Lalchand Tewani S/O Late Shri ... vs Union Of India
2021 Latest Caselaw 5423 Guj

        C/LPA/703/2020                                      CAV JUDGMENT



            IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

               R/LETTERS PATENT APPEAL NO. 703 of 2020
                                   In
              R/SPECIAL CIVIL APPLICATION NO. 7527 of 2020
                                 With
               CIVIL APPLICATION (FOR STAY) NO. 1 of 2020
                                   In
               R/LETTERS PATENT APPEAL NO. 703 of 2020

FOR APPROVAL AND SIGNATURE:

HONOURABLE THE CHIEF JUSTICE MR. JUSTICE VIKRAM NATH

and
HONOURABLE MR. JUSTICE J.B.PARDIWALA
==========================================================

1 Whether Reporters of Local Papers may be allowed to see the judgment ? YES

2 To be referred to the Reporter or not ?

YES 3 Whether their Lordships wish to see the fair copy of the judgment ? NO

4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order NO made thereunder ?

========================================================== LALCHAND TEWANI S/O LATE SHRI BACHUMAL Versus UNION OF INDIA ========================================================== Appearance:

MR KSHITIJ AMIN, ADVOCATE for the Respondent(s) No. 1,2,3,4,6 MR DEVANG VYAS(2794) for the Respondent(s) No. 5 ==========================================================

CORAM: HONOURABLE THE CHIEF JUSTICE MR. JUSTICE VIKRAM NATH and HONOURABLE MR. JUSTICE J.B.PARDIWALA

Date : 07/05/2021

CAV JUDGMENT

(PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA)

1 This appeal under Clause 15 of the Letters Patent is at the instance of an unsuccessful writ applicant of a writ application and is directed against the judgement and order passed by a learned Single Judge of this Court in the Special Civil Application No.7527 of 2020 dated 1st September 2020, by which, the learned Single Judge rejected the writ application affirming the order passed by the NCLT, Ahmedabad putting an end to the contractual service of the appellant herein.

2 The facts giving rise to this appeal, as noted by the learned Single Judge in the impugned order, are as under:

"2.1 The petitioner was appointed as a Stenographer in the Ahmedabad Bench of the National Company Law Tribunal ('NCLT' for short). The petitioner was appointed after a skilled test and stenography test as well as after interview. The appointment order dated 31.05.2018 is on record.

2.2 The case of the petitioner is that thereafter he was promoted as a Private Secretary and attached to the Member (Judicial) Ms.Manorama Kumari vide office order dated 14.06.2018. The case of the petitioner is that though more than 50 employees' terms have been extended, the petitioner's service contract has been brought to an end on 17.06.2020 without assigning reasons.

2.3 Allegations have been made by the petitioner against the Member Judicial - respondent no.5 - Ms. Manorama Kumari stating that when he was working as a Private Secretary, in the Month of June 2018, the learned Judicial Member Ms.Manorama Kumari lost her father leaving behind a widow Sonia Devi, two brothers and the Judicial Member herself. It is the case of the petitioner that at the behest of the Member Judicial, since there were some Fixed Deposits in the name of the deceased father in the State Bank of India, Gujarat High Court, the petitioner was directed to submit an affidavit showing that only the Member Judicial and the mother were the heirs. The petitioner drafted that affidavit being unaware that the Member Judicial had two brothers at the relevant point of time. The

case of the petitioner is that he sent an affidavit as per the instruction of Member Judicial and also got an obituary public notice published of the late father. The case of the petitioner is that later on the petitioner came to know that the Member Judicial had two brothers and apprehending that the false affidavit filed by the petitioner at the behest of the Member Judicial would lend him into trouble, he asked for a copy of the affidavit from the Member Judicial, which the Member Judicial refused to provide.

2.4 The petitioner as per the petition states that on 25.02.2020 he asked for a copy of the affidavit. Annoyed by this, on 26.02.2020, the Member Judicial sent an E­mail to the President of the National Company Law Tribunal recommending that the petitioner's services be terminated. The petitioner was then subsequently transferred as the Private Secretary of Hon'ble Member Technical Shri Prashant Kumar. The case of the petitioner is that the termination during the pandemic is in violation of the circular guidelines of the Central Government not to adversely terminate or put an end to the service conditions of the employee."

3 In paras 3.1 and 3.2 respectively of the impugned judgement, the learned Single Judge has noted the submissions canvassed on behalf of the appellant herein (original writ applicant). We quote as under:

"3.1 He would submit that that the petitioner has been victimized due to the mala­fide intentions of the Member Judicial. Only because he insisted that a false affidavit that was filed at the behest of the Member Judicial be withdrawn and copy thereof be given to him, the next day after such a demand, the respondent no.5 Member Judicial recommended that services of the petitioner be terminated.

3.2Mr.Soni would further submit that it is an admitted fact as is evident from the order dated 08.05.2020 that but for the extension of the services of the other employees it is only the petitioner who has been singled out and his services have been terminated. He invited the attention of the Court to the extensive allegations of mala­fide made in para 5 of the petition. Mr.Soni would submit that from the allegations made in the affidavit filed by the respondent no.5, the allegations with regard to misbehavior was completely unwarranted and misconceived and now made only with a view to justify the petitioner's discontinuance. He would submit that no reasons are assigned in the order of termination. In support of his submissions, Mr.Soni read out the rejoinder reiterating the submissions made on behalf of the petitioner and relied on the decision of this Court in the case of Manilal Ramjibhai Chaudhary v. State of Gujarat through Executive Director, Gujarat Minerals reported in 2013 JX (GUJ) 201. He would submit that there should always be a

grant of extension of contract. Reliance was also placed on the decision rendered by a Division Bench of this Court in State of Gujarat v. Chetan Jayantilal Rajgor reported in 2020 JX (GUJ) 418 to submit that the order terminating the services on contractual basis in stigmatic instamatic. Such an order must be quashed and set aside and there is no defense on the part of the respondent that a contractual appointment can always be discontinued."

4 The contentions canvassed on behalf of the respondents Nos.1 to 4 and 6 respectively, as noted by the learned Single Judge, are as under:

"4.1 He has drawn my attention to the affidavit in reply filed by one Mr.George Thomas, Deputy Registrar, National Company Law Tribunal, Ahmedabad Bench. Mr.Kshitij Amin would submit that it is evident from the order appointing the petitioner dated 08.05.2018 that the appointment was purely contractual on a fixed remuneration of Rs.42000/­. The terms of the appointment categorically said that the appointment was on a contractual basis and would not give any right to the petitioner to continue in service. He would therefore submit that the petitioner's appointment being contractual, no vested right was with the petitioner to continue in service.

4.2 Mr.Amin would draw the attention of the Court that the Member Judicial and Head of the Department found that the petitioner's behavior of unbecoming of a subordinate staff member. He would pick up quarrels for petty issues with the other members. It was under this context that recommendation was made on 26.02.2020 to discontinue the services of the petitioner. The petitioner was transferred with the other Technical Member. Had the respondents any mala­fide, they would not waited for the contract period to end on 17.06.2020 but could have terminated the services of the petitioner in February, 2020 itself on the basis of the recommendation of the respondent no.5 under whom the petitioner was working.

4.3 Mr.Amin would further submit that it was on these grounds that the petitioner's appointment being purely contractual and due to his behavior and insubordination, the petitioner's services were put to an end."

5 It appears that Mr. Devang Vyas, the learned Additional Solicitor General of India appeared on behalf of the respondent No.5. His submissions have been recorded by the learned Single Judge as under:

"5.1 An affidavit­in reply has been filed by Ms.Manorama Kumari, Member Judicial. Reading of the affidavit indicates that the petitioner was appointed as a Private Secretary without her consultation when she was on leave. It appears that on the death of her father, a request was made that the fixed deposits which were in the single name of the father and other fixed deposits which were in her joint name with the mother, be appropriately dealt with. It was in this context that the petitioner was asked to bring a nonjudicial stamp paper. It is the case of the respondent no.5 that the petitioner brought the judicial paper typed the format and submitted it to the bank with a disclaimer on her behalf and a bond on behalf of the mother. She also has annexed a letter of State Bank of India dated 21.07.2020 wherein the bank has categorically stated that the Member Judicial has disclaimed her share.

