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CASE NO.: Appeal (civil)  5064 of 2007

PETITIONER: State of Haryana & Ors

RESPONDENT: Navneet Verma

DATE OF JUDGMENT: 31/10/2007

BENCH: Tarun Chatterjee & P. Sathasivam

JUDGMENT: JUDGMENT (Arising out of SLP (C) No. 23499 OF 2004)

P. Sathasivam, J. 1)              Leave granted.  2)              Whether the abolition of the post has been done in  good faith or whether it is a camouflage to cover up and  conceal the real intention of weeding out the respondent  from service is the only question to be decided in this  appeal. BRIEF FACTS: 3)              The respondent-herein was appointed as Accounts  Executive in the Haryana Bureau of Pubic Enterprises (in  short \021the HBPE\022) on 16.07.1993.  While continuing so, his  services were terminated on 31.12.1994 on the ground that  the post of Accounts Executive has been abolished.   According to the respondent-herein, the third appellant  applied for the post of Financial Adviser.  Even though she  did not fulfill the prescribed requirement of three years  experience after doing chartered accountancy, she had been  appointed as Financial Adviser and the respondent-herein  who was appointed as Accounts Executive was required to  report to her due to which she wanted him to work as her  personal staff.  He did not carry out petty directions.  When  he brought these facts to the notice of the Member  Secretary, HBPE, he wanted him to resign the job.  The  Member Secretary and the Financial Adviser seemed to have  different attitude and started planning to eliminate him.   Having no other option, on 26.07.1994, he made a  representation to the then Chief Minister of Haryana.  In the  meanwhile, the Financial Adviser \026 third appellant herein  lodged a false and baseless complaint against him to the  Member Secretary.  Based on the complaint of the Financial  Adviser, a preliminary inquiry was conducted.  However, no  action was taken against him on the basis of the report of  the Inquiry Officer.  But instead of taking any action, in  accordance with law, his services have been dispensed with  consequent upon the abolition of the posts of Accounts  Executives.  4)              According to the respondent, there is no  justification for abolition of the posts of Accounts Executive  and it was done with a malafide intention to dispense with  his services without any basis.  Though two posts of  Accounts Executives were advertised, only one post was  filled up by appointing him.  Thus, according to him, the  post was not abolished in good faith, but this was a device  to weed him out from service.  Therefore, the order of  termination on the ground of abolition of post is liable to be  set aside.

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5)              It is the case of Haryana Government and HBPE  that the abolition of posts of Accounts Executives was not  done with malafide intention or extraneous reasons.   According to them, in January, 1994, it was felt that the  work of Bureau was not being performed as per official  requirements and it required restructuring of the staff vis-‘- vis the work load of the Bureau and it was observed that  the contribution of two posts of Accounts Executives,  especially, when there are two posts of Accountants were  not result oriented and the work could smoothly be carried  out on even without the two posts of Accounts Executives.   It was further stated that the Accountants can send their  case directly to the Financial Advisor, who was the head of  the financial wing in giving advice regarding financial offers.   Consequently, two posts of Accounts Executives were  abolished and services of the respondent were terminated  as he was no longer required.   6)              Though a complaint was received from the Financial  Adviser regarding mis-behaviour by the respondent-herein,  preliminary inquiry was conducted into the allegations  made, but no action was taken and the preliminary inquiry  has no relevance with regard to the decision taken on the  abolition of the posts.  The said decision was taken to  abolish the posts of Accounts Executives after obtaining  permission of the government.     7)              The Learned Single Judge of the Punjab and  Haryana High Court, after finding that the abolition of posts  of Accounts Executives have not been done in good faith but  only intended to get rid of the respondent-writ petitioner  herein, quashed the order dated 30.12.1994 abolishing the  posts of Accounts Executive and consequential termination  of services of the writ petitioner.  In the same order, the  learned Judge issued direction for reinstatement with all  consequential benefits.  The said order was challenged by  the Government of Haryana, HBPE as well as Smt. Kiran  Lekha Walia, Financial Adviser, HBPE in Letters Patent  Appeal No. 163 of 1999.  The Division Bench, by impugned  order, accepted the conclusion arrived at by the learned  Single Judge and finding no merit in the appeal dismissed  the same with no order as to costs.  Questioning the order  of the High Court, the appellants have filed the above  appeal by way of special leave.  8)              We have heard Mr. P.N.Misra, learned senior  counsel, appearing for the appellants and Mr. M.K.Dua,  learned counsel, appearing for the respondent. 9)              As observed earlier, we have to find out whether the  abolition of posts of Accounts Executive has been done in  good faith or whether it is a camouflage to cover up and  send out the respondent-herein from service.  10)     Before proceeding to ascertain the answer for the  above question, it is useful to refer to the appointment order  of the Government of Haryana dated 13.07.1993 wherein  the respondent-herein was appointed as Accounts Executive  in HBPE.  Among the other terms, clause 2 of the said order  is relevant which reads as under:- \023This offer of appointment is purely against temporary post  which is liable to be abolished at any time and carries no  promise of subsequent permanent employment.  No offer of  permanent vacancy can be made to him at present.   Consequently his services can be terminated without notice  whenever there is no vacancy against which he can be  retained.\024  It is clear that the respondent-herein was appointed purely  against temporary post and it is liable to be abolished at any  time.  The said clause makes it clear that the post has no

