Andhra HC (Pre-Telangana)
B.Nandeswar Rao..... Petitione vs A.P.Tourism Development Corporation ... on 24 April, 2014
Author: Dama Seshadri Naidu
Bench: Dama Seshadri Naidu
THE HONBLE SRI JUSTICE DAMA SESHADRI NAIDU W.P.No.6503 of 2014 24-04-2014 B.Nandeswar Rao..... PETITIONE A.P.Tourism Development Corporation Limited,3-5-891, Tourism House, Himayat Nagar,Hyderabad, rep. by its Chairman & Managing Director and another.....RESPONDENTS Counsel for the petitioner: Sri N.Bharat Babu Counsel for respondents : Government Pleader for Tourism <Gist: >Head Note: ?Cases referred: 1. (2001) 10 SCC 83) 2. (1987) 1 SCC 146 at page 150) 3. (1984) 3 SCC 316 4. (1958 SCR 828) 5. (2000) 5 SCC 152 6. 2013 (3) SCC 607 HONBLE SRI JUSTICE DAMA SESHADRI NAIDU WRIT PETITION No.6503 of 2014 ORDER:
Heard Sri P. Gangaiah Naidu, the learned Senior Counsel representing Sri N. Bharath Babu, the learned counsel for the petitioner and the learned Assistant Government Pleader for the respondent Corporation, apart from perusing the record.
Since the issue lies in a narrow compass, the writ petition is disposed of at the admission stage itself.
Shorn of extraneous particulars, the brief facts, relevant for the purpose of disposing the writ petition, are that the respondent Corporation issued notification in December, 2012 inviting applications from suitable candidates to fill up several posts, which include those of Assistant General Manager, Divisional Manager, Manager and Assistant Manager. In response to the said notification, when the petitioner applied, in view of his eligibility, experience and suitability, the respondent Corporation appointed him Assistant General Manager on contract basis for a period of 2 years. On such appointment, the petitioner is said to have been posted as Divisional Manager at Warangal.
In course of time, the respondent Corporation issued a memo, dated 29-07-2013, calling upon the petitioner to explain in respect of certain irregularities, such as appointing a receptionist at Haritha Kakatiya and staying at Haritha hotel at subsidised rates. Though the alleged irregularities listed out in the said charge memo are considerable, they need not be listed out, for this Court desires to dispose of the writ petition without touching on the merits of the matter.
In any event, the record reveals that the petitioner submitted a detailed explanation on 17.08.2013 denying all the allegations, apart from supplying justification as to some of the administrative measures said to have been initiated by the petitioner. Nevertheless, notwithstanding the explanation submitted by the petitioner, the respondent Corporation went ahead and terminated the services of the petitioner through Memo No.APTDC/Admn/P2/29/2013, dated 20.08.2013. Though the petitioner made several representations to reconsider its decision, the last of those representations being on 14.01.2014, the respondent Corporation remained unmoved, thus compelling the petitioner to take recourse to public law remedy by filing the present writ petition.
Sri P. Gangaiah Naidu, the learned Senior Counsel appearing for the petitioner has taken the Court through the entire record and has contended that the termination is stigmatic and is without minimal observance of the principles of natural justice. He has contended that the alleged report for the General Manager (Hotels), which is said to have been the basis of terminating the petitioner, was not supplied to the petitioner, nor was there any opportunity given to the petitioner to establish that the allegations levelled against the petitioner were without any basis, much less substance.
Referring to the service conditions, the principal contention, rather leitmotif, of the learned Senior Counsel is that any punishment, even concerning a contract employee, once it is punitive in nature, cannot be inflicted on the delinquent without due process. He has further submitted that even as per clause 3 of the contract, the petitioner ought to have been put on notice one month prior to termination. Adverting to the facts, the learned Senior Counsel has demonstrated that what could be termed as show cause notice was issued on 29.07.2013 and the petitioner was terminated from service on 20.08.2013. The learned Senior Counsel has further referred to clauses 13 and 14 of the Constitution and has stated that the petitioner has not been charged with any activity, illegal or otherwise, unbecoming of a public servant, thus being detrimental to the respondent Corporation. Expatiating the issue further, the learned Senior Counsel has contended that it is not a termination simpliciter, but a termination on specific allegations with stigma attached to them. The learned Senior Counsel has also adverted to the principles of proportionality.