5.2 Reading the affidavit, Mr.Vyas would submit that the Member Judicial found the approach of the petitioner inappropriate and she would not allow the petitioner in the chamber or all by himself. Whenever the petitioner would remain in the chamber, she would insist some ministerial staff to be present due to the intemperate behavior of the petitioner. The affidavit in reply indicates that on 25.02.2020 at around 6.30 p.m. when the Member Judicial was alone in the Chamber the petitioner barged in and shouted and abused the Member Judicial in a foul language."

6 The learned Single Judge, after due consideration of the case put up by the appellant herein as well as the respondents, came to the conclusion that the decision not to extend the contractual tenure cannot be termed as an order of termination casting any stigma. In other words, the view taken by the learned Single Judge is that even if the order taking the decision not to extend the contractual tenure of the appellant herein beyond 17th June 2020 is to be treated as an order of termination, the same could be said to be termination simpliciter and not punitive in any manner. We may quote the relevant observations made by the learned Single Judge while rejecting the writ application:

"6.1 The appointment order dated 31.05.2018 indicates that the appointment of the petitioner as a stenographer in the NCLT was purely on a contractual basis initially for a period of 1 year from the date of joining and may be further extendable depending upon requirement. On

19.06.2018, the National Company Law Tribunal, Delhi, engaged the petitioner's services again on a contractual basis as a private secretary to the Member Judicial on a fixed monthly remuneration of Rs.42000/­.

Evidently therefore what is clear from the appointment orders so passed is that the petitioner was appointed as a stenographer and then a private secretary on a contractual basis. The appointment being purely on a contractual basis and not a regular appointment on a post, no vested right exists with the petitioner to pray that the contract of the petitioner be extended for a period of one year from 17.06.2020 to 16.06.2021.

6.2 Reading the letter dated 26.02.2020, addressed by the Member Judicial is a President of NCLT, would indicate that the Member Judicial took into consideration the fact that after May, 2018, when the term expired in May, 2019, the services of the petitioner was extended for a period of one year. However, the letter indicates that for the last six months, the petitioner's behavior was unbecoming of a subordinate staff member and therefore she had requested the President that petitioner's services be discontinued. At that time, the President of NCLT could have exercised his discretion against the petitioner and discontinued the services because it was purely contractual. The Tribunal opted for an alternative and transferred the petitioner on 06.03.2020 to be the Private Secretary of a Member Technical.

6.3 As far as the allegations that are made extensively by the petitioner with regard to the sourness of relationship between the Member Judicial and the petitioner, on account of a false affidavit that the petitioner was compelled to file, these are questions of fact pleaded by the petitioner and denied by respondent no.5 in her affidavit in reply. The Court in exercise of powers under Article 226 of the Constitution of India would not dealt into the question of facts, and particularly when they are made at the behest of an employee who was purely engaged on a contractual basis. Be it noted that the petitioner is aged 63 years and was at the NCLT only working because of a contract in his favour which was extended once till June, 2018. Without getting into the allegations in detail made by the petitioner and so countered by the Member Judicial, reading of letter of the State Bank of India indicates that by virtue of the affidavit that the petitioner was compelled to filed as it is so projected by the petitioner, no benefit accrued to the Member Judicial, because even as per the letters of the SBI, the Member Judicial disclaimed any benefit out of the FDRs.

6.4 The allegations on mala­fides are best made easily so as to try and influence the proceedings as is sought to be made in the present case.

6.5 Reading of the affidavit filed by the Deputy Registrar of NCLT, together with the affidavit of the Member Judicial - respondent no.5 indicates that the Tribunal particularly the Member Judicial found the behavior of the petitioner intemperate. She has gone on record by filing an

affidavit stating that whenever the petitioner would remain present in the chamber, she would insist on a presence of any other staff member. The petitioner was working as a Private Secretary to a Judicial Member of a Tribunal. If the petitioner as a Private Secretary to the Member Judicial of the NCLT was projected to behave in the manner that he did, as is evident from the affidavit filed by the Member Judicial and the Deputy Registrar, there was no reason for a contract of appointment to be continued.

6.6 The decision in the case of Manilal Ramjibhai Chaudhary (supra) will not be applicable to the petitioner and helpful to him because here is a case where the employer has shown its' willingness not to extend the contract and therefore, if it was an appointment purely on a contractual basis, on its' term coming to an end on 17.06.2020, if the authority­employer has thought it fit not to extend it beyond the term, no fault can be found with such action.

6.7 As far as the decision in the case of Chetan Jayantilal Rajgor (supra) of the Division Bench, the facts of the case indicate that the termination of an employee on a contractual basis was on account of lodging of the First Information Report. That the Court held was stigmatic. In the present case when the order of appointment is read with the order of termination, it simply states that the contract tenure is not extended beyond 17.06.2020. The order of termination is essentially an order of non­extension of contract of appointment. The order does not indicate any stigma so as to disqualify the petitioner for a subsequent appointment. Even otherwise the appointment was contractual and the age of the petitioner is 63, when the Member Judicial and the Deputy Registrar had found and had gone on record to suggest that the behavior of the petitioner with the Member Judicial was intemperate which amounted to insubordination and when the Member Judicial herself had in February, 2020, recommended that the petitioner need not continued in service, I find no reason with to interfere with the discretion exercised by the NCLT in not extending the appointment of the petitioner and that the term of the contract and on its' expiry. No vested right exists with the petitioner for extension of his contract when he accepted his appointment in accordance with the terms of the contract."

7 Being dissatisfied with the impugned judgement and order passed by the learned Single Judge, the original writ applicant - appellant herein has come up with the present appeal.

● SUBMISSIONS ON BEHALF OF THE APPELLANT HEREIN:

8 Mr. Yatin Soni, the learned counsel appearing for the appellant

vehemently submitted that the learned Single Judge committed a serious error in rejecting the writ application. According to Mr. Soni, the decision not to extend the contractual tenure of his client any further is the outcome of the voice raised by his client against the illegalities of the respondent No.5 and which was not like by the respondent No.5. According to Mr. Soni, there is an element of mala fide in taking the decision not to extend the contractual tenure of the appellant, and therefore, the termination could be said to be stigmatic or rather punitive. Mr. Soni invited the attention of this Court to Annexure : G, page : 39 of the original writ application, which is a letter dated 26th February 2020 addressed by the respondent No.5 to the President, National Company Law Tribunal, New Delhi, levelling allegations against the appellant herein. Mr. Soni, thereafter, invited the attention of this Court to the affidavit­in­reply filed by the respondent No.5 in the writ application, more particularly, the averments made in paras 4.2 to 4.8 therein. Mr. Soni vehemently submitted that the respondent No.5 laid a trap to remove the appellant from service of the NCLT and to appoint one Mr. Krishnakumar Nair as her Private Secretary.

9 Mr. Soni, thereafter, invited the attention of this Court to page : 78 of the paper book i.e. the affidavit­in­reply filed on behalf of the respondents Nos.1 to 4 and 6 in the writ application, wherein according to Mr. Soni, serious allegations have been levelled against the appellant herein.

10 Thus, according to Mr. Soni, the case on hand is one of punitive termination and not termination simpliciter. It is argued that although a contractual employee may not have any vested or legal right to remain in service, yet if he is to be removed on certain grounds of alleged misconduct, then a departmental inquiry is must.

● SUBMISSIONS ON BEHALF OF THE RESPONDENTS:

11 Mr. Kshitij Amin, the learned Standing Counsel appearing for the respondents Nos.1 to 4 and 6 respectively submitted that no error, not to speak of any error of law could be said to have been committed by the learned Single Judge in passing the impugned order. According to Mr. Amin, the case on hand is one of putting an end to the service by not extending the contractual tenure any further. There is no element of any stigma in the same.

12 Mr. Devang Vyas, the learned Additional Solicitor General of India would submit that the learned Single Judge could not be said to have committed any error much less an error of law in passing the impugned order. According to Mr. Vyas, there is no merit in the present appeal and the same may be dismissed.

● ANALYSIS:

13 Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is whether the learned Single Judge committed any error in passing the impugned judgement and order.

14 Having dealt with identical issue arising in many matters over a period of time, it appears that the question, as to whether an order of discharge or termination of service simpliciter can be treated as punitive, has not only confronted the courts for a long time, but it appears that the State authorities also have no idea about the same.