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assurance or promise for a permanent employment.  It also  makes it clear that his services can be terminated without  notice whenever there is no vacancy against which he can be  retained.  Now, with this background, let us consider the law  laid down by this Court with regard to power of the  Government in abolishing temporary/permanent post. i)      M. Ramanatha Pillai vs. The State of Kerala and  Another, (1973) 2 SCC 650, a Constitution Bench of this  Court held as under:  \02323. A post may be abolished in good faith.  The order  abolishing the post may lose its effective character if it is  established to have been made arbitrarily, mala fide or as a  mask of some penal action within the meaning of Article  311(2).\024

ii)     Shri Kedar Nath Bahl vs. The State of Punjab and  Others, (1974) 3 SCC 21, a three-Judge Bench of this Court  held in para 11 as under:  \023\005 \005 \005.If, in the interest of the Administration, the  temporary post is abolished, the question as to what were  the personal relations between the appellant and his  superiors was irrelevant. Moreover, all that the appellant has  been able to say is that his immediate superiors in the  Department were with the action of his immediate superiors  but the action of the Government. The decision to  discontinue the post was the decision of the Government and  it is not alleged in the Writ Petition that in taking this  decision the Government acted malafide. We, therefore, agree  with the High Court that there is no substance in the  allegation that the post was discontinued or abolished in  order to punish the appellant. iii)    State of Haryana vs. Shri Des Raj Sangar and  Another, (1976) 2 SCC 844, this Court, in para 8, has held:  \023\005. \005 \005 The fact that the post to be abolished is held by a  person who is confirmed in that post and the post which is  not abolished is held by a person who is not permanent  would not affect the legality of the decision to abolish the  former post as long as the decision to abolish the post is  taken in good faith.\024

iv)     Dr. N.C. Singhal vs. Union of India and Others, (1980)  3 SCC 29.  Similar issue was considered in detail.  Accepting  the stand of the Government of India in abolishing the post,  this Court held thus:  \02318. \005 \005 \005 The need for the post of the requirements of  the hospital, or the need for an ad hoc or additional  appointment is a matter which the Government is competent  to decide and in the absence of requisite material the Court  cannot interpose its own decision on the necessity of  creation or abolition of posts. Whether a particular post is  necessary is a matter depending upon the exigencies of the  situation and administrative necessity. The Government is a  better Judge of the interests of the general public for whose  service the hospitals are set up. And whether a hospital  catering to the needs of general public providing medical  relief in different specialities has need for a particular post in  a particular speciality would be better judged by the  Government running the hospital. If Government is a better  judge it must have the power to create or abolish the posts  depending upon the needs of the hospital and the  requirements of general public. Creation and abolition of  posts is a matter of Government policy and every sovereign  Government has this power in the interest and necessity of  internal administration. The creation or abolition of post is  dictated by policy decision, exigencies of circumstances and

