Gujarat High Court
Miss Chaula Kuruwa vs Tourism Corporation Of Gujarat Ltd. And ... on 11 March, 1991
Equivalent citations: (1991)2GLR775
JUDGMENT A.N. Divecha, J.
1. By means of this petition the petitioner has invoked the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India challenging the action of respondent No. 2 terminating her services by the order passed on 25th April, 1986. Its copy is at Annexure "O" to the petition.
2. The facts giving rise to the present petition may be summarised thus: The petitioner was appointed as a Lady Receptionist on 15th November, 1977 on the establishment of respondent No. 1. She was confirmed as such sometime in 1978. On 13th January, 1983 as advertisement was issued on behalf of respondent No. 1 inviting applications inter alia for the post of Assistant Publicity and Public Relations Officer. The petitioner submitted her application in response thereto. She appears to have successfully faced the interview taken by the committee constituted by and on behalf of respondent No. 1 for the purpose. By an order passed on 18th April, 1983 she came to be appointed as Assistant Publicity and Public Relations Officer. A copy of the order of her appointment is at Annexure "B" to this petition. Her appointment was on probation for a period of one year in the first instance as stipulated in condition No. 1 of the conditions set out therein. It was further stipulated therein that her services were liable to be terminated without notice and without assigning any reason during her probationary period. The post of Assistant Publicity and Public Relations Officer has come to be redesignated as the Deputy Manager (Publicity) in the course of time. Sometime in May, 1984 she was transferred as Liaison Officer at Gandhinagar. She challenged the order of her transfer to the post of Liaison Officer at Gandhinagar by means of Special Civil Application No. 2416 of 1984. It appears that after its preliminary hearing rule nisi thereon was ordered to be issued and the order of her transfer was stayed during the pendency of the petition before this Court. I am told at the bar that it is still pending for final hearing. On 10th September, 1984 her office was shifted to the Air Lines Office at Lal Darwaja, Ahmedabad from the building known as H.K. House, Ashram Road, Ahmedabad. A copy of that order passed on 10th September, 1984 is at Annexure "B" to the petition. In about six month's time by an order passed on 22nd March, 1985 the earlier order of 10th September, 1984 at Annexure "D" to the petition came to be cancelled. A copy of the order passed on 22nd March, 1985 is at Annexure "F" to this petition. It may be noted that she was appointed in the pay scale of Rs. 650-1200. It was obviously a running scale entitling her to earn her due periodical increments presumably every year. She was presumably not given her due increment on completion of one year's service. She thereupon made a representation in that regard on 13th November, 1984 for release of her due yearly increment. A copy of her representation is at Annexure "F" to this petition. It appears that her representation found favour with the authorities and she was given her due increment by an order passed on 4th December, 1984. Its copy is at Annexure "C" to the petition. Thereafter by an order passed on 22nd March, 1985, the period of her probation came to be extended upto 31st May, 1985 presumably with retrospective effect without making any mention to that effect. A copy of the order extending the period of her probation upto 31st May, 1985 is at Annexure "H" to the petition. Thereunder she was also warned to improve and to show better results. She appears to have resented at extension of her probationary period and the warning dished out to her in the order at Annexure "H" to the petition. She therefore made one representation there against on 26th April, 1985 to the Managing Director of respondent No. 1. Its copy is at Annexure "I" to the petition. It appears that no reply thereto was given. It appears that she was not given her due yearly increment on completion of her second year of her service. Thereupon she made her representation to the Managing Director of respondent No. 1 on 1st October, 1985 for release of her due yearly increment. A copy of her representation is at Annexure "J" to the petition. It appears that her representation at Annexure "H" to the petition was not favourably considered by the authorities. Instead, the authorities appear to have thought that her work was not satisfactory and thereupon the period of her probation was extended till 31st January, 1986. An order in that regard appears to have been made on 3rd December, 1985. Its copy is at Annexure "K" to the petition. The extension of the period of her probation on the ground of her unsatisfactory work would obviously put her to thinking. She thereupon, by her letter of 6th December, 1985, sought clarification as to how her work remained unsatisfactory. She also requested to supply to her the guidelines or rules and regulations governing extension of the period of probation of an employee appointed on probation. A copy of her letter of 6th December, 1985 is at Annexure "L" to the petition. No reply appears to have been given to her letter at Annexure "L" to the petition. Thereupon she represented her case to the Chairman of respondent No. 1-Corporation by her communication of 27th December, 1985 giving vent to her grievances against extension of her probationary period and non-release of her due annual increment. Its copy is at Annexure "M" to the petition. Her representation appears not to have met any prompt response. She dreaded termination of her services during her probationary period ending on 31st January, 1986 by virtue of the order at Annexure "K" to the petition. She thereupon moved this Court by this very petition inter alia challenging the action of respondents Nos. 1, 2 and 3 in not confirming her in her present post and sought relief against extension of her probationary period or termination of her services under one or the other pretext. It appears that this petition was moved for its preliminary hearing on 30th January, 1986. Notice as to admission was ordered to be issued on that date with respect to this petition making it returnable on 7th February, 1986. By way of interim relief this Court directed maintenance of status quo. While this petition was pending for its preliminary hearing as to its admission, by an order passed on 25th April, 1986 her services came to be terminated. As aforesaid, a copy of that order is at Annexure "O" to this petition. She was thereupon required to amend her petition by introducing therein the ground of challenge to the order at Annexure "O" to this petition and also to pray for an appropriate relief for quashing and setting aside the said order. It appears that on 23rd July, 1987 rule nisi came to be issued after its preliminary hearing. During the pendency of this petition respondent No. 4 came to be added as a party respondent. On behalf of respondents Nos. 1, 2 and 3 reply affidavits have been filed on three different occasions. The first reply affidavit was filed to oppose issuance of rule nisi at the time of its preliminary hearing. That was sworn in by the then Managing Director of respondent No. 1-Corporation. Simultaneously another reply affidavit was filed of the same date by the then Senior Manager of respondent No. 1 herein. Strangely enough the third reply affidavit was also filed by the then Managing Director of respondent No. 1 while the petition was pending for its preliminary hearing as to admission. The petitioner appears to have met with the contentions raised in all the three reply affidavits by filing her rejoinder affidavits again during the pendency of this petition for its preliminary hearing as to admission. No further affidavit has come to be filed thereafter.