15 The employee would usually plead that although the order of termination does not contain any express word of stigma, yet in reality,

it is punitive in nature because the employer has tried to get rid of him/her on the basis of the alleged misconduct. On the other hand, the employer would rely on its right under the contract of employment or the rules, governing the service and maintenance that the employee who does not have the right to hold the post, can be asked to go home at any time and without assigning any reason.

16 In Parshotam Lal Dhingra Vs. Union of India, AIR 1958 S.C 36, the Constitution Bench of the Supreme Court considered the various facets of the employee's right to hold the post and the employer's right to terminate his service. The majority of the Constitution Bench referred to the provisions of Articles 309, 310 and 311 of the Constitution of India along with Section 96B(1) of the Government of India Act, 1915 and Section 240(1) of the Government of India Act, 1935 and held as under:

"Shortly put, the principle is that when a servant has right to a post or to a rank either under the terms of the contract of employment, express or implied, or under the rules governing the conditions of his service, the termination of the service of such a servant or his reduction to a lower post is by itself and prima­facie a punishment, for it operates as a forfeiture of his right to hold that post or that rank and to get the emoluments and other benefits attached thereto. But if the servant has no right to the post, as where he is appointed to a post, permanent or temporary either on probation or on an officiating basis and whose temporary service has not ripened into a quasi permanent service as defined in the Temporary Service Rules, the termination of his employment does not deprive him of any right and cannot, therefore, by itself be a punishment. One test for determining whether the termination of the service of a Government servant is by way of punishment is to ascertain whether the servant, but for such termination, had the right to hold the post. If he had a right to the post, the termination of his service will by itself be a punishment and he will be entitled to the protection of Article 311. In other words and broadly speaking, Article 311 (2), will apply to those cases where the Government servant, had he been employed by a private employer, will be entitled to maintain an action for wrongful dismissal, removal or reduction in rank. To put it in another way, if the Government has, by contract, express or implied, or, under the rules, the right to terminate the employment at any time, then such termination in the manner provided by the contract or the rules is, prima facie and per se, not a punishment

and does not attract the provisions of Art. 311."

17 The majority of the Constitution Bench then considered the eventualities in which the termination of the services of an employee can be termed as punitive and held:

"Any and every termination of service is not a dismissal, removal or reduction in rank. A termination of service brought about by the exercise of a contractual right is not per se dismissal, or removal, as has been held by this court in Satish Chander Anand Vs. The Union of India, AIR 1953 SC 250(supra). Likewise the termination of service by compulsory retirement in terms of a specific rule regulating the conditions of service is not tantamount to the infliction of a punishment and does not attract Art. 311(2) as has also been held by this court in 1955­I SCR 26: (AIR 1954 SC 369) .... In short if the termination of service is founded on the right flowing from contract or the service rules then, prima facie, the termination is not a punishment and carries with it no evil consequences and so Art. 311 is not attracted. But even if the Government has, by contract or under the rules, the right to terminate the employment without going through the procedure prescribed for inflicting the punishment of dismissal, or removal or reduction in rank, the Government may, nevertheless, choose to punish the servant and if the termination of service is sought to be founded on misconduct, negligence, inefficiency or other disqualification, then it is a punishment and the requirements of Art. 311 must be complied with .... As already stated, if the servant has got a right to continue in the post, then, unless the contract of employment or the rules provide to the contrary, his services cannot be terminated otherwise than for misconduct, negligence, in efficiency or other good and sufficient cause. A termination of the service of such a servant on such grounds must be a punishment and, therefore, a dismissal or removal within Art.311, for it operates as a forfeiture of his right and he is visited with the evil consequences of loss of pay and allowances. It puts an indelible stigma on the officer affecting his future career...... But the mere fact that the servant has no title to the post or the rank and the Government has, by contract, express or implied, or under the rules, the right to reduce him to a lower post does not mean that an order of reduction of a servant to a lower post or rank cannot in any circumstances be a punishment. The real test for determining whether the reduction in such cases is or is not by wa of punishment is to find out if the order for the reduction also visits the servant with any penal consequences..... The use of the expression, "terminate" or "discharge" is not conclusive. In spite of the use of such innocuous expressions, the court has to apply the two tests mentioned above, namely, (1) Whether the servant had a right to the post or the

rank or (2) whether he has been visited with evil consequences of the kind hereinbefore referred to? If the case satisfies either of the two tests then it must be held that the servant has been punished and the termination of his service must be taken as a dismissal or removal from service....."

18 The above exposition of law has been reiterated and followed in almost all subsequent decisions of the Supreme Court and various High Courts, which were rendered in the cases involving challenge to the termination of the services of the employees appointed on temporary basis or on probation.

19 In State of Orissa Vs. Ram Narayan Das, AIR 1961 SC 177, another Constitution Bench considered the question whether a probationer can be discharged in the manner provided by Rule 55B of the Civil Services (Classification, Control and Appeal) Rules, and held:

"A probationer can be discharged in the manner provided by R. 55B of the Civil Services (Classification, Control and Appeal) Rules. Mere termination of employment does not carry with it "any evil consequences" such as forfeiture of pay or allowances, loss of seniority, stoppage or postponement of future chances of promotion, etc. An order discharging a public servant, even if a probationer, in an enquiry on charges of misconduct, negligence, inefficiency or other disqualification, may appropriately be regarded as one by way of punishment, but an order discharging a probationer following upon an enquiry to ascertain whether he was fit to be confirmed, is not of that nature. And to such a case Art. 311(2) does not apply."

20 In I.N. Saksena Vs. State of Madhya Pradesh, AIR 1967 SC 1264, their Lordships of the Supreme Court held that when there are no express words in the impugned order itself which throw a stigma on the Government servant, the court would not delve into the secretariate files to discover whether some kind of stigma could be inferred on such research.

21 In Shamsher Singh Vs. State of Punjab, (1974) 2 SCC 831, the

Seven Judges Bench of the Supreme Court considered the question whether the services of the appellants who were serving as judicial officers on probation could be terminated on the basis of an enquiry got conducted by the High Court through the vigilance department of the State. While criticising the High Court's approach in handing over the enquiry to an outside agency, their Lordships held that the action taken on the basis of the vigilance report which contained finding of guilty in respect of specific charges of misconduct levelled against the officers amounted to stigma. Their Lordships further held that the form of the order is not conclusive and in appropriate case the Court can lift the veil to find out the true character of the order terminating the services of the employee. Speaking for the Bench, Ray C.J. observed:

"The form of the order is not decisive as to whether the order is by way of punishment and that even an innocuously worded order terminating the services may in the facts and circumstances of the case establish that an enquiry into the allegations of serious and grave character of misconduct involving stigma has been made in infraction of the provision of Article 311(2)."

22 In State of Maharashtra Vs. Veerappa R. Saboji, (1979) 4 SCC 466, the Supreme Court upheld the termination of the services of the respondent who was working as a judicial officer on probation and observed: "Ordinarily and generally the rule laid down in most of the cases by this Court is that you have to look to the order on the face of it and find whether it casts any stigma on the Government servant. In such a case there is no presumption that the order is arbitrary or mala fide unless a very strong case is made out and proved by the government servant who challenges such an order."

23 In Oil and Natural Gas Commission Vs. Dr. Mohd. S. Iskender Ali, (1980) 3 SCC 428, the Supreme Court held that even if misconduct,

negligence and inefficiency may be the motive or the inducing factor which influences the authority to terminate the service of the employee on probation, such termination cannot be termed as penalty or punishment.

24 In Union of India Vs. P.S. Bhatt, (1981) 2 SCC 761, the Supreme Court reversed the order of A.P. High Court which had quashed the termination of the respondent's service on the ground of violation of the rules of natural justice and held as under:

"Even if misconduct, negligence, inefficiency may be the motive or the inducing factor which influences the authority to terminate the service of the employee on probation, such termination cannot be termed as penalty or punishment. Loose talks and filthy and abusive language which had been used against the Station Director and the other officers may legitimately in the facts and circumstances of the case lead to the formation of a reasonable belief in the minds of the authorities that the person behaving in such fashion is not a suitable person to be employed as a Producer. Even if this undesirable conduct on the part of the respondent may be considered to be the motive or the inducing factor which influenced the authorities to pass the impugned order, the said order cannot be said to be by way of punishment."

