PETITIONER:
RAVINDRA KUMAR MISRA
Vs.
RESPONDENT:
U.P. STATE HANDLOOM CORPORATION LTD. & ANR.
DATE OF JUDGMENT15/10/1987
BENCH:
MISRA RANGNATH
DUTT, M.M. (J)
CITATION:
1987 AIR 2408 1988 SCR (1) 501
1987 SCC Supl. 739 JT 1987 (4) 106
1987 SCALE (2)766
ACT
U.P. State Handloom Corporation Rules: Rules 63 & 6 Temporary employee-Termination of servic Whether termination simpliciter or dismissal.
HEADNOTE
Rule 63 of the U.P. State Handloom Corporation Rules stipulates termination of temporary service on one month’s notice on either side. Rule 68 provides that if the punishment of discharge or dismissal is imposed, an enquiry commensurate with requirements of natural justice is a condition precedent.
The appellant was employed in the aforesaid Corporation on temporary basis. The order of appointment stated that his services were liable for termination with one month’s notice or one month’s pay in lieu of notice on either side. He was placed under suspension in November 1982 on charges of misconduct, dereliction of duty, mismanagement and showing fictitious production entries. That order, however, was revoked in November 1983 and his services terminated forthwith by notice entitling him to one month’s salary. The High Court held that the termination was not punitive and the question of breach of principles of natural justice did not arise.
In this appeal by special leave it was contended that the appellant was entitled to the protection of Articles 14 and 16 of the Constitution, that though his order of termination was innocuous, the setting in which it has been made clearly makes it an order of dismissal punitive in character and that as his service was determined by the order attaching stigma the appellant was entitled to a hearing commensurate with rules of natural justice and in the absence of the opportunity of being heard the order was liable to be quashed.
Dismissing the appeal, ^
HELD: As long as the adverse feature of the employee remains the motive and does not become transferred as the foundation of the order of termination, it is unexceptionable. Whether ’motive’ has be- 502 come the foundation has to be decided by the Court with reference to the facts of a given case. [510-G]
It is necessary for every employer to assess the service of the temporary incumbent in order to find out as to whether he should be confirmed in his appointment or his services should be terminated. It may also be necessary to find out whether the officer should be tried for some more time on temporary basis. Since both in regard to a temporary employee or an officiating employee in a higher post such an assessment would be necessary, merely because the appropriate authority proceeds to make an assessment and leaves a record of its views the same would not be available to be utilised to make the order of termination following such assessment punitive in character. [509G-H; 510A-B]
There may be cases where an enquiry is undertaken and prima facie material for serious charges are found; by disclosing the result of such preliminary enquiry, the officer concerned is put under suspension in contemplation of disciplinary action. After such steps have been taken, the employer/appropriate authority decides not to continue the departmental proceedings but makes an order terminating the service. [510C-D]
In the instant case the appellant was a temporary servant and had no right to the post. Both under the contract of service as also the Service Rules governing him the employer had the right to terminate his services by giving him one month’s notice. The order of termination was in innocuous terms. It did not cast any stigma on him nor did it visit him with any evil consequences. The order was, therefore, not open to challenge. [S11C-D]
The appellant is not entitled to compensation under the law. But since he has been put out of employment at an advanced age and it may be difficult for him to get an alternate employment, the Corporation to pay him a consolidated amount of Rs.25,000. [511F]
Purshotam Lal Dhingra v. Union of India, [1958] SCR 828; Champaklal Chimanlal Shah v. The Union of India, [1964] 5 SCR 190; Shamsher Singh & Anr. v. State of Punjab, [1975] 1 SCR 814; Regional Manager & Anr. v. Pawan Kumar Dubey; [1976] 3 SCR 540; State of U.P. v. Ram Chandra Trivedi, [1977] 1 SCR 452 and State of Orissa & Anr. v. Ram Narayan Dass, [19611 I SCR 606, referred to.