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administrative necessity. The creation, the continuance and  the abolition of post are all decided by the Government in the  interest of administration and general public (see M.  Ramanatha Pillai v. State of Kerala.) [1974] 1 S.C.R. 515 at  520. The Court would be the least competent in the face of  scanty material to decide whether the Government acted  honestly in creating a post or refusing to create a post or its  decision suffers from mala fide, legal or factual.\024 v)      In the recent decision - Avas Vikas Sansthan and  Another vs. Avas Vikas Sansthan Engineers Assn. and  Others, (2006) 4 SCC 132, analyzing all earlier decisions, this  Court has concluded:  \02359.  It is well settled that the power to abolish a post which  may result in the holder thereof ceasing to be a Government  Servant has got to be recognized. The measure of economy  and the need for streamlining the administration to make it  more efficient may induce any State Government to make  alterations in the staffing pattern of the civil services  necessitating either the increase or the decrease in the  number of posts or abolish the post. In such an event, a  Department which was abolished or abandoned wholly or  partially for want of funds, the Court cannot, by a writ of  mandamus, direct the employer to continue employing such  employees as have been dislodged.\024 11)     We summarize the power of government in abolishing a  post and role of the court for interference: a)      the power to create or abolish a post rests with the  government; b)      whether a particular post is necessary is a matter  depending upon the exigencies of the situation and  administrative necessity; c)      creation and abolition of posts is a matter of  government policy and every sovereign government  has this power in the interest and necessity of  internal administration; d)      creation, continuance and abolition of posts are all  decided by the government in the interest of  administration and general public; e)      the court would be the least competent in the face  of scanty material to decide whether the government  acted honestly in creating a post or refusing to  create a post or its decision suffers from malafide,  legal or factual; f)      as long as the decision to abolish the post is taken  in good faith in the absence of material, interference  by the court is not warranted. 12)     With the above principles, let us consider whether the  abolition of the posts of Accounts Executives are justified and  consequential order of termination terminating the  respondent-herein from the said post is sustainable. 13)     The main grievance of the respondent herein was that  since he was also equally qualified as that of Financial  Adviser, appellant No.3 herein, she was not in favour of  continuing him in HBPE as Accounts Executive.  The other  grievance was that appellant No.3 used to humiliate by  insulting him.  According to him, instead of taking any action  against him under the service Rules, his services have been  dispensed with by abolishing the post of Accounts Executive.   In other words, it is his specific case that the abolition of post  of Accounts Executive was done with a mala fide intention to  dispense with his service without any basis.  The materials  placed before the High Court as well as this Court show that  HBPE as well as the Financial Adviser denied those  allegations.  In the light of the complaint, allegations and  counter allegations, we verified the relevant records which are

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available in the paper book.  The first complaint (Annexure R1)  dated 15.09.1993 shows that there was some  misunderstanding between the Accounts Executive and  Financial Adviser, however, scrutiny of the said complaint  clearly shows that only Personal Assistant to Financial Adviser  was responsible for the alleged misbehaviour.  In the  complaint, Accounts Executive has specifically stated, \023The  P.A. attached to the F.A. grossly misbehaves and uses foul and  abusive language on the instigation of the F.A.\024  We also  perused the letter of the Member Secretary, HBPE dated  21.09.1993 addressed to the Accounts Executive and  subsequent correspondence which are available in the appeal  paper book.  As observed earlier, though certain  misunderstanding arose between the Accounts Executive and  the Financial Adviser, it is impossible to believe that for this  reason the Government abolished the post of Accounts  Executive and consequently terminated the service of the  respondent herein. 14)     Learned senior counsel appearing for the appellants, by  placing relevant materials, submitted that taking note of lesser  activities of HBPE and after assessing the work load as well as  sanctioned staff and after full deliberations by responsible  officers, it was recommended to the Government for abolition  of two posts of Accounts Executives.  On accepting the  recommendations of the Committee constituted by HBPE, the  Government passed an order according sanction to abolish  two temporary posts of Accounts Executives sanctioned for  HBPE from 31.12.1994 (A/N) vide order dated 30.12.1994  (Annexure R-13).  The said Government Order was issued in  the name of Governor of Haryana and with the concurrence of  Finance Department.  Based on the said decision of the  Government and in view of Condition No.2 of the appointment  letter of the respondent bearing No. 2/8/88-Estt-1 dated  13.07.1993, his services has been terminated from 31.12.1994  (AN).  In paragraph supra, we already referred to Condition  No.2 of the appointment order which makes it clear that the  appointment of the respondent was fully against temporary  post and the same is liable to be abolished at any time and  without notice.  In such circumstances, we are unable to  accept the claim of the respondent that there was no bona fide  in terminating his service and the High Court has committed  an error in accepting the said claim. 15)     It is also relevant to point out that by office order dated  05.08.1994 HBPE has earmarked various types of  works/subjects to be handled by Financial Adviser, 3rd  appellant herein, and Accounts Executive, respondent herein.   A perusal of the said office order, filed as Annexure R-7 in the  appeal paper book, clearly demarcates various types of work to  be handled by the Financial Advisor and the Accounts  Executive.  Learned senior counsel appearing for the  appellants has also brought to our notice various minutes of  the meetings and the ultimate decision by HBPE for pruning  their staff considering less work load and present position of  the staff sanctioned.  Proceedings dated 12.01.1994 (Annexure  R-3) shows that in order to assess the work load and present  position of the staff sanctioned for the HBPE a meeting of the  officers of the Bureau was held by the Chairman, HBPE on  11.09.1994 in which the Member Secretary, Personnel  Adviser, Financial Adviser and Assistant Research Officer of  HBPE were participated.  In the said meeting, the Chairman  felt that the work of the Bureau was not being performed as  per its mandate and suggested some restructuring of staff vis- ‘-vis the workload of the Bureau.  He further observed that  when there are three professional posts to handle the financial  affairs, Management Affairs and Personnel Affairs of all the