25 In Anoop Jaiswal Vs. Government of India and another, AIR 1984 SC 636, the Supreme Court referred to the earlier judgements in State of Punjab Vs. Sukh Raj Bahadur, AIR 1968 SC 1089, Union of India Vs. R.S. Dhaba, (1969) 3 SCC 603, State of Bihar Vs. Shiva Bhikshuk Mishra, AIR 1971 SC 1011, R.S. Sial Vs. State of U.P, AIR 1974 SC 1317, State of U.P. Vs. Ram Chandra Trivedi AIR 1976 SC 2547, I.N. Saksena Vs. State of Madhya Pradesh (supra) and Samsher Singh Vs. State of Punjab(supra) and held:

"It is, therefore, now well settled that where the form of the order is merely a camouflage for an order of dismissal for misconduct it is always open to the Court before which the order is challenged to go behind the form and

ascertain the true character of the order. If the Court holds that the order though in the form is merely a determination of employment is in reality a cloak for an order of punishment, the Court would not be debarred, merely because of the form of the order, in giving effect to the rights conferred by law upon the employee."

26 In that case the Supreme Court found that the services of the petitioner who was a probationer IPS Officer has been terminated on the basis of a specific allegation of misconduct and held that it was punitive in character.

27 In Governing Council of Kidwai Memorial Institute of Oncology, Bangalore Vs. Dr. Pandurang Godwalkar and another, (1992) 4 SCC 719, the Supreme Court discussed the rights of an employee who is on probation and laid down the following proposition of law:

"If an employee who is on probation or holding an appointment on temporary basis is removed from the service with stigma because of some specific charge, then a plea cannot be taken that as his service was temporary or his appointment was on probation, there was no requirement of holding any enquiry, affording such an employee an opportunity to show that the charge levelled against him is either not true or it is without any basis. But whenever the service of an employee is terminated during the period of probation or while his appointment is on temporary basis, by an order of termination simpliciter after some preliminary enquiry it cannot be held that as some enquiry had been made against him before the issuance of order of termination it really amounted to his removal from service on a charge as such penal in nature. When an appointment is made on probation, it pre­supposes that the conduct, performance, ability and the capacity of the employee concerned have to be watched and examined during the period of probation. He is to be confirmed after the expiry of probation only when his service during the period of probation is found to be satisfactory and he is considered suitable for the post against which he has been appointed. The principle of tearing of the veil for finding out the real nature of the order shall be applicable only in a case where the Court is satisfied that there is a direct nexus between the charge so levelled and the action taken. If the decision is taken, to terminate the service of an employee during the period of probation, after taking into consideration the overall performance and some action or inaction on the part of such employee then it cannot be

said that it amounts to his removal from service as punishment. It need not be said that the appointing authority at the stage of confirmation or while examining the question as to whether the service of such employee be terminated during the continuance of the period of probation, is entitled to look into any complaint made in respect of such employee while discharging his duties for purpose of making assessment of the performance of such employee. Even if such employee while questioning the validity of an order of termination simpliciter brings on the record that some preliminary enquiry or examination of some allegations had been made, that will not vitiate the order of termination." [Underlining is ours]

28 In that particular case, the Supreme Court reversed the judgement of the Karnataka High Court and held that the decision taken by the Governing Council of Institute to terminate the services of the respondent after considering different reports relating to the work and conduct of the respondent cannot be treated as punitive.

29 In Hukam Chand Khundia Vs. Chandigarh Administration, (1995) 6 SCC 534, the Supreme Court held that the termination of the appellant's service, who was holding the post of Clerk under the District and Sessions Judge, Chandigarh on the ground of unsatisfactory service was not punitive. Their Lordships took notice of the fact that successive judicial Officers under whom the appellant had worked, found that his integrity was questionable and held that this factor could be taken into consideration by the District Judge for forming an opinion that the employee was not fit to be continued in service.

30 In State of U.P. v. Kaushal Kishore Shukla, (1991)1 S.C.C. 108, a three­Judges Bench of the Supreme Court considered the earlier decisions of Purshotam Lal Dhingra v. Union of India, A.I.R. 1958 S.C. 36; State of Orissa v. Ram Narain Dass, A.I.R. 1961 S.C. 177; Jagdish Mittar v. Union of India, A.I.R. 1964 S.C. 449; A.G. Benjamin v. Union of India, 1967(1) L.L.J. 718; and State of Punjab v. Sukh Raj Bahadur, A.I.R. 1968 S.C. 1089 and summarised the position of law in the following words:

"Whenever, the competent authority is satisfied that the work and conduct of a temporary servant is not satisfactory or that his continuance in service is not in public interest, on account of his unsuitability, misconduct or inefficiency, it may either terminate his services in accordance with the terms and conditions of the service or the relevant rules or it may decide to take punitive action against the temporary government servant. If it decides to take punitive action it may hold a formal enquiry by framing charges and giving opportunity to the government servant in accordance with the provisions of Article 311 of the Constitution. Since, a temporary government servant is also entitled to the protection of Article 311(2) in the same manner as a permanent government servant, very often, the question arises whether an order of termination is in accordance with the contract of service and relevant rules regulating the temporary employment or it is by way of punishment. It is now well settled that the form of the order is not conclusive and it is open to the court to determine the true nature of the order. In Purshotam Lal Dhingra v. Union of India, a Constitution Bench of this Court held that the mere use of expression like 'terminate' or 'discharge' is not conclusive and in spite of the use of such expressions, the court may determine the true nature of the order to ascertain whether the action taken against the government servant is punitive in nature. The court further held that in determining the true nature of the order the court should apply two tests, namely (1) whether the temporary government servant had a right to the post or. The rank or (2) whether he has been visited with evil consequences; and if either of the tests is satisfied, it must be held that the order of termination of a temporary government servant is by way of punishment. It must be borne in mind that a temporary government servant has no right to hold the post and termination of such a government servant does not visit him with any evil consequences. The evil consequences as held in Parshotam Lal Dhinga case do not include the termination of services of a temporary government servant in accordance with the terms and conditions of service. The view taken by the Constitution Bench in Dhingra's case has been reiterated and affirmed by the Constitution Bench decisions of this Court in State of Orissa v. Ram Narayan Dass; R.C. Lacy v. State of Bihar, Jagdish Miner v. Union of India; A.G. Benjamin v. Union ' of India, Shamsher Singh v. State of Punjab. These decisions have been discussed and followed by a three Judge Bench in State of Punjab v. Sukh Raj Bahadur."

31 After 7 years a two Judges Bench of the Supreme Court again

considered the same question in R.S.Gupta v. U.P.State Agro Industries Corporation Ltd, J.T. 1998 (8) S.C. 585 analysed various judicial precedents on the subject including Parshotam Lal Dhinga v. Union of India (supra), State of Bihar v. Gopi Kishore Prasad, A.I.R. 1960 S.C. 689, State of Orissa v. Ram Narayan Das, 1961 (1) S.C.R. 606; Modan Gopal v. State of Punjab, A.I.R. 1963 S.C. 531: Jagdish Mitter v. Union of India (supra): Champaklal Chimalal Shah v. Union of India, A.I.R. 1964 S.C. 1854: State of Punjab v. Sukh Raj Bahadur (supra) Shamsher Singh v. State of Punjab, 1974(2) S.C.C. 831: State of U.P. v. Ram Chandra Trivedi, 1977(1) S.C.R. 462; Gujarat Steel Tube v. Gujarat Steel Tubes Mazdoor Sangh, (1980)2 S.C.C. 593; Anoop Jaiswal v. Government of India, (1984)2 S.C.C. 369; Nepali Singh v. State of U.P., J.T. 1988(2) S.C, 473: Triveni Shanker Saxena v. State of U.P., J.T. 1992(1) S.C. 37 and State of U.P, v. Prem Lata Mishra (supra) and laid down the following propositions:

"It will be noticed from the above decisions that the termination of the services of a temporary servant or one on probation, on the basis of adverse entries or on the basis of an assessment that his work is not satisfactory will not be punitive inasmuch as the above facts are merely the motive and not the foundation. The reason why they are the motive is that the assessment is not done with the object of finding out any misconduct on the part of the officer, as stated by Shah, J. (as he then was) in Ram Narayan Dass' case. It is done only with a view to decide whether he is to be retained or continued in service. The position is not different even if a preliminary inquiry is held because the purpose of a preliminary inquiry is to find out if there is prima facie evidence or material to initiate a regular departmental inquiry. It has been so decided in Champakalal's case. The purpose of the preliminary inquiry is not to find out misconduct on the part of the officer and if a termination follows without giving an opportunity, it will not be bad. Even in the case where a regular departmental inquiry is started, a charge­memo issued, reply obtained, and an enquiry officer is appointed if at that point of time, the inquiry is dropped and a simple notice of termination is passed, the same will not be punitive because the enquiry officer has not recorded evidence nor given any findings on the charges. That it what is held in Sukh Raj Bahadur's case and in Benjamin's case. In the latter case, the departmental inquiry was stopped because the employer was not sure of establishing the guilt of

the employee. In all these cases, the allegations against the employee merely raised a cloud on his conduct and as pointed by Krishna Iyer, J. in Gujarat Steel Tubes Case, the employer was entitled to say that he would not continue an employee against whom allegations were made the truth of which the employer was not interested to ascertain. In fact, the employer, by opting to pass a simple order of termination as permitted by the terms of appointment or as permitted by the rules was conferring a benefit on the employee by passing a simple order of termination so that the employee would not suffer from any stigma which would attach to the rest of his career if a dismissal or other punitive order was passed. The above are all examples where the allegations whose truth has not been found and were merely the motive, But in cases where the termination is preceded by an inquiry and evidence is received and findings as to misconduct of a definitive nature are arrived at behind the back of the officer and where on the basis of such a report, the termination order is issued, such an order will be violative of principles of natural justice, inasmuch as the purpose of the inquiry is to find out the truth of the allegations with a view to punish him and not merely to gather evidence for a future regular departmental inquiry. In such cases, the termination is to be treated as based or founded upon misconduct and will be punitive. These are obviously not cases where the employer feels that there is a mere cloud against the employees conduct but are cases where the employer has virtually accepted the definitive and clear findings of the Inquiry Officer, which are all arrived at behind the back of the employee even though such acceptance of findings is not recorded in the order of termination. That is why the misconduct is the foundation and not merely the motive, in such cases."

32 In Kunwar Arun Kumar Vs. U.P. Hill Electronics Corporation Ltd. and others, (1997) 2 SCC 191 the termination of the appellant's service, who was on probation was upheld by the Supreme Court by making the following observations:

"During the period of probation, the authorities are entitled to assess the suitability of the candidates and if it is found that the candidate is not suitable to remain in service they are entitled to record a finding of unsatisfactory performance of the work and duties. Under these circumstances, necessarily the appointing authority has to look into the performance of the work and duties during the period of probation and if they record a finding that during that period, the work and performance of the duties were unsatisfactory, they are entitled to terminate the service in terms of the letter of appointment without conducting any enquiry. That does not amount to any stigma. If the record does not support such a conclusion reached by the authorities, a different complexion would arise. In the present case they have recorded the finding that the petitioner was

regularly absent on one ground or the other. Under these circumstances, the respondents terminated his services. There is no illegality in the action taken by the respondents."

33 In High Court of Judicature at Patna Vs. Pandey Madan Mohan Prasad Sinha and others, (1997) 10 SCC 409, the Supreme Court reversed the decision of the Patna High Court and upheld the termination of the respondent's service. The facts of that case were that while he was holding the post of Munsiff as a probationer, the respondent had earned several adverse remarks during the period from 1976 to 1982. In the course of an inspection by a High Court Judge in 1983, the conduct and antecedence of the respondent were reported to be very much undesirable and unbecoming of a judicial officer. Several complaints touching his integrity with respect to judicial work and his character and morality were also received. All these factors were taken into consideration by the High Court on its administrative side and it was decided not to continue his service. The writ petition filed by the petitioner was allowed by the High Court on the ground that some of the adverse remarks recorded in the Annual Confidential Report of the respondent had not been communicated to him. The High Court held that the action taken against him was punitive. Allowing the appeal of the High Court, their Lordships of the Supreme Court observed as under:

"A probationer does not have a right to hold the post during the period of probation. The position of a probationer cannot be equated with that of an employee who has been substantively appointed on a post and has a right to hold that post. An order terminating the services of a probationer can be questioned only if it is shown that it has been passed arbitrarily or has been passed by way of punishment without complying with the requirements of Article 311(2) of the Constitution. Since a probationer has no right to hold the post on which he has been appointed on probation, he cannot claim a right to be heard before an order terminating his services is passed. The obligation to communicate the adverse material to a person before taking action against him on the basis of the said material is a facet of the principles of natural justice. But

principles of natural justice have no application in the case of termination of the services of a probationer during the period of probation since he has no right to hold the post. It is, therefore, not possible to hold that there is an obligation to communicate the adverse material to a probationer before a decision is taken on the basis of the said material that he is not fit for being retained in service. Such material can be relied upon to show that such a decision does not suffer from the vice of arbitrariness and is not capricious. Even with respect to persons who have been substantively appointed on a post and have a right to hold that post, it has been held that the failure to communicate the adverse remarks in the service record would not vitiate the order of compulsory retirement." [Underlining is ours]

34 In Radhe Shyam Gupta v. U.P. State Agro Industries Corporation Ltd., (1999) 2 SCC 21, the Supreme Court undertook an exhaustive review of various judicial precedents and culled out the following propositions:

"(1)The termination of the services of a temporary servant or one on probation, on the basis of adverse entries or on the basis of an assessment that his work is not satisfactory will not be punitive inasmuch as the above facts are merely the motive and not the foundation. The reasons why they are the motive is that the assessment is not done with the object of finding out any misconduct on the part of the officer. It is done only with a view to decide whether he is to be retained or continued in service. The position is not different even if a preliminary inquiry is held because the purpose of a preliminary enquiry is to find out if there is prima facie evidence or material to initiate a regular departmental inquiry. The purpose of the preliminary enquiry is not to find out misconduct on the part of the officer and if a termination follows without giving any opportunity, it will not be bad. Even in a case where a regular departmental enquiry is started, a charge­memo issued, reply obtained, and an enquiry officer is appointed - if at that point of time, the enquiry is dropped and a simple notice of termination is passed, the same will not be punitive because the enquiry officer has not recorded evidence nor given any findings on the charges. The departmental enquiry was stopped because the employer was not sure of establishing the guilt of the employee. The employer was entitled to say that he would not continue an employee against whom allegations were made the truth of which the employer was not interested to ascertain. In fact, the employer by opting to pass a simple order of termination as permitted by the terms of appointment or as permitted by the rules was conferring a benefit on the employee by passing a simple order of termination so that the employee would not suffer from any stigma which would attach to the rest of his career if a dismissal or other punitive order

was passed. The above are all examples where the allegations whose truth has not been found, and were merely the motive.

(ii)But in cases where the termination is preceded by an enquiry and evidence is received and findings as to misconduct of a definitive nature are arrived at behind the back of the officer and where on the basis of such a report, the termination order is issued, such an order will be violative of the principles of natural justice inasmuch as the purpose of the enquiry is to find out the truth of the allegations with a view to punish him and not merely to gather evidence for a future regular departmental enquiry. In such cases, the termination is to be treated as based or founded upon misconduct and will be punitive. These are obviously not cases where the employer feels that there is a mere cloud against the employee's conduct but are cases where the employer has virtually accepted the definitive and clear findings of the enquiry officer, which are all arrived at behind the back of the employee - even though such acceptance of findings is not recorded in the order of termination. That is why the misconduct is the foundation and not merely the motive in such cases."

35 In Dipti Prakash Banerjee v. Satvendra Nath Bose National Centre for Basic Sciences, Calcutta, (1999) 3 SCC 60, the Supreme Court virtually conceded that it was extremely difficult for the courts to draw a clear cut line of demarcation between the cases in which the termination of the services of a temporary employee or probationer by innocuous orders could be treated as punitive and the cases in which the allegations of misconduct may be treated as mere motive for terminating the services of such employee and held as under:

(I)"If findings are arrived at in an enquiry as to misconduct, behind the back of the officer or without a regular departmental enquiry, simple order of termination is to be treated as 'founded' on the allegations and will be bad. If however enquiry was not held, no findings were arrived at and the employer was not inclined to conduct an enquiry but at the same time, he did not want to continue the employee against whom there were complaints, it would only be a case of motive and the order would not be bad. Similar is the position if employer did not want to enquire into truth of the allegations because of delay in regular departmental proceedings or he was doubtful about securing adequate evidence. In such a circumstance, the allegations would be motive and not foundation and simple order of termination would be valid."