JUDGMENT
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 443 of 1985. 503
From the Judgment and order dated 6.5.1985 of the Allahabad High Court in C.M.W.P. No. 2822 of 1983.
Dr. Y.S. Chitale, Mrs. Rekha Pandey, S.P. Pandey, Atul Tiwari, Pinaki Misra, Mrs. Mamta Kachawala and Miss Bina Gupta for the Appellant.
M.K. Banerjee, Solicitor General, A.K. Ganguli, Gopala Subramaniam, K.J. John, M.M. John, Harish N. Salve and Miss Nisha Srivastava for the Respondents.
The Judgment of the Court was delivered by
RANGANATH MISRA, J. This is an appeal by special leave. The appellant was employed on the production side of the Uttar Pradesh State Handloom Corporation, a public sector undertaking-(hereinafter referred to as ’Corporation’ for short) on temporary basis. Having been appointed on 30th of October, 1976 as Bunker Sewa he obtained two promotions while still working in temporary status and by 1983 was working as Deputy Production Manager. The appellant’s letter of appointment, as far as material, stated:-
"With effect from the date of taking over
charge Shri Rabindra Kumar Mishra ... is hereby
appointed as Bunker Sewa ...... on the following
terms and conditions:-
(1) That his appointment is temporary and his
services are liable for termination with one
month’s notice or one month’s pay in lieu of
notice from either side On November 22, 1982 the appellant was placed under suspension and that order read as follows:-
"As a result of preliminary enquiries made by
the Central Manager on 13.11.1982 of the
Production Center, Kunda and other Centres under
the same, it has come to notice that Sri R.K.
Misra, former Dy. Production Manager, Kunda, is
responsible for misconduct, dereliction of duty,
mismanagement and showing fictitious production of
terrycot cloth. He is, therefore, placed under
suspension with immediate effect ............... "
(Underlinings are ours) 504
On the 1st of February, 1983 the order of suspension was A revoked and on 10th of February, 1983 the impugned order terminating his services being to the following effect was passed:-
"The undersigned hereby gives notice to Shri
R.K. Misra, Deputy Production Manager, Production
Center, Kunda, Prataapgarh, Salon Rai Bareilly
that his services are no more required and his
service will be deemed to be terminated from
receipt of this notice by him. It is directed that
he will be entitled to receive one month’s salary
in lieu of notice period on the same rate on which
he was receiving salary before termination of his
service."
The appellant challenged the order of termination of his service before the Allahabad High Court but the High Court declined to interfere by holding that the termination was not punitive and the question of breach of principles of natural justice did not arise.
It is not disputed that the employer-Corporation is ’State’ within the meaning of Article 12; yet it has not been contended-and rightly-that the protection of Article 311(2) of the Constitution is avilable to the employees of the Corporation. The appellant has however, claimed that he is entitled to the protection of Article 14 and 16 of the Constitution; though his order of termination is innocuous the setting in which it has been made clearly makes it an order of dismissal and the High Court has gone wrong in holding that the order of termination was not punitive; as service was determined by the order of termination attaching stigma the appellant was entitled to a hearing commensurate with rules of natural justice and in the absence of that opportunity of being heard the order is liable to be quashed.
It cannot be disputed that temporary service can be terminated by notice. The order of appointment in the appellant’s case made it abundantly clear that with a month’s notice or payment of salary m lieu of notice such termination could be effected by either side Rule 63 of the Corporation Rules made in exercise of Article 127 of the Articles of Association of the Uttar Pradesh State Handloom Corporation Limited recognised such a power. That Rule provides:-
" 1. The appointing authority may, at any
time, during the pendency of the temporary tenure
terminate the services of a temporary employee by
giving him one month’s notice or emoluments for
such lesser period by H 505
which the notice falls short of one month.
