appointment. After some time he applied, pursuant to an open advertisement for recruitment to the post of ACA, the first respondent considered his application, allowed him to participate in the recruitment process, and found him fit on merits. Consequent to this he was appointed. The advertisement for ACA no where indicates that it is a temporary post. Therefore, the submission of the respondent about appointment of the petitioner to a temporary post, has no substance. In the counter affidavit itself the first respondent has in terms admitted that the post was a direct recruitment post. In this background what requires to be seen is justification or, otherwise, the impugned action.

20. The first respondent has justified the impugned termination on the ground that the two previous incumbents, to the post of ACA who had been appointed as Vigilance Inspectors, stood reverted pursuant to a decision of the Board of Directors. Those two persons, were appointed on 22.9.1989, on purely ad hoc basis for three months. That order, produced as Annexure R-5 suggests that it was an ad hoc promotion. Hence there was no question of such persons acquiring any right to the post of Vigilance Inspectors. Besides it is noteworthy that appointments were made on 22.9.1989. The proceeding/Minutes of the Board. On the other hand, show that it was concerned with a merit list prepared by the Selection Board and for recruiting Vigilance Inspectors. In view of certain irregularities noticed in that regard, it was decided that appointments of Vigilance Inspectors be set aside and that the recruitment procedure should be initiated de novo by following the quota prescribed in that regard. The Minutes of the Board, however, no where record that while adopting this course of action, persons to be reverted would displace those who were directly recruited on regular basis, after following the procedure and as per merit. Also, the Minutes of the Meeting of the Board contain no material to suggest that the posts of Vigilance Inspector was ever abolished as repeatedly mentioned in the counter affidavit and reiterated during the course of hearings.

21. In view of the above discussion and the stand of the respondent that the post of Vigilance Inspectors stood abolished is not borne out from the records. Hence its entire defense about the need to displace the petitioner from the post of ACA in order to accommodate others, is factually baseless.

22. This aspect can be seen from another angle also. While the respondents submission about existence of powers of the administrative authority, to abolish posts, cannot be denied, equally the Supreme Court has held that an action of abolition of post has to be in good faith. It has been held by five Judge Bench decision of the Supreme Court, in M. Ramanatha Pillai v. State of Kerala, 1973(2) SCC 650 that:

"a post may be abolished in good faith. The order abolishing the post may lose its effective character if it is established to have been made arbitrarily, mala fide or as an mask of some penal action."

Likewise in the judgment relied upon by the respondents namely, K. Rajendran v. State of Tamil Nadu, 1982(2) SCC 273 the Court held as follows :

"This power is inherent power in the very concept of the governmental administrative. To deny that power to the Government is to strike at the very roots of proper administration. The power to abolish a post which may result in the holder thereof ceasing to be a government servant has got to be recognised. But we may hasten to add that any action, legislative or executive taken pursuant to that power is always subject to judicial review."

23. The scope of judicial review, it has been repeatedly held, includes the power to examine the correctness of the decision making process and see whether the administrative action is bona fide legal and taken in furtherance of the powers vested for the purpose. Even orders which are within jurisdiction or within powers conferred, but taken for irrelevant or extraneous considerations or without regard to the statutory purpose or controlling enactment, would be subject to correction in judicial review under Article 226.

24. The manner in which the petitioner was first recruited to the post of Accounts Assistant, thereafter selected on merits and appointed as ACA, but subsequently terminated summarily within three months in February, 1998, in my considered opinion smacks of arbitrariness. The arbitrary nature of this action stands out in sharp relief when the subsequent move by the first respondent to fill two posts of ACA barely three months later, in May, 1990 is seen. The petitioner's allegation as to malice, appears to have some basis, in view of the condition that the age limit of 25 years could not be relaxed in general merit candidate like him and was available only to scheduled casts candidate.

