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PETITIONER: MADHYA PRADESH HASTA SHILPA VIKAS NIGAM LIMITED

       Vs.

RESPONDENT: DEVENDRA KUMAR JAIN & ORS.

DATE OF JUDGMENT07/12/1994

BENCH: FAIZAN UDDIN (J) BENCH: FAIZAN UDDIN (J) AGRAWAL, S.C. (J)

CITATION:  1995 SCC  (1) 638        JT 1995 (1)   198  1994 SCALE  (5)164

ACT:

HEADNOTE:

JUDGMENT:   FAIZAN UDDIN, J.:   1.     Leave granted.   2.      The appellant is a Government Company  within  the meaning  of  Section  617  of the  Companies  Act  which  is controlled   and  owned  by  the  State  Government  and   a subsidiary company of M.P. Laghu Udhyog Nigam Limited  which is  carrying  on  business  activities  of  development   of handicrafts and handloom products.  At the relevant time one Shri K.P. Thakur was the Managing Director of the appellant- company  who by an order dated 6.7.89  Annexure-D  appointed the  respondents  No. 1 to 3, namely, Devendra  Kumar  Jain. Dilip Goel and Promod Mishra as temporary Jr. Manager and by subsequent two orders both dated 8.6.89 (Annexure-E/1 and 2) appointed  the  respondents  No. 4 and  5,  namely.  Mehboob Hussain  and  Liaquat  Mohd.  Khilzi  as  temporary   Junior Managers   in  the  appellant-company.  Soon   after   their appointment the appellant-company noticed that the aforesaid appointments of respondents No. 1 to 5 were made by the then Managing Director. Shri K.P. Thakur in contravention of  the Government   Order  dated  1.4.89  Annexure-B  without   the approval  of  the State Government  and  therefore.  another Managing  Director  successor of Shri K.P. Thakur  by  order dated 31.7.89 terminated the services of the respondents No. 1  to 5. The respondents challenged the aforesaid  order  of termination   in  the  High  Court  of  Madhya  Pradesh   in Miscellaneous  Petition  No. 3973/83 which  was  allowed  by judgment  dated 1.12.93 whereby the order of termination  of the respondents was quashed. It 200 has  been  directed that the respondents  will  continue  in service till their services are not validly terminated.   It is this order which has been challenged in this appeal. 3.     The  High Court quashed the order of  termination  of service  of respondents mainly on two grounds. Firstly,  the High Court took the view that the respondents services  were

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terminated without giving them any opportunity of hearing in consonance with the rules of natural justice and, therefore, the order of termination of service was contrary to law  and violatire  of Article 14 of the Constitution and;  secondly, Government approval was not necessary for the appointment as contended by the appellant and that in any case nO  material was placed to show that the appointment was contrary to  the Government instructions.  In our considered opinion the High Court fIl in serious error in taking the aforesaid view and, therefore,  the  order  of  the  High  Court  could  not  be sustained in law. 4.      Admittedly  the appointment of the  respondents  was made  purely  on temporary basis which is evident  from  the order  of  their appointment. The first order  dated  6.7.89 Annexure-D  by  which  the  respondents  No.  1  to  3  were appointed reads as follows:                                        Bhopal; 6.7.89                                     ORDER                   "The  following persons are  appointed  to               the post of Junior Manager in the Pay Scale of               1290-30-1560-40-2040  from the date of  taking               over, till further orders temporarily and  are               posted 10 the Headquarters:-               1. Shri D. K. Jam               2. Shri Pramod Mishra               3. Shri Dilip Kumar Goyal               2.  Employee  has to  submit  Medical  Fitness               Certificate   from   Civil  Surgeon   of   the               District.               3.  Dearness  Allowance and  other  facilities               according  to  the rules  of  the  Corporation               shall be payable.                     Above appointments are purely  temporary               and  are liable to termination without  notice               or assigning any reason.               By order of Managing Director                                GENERAL MANAGER                     Hastashilp Vikas Nigam LTd., Bhopal"                                    6.7.89 The  subsequent two orders both dated 8.6.89 with regard  to the appointment of respondents No. 4 and 5 are identical one of which is reproduced herein below:-                                              6.7.89                                       ORDER                    "Shri  Mohammad Hussain is  appointed  to               the post of Junior Manager in the Pay Scale of               1290-30-1560-40-2040  from the date of  taking               over, temporarily and posted at Headquarters.                    Employee  has to obtain  Medical  Fitness               Certificate  from Civil Surgeon and submit  to               office.                   Dearness  Allowance and  other  facilities               according  to  the rules  of  the  Corporation               shall be payable.                   Above appointment is purely temporary  and               is  liable to termination at any time  without               notice or assigning a reason.               GENERAL MANAGER" 201 5.      A plain reading of these two orders will go to  show that  the appointments were made purely on  temporary  basis and their services were liable to be terminated at any  time without  notice  or assigning any reason.  In  the  case  of appointment on temporary basis a servant who is so appointed does  not  acquire any substantive right to the  post,  even