2. The temporary employee, on his part, shall
have the option of quitting service by giving one
month’s notice to the appointing authority or
paying to the Corporation an amount equal to his
one month’s pay .. " The order of termination of service in this case is indeed innocuous. The appellant is not entitled to the protection of Article 311(2) of the Constitution not being a member of a civil service of the Union or a State nor holder of a civil post under the State but his own Service Rules provide under Rule 68 that if the punishment of discharge or dismissal is imposed, an enquiry commensurate with requirements of natural justice is a condition precedent. Admittedly no such enquiry has been held. The question that crops up here for determination, therefore, is whether the impugned order was an order of termination simpliciter or really amounted to an order of dismissal. In Purshotam Lal Dhingra v. Union of India, [ 1958] SCR 828. a Constitution Bench of this Court stated:-
"This use of 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 herinbefore referred to?
If the case satisfied 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 or the
reversion to his substantive rank must be regarded
as a reduction in rank and if the requirements of
the rules and Article 311, which give protection
to Government servant have not been complied with,
the termination of the service or the reduction in
rank must be held to be wrongful and in violation
of the constitutional right of the servant. This view has been approved by another Constitution Bench of this Court in Champaklal Chimanlal Shah v. The Union of India, [ 19641 5 SCR 190. After indicating approval, Wanchoo, J. as he then was, spoke for the Constitution Bench thus:-
"It is well known that Government does not
terminate 506
nate the services of a public servant, be he even
a temporary servant without reason; nor is it
usual for Government to reduce a public servant in
rank without reason even though he may be holding
the higher rank only tempoarily. One reason for
terminating the services of a temporary servant
may be that the post that he is holding comes to
an end. In that case, there is nothing further to
be said and his services terminate when the post
comes to an end. Similarly a Government servant
temporarily officiating in a higher rank may have
to be reverted to his substantive post where the
incumbent of the higher post comes back to duty or
where the higher post created for a temporary
period comes to an end. But besides the above, the
Government may find it necessary to terminate the
services of a temporary servant if it is not
satisfied with his conduct or his suitability for
the job and/or his work. The same may apply to the
reversion of a public servant from a higher post
to a lower post where the post is held as a
temporary measure. This dissatisfaction with the
work and/or conduct of a temporary servant may
arise on complaint against him. In such cases two
courses are open to Government. It may decide to
dispense with the services of the servant or
revert him to his substantive post without any
action being taken to punish him for his bad work
and/or conduct. Or the Government may decide to
punish such a servant for his bad work or
misconduct, in which case even though the servant
may be temporary, he will have the protection of
Article 311(2). But even where it is intended to
take action by way of punishment what usually
happens is that something in the nature of what
may be called a preliminary enquiry is first held
in connection with the alleged misconduct or
unsatisfactory work. ln this preliminary enquiry
the explanation of the government servant may be
taken and documentary and even oral evidence may
be considered. It is usual when such a preliminary
enquiry makes out a prima facie case against the
servant concerned that charges are then framed
against him and he is asked to show cause why
disciplinary action be not taken against him. An
enquiry officer (who may be himself in the case
where the appointing authority is other than the
Government) is appointed who holds enquiry into
the charges communicated to the servant concerned
after taking his explanation and his enquiry is
held in accordance with the principles of natural 507
justice. This is what is known as a formal
departmental enquiry into the conduct of a public
servant .......
"Generally therefore a preliminary enquiry is
usually held to determine whether a prima facie
case for a formal departmental enquiry is made
out, and it is very necessary that the Two should
not be confused. Even where Government does not
intend to take action by way of punishment against
a temporary servant on a report of bad work or
misconduct a preliminary enquiry is usually is
held to satisfy Government that there is reason to
dispense with the services of a temporary employee
or to revert him to his substantive post, for as
we have said already, Government does not usually
take action of this kind without any reason.