Per contra, the learned Assistant Government Pleader, on his part, strenuously opposed the claims and contentions of the petitioner. Further, he has stoutly defended the order of termination under challenge. According to the learned Assistant Government Pleader, the petitioner was employed on a contractual basis and the very contract of service makes it amply clear that the petitioners services could be dispensed with in the event of his failing to discharge the duties to the satisfaction of the employer Corporation. On the issue of compliance with the principles of natural justice, the learned Assistant Government Pleader has submitted that the Corporation, indeed, put the petitioner on notice, sought for his explanation, examined it, and eventually passed the impugned order which is animated with reasons. Accordingly, the learned Assistant Government Pleader strenuously contends that the order of termination under challenge does not call for any interference. According to the learned Assistant Government Pleader, the petitioner cannot be put on the pedestal of a permanent employee to insist on a thorough departmental enquiry, which is not contemplated under the contract which governs the service conditions of the petitioner.
Be that as it may, this court proposes to dispose of the writ petition on admitted facts. It is indeed not in dispute that the petitioner was initially appointed Assistant General Manager after following due process. It is further not in dispute that the post of the petitioner is tenurial in nature, governed by a specific contract with a validity of two years. Though a string of irregularities has been attributed to the petitioner, eventually his services were terminated based on the explanation submitted by the petitioner. It can be stated without fear of contradiction that it is not a termination simpliciter but one being punitive in nature. In other words, the termination is stigmatic.
In the above facts and circumstances, the issue that falls for consideration is whether the termination which is punitive or stigmatic can be inflicted without following the principles of natural Justice, to wit without any departmental enquiry, or in other words, an opportunity of fair hearing.
It is pertinent to observe that in the impugned memo, dated 20.08.2013, the respondent Corporation specifically placed reliance on clauses 13 and 14 of the contract, which are as follows:
"Clause 13: the contract appointee assures the Corporation that he would not indulge in any illegal and unsocial activities and would be law-abiding person exhibiting high sense of devotion to duty.
Clause 14: the contract appointee shall not indulge in any of the activities which are detrimental to the interests of the Corporation."
Further, in justification of the termination, the respondent Corporation has in the said impugned memo observed as follows:
It is concluded that he [the petitioner] had violated the above agreed conditions in clause 13 and clause 14 causing loss of inconvenience to the Corporation by not effectively controlling the units. The image of the Corporation is at risk due to his ineffective functioning. His performance has been disappointing.
Thus a plain reading of the above justification of the respondent Corporation makes it manifestly clear that the respondent Corporation terminated the services of the petitioner on account of what could be stated as gross misconduct on the petitioners part.
The legal position is fairly well settled that an order of termination simpliciter of a temporary employee or a probationer or even a tenure employee, without casting any stigma may not be interfered with by the Court. But the Court is not debarred from looking at the attendant circumstances, namely, the circumstances prior to the issuance of order of termination to find out whether the alleged inefficiency really was the motive for the order of termination or formed the foundation for the same order. If the Court comes to a conclusion that the so-called inefficiency was the real foundation for passing of order of termination, then obviously such an order would be held to be penal in nature and must be interfered with since the appropriate procedure has not been followed. (see A.P. State Federation of Coop. Spg. Mills Ltd. v. P.V. Swaminathan ).
If the term stigma is semantically examined, according to Webster's New World Dictionary, it is something that detracts from the character or reputation of a person, a mark, sign, etc. indicating that something is not considered normal or standard. The Legal Thesaurus by Burton gives the meaning of the word to be blemish, defect, disgrace, disrepute, imputation, mark of disgrace or shame. Webster's Third New International Dictionary gives the meaning as a mark or label indicating a deviation from a norm. According to yet another dictionary stigma is a matter for moral reproach. (see Kamal Kishore Lakshman v. Pan American World Airways ).
Even if the employees of the Corporation, which is an instrumentality of the State, cannot be said to be the members of a civil service of the Union or an all India service or hold any civil post under the Union, for the purpose of Articles 310 and 311 and therefore, not entitled to the protection of Article 311, they would nonetheless be entitled to protection of the fundamental rights enshrined in Articles 14 and 16 of the Constitution. In other words, they would be entitled to the protection of equality in the matter of employment in public service and they cannot be dealt with in an arbitrary manner. (See A.L. Kalra v. Project and Equipment Corporation of India Ltd. ).
In fact, the question whether termination of the service of a temporary employee or a probationer can be treated as punitive even though the order passed by the competent authority does not contain any stigma has been considered in a series of judgments, the earliest being Parshotam Lal Dhingra v. Union of India . In that case a Constitution Bench of the Supreme Court was called upon to decide whether the order of reversion of an official holding a higher post in an officiating capacity could be treated as punitive. After an elaborate consideration of the relevant provisions of the Constitution and judicial decisions on the subject, the Constitution Bench observed:
In short, if the termination of service is founded on the right flowing from contract or the service rules then, prima facie, the termination is not a punishment and carries with it no evil consequences and so Article 311 is not attracted. But even if the Government has, by contract or under the rules, the right to terminate the employment without going through the procedure prescribed for inflicting the punishment of dismissal or removal or reduction in rank, the Government may, nevertheless, choose to punish the servant and if the termination of service is sought to be founded on misconduct, negligence, inefficiency or other disqualification, then it is a punishment and the requirements of Article 311must be complied with...
