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CASE NO.: Appeal (civil)  3125 of 2008

PETITIONER: Punjab National Bank by Chairman & Anr

RESPONDENT: Astamija Dash

DATE OF JUDGMENT: 30/04/2008

BENCH: S.B. SINHA & V.S. SIRPURKAR

JUDGMENT: J U D G M E N T REPORTABLE

CIVIL APPEAL NO. 3125  OF 2008 (Arising out of SLP (C) No. 18997 of 2005) WITH CIVIL APPEAL NO. 3126 OF 2008 (Arising out of SLP (C) No. 23155 of 2005) Astamija Dash                                                         .\005. Appellant                  Versus Punjab National Bank and another                                   \005.. Respondents

S.B. SINHA, J.   

1.      Leave granted in both the matters.

2.      These two appeals arise out of a judgment and order dated 20th May,  2005  rendered by the Division Bench of the Orissa High Court at Cuttack in  WP No. 2333 of 1991.

3.      Writ Petitioner (Respondent in appeal arising out of SLP ) No. 18997  of 2005 and Appellant in the connected appeal) was appointed as a  Management Trainee in the Punjab National Bank (Bank).  She was duly  selected by the Banking Service Recruitment Board, Delhi.  An offer of  appointment was made to her favour on or about 28th July, 1986 inter alia on  the following terms and conditions :- "2.     TRAINING/PROBATION/CONFIRMATION "You will be on training/probation for a period of 2 years  from the date of your joining the Bank and you will be  considered for confirmation in the service, subject to  your satisfactory report on your training, passing Bank’s  confirmation test and receipt of satisfactory report from  the Police authorities about your character and  antecedents. You may also be required to pass a test in a  language other than your mother tongue before  confirmation. 3.      During the period of probation your services can  be terminated by giving one month’s notice or payment  of one month’s emoluments in lieu thereof. The Bank  may, however, in its discretion extend your probation by  a further period not exceeding one year.  If you desire to  leave the services of the Bank at any time during the  period of probation, including the extended period  thereof, if any, you shall give a month’s notice or in lieu  thereof, you shall pay a month’s emoluments to the  bank."

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4.      She joined the services of the Bank immediately thereafter.

       Pursuant to the condition that she must pass the confirmation test, she  appeared in the said examination on 29th May, 1988.  She did not pass the  said examination.  She was, however, again asked to appear in the  examination on 1st October, 1989.  By a letter dated 5th September, 1989 she  expressed her inability to do so, stating :-

"       I invite a kind reference to your letter dated 18th  August, 1989 wherein I was advised to appear in the  confirmation test scheduled to be held on 1 October,  1989 in Central Staff College, Delhi.  In this context, I  would like to inform you that I am passing through the  period of pregnancy and am advised by the doctor not to  undertake long journey during the period of pregnancy  till delivery as a result of which I will not be able to  appear the test.  

       I, therefore, request you to kindly consider my case  sympathetically and permit me to appear the test on the  next schedule date, in future.  I enclose a medical  certificate for your information and favourable  consideration."

5.      She had two mis-carriages.  She was asked again to appear in the  examination on 19th August, 1990.  She appeared in the said test, but could  not succeed.  In the meanwhile the probation period expired on 28th July,  1988.  It was extended by another year i.e. till 28th July, 1989.   6.      Indisputably, she had otherwise completed her period of probation.   She also fulfilled the other conditions of service.  Her services, however,  were terminated by an order dated 9th November, 1990 stating :-

"You were appointed as a Management Trainee on  25.8.1986.  One of the terms of your appointment  stipulates that :

       "3.     CONFIRMATION

       You will be considered for confirmation in the  Bank service after two years on :

a)      Satisfactory report of your training. b)       Passing Bank’s confirmation Test. c)      You may also be required to pass a test in language  other than your mother tongue before confirmation.

In the event of your not satisfactorily completing  the training referred to in sub para 3(a) or failure to  qualify the Bank’s confirmation test within the  training/probation period of two years or to pass the test  in a language other than your mother tongue, your  probation may be extended by a further period not  exceeding one year. If during the period of probation, including the  period of extension, if  any, the competent authority is of  the opinion that you are not fit for confirmation to be  retained in the bank service, your services shall be liable  to be terminated by one month’s notice or payment of  one month’s emoluments in lieu thereof.  You had appeared in the confirmation test held on  29.5.1988 but you did not qualify the same.  In the  confirmation test held on 1.10.1989, you have been  advised to appear for the test but you had remained

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absent.  Although the Bank would have been justified in  terminating your services in accordance with your terms  of appointment, a lenient view was taken and you were  given a last and final opportunity for qualifying the  confirmation test in August, 1990.  You appeared in the  Bank’s confirmation test held on 19.8.1990 but did not  qualify the test."   

