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PETITIONER: RAVINDRA KUMAR MISRA

       Vs.

RESPONDENT: U.P. STATE HANDLOOM CORPORATION LTD. & ANR.

DATE OF JUDGMENT15/10/1987

BENCH: MISRA RANGNATH 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  CITATOR INFO :  R          1992 SC 496  (26)

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  That  order,  however,  was revoked  in   November  1983  and  his  services  terminated forthwith by notice entitling him to one month’s salary.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

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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

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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

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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

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         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

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         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

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         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

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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

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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