Delhi High Court
Satish Joshi vs Union Of India And Anr. on 20 March, 2013
Author: Valmiki J. Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ WP(C) No.3215/2012
% March 20, 2013
SATISH JOSHI ..... Petitioner
Through: Mr. Shree Parkash Sinha, Advocate.
Versus
UNION OF INDIA AND ANR. ..... Respondents
Through: Mr. Jatan Singh, CGSC for
respondent No.1
Mr. Ajit Kumar Singh, Advocate for
respondent No.2.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J. MEHTA
To be referred to the Reporter or not? Yes.
VALMIKI J. MEHTA, J (ORAL)
1. This writ petition is filed by the petitioner Sh. Satish Joshi
impugning the letter dated 17.4.2012 terminating his contractual services
w.e.f 17.4.2012. Challenge in effect is also laid to the communication dated
2.5.2012 of the employer/respondent No.2-National Project Coordinator
which states that services of the petitioner were terminated on account of
inadequate performance.
2. On behalf of the petitioner, it is argued before this Court that
though the petitioner was a contractual employee in terms of General
Service Agreement dated 1.9.2008, however, the service agreement was to
be ordinarily extended till the completion of the project inasmuch as
respondent No.2 is a project entity, and employees who have taken
employment with respondent No.2/project entity cannot be terminated at the
whims and fancies of the respondent No.2 although the project continues. It
is also argued on behalf of the petitioner that the stand of the respondent
No.2 that the services were terminated on account of inadequate
performance as stated in the letter dated 2.5.2012 is really an afterthought,
because the said reasons are not found mentioned in the communication
dated 17.4.2012. In any case, it is argued that the respondent No.2 was
bound to follow the principles of audi alteram partem before terminating the
services of the petitioner. It is argued that the petitioner was appointed
through regular recruitment process as a Manager (Finance and
Administration) as the petitioner satisfied the requirements of being a
Chartered Accountant with 10-15 years experience. It is finally argued that
respondent No.2 being an instrumentality of the State under Article 12 of the
Constitution of India cannot act arbitrarily by terminating the services of the
petitioner, although the project of the respondent No.2 continues, much less
by violating the principles of natural justice.
3. On behalf of respondent No.2, great stress is laid out on the
aspect of contractual employment of the petitioner. It is argued that the last
extension was given till 31.12.2011 and whereafter no extension has been
given and therefore terminating the services of the petitioner vide
communication dated 17.4.2012 taking the period expiring on 17.4.2012 is
perfectly justified. Reliance is also placed upon the communication dated
2.5.2012 which gave reasons for not continuing the services of the
petitioner.
4. No doubt, the Supreme Court in the Constitution Bench
judgment in the case of Secretary, State of Karnataka & Ors. vs. Umadevi
& Ors., (2006) 4 SCC 1 has held that there cannot be regularization of
contractual employees, however, the said judgment goes on to clarify that
basically a contractual appointment for a project is ordinarily for that project
period i.e there cannot be a principle of hire and fire if the project continues.
The ratio in the case of Umadevi (supra) though on the one hand denied
regularization of casual employees or those employees who are employed
without following the regular recruitment process, however, on the other
hand the Supreme Court was at pains to observe that Government had a right
to appoint employees for a project and therefore the employees for a project
though may not have a right to be regularized, however, their services have
to be co-terminus with the project in question. I may also note that right
from the judgments of the Supreme Court in the cases of Kumari Shrilekha
Vidyarthi Vs. State of U.P. (1991) 1 SCC 212 and ABL International Ltd.
& Anr. Vs. Export Credit Guarantee Corporation of India Ltd. & ors.
(2004) 3 SCC 553, the Supreme Court has said that even with respect to
contractual matters the State has no right to act whimsically and arbitrarily.
It has been held that if a State acts whimsically and arbitrarily, its actions
can be challenged in a Court of law.
5. A reference to the facts of the present case shows that it is
undisputed that respondent No.2 organization was created for a specific
project. This project was a project of the Ministry of Steel, Government of
India in collaboration with United Nations Development
Programme(UNDP) and Global Environment Facility (GEF). The project
was "Removal of Barriers to Energy Efficiency in Steel Re-rolling Mill
(SRRM) sector in India". It is not disputed on behalf of respondent No.2
that the project continues and in fact in place of the petitioner one Sh. B.