3. Shri A.D. Padiwal, the learned Advocate for the petitioner, has urged the following submissions before me in support of this petition.
1. Respondent No. 1 answers the definition of State contained in Article 12 of the Constitution of India, and as such the petition would be entitled to claim protection of her fundamental rights guaranteed in Part III of the Constitution of India against respondent No. 1. It is her case that the impugned action of respondent No. 1 is violative of her fundamental rights guaranteed under Articles 14 and 16 of the Constitution of India.
2. The impugned order of termination of her services is illegal and invalid on the ground that it is not supported by any reason whatsoever.
3. The impugned order of termination of services of the petitioner is illegal and invalid also on the ground that no proper opportunity was given to her for improvement in her work.
4. The impugned order of termination of her services suffers from the vice of colourable exercise of powers with a view to victimising the petitioner.
5. The petitioner could not be said to have continued on probation or release of her due annual increment by an order passed on 4th December, 1984 at Annexure "G" to the petition.
6. Clause 1 of the appointment order at Annexure "B" is violative of Articles 14 and 16 of the Constitution of India as conferring unbridled and unguided arbitrary powers on the concerned authorities of respondent No. 1.
4. There is no difficulty in coming to the conclusion that respondent No. 1 is an instrumentality of State for the purposes of Article 12 of the Constitution of India. In para 5 of the petition salient features of respondent No. 1-Corporation in the light of its Memorandum and Articles of Association have been highlighted. As pointed out therein respondent No. 1-Corporation has been established by the State of Gujarat. It has further been pointed out therein that the objects clearly demonstrate the nature of important public functions of the Corporation in the field of establishing, developing, promoting places of tourists interests including pilgrimage centres, hill resorts, beaches, coastal tours, etc. It has also been pointed out therein that the State of Gujarat is entitled to nominate and appoint upto twelve Directors on the Board of Directors of respondent No. 1 of whom at least four shall be permanent Directors. It has been stated therein that the Directors appointed by the State are not liable to retire. It has also been provided therein that the Managing Director is to be appointed from time to time by the State of Gujarat and the remuneration of the Managing Director is also to be determined by the State Government. It has been stipulated in the Articles of Association that the State Government may from time to time issue such directives as it may consider necessary in regard to conduct of affairs of the Company or the Directors thereof and any matters involving national security or substantial public interests. The Directors are required to give immediate effect to the directives so issued. It is also stipulated in the Articles of Association that the State Government shall have right to call for such return, account and other information with respect to the properties and activities of the Corporation as may be required from time to time. The petitioner has also chosen to point out that the substantial number of shares of respondent No. 1-Corporation are held and owned by the State Government. The averments contained in para 5 of the petitioner have not been denied by and on behalf of the respondents in any of the three reply affidavits filed on their behalf. In that view of the matter, there is no hesitation in coming to the conclusion that respondent No. 1-Corporation is financially and controlled fully, or in any case substantially, by the State Government. It would therefore answer the definition of "State" contained in Article 12 of the Constitution of India.