Therefore when a preliminary enquiry of this
nature is held in the case of a temporary employee
or a Government servant holding a higher rank
temporarily it must not be confused with the
regular departmental enquiry (which generally
follows such a preliminary enquiry) when the
Government decides to frame charges and get a
departmental enquiry made in order that one of the
three major punishments already indicated may be
inflicted on the government servant. Therefore, so
far as the preliminary enquiry is concerned, there
is no question of its being governed by Article
311(2) for that enquiry is really for the
satisfaction of government to decide whether
punitive action should be taken or action should
be taken under the contract or the rules in the
case of a temporary government servant or a
servant holding higher rank temporary to which he
has no right. In short a preliminary enquiry is
for the purpose of collection of facts in regard
to the conduct and work of a government servant in
which he may or may not be associated so that the
authority concerned may decide whether or not to
subject the servant concerned to the enquiry
necessary under Article 311 for inflicting one of
the three major punishments mentioned therein.
Such a preliminary enquiry may even be held ex
parte, for it is merely for the satisfaction of
Government, though usually for the sake of
fairness, explanation is taken from the servant
concerned even at such an enquiry." Both Pershotam Lal Dhingra’s case (supra) and Champaklal’s case 508 (supra) were referred to and relied upon in Shamsher Singh & Anr. v. State of Punjab, [1975] 1 SCR 814. This is a case which was heard by a 7-Judge Bench. Ray, CJ., who spoke for the majority of five considered all the cases rendered by this Court till then touching on the point and at page 841 of the Reports stated as follows:-
"The form of the order is not decisive as to
whether the order is by way of punishment. Even an
innocuously worded order terminating the service
may in the facts and circumstances of the case
establish that an enquiry into allegations of
serious and grave character of misconduct
involving stigma has been made in infraction of
the provision of Article 311. In such a case the
simplicity of the form of the order will not give
any sanctity." In Sharnsher Singh’s case (supra) the ratio of the two earlier Constitution Bench judgment was approved. On facts it was found that the order of termination though innocuous in form was really an order by way of punishment removing the appellant from service on the basis of charges of gross misconduct found to have been established by an exparte enquiry conducted by the S.P. Vigilance Department with the only object of ascertaining truth of the alleged misconduct and for the purpose of dismissing or removing the appellant, if charges were found established. It was ultimately on the basis of specific findings recorded by the S.P. Vigilance that the appellant’s services were terminated. The Court found that the enquiry by the S.P. Vigilance was essentially and in character and object different from the informal enquiry into the and in object different from the informal enquiry into the suitability of the appellant. Ray, CJ. in Shamsber Singh’s case (supra) further pointed out:-
"The fact of holding an enquiry is not always
conclusive. What is decisive is whether the order
is really by way of punishment ..... A probationer
whose terms of services provided that it could be
terminated without any notice and without any
cause being assigned could not claim the
protection of Article 311(2).
An order terminating the services of a
temporary servant or probationer under the Rules
of employment and without anything more will not
attract Article 311. Where a departmental enquiry
is contemplated and if an enquiry is not in fact
proceeded with Article 311 will not be attracted 509
unless it can be shown that the order though
unexceptionable in form is made following a report
based on misconduct. " In Regional Manager & Anr. v. Pawan Kumar Dubey, [1976] 3 SCR 540 it was observed by this Court thus: 1
"We think that the principles involved in
applying Article 311(2) having been substantially
explained in Shamsher Singh’s case (supra) it
should not no longer be possible to urge that
Sughar Singh’s case could give rise to some
misapprehension of the law. Indeed we do not think
that the principles of law declared and applied so
often have really changed. But the application of
the same law to the differing circumstances and
facts of various cases which have come up to this
court could create the impression some times that
there is some conflict between decisions of this
Court. Even where there appears to be some
conflict, it would, we think, vanish when the
ratio decidendi of each case is correctly
understood. It is the rule deducible from the
application of law to the facts and circumstances
of a case which constitutes its ratio decidendi
and not some conclusion based upon facts which may
appear to be similar. One additional or different
fact can make a word of difference between
conclusions in two cases even when the same
principles are applied in each case to similar
facts .. ".