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State Public Enterprises then there was no necessity of having  two posts of Accounts Executives having the similar  qualifications and experience as the Financial Adviser.  It was  also suggested that in the next officers\022 level meeting, the  complete restructuring of staff vis-‘-vis officers oriented  nature of work of the Bureau and sanctioned staff may be put  up with details.  Thereafter on 11.04.1994 (Annexure R-4), a  meeting was held.  The minutes of the meeting shows that the  details of the sanctioned staff, work load and re-structuring  was discussed in detail.  It further shows that the instructions  on economy in expenditure issued by the State Government  from time to time were also brought to the notice of the  Chairman for which he desired that these should also be made  applicable for the staff of the Bureau.  The Chairman had also  made clear that the Bureau should not have excess staff as  compared to the work load.  In the said meeting while  assessing the work load and staff in the Financial Wing, it was  observed that the contribution of two posts of Accounts  Executives especially when there are two posts of Accountants  was not result oriented and the work can smoothly be carried  on even without the two posts of Accounts Executives.  The  Chairman desired that MS/HBPE should assess the work load  and the staff strength of Finance and Accounts Wing and  discuss in detail in the next officers level meeting.  It is also  relevant to point out that before taking final decision; the  respondent herein by letter dated 26.07.1994 made a  complaint to Hon\022ble the Chief Minister of Haryana about his  difficulty in working as an Accounts Executive with HBPE  which is annexed as Annexure R-5.  The complaint makes it  clear that the Accounts Executive had some grievance against  the Member Secretary and the Financial Advisor regarding the  distribution of work.  Further materials placed show that on  the basis of the complaint, a preliminary enquiry was  conducted and ultimately no action was taken based on the  same.  Finally, as stated earlier, after getting all the required  details regarding the work load and sanctioned staff of HBPE  and on the basis of the report of the Committee, a decision  was taken by the Chairman that there was no requirement for  two posts of Accounts Executives and can be abolished  without affecting the work of the Bureau.  Based on the said  decision, the Government while accepting the same accorded  sanction to abolish two temporary posts of Accounts  Executives sanctioned earlier.  In those circumstances, it is  impossible to accept the stand of the respondent herein that  the posts of Account Executives were abolished in order to  terminate him from the said service.  We are of the view that  the High Court has committed an error in accepting the claim  of the respondent herein. 16)     Rejoinder affidavit filed on behalf of the HBPE before this  Court clearly shows the various steps taken by the Committee  and the ultimate decision of the Chairman for reduction of the  staff strength.  It is specifically stated in the reply that in  accordance with the instructions of the Government, the  requirement of posts for HBPE has been reviewed from time to  time and various posts have been abolished even after the  decision to abolish two posts of Accounts Executives. The  information about the abolition of the various posts given in  the rejoinder affidavit dated 20.07.2005 is relevant which  reads as under: S.No. Name of the Post No. of posts  Date of abolition   1. Accounts Executive

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    2 31.12.1994   2. Senior Research Officer      1 29.6.1999   3. Assistant Research Officer      1 28.8.2000   4. Asstt. District Attorney      1 1.3.2000   5. Computer Operator      1 1.6.2001   6. JSS/Steno Typist      4 31.12.94/22.10.2001   7. Clerk      1 22.10.2001   8. Peon      4 31.12.94/22.10.2001   9. Personnel Advisor      1 14.5.2004 10. Accountant      1 14.5.2004 It is clear from the materials placed in the rejoinder affidavit  that the Government of Haryana has been making earnest  efforts to control its non-planned expenditure.  The rejoinder  affidavit also shows that due to various efforts including the  action taken by the HBPE non-planned expenditure has been  substantially reduced.  In the light of the particulars  furnished, we are of the opinion that the decision to abolish  the posts of Accounts Executives was taken on the basis of the  overall assessment of the work load and staff requirement of  the Bureau and the same was finally approved and sanctioned  by the Government and   consequent to the said decision, the  service of the respondent herein was terminated.  We hold that  the entire action was taken in good faith and there is no  substantial material to arrive at a conclusion that the abolition  of the post was due to revenge against the respondent herein. 17)     In the light of the above discussion, we are unable to  accept the conclusion arrived at by the High Court and we are  in agreement with the decision taken by the Bureau and the  Government.  Consequently, the orders passed by the High  Court in L.P.A. No. 163 of 1999 dated 16.03.2004 and in  C.W.P. No. 442 of 1995 dated 29.01.1999 are set aside.  The  appeal is, accordingly, allowed.  There shall be no order as to  costs.