7.      She preferred an appeal thereagainst before the appellate authority  asking for another chance to clear the confirmation test stating thatsimilarly  situated employees including one Indubala had been given another chance to  appear at the examination.  However, the said appeal was dismissed by an  order dated 28th November, 1990.   8.      She filed a writ petition before the High Court, inter alia, contending:- i)      In terms of the Punjab National Bank (Officers) Service  Regulations, 1979 insistence of passing the confirmation  teat was illegal. ii)     As the extended period of probation expired on 28th July,  1989 she should be deemed to have been confirmed in  service. iii)    She had been subjected to discriminatory treatment viz-a- vis. Indubala who was granted an opportunity to appear  in the confirmation test for the 4th time on the ground of  illness of her mother. 9.      The High Court rejected the first two contentions raised by the writ  petitioner herein but accepted the third.  The writ petition was allowed on  the said premise.   10.     Both the parties, being aggrieved, are before us. 11.     Mr. Dhruv Mehta, learned counsel appearing on behalf of the Bank  would submit:- i)      Although Regulations do not provide for a confirmation test,  the writ petitioner having accepted the conditions of  appointment, she cannot be permitted to approbate or  reprobate. ii)     Her services having not been expressly confirmed, the doctrine  of implied confirmation is not applicable in view of the  decision of the Division Bench of the Allahabad High Court in  General Manager, Punjab National Bank and others  vs.  Khar  Bhan Ram : (1995) II LLJ 93 All. iii)    Reliance placed by the High Court on the case of Indubala was  misplaced as an affidavit explaining the situation had not been  taken into consideration and in any event no legal right can be  claimed on the basis of an illegality committed by the employer  as Article 14 of the Constitution of India speaks of a positive  right.  12.     Mr. S.S. Upadhyay, learned Senior Counsel, appearing on behalf of  the writ petitioner, on the other hand, would submit :- i)      The order of termination being not based on  unsatisfactorily completion of the in-house training or the  non-passing of a language test, which only have been  provided for in the Regulations, the impugned order of  termination could not have been passed on the premise  that the writ petitioner did not pass the confirmation test. ii)     Having regard to Regulations 15 and 16 of the  Regulations, her services having been terminated on 9th  November, 1990 i.e., after the extended period of the  period of probation upto 28th July, 1989 expired, she  would be deemed to have been confirmed in service.  iii)    In any event she had clearly been discriminated against  inasmuch as an employee who was similarly situated had  been given a fourth opportunity to clear the said  confirmation test, whereas the writ petitioner was not. 13.     The Bank is a scheduled Bank within the meaning of the provisions of  the Banking Companies (Acquisition and Transfer of Undertakings) Act,  1970.  It has various statutory powers.  It has inter alia power to frame

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Regulations.  In exercise of its powers conferred upon it by Section 19 read  with sub-section (2) of Section 12 of the Banking Companies (Acquisition  and Transfer of Undertakings) Act, 1970, the Board of Directors of the  Punjab National Bank, in consultation with the Reserve Bank of India and  with the previous sanction of the Central Government made Regulations  known as the Punjab National Bank (Officers’) Service Regulations, 1979  (for short Regulations).  Applicability of the said Regulations to the case of  the writ petitioner is not in dispute. 14.     Regulations 15, 16 and 36, which are relevant for our purposes may  be noticed.  In terms of sub-regulation (1) of Regulation 15, the period of  probation is two years.  Sub-regulation (1) of Regulation 16 provides for  confirmation of service, if in the opinion of the competent authority, the  officer has satisfactorily  completed the training in any institution to which  he might have been deputed for training and in the in-service training in the  bank.  The proviso appended thereto provides for passing a test in a  language other than the mother tongue of the office.  Sub-regulation (2) of  Regulation 16 provides for extension of the period of probation only in the  event the officer does not satisfactorily complete either or both the trainings  referred to in sub-regulation (1) or fails to pass the test referred to therein.   Extension of the period of probation, however, could not exceed a further  period of one year.  Sub-regulation (3) of Regulation 16 provides that  service of an employee can be terminated in the case of a direct appointee,  by one month’s notice or payment of one month’s emoluments in lieu  thereof only when during the period of probation, including the period of  extension, if any, the competent authority is of the opinion that the officer is  not fit for promotion.           Regulation 36 provides for maternity regulation in terms whereof  leave upto a period of six months can be granted. 16.     Indisputably, the Regulations do not provide for passing of any  confirmation test.  Such a confirmation test had been prescribed only in the  letter of appointment.  Ordinarily, although when conflict occurs between an  executive order and a statutory Regulation, the latter will prevail; we will  proceed on the premise that such a condition could be imposed by the  competent authority.   17.     We, for the time being, would also assume that having regard to the  doctrine of  approbation and reprobation as also the doctrine of election, the  writ petitioner could not question the validity or otherwise of the said  executive action.   

18.     While saying so, however, we are not unmindful of the observations  made by this Court in Municipal Corporation, Raipur vs. Ashok Kumar  Misra : (1991) 3 SCC 325.  "6. Exercise of the power to extend the probation is  hedged with the existence of the rule in that regard  followed by positive act of either confirmation of the  probation or discharge from service or reversion to the  substantive post within a reasonable time after the expiry  of the period of probation. If the rules do not empower  the appointing authority to extend the probation beyond  the prescribed period, or where the rules are absent about  confirmation or passing of the prescribed test for  confirmation of probation then inaction for a very long  time may lead to an indication of the satisfactory  completion of probation."  