As we have already observed, though the provisions of Article 311(2) of the Constitution do not apply, the Service Rules which are almost at par make the decisions of this Court relevant in disposing of the present appeal. In several authoritative pronouncements of this Court, the concept of ’motive’ and ’foundation’ has been brought in for finding out the effect of the order of termination. If the delinquency of the officer in temporary service is taken as the operative motive in terminating the service, the order is not considered as punitive while if the order of termination is founded upon it, the termination is considered to be a punitive action. This is so on account of the fact that it is necessary for every employer to assess the service of the temporary incumbent in order to find out as to whether he should be confirmed in his appointment or his services should be terminated. It may also be necessary to find out whether the officer should be tried for some more time on temporary basis. Since both in regard to a temporary employee or an officiating employee in a higher post such H 510 an assessment would be necessary merely because the appropriate authority proceeds to make an assessment and leaves a record of its views the same would not be available to be utilised to make the order of termination following such assessment punitive in character. In a large democracy as ours, administration is bound to be impersonal and in regard to public officers whether in Government or public Corporations, assessments have got to be in writing for purposes of record. We do not think there is any justification in the contention of the appellant that once such an assessment is recorded, the order of termination made soon thereafter must take the punitive character.
There may be cases where an enquiry is undertaken and prima facie material for serious charges are found; by disclosing the result of such preliminary enquiry, the officer concerned is put under suspension in contemplation of disciplinary action. After such steps have been taken, the employer/appropriate authority decides not to continue the departmental proceedings but makes an order terminating the service, as has been done in this case.
Counsel for the respondents pointed that that in the matter of ordering termination of service of a temporary employee, the order follows a review of his working. Unless the termination is ordered because there is no need for the post, in the absence of reasons for termination, the action is open to challenge as arbitrary, particulary when other similarly situated employees are continued in service. When reasons are given, they are bound to disclose adverse features of the employee and disclosure of such features become the ground of challenge of the order on the plea that termination is not innocuous. To meet this position, the distinction between ’motive’ and ’foundation’ has been adopted by the courts. As long as the adverse feature of the employee remains the motive and does not become transformed as the foundation of the order of termination it is unexceptionable. No straight jacket test can be laid down to distinguish the two and whether ’motive’ has become the foundation has to be decided by the court with reference to the facts of a given case. The two are certainly two points of one line-ordinarily apart but when they come together ’motive’ does get transformed and merges into foundation.
As has been held by a three-Judge Bench in State of U.P. v. Ram C’handra Trivedi, [1977] 1 SCR 462 the position in regard to cases of the present nature is clear and the examination of the decisions of this court shows that there is no real conflict in their ratio decidendi. On facts as established in different cases, courts have applied the known 511 tests and in order that complete justice may be done on the facts found, there have been punishable deviations.
We may point out that this Court in a Consitution Bench judgment in the case of State of Orissa & Anr. v. Ram Narayan Dass, [ 1961] 1 SCR 606, indicated:-
"The fact of the holding of an enquiry is not
decisive of the question. What is decisive is
whether the order in the light of the decisions
laid down in Parshotam Lal Dhingra’s case.
Keeping in view the principles indicated above, it is difficult to accept the claim of the appellant. He was a temporary servant and had no right to the post. It has also not been denied that both under the contract of service as also the Service Rules governing him the employer had the right to terminate his services by giving him one month’s notice. The order to which exception is taken is expressly an order of termination in innocuous terms and does not cast any stigma on the appellant nor does it visit him with any evil consequences. It is also not founded on misconduct. In the circumstances, the order is not open to challenge .
We may point out that the learned Solicitor General appearing for the Corporation had at the commencement of the arguments suggested that the appellant could be given some compensation for termination. Ordinarily, under the law he would not be entitled to compensation in a case of this type, but since he has been put out of employment at an advanced age and it may be difficult for him to get an alternate employment, while dismissing his appeal we think it reasonable to call upon the Corporation to pay a consolidated amount of Rs.25000 (Rupees Twenty-five Thousand only).
Accordingly the appeal is dismissed. The amount of Rs.25,000 as indicated above may be paid to the appellant within one month from today. There would be no order for costs. P.S.S. Appeal dismissed. 512