(ii)"Material which amounts to stigma need not be contained in termination order of a probationer but might be contained in documents referred to in the termination order or in its annexures. Such documents can be asked for, or called for, by any future employer of the probationer. In such a case, employee's interests would be harmed and therefore termination order would stand vitiated on the ground that no regular enquiry was conducted."

36 In State of U.P. And another Vs. Ram Krishna and another, (1999) 7 SCC 350, the termination of the respondent's service on the ground of unsatisfactory performance was upheld with the observation that the rules of natural justice are not attracted in such a case.

37 In V.P. Ahuja Vs. State of Punjab, (2000) 3 SCC 239, the Supreme Court after making reference to the judgement in Dipti Prakash Banerjee's case (supra) and taking note of the averments contained in the affidavit­in­reply filed on behalf of the respondents before the High Court, held that the termination of the appellant's service was punitive.

38 In Chandra Prakash Shahi Vs. State of U.P, (2000) 5 SCC 152, the Supreme Court ruled that where the termination is preceded by a preliminary enquiry into the allegations of serious misconduct allegedly committed by the employee, the action of the employer will be treated as punitive. The facts of that case were that the appellant was appointed as a Constable on 1st October 1985 in the Pradeshik Armed Constabulary. He successfully completed training on 6th September 1986. Thereafter,he was posted on probation for two years. He successfully completed the period of probation without any blemish. His services were terminated on 19th July 1989 by a simple notice issued in terms of Rule 3 of the U.P. Temporary Government Servants (Termination of Service) Rules, 1975. The U.P. Public Service Tribunal declared the termination of the appellant's service as punitive because it was founded on a preliminary

inquiry conducted by the concerned authority in the matter of quarrel between two other Constables. The order of the Tribunal was set aside by the High Court. On appeal, the Supreme Court took note of the various previous decisions and observed:

" The whole case­law is thus based on the peculiar facts of each individual case and it is wrong to say that decisions have been swinging like a pendulum; right, the order is valid;left the order is punitive. It was urged before this Court, more than once including in Ram Chandra Trivedi case that there was a conflict of decisions on the question of an order being a simple termination order or a punitive order, but every time the Court rejected the contention and held that the apparent conflict was on account of different facts of different cases requiring the principles already laid down by this Court in various decisions to be applied to a different situation. But the concept of "motive" and "foundation" was always kept in view."

39 Their Lordships then reiterated the proposition laid down in Radhe Shyam Gupta's case (supra) in the following words:

"The important principles which are deducible on the concept of "motive" and "foundation", concerning a probationer, are that a probationer has no right to hold the post and his services can be terminated at any time during or at the end of the period of probation on account of general unsuitability for the post in question. If for the determination of suitability of the probationer for the post in question or for his further retention in service or for confirmation, an inquiry is held and it is on the basis of that inquiry that a decision is taken to terminate his service, the order will not be punitive in nature. But, if there are allegations of misconduct and an inquiry is held to find out the truth of that misconduct and an order terminating the service is passed on the basis of that inquiry, the order would be punitive in nature as the inquiry was held not for assessing the general suitability of the employee for the post in question, but to find out the truth of allegations of misconduct against that employee. In this situation, the order would be founded on misconduct and it will not be a mere matter of "motive".

"Motive" is the moving power which impels action for a definite result, or to put it differently, "motive" is that which incites or stimulates a person to do an act. An order terminating the services of an employee is an act done by the employer. What is that factor which impelled the employer to take this action? If it was the factor of general unsuitability of the

employee for the post held by him, the action would be upheld in law. If, however, there were allegations of serious misconduct against the employee and a preliminary inquiryis held behind his back to ascertain the truth of those allegations and a termination order is passed thereafter, the order, having regard to other circumstances, would be founded on the allegations of misconduct which were found to be true in the preliminary inquiry."

40 In Pavanendra Narayan Verma Vs. Sanjay Gandhi PGI of Medical Sciences and another, (2002) 1 SCC 520 the Supreme Court referred to various judicial precedence on the subject including Parshotam Lal Dhingra Vs. Union of India, (supra) Benjamin (A.G) Vs. Union of India(supra), Samsher Singh Vs. State of Punjab(supra), State of U.P. Vs. Kaushal Kishore Shukla (supra), Radhey Shyam Gupta Vs. U.P. State Agro Industries Corporation Ltd. (supra), Dipti Prakash Banerjee Vs. Satvendra Nath Bose National Centre for Basic Sciences, Calcutta, V.P. Ahuja Vs. State of Punjab(supra), Chandra Prakash Shahi Vs. State of U.P (supra) and held that where the services of an employee are terminated on the ground of unsatisfactory work or conduct, the action of the employer cannot be termed as stigmatic. Some of the propositions laid down in that judgment are extracted below:

(i) One of the judicially evolved tests to determine whether in substance an order of termination is punitive is to see whether prior to the termination there was (a) a full­scale formal enquiry (b) into allegations involving moral turpitude or misconduct which (c) culminated in a finding of guilt. If all three factors are present the termination has been held to be punitive irrespective of the form of the termination order. Conversely if any one of the three factors is missing, the termination has been upheld.

(ii) Whenever, a probationer challenges his termination the court's first task will be to apply the test of stigma or the "form" test. If the order survives this examination the "substance" of the termination will have to be found out. (iii) Generally speaking when a probationer's appointment is terminated it means that the probationer is unfit for the job, whether by reason of misconduct or ineptitude, whatever the language used in the termination order may be. Although strictly speaking, the stigma is implicit in the termination, a simple termination is not stigmatic. A

termination order which explicitly states what is implicit in every order of termination of a probationer's appointment, is also not stigmatic. In order to amount to a stigma, the order must be in a language which imputes something over and above mere unsuitability for the job."

41 In State of Punjab Vs. Bhagwan Singh, (2002) 9 SCC 636, the Supreme Court held that where the services of a probationer are terminated on the ground of unsatisfactory performance, the same cannot be treated as stigmatic merely because the competent authority takes into consideration adverse reports prepared by other officers.

42 In Registrar of Gujarat High Court Vs. C. G. Sharma, 2005 (1) GLH 40, the Supreme Court reversed the judgement of the Division Bench of this Court and upheld the termination of the respondent's service by making the following observations:

" .... Since the overall performance of the respondent was found to be unsatisfactory by the High Court during the period of probation, it was decided by the High Court that the services of the respondent during the period of probation of the respondent be terminated because of his unsuitability for the post. In this view of the matter, order of termination simplicitor cannot be said to be violative of Arts. 14, 16 and 311 of the Constitution of India. The law on the point is crystallised that the probationer remains probationer unless he has been confirmed on the basis of the work evaluation.

Under the relevant Rules under which there respondent was appointed as a Civil Judge, there is no provision for automatic or deemed confirmation and/or deemed appointment on regular establishment or post, and in that view of the matter the contentions of the respondent that the respondent's services were deemed to have been continued on the expiry of the probation period are misconceived."

43 In Sher Singh v. State of Haryana, 1994 (3) S.C.T. 1, (supra), a Full Bench of the Punjab and Haryana High Court considered the question as to whether a Constable can be discharged from service under

Rule 12.21 of the Rules at any time within 3 years of his enrolment in spite of the fact that there is a specific allegation which may even amount to misconduct against him. The Full Bench referred to the propositions laid down by the Supreme Court in Parshotam Lal Dhingra v. Union of India (supra), Jagdish Mitter v. Union of India (supra), Champaklal Chimanlal Shah v. Union of India (supra), A.G. Benjamin v. Union of India (supra) and State of U.P. v. Kaushal Kishore Shukla (supra) and culled out the following principles;

"(i) If a person has been employed on purely temporary basis and his services are terminated on account of his unsuitability or some alleged misconduct by a simple and innocuous order which carries no stigma/or penal consequences, the provisions of Article 311(2) are not attracted unless it is shown by some evidence that the authority actually intended to punish the employee.

(ii) The employer is entitled to conduct a preliminary enquiry to determine the truth or falsehood of the complaint as also the suitability of the employee. Such an enquiry cannot be itself imply that the employer intended to punish the employee.