19.     The period of probation is governed by a statutory provision.  The  appointing authority is bound thereby.  The initial period of probation is two  years, subject only to non compliance of the conditions laid down under sub- regulation (1) of Regulation 16, namely failure to complete satisfactorily  either or both the trainings referred to therein or passing of a language test,  the period of probation can be extended. The statute mandates that it can be  extended for a period not exceeding one year.  The total period of probation,  therefore, can be three years and not more.  No doubt for confirming the  services of an officer of the bank, the competent authority must satisfactorily

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form an opinion that the officer had completed the trainings in any   institution to which the officer had been deputed as also the in-service  training in the bank.  It is not the case of the appellant-bank that the proviso  appended thereto is applicable in the case of the writ petitioner. 20.     Extension of the period of probation limited to one year, however, is  circumscribed by the conditions specified in sub-regulation (2).  What is  apparent, has been made explicit by sub-regulation (3) as the competent  authority has to form an opinion that the officer is not fit for confirmation  only within the period of probation including the period of extension and not  beyond the same. 21.     The High Court, as noticed hereinbefore, has relied upon the decision  of the Division Bench of the Allahabad High Court in the case of appellant- bank itself.   Chief Justice S.S. Sodhi, speaking for the Division Bench,  distinguished  the cases of State of Punjab  vs.  Dharam Singh :1968 (3)  SCR 1 and Om Pakash Maurya  vs.   U.P. Co-operative Sugar Federation,  Lucknow : 1986 Suppl. SCC 95 to hold :- "It may be mentioned here that both Dharam Sigh and  Om Prakash’s cases (supra) were later distinguished by  the Supreme Court in Municipal Corporation, Raipur v.  Ashok Kumar Misra (1991-II-LLJ-343), where the facts  were somewhat similar as here in that the relevant service  rules, besides requiring successful completion of  probation for confirmation in service, also laid down, as  an essential pre-condition, the passing of the  departmental test. It was held that mere expiry of the  period of probation did not automatically have the effect  of deemed confirmation. Both the earlier judgments of  the Supreme Court in Dharam Singh and Om Prakash  cases (supra) were noticed and distinguished. Seen in this  light, there can be no escape from the conclusion that in  the circumstances here, mere expiry of the period of  probation, without the respondent having qualified in the  confirmation test, did not entitle him to confirmation in  service.

22.     The decisions of this Court in Dharam Singh (supra) and Om Prakash  Maurya (supra), on the one hand, and Municipal Corporation, Raipur  vs.   Ashok Kumar Misra : (1991) 3 SCC 325, on the other, as would appear from  the discussions made hereinafter had set the legal principles differently. 23.     In Dharam Singh, a Constitution Bench of this Court categorically  held that :-

"Where on the completion of the specified period of  probation the employee is allowed to continue in the post  without an order of confirmation., the only possible view  to take in the absence of anything to the contrary in the  original order of appointment or promotion or the service  rules, is that the initial period of probation has been  extended by necessary implication."   What is, therefore, evident is that the matter must be governed by the  statutory rules.   24.     The Rule in question which was applicable in Dharam Singh (supra)  was sub-rule (3) of Rule 6 of the Punjab Educational Service (Provincialised  Cadre) Class III Rules, 1961 which was in the following terms :- "6(3) On the completion of the period of probation the  authority competent to make appointment may confirm  the member in his appointment or if his work or conduct  during the period of probation has been in his opinion  unsatisfactory he may dispense with his services or may  extend his period of probation by such period as he may  deem fit or revert him to his former post if he was  promoted from some lower post.  Provided that the total period of probation including

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extensions, if any, shall not exceed three years."

In view of the said Rule it was held :-

"This Court has consistently held that when a first  appointment or promotion is made on probation for a  specific period and the employee is allowed to continue  in the post after the expiry of the period without any  specific order of confirmation, he should be deemed to  continue in his post as a probationer only, in the absence  of any indication to the contrary in the original order of  appointment or promotion or the service rules. In such a  case, an express order of confirmation is necessary to  give the employee a substantive right to the post, and  from the mere fact that he is allowed to continue in the  post after the expiry of the specified period of probation  it is not possible to hold that he should be deemed to  have been confirmed."

It was further held :- "In the present case, r. 6(3) forbids extension of the  period of probation beyond three years. Where, as in the  present case, the service rules fix a certain period of time  beyond which the probationary period cannot be  extended, and an employee appointed or promoted to a  post on probation is allowed to continue in that post after  completion of the maximum period of probation without  an express order of confirmation, he cannot be deemed to  continue in that post as a probationer by implication. The  reason is that such an implication is negatived by the  service rule forbidding extension of the probationary  period beyond the maximum period fixed by it. In such a  case, it is permissible to draw the inference that the  employee allowed to continue in the post on completion  of the maximum period of probation has been confirmed  in the post by implication."  

25.     The said principle was reiterated by a seven Judge Bench of this Court  in Samsher Singh vs. State of Punjab   vs. State of Punjab : (1974) 2 SCC  831 stating : "71. Any confirmation by implication is negatived in the  present case because before the completion of three years  the High Court found prima facie that the work as well as  the conduct of the appellant was unsatisfactory and a  notice was given to the appellant on October 4, 1968 to  show cause as to why his services should not be  terminated. Furthermore, Rule 9 shows that the  employment of a probationer can be proposed to be  terminated whether during or at the end of the period of  probation. This indicates that where the notice is given at  the end of the probation the period of probation gets  extended till the inquiry proceedings commenced by the  notice under Rule 9 come to an end. In this background the  explanation to Rule 7(1) shows that the period of probation  shall be deemed to have been extended impliedly if a  Subordinate Judge is not confirmed on the expiry of this  period of probation. This implied extension where a  Subordinate Judge is not confirmed on the expiry of the  period of probation is not found in Dharam Singh case .  This explanation in the present case does not mean that the  implied extension of the probationary period is only  between two and three years. The explanation on the  contrary means that the provision regarding the maximum  period of probation for three years is directory and not