25. The plea of unavailability of posts in the cadre of ACA and as a consequence the termination of the petitioner, in my opinion rings hollow if the event of advertisement issued on 11.5.1990 in respect of two posts of ACA, is taken into consideration. The first respondent has stated that two posts were created and had to be filled. However, no details have been given as to when and how those posts were created and whether the respondents at all took into consideration the petitioner's representations of being retained in the organization. These were relevant germane factors that the first respondent had, to but did not consider. These are relevant since the petitioner was apparently found suitable on his own merits and was appointed in December, 198 to the same post. Therefore, even if the plea of unavailability of posts of ACA in February were to be assumed, nothing prevented the first respondent from recalling and offering the so-called newly created posts which were advertised, to the petitioner.

26. The respondents have not rebutted the allegation of the petitioner of discrimination. A specific averment containing the names of various persons said to be junior to him has been made in the petition. It was also reiterated during the course of arguments. However, this allegation has not been denied. The only inference which, can be drawn is that such persons in fact were continued in the organization even while the petitioner's services were terminated. Similarly, the respondents, in their reply as well as submissions during the course of hearing, defended the action in not continuing the petitioner even in the post of Accounts Assistant on the plea that he had resigned that post upon being appointed as ACA. No material was brought to my notice in support of such a plea. Equally, the appointment letter, in respect of the post of ACA no where indicates that the petitioner lost his right to the post of Accounts Assistant. In any case, the petitioner being an in house employee could not have been worse of merely because he was directly recruited to another post. The respondents have also no where pleaded that the post of Accounts Assistant vacated by the petitioner was ever filled up.

27. In the light of the above, the impugned order in my considered view is arbitrary and discriminatory, judged by any yardstick. It also amounts to malice in law. The Supreme Court in its decision reported as S.R. Venkatraman v. Union of India, 1979(2) SCC 491 made a subtle distinction between malice in law and malice in fact. It was held that malice, in its legal sense means malice such as may be assumed from doing of a wrongful act but have just cause or excuse or for want of reasonable or probably cause. The Court observed that if a discriminatory power has been exercised for an unauthorised purpose, it is immaterial whether it is repository was acting in good faith or bad faith. Such an order amounts to malice in law.

28. The facts of the present case also show that the reasons urged in support of the impugned order are arbitrary. As far as the plea of abolition to the post of Vigilance Inspectors is concerned, the state of records as existing, does not bear out that plea at all. Equally nothing has been shown as to why the petitioner could not have been accommodated as ACA and the posts had to be advertised in May, 1991. Also, the respondent is silent about the charge of discrimination. It has no where pleaded or produced material to show that the post previously held by the petitioner before December 1989, namely Accounts Assistant was not available since some one else had been appointed. All these factors, in my opinion, point to malice in law which vitiates the impugned order.

29. In view of the above findings, the petition is entitled to succeed. One of the resultant consequences would be the petitioner's entitlement to continuation of service as ACA and arrears of salary. The consequence of a declaration in the present case means that the impugned action was not only illegal, it was a nullity on account of arbitrariness. The petitioner in effect has been penalized for no fault of his. In an action of this nature the logical consequence ought to be full restitution which could mean that the petitioner ought to get complete arrears of salary. However, having regard to the duration of the litigation, namely 13 years, it may not be appropriate to direct payment of entire back wages. In order to balance the equities, therefore, I am of the considered view that apart from the reinstatement and continuity of service, the petitioner should be held entitled to 75% of arrears of salary inclusive of periodic increments.

30. The petition is, therefore, allowed. The following directions are therefore issued :

(a) The impugned order dated 19.2.1990 is quashed;

(b) the first respondent is held liable to reinstate the petitioner to the post of Assistant Commercial Accountant within a period of eight weeks from today with continuity of service and 75% of arrears of salary (including increments and periodic revisions of pay etc). The petitioner shall also be entitled to notional promotions and fixation of salary;

(c) the respondents shall pay costs assessed at Rs.7,500/-.

(d) respondent is directed to give effect to (a) (b) and (c) above within ten weeks from today.

It is ordered accordingly.

The petition stands disposed of.