(iii) In a case where allegations amounting to misconduct are made against a temporary employee, the employer has a two­fold choice. It can either choose to terminate the services of the employee in accordance with the terms of appointment and the rules governing the service or it can proceed to take punitive action. If it chooses to invoke its right under the contract of service and passes a simple order of termination/discharge, the provisions of Article 311 or the rules prescribing the procedure for imposition of a penalty are not attracted.

However, if the employer feels that the employee deserves to be punished and proceeds to take punitive action, the prescribed procedure and the provisions of Article 311 of the Constitution of India have to be followed."

44 In Ratnesh Kumar Choudhary v. Indira Gandhi Institute of Medical Science, Patna, Bihar, (2015) 15 SCC 151, the Supreme Court

held as follows;

"33. It will be noticed from the above decisions that the termination of the services of a temporary servant or one on probation, on the basis of adverse entries or on the basis of an assessment that his work is not satisfactory will not be punitive inasmuch as the above facts are merely the motive and not the foundation. The reason why they are the motive is that the assessment is not done with the object of finding out any misconduct on the part of the officer, as stated by Shah, J. (as he then was) in Ram Narayan Das case. It is done only with a view to decide whether he is to be retained or continued in service. The position is not different even if a preliminary enquiry is held because the purpose of a preliminary enquiry is to find out if there is prima facie evidence or material to initiate a regular departmental enquiry. It has been so decided in Champaklal case. The purpose of the preliminary enquiry is not to find out misconduct on the part of the officer and if a termination follows without giving an opportunity, it will not be bad. Even in a case where a regular departmental enquiry is started, a charge­memo issued, reply obtained, and an enquiry officer is appointed -- if at that point of time, the enquiry is dropped and a simple notice of termination is passed, the same will not be punitive because the enquiry officer has not recorded evidence nor given any findings on the charges. That is what is held in Sukh Raj Bahadur case and in Benjamin case. In the latter case, the departmental enquiry was stopped because the employer was not sure of establishing the guilt of the employee. In all these cases, the allegations against the employee merely raised a cloud on his conduct and as pointed by Krishna Iyer, J. in Gujarat Steel Tubes case the employer was entitled to say that he would not continue an employee against whom allegations were made the truth of which the employer was not interested to ascertain. In fact, the employer by opting to pass a simple order of termination as permitted by the terms of appointment or as permitted by the rules was conferring a benefit on the employee by passing a simple order of termination so that the employee would not suffer from any stigma which would attach to the rest of his career if a dismissal or other punitive order was passed. The above are all examples where the allegations whose truth has not been found, and were merely the motive.

34. But in cases where the termination is preceded by an enquiry and evidence is received and findings as to misconduct of a definitive nature are arrived at behind the back of the officer and where on the basis of such a report, the termination order is issued, such an order will be violative of the principles of natural justice inasmuch as the purpose of the enquiry is to find out the truth of the allegations with a view to punish him and not merely to gather evidence for a future regular departmental enquiry. In such cases, the termination is to be treated as based or founded upon misconduct and will be punitive. These are obviously not cases where the

employer feels that there is a mere cloud against the employee's conduct but are cases where the employer has virtually accepted the definitive and clear findings of the enquiry officer, which are all arrived at behind the back of the employee -- even though such acceptance of findings is not recorded in the order of termination. That is why the misconduct is the foundation and not merely the motive in such cases."

45 The above survey of the judicial precedents may give an impression that the Supreme Court has expressed conflicting views in different decisions. In some cases the order of termination of the probationer which was preceded by some enquiry by the employer into the allegation of misconduct or consideration of adverse material was upheld on the ground that such enquiry was held and adverse material was considered only with a view to determine the suitability or fitness of the probationer to be continued in service. In other cases, the termination of the services of the probationers even by innocuous orders was nullified on the ground that the enquiry held into the allegations of misconduct constituted the foundation of the employer's action. The conflicting views of the Supreme Court do create difficulty for all other Courts including the High Courts in following the particular judicial precedent, but on a careful study of the ratio of various judgments one can steer clear and apply the correct test for determining whether or not the termination of the services of a probationer is punitive or stigmatic. In our view, while dealing with the cases involving adjudication of challenge to the termination of services of an employee who is on probation or a temporary employee, the Court should keep in view the following principles:

(1) A probationer does not have the right to hold the post during the period of probation.

(2) The position of a probationer cannot be equated with that

of an employee who has been substantively appointed on a post and has the right to hold that post.

(3) When an appointment is made on probation, it presupposes that the conduct, performance, ability and the capacity of the employee concerned have to be watched and examined during the period of probation. He is to be confirmed after the expiry of the probation only when his service during the period of probation is found to be satisfactory and he is found to be suitable for the post.

(4) An order terminating the services of a probationer can be questioned only if it is shown that the same has been passed arbitrarily or by way of punishment without complying with the rules of natural justice and the requirements of Article 311 of the Constitution, if applicable or it is shown that in the garb of termination of service by an innocuous order the employer has punished the probationer.

(5) Since a probationer does not have the right to hold the post on which he has been appointed on probation, he cannot ordinarily claim a right to be heard before the termination of his service.

(6) For the purpose of forming an opinion on the suitability of a probationer to be continued in service, the employer can take into consideration the reports relating to his performance, conduct, behavior and such reports need not be conveyed to the employee concerned. The competent authority can also take into consideration the other relevant factors for the purpose of determining the suitability and fitness of the probationer to be continued in service.

(7) The decision on the question of suitability and fitness of a probationer can be taken during or at the end of the period of probation.

(8) If the decision is taken to terminate the service of an employee during the period of probation, after taking into consideration his over all performance, conduct, behavior and some action or omission, then the order cannot be treated as punitive.

(9) Even if the employer holds a preliminary inquiry or gets such an enquiry made into the allegations of misconduct with a view to satisfy himself about the suitability of the probationer to be continued in service, the ultimate decision to terminate the services of the probationer cannot be termed as stigmatic. However, if an inquiry is made at the back of the employee on the charges of misconduct and it is established that the allegation of misconduct constituted the foundation of the action taken by the employer, then the Court can declare the termination of the services of the probationer as punitive and nullify the action of the employer on the ground of violation of the rules of natural justice.

(10) For determining the true nature of the order of termination of the probationer's service, the court can lift the veil, examine the preceding and attendant facts and circumstances and then decide whether an innocuous order of termination of service is punitive or stigmatic. However, the principle of tearing of the veil for finding out the real nature of the order is to be applied only in a case where the Court is satisfied that there is a direct nexus between the charge levelled against the employee and the action

taken by the employer.

●     IMPUTATIONS IN THE AFFIDAVIT­IN­REPLY:
46    In many matters, over a period of time, we have noticed that the

order of termination may be quite innocuous, but when challenged before the Court of Law, and to meet with such challenge, if the employer files affidavit­in­reply imputing something to the employee, the same is being construed as casting stigma and, thereafter, the simple order of termination, no longer remains innocuous but becomes stigmatic. It would be argued on behalf of the terminated employee that having regard to the averments made in the affidavit­in­reply filed by the employer, the termination could not be said to be simpliciter but it would assume the nature of being punitive.

47 We are of the view that the averments contained in the affidavit­ in­reply cannot always be made the basis for recording a finding on the true nature of the termination of service. If an employee challenged the order of termination, simpliciter by asserting that it is arbitrary and capricious, the employer is bound to place the material before the court to show that the power vested in him was exercised in good faith and the action was founded on cogent reasons. At times, this is done by making averments in the affidavit­in­reply. If such averments were to be relied upon for recording a finding that the order of discharge or termination simpliciter is punitive, then in a majority of cases, the action taken by the employer to terminate the services of the employees in accordance with the terms and conditions of employment or the relevant rules would be rendered punitive. However, that is not a correct approach. In our considered view, the court can examine the order of termination of service along with the attending facts and circumstances for taking the view that it is punitive but the averments contained in the

affidavit­in­reply cannot, ordinarily, be made the basis for granting such a declaration.