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mandatory unlike in Dharam Singh case and that a  probationer is not in fact confirmed till an order of  confirmation is made." (Emphasis supplied)

26.     In Om Parkash Maurya vs. U.P. Coop. Sugar Factories Federation :  (1986) Suppl. SCC 95 following Dharam Singh, this Court held :- "4. In the instant case the order of appointment  promoting the appellant to the post of Commercial  Officer merely indicated that his probationary period  could be extended and he could be reverted to the post of  Office Superintendent without any notice. Stipulation for  extension of probationary period in the appointment  order must be considered in accordance with the proviso  to Regulation 17(1) which means that the probationary  period could be extended for a period of one year more.  Indisputably on the expiry of the appellant’s initial  probationary period of one year, the appointing authority  extended the same for another period of one year which  also expired on September 4, 1982. During the period of  probation appellant’s services were neither terminated  nor was he reverted to his substantive post instead he was  allowed to continue on the post of Commercial Officer.  On the expiry of the maximum probationary period of  two years, the appellant could not be deemed to continue  on probation, instead he stood confirmed in the post by  implication. The appellant acquired the status of a  confirmed employee on the post of Commercial Officer  and the appointing authority could not legally revert him  to the lower post of Superintendent."                                                  (Emphasis supplied)

27.     The said principle, we may notice, was again reiterated in Chief G.M.,  State Bank of India  vs. Bijoy Kumar Mishra : (1997) 7 SCC 550 wherein  this Court had the occasion to consider a pari materia rule, stating :- "10. There can thus be no doubt that the deemed  confirmation which is inferred from the employer’s  conduct is permissible only when it follows from the  positive act of the employer permitting the employee to  continue to work on the post even after completion of the  maximum period of probation permitted under the  Service Rules since no other inference is possible in such  a situation from the employer’s conduct of continuing to  take work from the employee after that period."  

28.     We may, having noticed the legal principles enunciated by this Court,  consider the decision of this Court in Ashok Kumar Misra (supra).  The  relevant Rule which was involved therein was Rule 8 of Madhya Pradesh  Government Servants’ General Conditions of Service Rules, 1961  which  was in the following terms :- "8. Probation .\027 (1) A person appointed to a service or  post by direct recruitment shall ordinarily be placed on  probation for such period as may be prescribed.  (2) The appointing authority may, for sufficient reasons,  extend the period of probation by a further period not  exceeding one year.  Note .\027 A probationer whose period of probation is not  extended under this sub-rule, but who has neither been  confirmed nor discharged from service at the end of the  period of probation shall be deemed to have been  continued in service, subject to the condition of his  service being terminable on the expiry of a notice of one  calendar month given in writing by either side.  (3) A probationer shall undergo such training and pass  such departmental examinations during the period of his

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probation as may be prescribed.  (4) and (5) are not relevant, hence omitted.  (6) On the successful completion of probation and the  passing of the prescribed departmental examinations, the  probationer shall be confirmed in the services or post to  which he has been appointed."  

29.     The note appended to sub-rule (2) of Rule 8 as also sub-rule (6)  thereof made all the difference.   In terms of note appended to sub-rule (2) a  legal fiction was created in terms whereof upon completion of the extended  period of probation the employee would have been continued in service,  subject to the condition that the same would be terminable on the expiry of a  notice of one calendar month and furthermore an express order confirming  the service would be necessary.   In the aforementioned situation Dharam Singh (supra) and Om  Prakash Maurya (supra) were distinguished opining :-

"6.  Exercise of the power to extend the probation is  hedged with the existence of the rule in that regard  followed by positive act of either confirmation of the  probation or discharge from service or reversion to the  substantive post within a reasonable time after the expiry  of the period of probation. If the rules do not empower  the appointing authority to extend the probation beyond  the prescribed period, or where the rules are absent about  confirmation or passing of the prescribed test for  confirmation of probation then inaction for a very long  time may lead to an indication of the satisfactory  completion of probation. But in this case Rule 8  expressly postulates otherwise. The period of probation is  subject to extension by order in writing for another  period of one year. Passing the prescribed examinations  and successful completion of probation and to make an  order of confirmation are condition precedent. Mere  expiry of the initial period of probation does not  automatically have the effect of deemed confirmation and  the status of a deemed confirmation of the probation. An  express order in that regard only confers the status of an  approved probationer. We are of the view that note to  sub-rule (2) read with sub-rule (6) of Rule 8 manifests  the legislative intent that confirmation of the probation of  the respondent would be made only on successful  completion of the probation and the passing of the  prescribed examinations. It is not the respondent’s case  that he passed all the examinations. He shall be deemed  to be continued on probation. Before confirmation the  appointing authority is empowered to terminate the  service of the probationer by issuing one calendar  month’s notice in writing and on expiry thereof the  service stands terminated without any further notice.  Within three months from the date of expiry of original  two years period of probation and within one year’s  period, the order of termination was made. In this view  the question of conducting an inquiry under the  Classification, Control and Appeal (Rules) after giving  an opportunity and that too for specific charges does not  arise."