Ramakrishna Bhatta has been appointed vide office order dated 22.8.2012.
The employment of Sh. B. Ramakrishna Bhatta is also a contractual
employment and as per the statement made by the counsel for respondent
No.2 the terms of the same expires in June, 2013.
6. Therefore, we have a situation that project continues,
requirement of a person having the qualifications of the petitioner continues,
and after removal of the petitioner another person on the same post was
appointed by the respondent No.2 and whose contract is going to expire in
June, 2013. Though I need not go into the detail, in the argument urged as
per the counsel for the petitioner that the petitioner was terminated from
services because the petitioner raised inconvenient questions about financial
management, however, two things are crystal clear. Firstly, there is no
compliance of principles of natural justice and the petitioner has been
removed without any enquiry or at least without calling an explanation from
him and hearing him. It may be noted that there is nothing on record that
there were any charges or complaints or any issue brought to the notice of
the petitioner for his alleged inadequate performance and which for the first
time only finds mention in the communication dated 2.5.2012 issued by the
respondent No.2. Secondly, no reasons whatsoever were given in the letter
dated 17.4.2012 for extending the services of the petitioner only till
17.4.2012 and terminating the services also w.e.f. 17.4.2012.
7. Quite clearly, the respondent No.2, an instrumentality of State,
is using the policy of pick and choose with respect to appointing employees
and terminating their services, and which action falls foul of the mandate of
Article 14 of the Constitution of India. Even with respect to contractual
employees, once the contractual employees are for a specific project, unless
and until the project comes to an end or the need for the post comes to an
end or the employee is otherwise found not fit for continuation after
following the principles of natural justice, services of such employees cannot
be terminated on whims and fancies of the instrumentality of the
State/employer organization.
8. Though the General Service Agreement entered into between
the petitioner and respondent No.2 may not categorically provide that the
term of employment will continue till the project of respondent No.2
continues, however, this will be said to be implicit in the contract by virtue
of Article 14 of the Constitution of India and the ratio of the judgments of
the Supreme Court in the cases of Kumari Shrilekha Vidyarthi (supra) and
ABL International Ltd. (supra). In fact, para 2 of the General Service
Agreement in a way can be read to mean that the period of contract has to be
extended subject however to performance, and which aspect of performance,
or lack of it, can only be if the petitioner is put to notice of non-performance
and in spite of the same the petitioner fails to improve his performance. No
doubt, a detailed departmental enquiry need not be held, however, there has
to be reasonable compliance of principles of natural justice by issuance of a
show cause notice making specific averments as to how the performance of
the petitioner is lacking. A general statement, without any specific
details/charges, made in the communication dated 2.5.2012 of the
petitioner's performance being inadequate is neither here nor there, besides
this statement being an afterthought. The claim of inadequate performance
made first time on 2.5.2012 is surely only a convenient averment to justify
the action of removal of the petitioner by the impugned letter dated
17.4.2012.
9. In view of the above, the writ petition is allowed. The
impugned letter dated 17.4.2012 is quashed. It is held that the petitioner
cannot be removed from services without complying with the principles of
natural justice. However while setting aside the termination of services of
the petitioner, partially applying the principle of no pay for no work, it is
ordered that for the period from 17.4.2012 till today the petitioner will not be
entitled to complete salary, and petitioner will be entitled to only 1/3rd of the
monthly salary in view of the judgment of the Supreme Court in the case of
State of Kerala & Ors. Vs. E.K. Bhaskaran Pillai (2007) 6 SCC 524 which
holds that once the termination of services is found to be illegal, as a thumb
rule the principle of no pay for no work automatically does not come into
application. Equities of the situation are met on the petitioner being directed
to receive only 1/3rd of the salary. Let the respondent No.2 release the entire
arrears of salary to the petitioner within a period of four weeks from today.
The petitioner is directed to report for duty within a period of one week from
today, and the respondent No.2 will accept the letter of the petitioner of his
joining duties and will post the petitioner to an appropriate position till June,
2013 when the contractual appointment of Sh. Bhatta is stated to expire.
Thereafter the petitioner will be put to his post and duties as on 17.4.2012.
10. Writ petition is allowed and disposed of in terms of aforesaid
observations.
VALMIKI J. MEHTA, J
MARCH 20, 2013
Ne