48 In State of U.P. and Ors. v. Krishan Kumar Sharma, (1997) 11 S.C.C. 437, their Lordships of the Supreme Court considered an exactly identical question and answered in favour of the employer. The facts of that case were that while he was working as a temporary Fireman Constable in the Police Fire Brigade, the services of the respondent were terminated by paying him one month's pay in lieu of notice under the U.P. Temporary Government Servants (Termination of Services) Rules, 1975. The High Court held the termination order to be punitive and violative of Article 311(2) on the ground that in the State's counter affidavit, it had been that work of the respondent was not satisfactory and that he was a habitual absentee without leave and, therefore, his services had been terminated. Their Lordships of the Supreme Court reversed the order of the High Court and held as under: ­

"During the period prior to 1979 there were remarks indicating that his performance was not quite satisfactory. He was found to have overstayed from leave and a number of punishments were imposed on him. For the year 1979 there were remarks that he was most undisciplined and undesirable type of constable and that he was careless and habitual of leaving the fire station without leave or permission. These remarks reflect upon his performance in the earlier period. Keeping in view the said record of service of the respondent, the competent authority came to the conclusion that the performance of the respondent, who was only a temporary employee was not satisfactory and for that reason his services were terminated. It cannot be said that the termination of the services of the respondent in these circumstances was by way of punishment which required compliance with the provisions of Article 311(2) of the Constitution.

The averments in the State's counter­affidavit were in reply to the allegation made in the writ petition that by virtue of the order passed by IG of the fire services on 16.1.1980 all firemen stood confirmed w.e.f. 13.12.1978 but the respondent was not confirmed. In the said counter­ affidavit, it has also been stated that confirmation was to be done only if the work and conduct was found to be satisfactory and up to the mark.

The averments in the said counter­affidavit do not, therefore, alter the nature of the order of termination which was termination simpliciter in accordance with the Rules."

49 In State of U.P. v. Prem Lata Mishra, A.I.R. 1994 S.C. 2411, the Supreme court held that whether the services of the respondent, who was a temporary appointee, were terminated after considering the fact that she was rank irregular in her duties and left office without permission, the same could not be treated as punitive. The facts of that case were that the respondent was temporarily appointed as the Assistant Project Officer on 20th May 1980 on the recommendations of the Selection Committee. In April and May, 1982, the Superior Officer reported that her work was not satisfactory. Consequently, her services were terminated by giving one month's pay and allowances in lieu of one month's notice. The High Court held that termination was punitive because it was based on the allegations for misconduct, namely, absence from duty. Their Lordships of the Supreme Court reversed the order of the High Court and held as under: ­

"If misconduct is the foundation to pass the order, then an enquiry into misconduct should be conducted and an action according to law should follow. But if it is (sic) motice, it is not incumbent upon the competent officer to have the enquiry conducted and the service of a temporary employee could be terminated in terms of the order of appointment or rules giving one month's notice or pay salary in lieu thereof. Even if an enquiry was initiated, it could be dropped midway and action could be taken in terms of the rules or order of appointment. The same principles applies to the facts in this case. It is seen that the respondent was appointed by direct recruitment by selection committee constituted by the government in this behalf and on finding about the suitability to the post as an Asstt. Project Officer, the respondent was appointed and was posted to the place where she had joined. Thereafter, her work was supervised by the higher officers and two officers have submitted their reports concerning the performance of the duties by the respondent. She wax regularly irregular in her duties, insubordination and left the office during office house without permission etc. On consideration thereof, the competent authority found that the respondent is not fit to be continued in service as

her work and conduct were unsatisfactory under these circumstances the termination is for her unsuitability or unfitness but not by way of punishment as a punitive measure and one in terms of the order of appointment and also the Rules. Accordingly, the High Court has gone against settled law in allowing the writ petition."

50 Thus, from the aforesaid, if we have to curl out the principles of law that should be made applicable in the cases of the present type, those may be summarized as under:

(i) If a person has been employed on purely temporary basis and his services are terminated on account of his unsuitability or some alleged misconduct by a simple and innocuous order which carries no stigma/or penal consequences, the provisions of Article 311(2) of the Constitution are not attracted unless it is shown by some evidence that the authority actually intended to punish the employee. This principle would apply even in the case of a probationer.

(ii) The employer is entitled to conduct a preliminary inquiry to determine the truth or falsehood of the complaint/allegations as also the suitability of the employee. Such an inquiry cannot by itself imply that the employer intended to punish the employee.

(iii) In a case where the allegations amounting to misconduct are made against a temporary employee/probationer, the employee has a two­fold choice. It can either choose to terminate the services of the employer in accordance with the terms of appointment and the rules governing the service or it can proceed to take punitive action. If the employer chooses to invoke its right under the contract of service and passes a simple order of termination/discharge, the provisions of Article 311 of the

Constitution or the Rules, prescribing the procedure for imposition of a penalty are not attracted. However, if the employer feels that the employee deserves to be punished and proceeds to take punitive action, the prescribed procedure and the provisions of Article 311 of the Constitution of India have to be followed.

(iv) The determination of the moot question further determines the course of enquiry into the validity of the orders and procedure to be followed before determining such issue and relief that may be granted as a result of such enquiry. The parameters of adjudicating the validity and consequence differ in the case arising purely as a result of the master­servant relationship between the State and individual under the service rules and the case which is governed by labour legislation like the Industrial Disputes Act. In the former case on finding the invalidity of action the consequence flows straightaway in the form of relief. That is not so in the case of claims adjudicated under the Industrial­Disputes Act. In the former case if it is found that it is a case of discharge simpliciter of a temporary employee and the order is not punitive the order will be sustained, unless it is otherwise contrary to rules. If the order is found to be punitive the Court will enquire whether an enquiry has been held in the alleged misconduct and whether principles of natural justice have been followed. If the answers are in the affirmative the order is sustained. If the answers are in negative the order of termination is vitiated. Neither the Court examine the correctness of finding on appreciating the evidence, nor the Court grant an opportunity to prove the misconduct, in case enquiry is not held or it is defective, to the employer. However, the case is different when it comes to be tested on the anvil of the Industrial Disputes Act. In case the order is found to be termination

simpliciter, it needs to be enquired whether the employee is workman and termination amounts to retrenchment, if so, whether he falls in the Protection envisaged under Chapter VA or VB, as the case may be, and conditions of valid retrenchment have been complied with. If the order is found to be punitive, it does not become a case of falling under retrenchment and provisions governing retrenchment are not attracted. However, the enquiry takes different turn. In case termination is found to be by way of punishment the order can be sustained on proof of a fair and just enquiry preceding the dismissal or removal in which the guilt of the workman is proved. The Labour Court or Tribunal not only examines the fairness of the enquiry but also the validity of the findings reached on enquiry even if the enquiry is found to be just and fair. The matter does not rest there. Where the Labour Court finds that enquiry is not fair or was defective, or even in case no enquiry is at all held, it has to give an opportunity to the employer to lead evidence, if so demanded, to prove the alleged misconduct on which the termination order is founded and thereafter reach its own conclusion. (See Beck & Co. India Ltd., Ankleshwar vs. S.J. Mehta, (2000) GLR 143.)

51 While dealing with the present appeal, one has to bear in mind that a intra­Court appeal is really not a statutory appeal preferred against the judgment and order of an inferior to the superior Court. The appeal inter se in a High Court from one Court to another is really an appeal from one coordinate Bench to another Coordinate Bench and it is for this reason that a writ cannot be issued by one Bench of the High Court to another Bench of the High Court nor can even the Supreme Court issue writ to a High Court. Thus, unlike an appeal, in general, an intra­Court appeal is an appeal on principle and that is why, unlike an

appeal, in an ordinary sense, such as a criminal appeal, where the whole evidence on record is examined afresh by the appellate Court, what is really examined, in an intra­Court appeal, is the legality and validity of the Judgment and/or Order of the Single Judge and it can be set aside or should be set aside only when there is a patent error on the face of the record or the judgment is against the established or settled principle of law. If two views are possible and a view, which is reasonable and logical, has been adopted by a Single Judge, the other view, howsoever appealing such a view may be to the Division Bench, it is the view adopted by the Single Judge, which should, normally, be allowed to prevail. Hence, the impugned judgment of the learned Single Judge should not be completely ignored and this Court has to consider the judgment and order in its proper perspective and if this Bench, sitting as an appellate Bench, is of the view that the decision has been arrived at by the learned Single Judge without any material error of fact or law, then, the judgment, in question, should be allowed to prevail.

52 In the overall view of the matter, we are convinced that no case is made out by the appellant to interfere with the impugned judgement and order passed by the learned Single Judge.

53 In the result, this appeal fails and is hereby dismissed.

54 Consequently, the Civil Application for stay stands disposed of.

(VIKRAM NATH, CJ)

(J. B. PARDIWALA, J) CHANDRESH