30.     The order of termination in that case was, therefore passed within the  extended period of probation in service.  Ashok Kumar Misra (supra),  therefore, in our opinion did not speak in a different tone and is in  conformity with the legal principles laid down in Dharam Singh (supra) and  others. 31.     The High Court, therefore, in our opinion was not correct in relying  upon the decision of the Division Bench of the Allahabad High Court in the

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case of the appellant bank.  It, with utmost respect, did not lay down the  correct law and is, therefore, liable to be over-ruled.  32.     So far as the question of discrimination meted out to the writ  petitioner is concerned, we may notice that the High Court had come down  heavily on the bank and, in our opinion, rightly so.   33.     In the affidavit affirmed by one Rabi Shankar Sabat (Manager  Personnel) of the Bank the Indubala case was sought to be distinguished  stating:-

"5.     That as regards the case of petitioner vis-‘-vis case  of one Ms. Indubala is concerned it is submitted that both  the cases stand absolutely on different footing.  Ms.  Indubala is not a batchmate of petitioner.  Ms. Indubala  joined the bank as Management Trainee on 12.11.1984  and she was called for confirmation test of Management  Trainee held by the bank on 13.7.1986.  She did not  appear in the said test.  She was given another chance for  confirmation test held on 26.4.1987 who appeared in the  said test but failed.  Ms. Indubala was again called for  confirmation test held on 29.5.1988, as per the decision  of the Executive Committee of the bank, however, she  could not take the confirmation test this time due to her  illness and accordingly her services were terminated by  the Bank on 29.5.1988.  On appeal by Ms. Indubala the  matter was put up before the Executive Committee of the  bank and the Executive Committee in its meeting held on  16.8.89 decided that in view of the fact that Ms. Indubala  could not avail of the last i.e. 3rd chance due to her  illness, she may be afforded another opportunity to  appear in the confirmation test and this is how Ms.  Indubala was given one more chance.  Copy of decision  of the Committee dated 16.8.89 is filed herewith as  Annexure-F.  On the other hand the petitioner joined the  Bank as Management Trainee on 25.8.1986 and she  failed to appear in the confirmation test held in April,  1988 and October, 1989.  She was also given the 3rd  chance the last chance where she did appear and failed to  qualify.  It may be noted here that Ms. Indubala was  given the 3rd chance but she could not appear in the 3rd  and last chance due to her illness.  So both the cases  stand on a different footing as such petitioner cannot  claim any benefit on the basis of Ms. Indubala’s case.   Besides, that was a solitary case and as the Principle that  one wrong cannot justify another wrong the petitioner  cannot claim any advantage relying on the same."  

34.     At once we may notice that the said statement contained a factual  error which has been very fairly conceded by Mr. Mehta as the ground for   giving another opportunity to Indubala to appear at the confirmation test for  the 4th time was not on the ground of her own illness but on her mother’s  illness.   

35.     Was the fact situation in Indubala’s case is different from that of the  writ petitioner?  The answer must be found in the judgment of the High  Court, wherein it was held that the writ petitioner’s case stands on a much  better footing.  As she could not appear in the third chance on account of the  illness of her mother which did not depict the correct state of affairs whereas  the writ petitioner underwent a mis-carriage of her conception in the month  of April, 1988, she had to remain alone at the place of posting and could not  prepare for the examination.  At the time when she was called upon to  appear in the examination for the second time, she was in the advance stage  of pregnancy and she was medically advised not to move, as she had  miscarriages at two previous occasions.  That is the reason why she could  not appear in the test.  When she was called upon to appear for the third  examination, she having undergone caesarian delivery, she was advised rest

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by the doctor.  At the time of her examination, her son was only six month’s  old and was not keeping good health.   36.     Submission of the Bank is that the competent authority had  formulated a policy of not permitting anybody to appear the in the test more  than thrice.  Strong reliance in this behalf is placed on the decision of the  Executive Committee of the Bank dated 19th June, 1990 deciding that  maximum number of 3 chances should be given to the Management Trainee  for qualifying in the confirmation test failing which services of the  probationer be terminated.  37.     Regulation does not speak of any confirmation test.  The offer of  appointment does not speak about the number of chances to be given for  passing the confirmation test.  A decision was taken in this behalf when the  writ petitioner had already appeared on one occasion.  The decision even  otherwise was to give atleast three  opportunities to a candidate must be real  and effective one.  Such a contention must be considered having regard to  the doctrine of reasonableness and fairness, which the Bank is required to  comply with keeping in view its status of a State within the meaning of  Article 12 of the Constitution of India.  As a ’State’ the Bank was bound to  follow the equity clause contained in Articles 14 and 16 of the Constitution  of India.  Its action even in relation to its own employees is expected to be  not only fair but also non-arbitrary.   38.     In E.P. Royappa  vs.  State of Tamil Nadu and another : (1974) 4  SCC3, a Constitutional Bench of this court as regards the argument that the  petitioner was appointed to a post that was inferior to the status and office of  the Chief Secretary , thus offending Articles 14 and 16 of the Constitution,   opined :- "Article 16 embodies the fundamental guarantee that  there shall be equality of opportunity for all citizens in  matters relating to employment or appointment to any  office under the State. Though enacted as a distinct and  independent fundamental right because of its great  importance as a principle ensuring equality of  opportunity in public employment which is so vital to the  building up of the new classless egalitarian society  envisaged in the Constitution, Article 16 is only an  instance of the application of the concept of equality  enshrined in Article 14. In other words, Article 14 is the  genus while Article 16 is a species, Article 16 gives  effect to the doctrine or equality in all matters relating to  public employment. The basic principle which, therefore,  informs both Articles 14 and 16 is equality and inhibition  against discrimination. Now, what is the content and  reach of this great equalising principle? It is a founding  faith, to use the words of Bose, J., "a way of life", and it  must not be subjected to a narrow pedantic or  lexicographic approach. We cannot countenance any  attempt to truncate its all-embracing scope and meaning,  for to do so would be to violate its activist magnitude.  Equality is a dynamic concept with many aspects and  dimensions and it cannot be "cribbed, cabined and  confined" within traditional and doctrinaire limits. From  a positivistic point of view, equality is antithetic to  arbitrariness. In fact equality and arbitrariness are sworn  enemies; one belongs to the rule of law in a republic  while the other, to the whim and caprice of an absolute  monarch. Where an act is arbitrary it is implicit in it that  it is unequal both according to political logic and  Constitutional law and is therefore violative of Article  14, and if it affects any matter relating to public  employment, it is also violative of Article 16. Articles 14  and 16 strike at arbitrariness in State action and ensure  fairness and equality of treatment. They require that State  action must be based on equivalent relevant principles  applicable alike to all similarly situate and it must not be  guided by any extraneous or irrelevant considerations