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though the post itself may be permanent and it is an implied term  of such appointment that it may be terminable  at  any time and without notice. A temporary Government servant does not become a permanent Government servant unless he acquires that  capacity  by force of any rule or he  is  declared  or appointed as a permanent servant.  In the present case there is no rule under which the respondents may be deemed to have become  permanent  by force of such rule nor  they  were  so declared by any subsequent order of the appellant-company to have acquired that status.  On the contrary the  respondents all  along  continued to be temporary and according  to  the terms  of the order of appointment their services  could  be terminated  at any time without any notice or assigning  any reasons.  In such a case it is not necessary to  follow  the formalities contemplated by Article 311 of the Constitution. In  these  facts and circumstances the High  Court  was  not right  in  holding that the respondents  were  entitled  for being heard  before passing the said order of termination of their services and that the order of termination was bad  in law on that account. 6.      As  regards the second ground  the  learned  counsel appearing  for the appellant contended that  the  aPpellant- corporation  had prepared a project in January 1980 (a  copy of which is filed as Annexure-A in  8. this aPpeal) for  the development of handicrafts through Exhibitions and  proposed that  five officers of junior manager rank and  some  sales- girls/sales-men  be appointed in that connection.  But  when the  Government  came  to know about  the  said  project  it disapproved the same by order dated 1.4.89 (Annexure-B)  and directed that no appointments shall be made to the said post without  obtaining prior approval of the  State  Government. The learned counsel for the appellant, therefore,  contended that the appointment of the respondents was made against the directions  of the State Government and while  quashing  the order  of the termination the High Court did not  take  into consideration the said directions of the State Government. 7.     It  may  be  pointed out  here  that  the  aPPellant- corporation  is a Government company fully financed  by  the State  Government and that being so the Government would  be very  much  concerned to see that any project which  is  not economically  beneficial  for the corporation and  which  is likely to result in any loss should not be given effect  to. The  Government,  therefore. would be justified  in  issuing instructions that no aPpointments of any staff in connection with  the said project will be made without the aPproval  of the  Board  of Directors of M.P. Hasta  Shilpa  Vikas  Nigam Limited  and passed the order to that effect which has  been filed  as Annexure-B  in this appeal.  But it  appears  that the  High  Court  ignored  the  said  order  of  the   State Government  while observing that no material in  support  of the  contention that the Government has issued  instructions not to make aPpointment was produced by the appellant_ 8.    It  is  note worthy that Shri K.P.  Thakur.  the  then Managing Director 202 himself  was retiring on 31.7.89 and in hot haste he  issued the  orders of appointment of the respondents on 6.7.89  and 8.6.89  inspite of the instructions of the State  Government to  the  contrary.   In these facts  and  circumstances  the impugned  order  passed  by  the  High  Court  quashing  the termination  of  service  of  the  respondents  can  not  be sustained. 9.     In  the  result the appeal  succeeds  and  is  hereby allowed.  The  impugned order dated 1.12.93 passed  by   the High  Court in Misc. Petition No. 3973/89 is set  aside  and

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the said writ petition is dismissed but without any order as to costs. 204