It can be stated that through a series of judicial pronouncements it is well settled that the circumstances preceding or attendant on the order of termination have to be examined in each case, the motive behind it being immaterial. If the order visits the public servant with any evil consequences or casts an aspersion against his character or integrity, it must be considered to be one by way of punishment, no matter whether he was a mere probationer or a temporary servant. In other words, the form of the order is not conclusive of its true nature and it might merely be a cloak or camouflage for an order founded on misconduct. In conclusion it can be held that if the findings were arrived at in an enquiry as to misconduct, behind the back of the officer or without a regular departmental enquiry, the simple order of termination is to be treated as founded on the allegations and will be bad.
In Chandra Prakash Shahi v. State of U.P. , the Supreme Court, taking into account the seeming cleavage of judicial opinion in this regard, has held that the whole case-law is thus based on the peculiar facts of each individual case and it is wrong to say that decisions have been swinging like a pendulum; right, the order is valid left, the order is punitive. Dealing with the issue of a probationer, their Lordships have observed to the effect:
The important principles which are deducible on the concept of "motive" and "foundation", concerning a probationer, are that a probationer has no right to hold the post and his services can be terminated at any time during or at the end of the period of probation on account of general unsuitability for the post in question. If for the determination of suitability of the probationer for the post in question or for his further retention in service or for confirmation, an inquiry is held and it is on the basis of that inquiry that a decision is taken to terminate his service, the order will not be punitive in nature. But, if there are allegations of misconduct and an inquiry is held to find out the truth of that misconduct and an order terminating the service is passed on the basis of that inquiry, the order would be punitive in nature as the inquiry was held not for assessing the general suitability of the employee for the post in question, but to find out the truth of allegations of misconduct against that employee. In this situation, the order would be founded on misconduct and it will not be a mere matter of "motive".
"Motive" is the moving power which impels action for a definite result, or to put it differently, "motive" is that which incites or stimulates a person to do an act. An order terminating the services of an employee is an act done by the employer. What is that factor which impelled the employer to take this action? If it was the factor of general unsuitability of the employee for the post held by him, the action would be upheld in law. If, however, there were allegations of serious misconduct against the employee and a preliminary inquiry is held behind his back to ascertain the truth of those allegations and a termination order is passed thereafter, the order, having regard to other circumstances, would be founded on the allegations of misconduct which were found to be true in the preliminary inquiry.
(emphasis added) In SBI v. Palak Modi , surveying the entire case law obtaining on this aspect, a learned Division Bench of the Supreme Court has eventually held:
20. The ratio of the above noted judgments is that a probationer has no right to hold the post and his service can be terminated at any time during or at the end of the period of probation on account of general suitability for the post held by him. If the competent authority holds an inquiry for judging the suitability of the probationer or for his further continuance in service or for confirmation and such inquiry is the basis for taking decision to terminate his service, then the action of the competent authority cannot be castigated as punitive.
However, if the allegation of misconduct constitutes the foundation of the action taken, the ultimate decision taken by the competent authority can be nullified on the ground of violation of the rules of natural justice.
(emphasis added) From the above crystallised judicial precedents, this Court is of the opinion that the Memo No.APTDC/Admn/P2/29/2013, dated 20.08.2013, through which the services of the petitioner were terminated is punitive and stigmatic in nature, one months salary paid in lieu of the advance notice being no solace. Ipso facto, the petitioner ought to have been given an opportunity of hearing, before inflicting the said major punishment, which is bound to come in the way of the petitioners future employment as well.
For the foregoing reasons, the writ petition is allowed directing the respondent Corporation to reinstate the petitioner within four (4) weeks of the production of a copy of this order before the authorities concerned. The respondent Corporation is further directed to provide to the petitioner all consequential benefits like pay, allowances, etc. within next two months from the date of reinstatement. It is, however, made clear that this order shall not preclude the competent authority from taking fresh decision in the matter of instituting a departmental enquiry against the petitioner, in which event the petitioner shall be provided an effective opportunity of hearing and participation in the departmental enquiry. There shall be no order as to costs. As a sequel, miscellaneous petitions, if any pending in this writ petition, shall stand closed.
______________________ DAMA SESHADRI NAIDU, J Date: 24.04.2014