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because that would be denial of equality. Where the  operative reason for State action, as distinguished from  motive inducing from the antechamber of the mind, is not  legitimate and relevant but is extraneous and outside the  area of permissible considerations, it would amount to  mala fide exercise of power and that is hit by Articles 14  and 16. Mala fide exercise of power and arbitrariness are  different lethal radiations emanating from the same vice :  in fact the latter comprehends the former. Both are  inhibited by Articles 14 and 16."

It was further held:

"It is also necessary to point out that the ambit and reach  of Articles 14 and 16 are not limited to cases where the  public servant affected has a right to a post. Even if a  public servant is in an officiating position, he can  complain of violation of Articles 14 and 16 if he has  been arbitrarily or unfairly treated or subjected to mala  fide exercise of power by the State machine."

39.     In the Constitution Bench decision of this court in Mithu  vs.  State of  Punjab : 1983) 2 SCC 277, the issue to be decided was the vires of Section  303 of the Indian penal Code vis-‘-vis Article 21 of the Constitution. It was  held that the same was unconstitutional as it violated the guarantee of  equality clause contained in Article 14 and 21 since a person who is  sentenced to life imprisonment incurs the mandatory penalty of death under  Section 303 if he commits a murder while he is under the sentence of life  imprisonment defied logic.  40.     In T.R. Kothandaraman and Ors.  vs. Tamil Nadu Water Supply &  Drainage BD and Ors. :  (1994) 6 SCC 282, the issue before this court was  as regards what Article 16 has to say when the right to be considered for  promotion is either barred or restricted on the basis of educational  qualifications. Thus, the validity of Rule 2(b), which prescribed the ratio of  3:2 for direct recruits and promotees, the former being degree-holders and  later diploma-holders was challenged as being  violative of the guarantee of  equality embodied in Article 16 Citing with approval Justice Krishna Iyer in   State of Jammu & Kashmir v. Trilokinath Khosa : ( 1974 ) 1 SCC 19,  it was  thus stated:

"Krishna Iyer, J., stated that the social meaning of  Articles 14 and 16 is neither dull uniformity nor  specious ’telentism’. Further, the soul of Article 16 is the  promotion of the common man’s capabilities, opening up  full opportunities to develop without succumbing to the  sophistic argument of the elite that talent is the privilege  of the few and they must rule. But then, personnel policy  does require an eye on efficiency; and so, though ’chill  penury" should not ’repress their noble rage’, technical  proficiency cannot be sacrificed at the altar of wooden  equality. All these call for a striking of balance between  the long hunger for equal chance of the lowlier and the  disturbing concern of the community for higher standards  of performance. Even so, mini-classifications based on  micro-distinctions are false to our egalitarian faith; and  over-doing of classification would be undoing of  equality. The Court has to function always as a sentinel  on the qui vive."

Thus, dismissing the writ petition, it was held that a harmony would  thus be struck, by maintaining reasonableness in the ratio, between the call  of social justice and the need for higher education, without in any way  jeopardising the principal object of classification, by the impugned rule. 41.     In T. Sham Bhat vs. Union of India (UOI) and Anr. 1994 Supp (3)

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SCC 340, the vires of Regulation 2 of the Indian Administrative Service  (Appointment by Selection) Second Amendment Regulations. 1989 - the  IAS Second Amendment Regulations was challenged before this court. It inter-alia referred to the following judgments: "16. Venkatashwara Theatre vs. State of Andhra Pradesh  and Ors. : (1993) 3 SCC 677, is a decision of this Court  which points out, as to how discrimination can arise, if  persons who are unequals are treated as equals, thus: "Just as a difference in the treatment of persons similarly  situate leads to discrimination, so also discrimination can  arise if persons who are unequals, i.e...differently placed,  are treated similarly.... A law providing for equal  treatment of unequal objects, transactions or persons  would be condemned as discriminatory if there is  absence of rational relation to the object intended to be  achieved by the law."

Food Corporation of India vs. Kamdhenu Cattle Feed  Industries : (1993) 1 SCC 71, is a decision of this Court  where it is pointed out that requirement of non- arbitrariness in a State action, if ought to conform to  Article 14 of the Constitution, due weight must be given  to reasonable or legitimate expectations of the persons  likely to be affected by such action, thus: "To satisfy this requirement of non arbitrariness in a  State action, it is, therefore, necessary to consider and  give due weight to the reasonable or legitimate  expectations of the persons likely to be affected by the  decision or else that unfairness in the exercise of the  power may amount to an abuse or excess of power apart  from affecting the bona fides of the decision in a given  case. The decision so made would be exposed to  challenge on the ground of arbitrariness."

       Thus, holding the classification between the increase in number of  years of continuous service of non-State Civil Service Class-I officers to  make them eligible for selection to the Indian Administrative service which  deprived them of the right to be considered for selection under the IAS  Selection Regulations which held the field for over 33 years, as unjust,  arbitrary, unreasonable and that which arbitrarily affected the legitimate and  normal expectations of non-State Civil Service Class-I officers and was  inhibited by Article 14 of the Constitution, the regulation was struck down  as unconstitutional.

42.     Delhi Transport Corporation  vs. D.T.C. Mazdoor Congress and  others : 1991 Supp (1) SCC 600,   dealt with the question of constitutional  validity of the right of the employer to terminate the services of permanent  employees without holding any inquiry in certain circumstances by  reasonable notice or pay in lieu of notice. After referring to a plethora of  decisions of this court on the application of Article 14 and 16 in cases of  public employment, it was opined: "Thus it could be hold that Article 14 read with 16(1)  accords right to an equality or an equal treatment  consistent with the principles of natural justice. Any law  made or action taken by the employer, corporate statutory  or instrumentality under Article 12 must act fairly, justly  and reasonably. Right to fair treatment is an essential  inbuilt of natural justice. Exercise of unbridled and  uncanalised discretionary power impinges upon the right  of the citizen; vesting of discretion is no wrong provided  it is exercised purposively judiciously and without  prejudice. Wider the discretion, the greater the chances of  abuse. Absolute discretion is destructive of freedom than  of man’s other inventions. Absolute discretion marks the  beginning of the end of the liberty. The conferment of

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absolute power to dismiss a permanent employee is  antithesis to justness or fair treatment. The exercise of  discretionary power wide of mark would bread arbitrary,  unreasonable or unfair actions and would not be  consistent with reason and justice. The provisions of a  statute, regulations or rules that empower an employer or  the management to dismiss, remove or reduce in rank of  an employee, must be consistent with just, reasonable  and fair procedure. It would, further, be held that right to  public employment which includes right to continued  public employment till the employee is superannuated as  per rules or compulsorily retired or duly terminated in  accordance with the procedure established by law is an  integral part of right to livelihood which in turn is an  integral facet of right to life assured by Article 21 of the  Constitution. Any procedure prescribed to deprive such a  right to livelihood or continued employment must be just,  fair and reasonable procedure. In other words an  employee in a public employment also must not be  arbitrarily unjustly and unreasonably be deprived of  his/her livelihood which is ensured in continued  employment till it is terminated in accordance with just,  fair and reasonable procedure. Otherwise any law or rule  in violation thereof is void."

43.     We have noticed hereinbefore the plight of the writ petitioner as to  why she could not prepare well or appear at the second test.  In such a  situation an employee in certain establishments would be governed by the  Maternity Benefit Act, 1961.  All shops and establishments were brought  within the purview of the said Act by Act No. 61 of 1988 w.e.f. 10th January,  1989.  In terms of the provisions of the said Act, a woman is prohibited from  working in an establishment during the period of six weeks from  immediately following the day of her delivery, miscarriage or medical  termination of pregnancy.  She, if a request is made by her in this behalf,  even would not be asked to work for the period specified in sub-section (4)  of Section 4.   Apart from the right to payment of maternity benefits, she  would be entitled to the benefits of Sections 6 and 9 thereof.  Section 9 reads  as under :-

"9.     Leave for miscarriage, etc. \026 In case of miscarriage  or medical termination of pregnancy, a woman shall, on  production of such proof as may be prescribed, be  entitled to leave with wages at the rate of maternity  benefit, for a period of six weeks immediately following  the day of her miscarriage, or, as the case may be, her  medical termination of pregnancy."

44.     Mr. Mehta has, however, drawn our attention to Regulation 36 of the  Regulations to contend that maternity leave was admissible upto a period of  6 months only, on and from the 1st day of April, 2000.  A statutory  Regulation, as is well known, is subject to the provisions of a Parliamentary  Act.  Regulations framed by the Board of Directors of the Bank fail to  provide for grant of maternity leave and other benefits to which a woman  employee would be entitled to in terms of the Maternity Benefit Act, 1961.  A subordinate legislation, as is well known, must be made in conformity  with the Parliamentary Act.  45.     In Bombay Dyeing and Mfg. Co. Ltd.  vs. Bombay Environmental  Action Group and Ors. :  (2006) 3 SCC 434, this court opined:

"By reason of any legislation whether enacted by the  legislature or by way of subordinate legislation, the State  gives effect to its legislative policy. Such legislation,  however, must not be ultra vires the Constitution. A  subordinate legislation apart from being intra vires the

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Constitution, should not also be ultra vires the parent Act  under which it has been made. A subordinate legislation,  it is trite, must be reasonable and in consonance with the  legislative policy as also give effect to the purport and  object of the Act and in good faith."

46.     Similarly, in Vasu Dev Singh and Ors.  vs. Union of India and Ors. :  2006 (11) SCALE 108, wherein the Validity of Section 3 of the East Punjab  Urban Rent Restriction Act, 1949 was challenged, this court after referring  to a large number of decisions on subordinate legislation, held: "A statute can be amended, partially repealed or wholly  repealed by the legislature only. The philosophy  underlying a statute or the legislative policy, with the  passage of time, may be altered but therefore only the  legislature has the requisite power and not the executive.  The delegated legislation must be exercised, it is trite,  within the parameters of essential legislative policy. The  question must be considered from another angle.  Delegation of essential legislative function is  impermissible. It is essential for the legislature to declare  its legislative policy which can be gathered from the  express words used in the statute or by necessary  implication, having regard to the attending  circumstances. It is impermissible for the legislature to  abdicate its essential legislative functions. The legislature  cannot delegate its power to repeal the law or modify its  essential features."

[See also Employees State Insurance Corporation  vs.  H.M.T. Ltd. and  another : 2008 (1) SCALE 341.] 47.     We, however, are not oblivious of the fact that the contention as  regards the applicability of the Maternity Benefit Act, 1961 had not been  raised before the High Court.  We will assume for the sake of arguments that  the said Act is not applicable.  However, we intend to emphasize that the  attitude on the part of the State in exercise of its power of discretion should  otherwise be commensurate with the doctrine of reasonableness.  A State,  even for applying the constitutional scheme of equqlity would not enforce its  decision only upon taking into consideration the cases of the different parties  before it.  A woman who had undergone miscarriages, in our opinion, was  entitled to a different treatment.  Article 14 indisputably is a positive  concept.  Applicability of the doctrine of equality as a positive concept,  therefore, should have been the premise that as a woman having regard to  the state of affairs in which the writ petitioner was placed, she was entitled  to obtain a different treatment from the employer.  Article 14 does not apply  in a vacuum.  Whereas persons absolutely similarly situated, should be  treated equally, equal treatment to the persons dis-similarly situated would  also attract the wrath of Article 14.  It is from that point of view that the writ  petitioner’s case ought to have been considered vis-a-vis Indubala.  If the  appellate authority was entitled to exercise its power of relaxation, which in  the absence of any statutory interdict (presumably it was entitled to), it  should have considered the case of the petitioner vis-‘-vis Indubala, whose  case, was rightly been found by the High Court stood at a much weaker  foundation.  Thus, Article 14 must be held to have been violated; the power  of relaxation having been conceded to the appellate authority.  48.     This aspect of the matter has been considered by this Court in Nehru  Yuva Kendra Sangathan   vs.  Mehbub Alam Laskar : 2008 (1) SCALE 590.    "A ’State’ within the meaning of Article 12 of the  Constitution of India should have placed full facts before  the High Court.  Only in its anxiety to show that the case  of Ajay Kumar Gupta was different from that of the  respondent, it came out with the truth that the respondent  was guilty of a serious misconduct."   

49.     We are not unmindful that as a positive concept, Article 14 would not  apply in illegality.

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50.     In Nagar Mahapalika, Kanpur  vs. Smt. Vibha Shukla and Ors.:  2007  (8) SCALE 361, the court on the issue of regularization of services opined: "Equality is a positive concept.  Therefore, it cannot be  invoked where any illegality has been committed or  where no legal right is established."

51.     Similar opinion was expressed in State of Orissa and Ors. vs. Prasana  Kumar Sahoo : 2007 (6) SCALE 236  at paragraphs 23 and 24 and in Vice  Chancellor, M.D. University, Rohtak  vs. Jahan Singh : 2007 (4) SCALE  226 at paragraph 28.  52.     The Executive Committee of the Bank had fixed the number of  chances to be given to an employee in the confirmation test.  If it is enforced  against the writ petitioner having regard to her physical position, to appear in  the second examination, the provisions thereof, keeping in mind the  principle underlying the statutory provisions of Maternity Benefit Act, may  not be held to be applicable.  She  was, thus, entitled to another opportunity  to appear at the examination.  The Executive Committee or for that matter  the appellate authority cannot exercise the power of relaxation in a  discriminatory manner.  It was expected to act judiciously, assuming that the  employer had a discretion in this behalf.  Discretion cannot be equated with  whims and caprices.  53.     We, for the reasons abovementioned, are not in a position to accept  the submission of Mr. Mehta that it was for the employer to decide as to how  many chances have to be given to each employee and the Bank cannot be  deprived of such discretionary jurisdiction.

54.     For the views we have taken we need not deal with the question as to  whether the insistence of confirmation test is not in accordance with the  Regulations.    

56.     For the reasons abovementioned appeal filed by the Bank is dismissed  and that of the writ petitioner is allowed.  The writ petitioner shall be  reinstated in service forthwith.  She, however, may be paid only 50 % of the  back wages.  This order we are passing keeping in view that her services had  been terminated on 9th November, 1990.  The writ petitioner is also entitled  to costs.  Counsel’s fee assessed at Rs.50,000/-.