5. I am fortified in my view by the binding ruling of the Supreme Court in the case of Ramana Dayaram Shetty v. International Airport Authority of India and Ors. it has been held:
A Corporation may be created in one of two ways. It may be either established by statute or incorporated under a law such as the Companies Act, 1956 or the Societies Registration Act, 1860. Where a Corporation is wholly controlled by Government not only in its policy making but also in carrying out the functions entrusted to it by the law establishing it or by the Charter of its incorporation, there can be no doubt that it would be an instrumentality or agency of Government. But ordinarily where a Corporation is established by statute, it is autonomus in its working, subject only to a provision, often times made, that it shall be bound by any directions that may be issued from time to time by Government in respect of policy matter. So also a Corporation incorporated under law is managed by a Board of Directors or Committee of Management in accordance with the provisions of the statute under which it is incorporated. When does such a Corporation become an instrumentality or agency of Government? Is the holding of the entire share capital of the Corporation by Government enough or is it necessary that in addition, there should be a certain amount of direct control exercised by Government and, if so, what should be the nature of such control? Should the functions which the Corporation is charged to carry out possess any particular characteristic or feature, or is the nature of the functions immaterial? Now, one thing is clear that if the entire share capital of the corporation is held by Government, it would go a long way towards indicating that the Corporation is an instrumentality or agency of Government. But, as is quite often the case, a Corporation established by statute may have no shares or shareholders, in which case it would be a relevant factor to consider whether the administration is in the hands of a Board of Directors appointed by Government, though this consideration also may not be determinative, because even where the Directors are appointed by Government, they may be completely free from Government control in the discharge of their functions. What then are the tests to determine whether a Corporation established by statute or incorporated under law is an instrumentality or agency of Government? It is not possible to formulate an all-inclusive or exhaustive test which would adequately answer this question. There is no cut and dried formula which would provide the correct Division of Corporation into those which are instrumentalities or agencies of Government and those which are not.
The salient features highlighted by the petitioner in para 5 of her petition answers the test contained in the aforesaid observations of the Supreme Court in the International Airport Authority's case (supra).
6. A reference also deserves to be made to the binding ruling of the Supreme Court in the case of Ajay Hasia v. Khalid Mujib Sahravardi and Ors. . In that case a society registered under the Societies Registration Act was found to be an authority falling within the definition of "State" contained in Article 12 of the Constitution of India. In para 11 at page 496 the test is as laid down to find out whether or not a Corporation answers the definition of State contained in Article 12 of the Constitution of India. It reads as under:
We may point out that it is immaterial for this purpose whether the Corporation is created by a statute or under a statute. The test is whether it is an instrumentality or agency of the Government and not as to how it is created. The inquiry has to be not as to how the juristic person is born but why it has been brought into existence. The Corporation may be a statutory Corporation created by a statute or it may be a Government Company or a Company formed under the Companies Act, 1956 or it may be a society registered under the Societies Registration Act, 1860. or any other similar statute. Whatever be its genetical origin, it would be an "authority" within the meaning of Article 12 if it is an instrumentality or agency of the Government and that would have to be decided on a proper assessment of the facts in the light of the relevant factors. The concept of instrumentality or agency of the Government is not limited to a Corporation created by a statute but is equally applicable to a Company or Society and in a given case it would have to be decided on a consideration of the relevant factors, whether the Company or Society is an instrumentality or agency of the Government so as to come within the meaning of the expression "authority" in Article 12.
Thereafter in para 15 at pages 497-498, salient features of the society were highlighted for coming to the conclusion that the said society would not answer the definition of "State" contained in Article 12 of the Constitution of India. It reads:
It is in the light of the discussion that we must now proceed to examine whether the Society in the present case is an "authority" falling within the definition of "State" in Article 12. Is it an instrumentality or agency of the Government? The answer must obviously be in the affirmative if we have regard to the Memorandum of Association and the Rules of the Society. The composition of the Society is dominated by the representatives appointed by the Central Government and the Governments of Jammu & Kashmir, Punjab, Rajasthan and Uttar Pradesh with the approval of the Central Government. The monies required for running the College are provided entirely by the Central Government and the Government of Jammu & Kashmir and even if any other monies are to be received by the Society, it can be done only with the approval of the State and the Central Government. The Rules to be made by the Society are also required to have the prior approval of the State and the Central Governments and the accounts of the Society have also to be submitted to both the Governments for their scrutiny and satisfaction. The Society is also to comply with all such directions as may be issued by the State Government with the approval of the Central Government in respect of any matter dealt with in the report of the Reviewing Committee. The control of the State and the Central Governments is indeed so deep and pervasive that no immovable property of the Society can be disposed of in any manner without the approval of both the Governments. The State and the Central Government have even the power to appoint any other person or persons to be members of the Society and any member of the Society other than a member representing the State or Central Government can be removed from the membership of the Society by the State Government with the approval of the Central Government. The Board of Governors which is in-charge of general superintendence, direction and control of the affairs of Society and of its income and property is also largely controlled by nominees of the State and the Central Governments. It will thus be seen that the State Government and by reason of the provision for approval, the Central Government also, have fully control of the working of the Society and it would not be incorrect to say that the Society is merely a projection of the State and the Central Governments and to use the words of Ray, C.J. in Sukhdev Singh's case (supra) the voice is that of the State and the Central Governments and the hands are also of the State and the Central Governments. We must, therefore, hold that the Society is an instrumentality or the agency of the State and the Central Governments and it is an "authority" within the meanging of Article 12.
7. In view of the aforesaid binding rulings of the Supreme Court in the International Airport Authority's case (supra) and Ajay Hasia's case (supra), there is no hesitation in coming to the conclusion that respondent No. 1 is the State for the purposes of Part III of the Constitution of India.
8. When respondent No. 1 is found to be the State for the purposes of Part III of Constitution of India, the petitioner can successfully invoke protection of her fundamental rights guaranteed under Articles 14 and 16 thereof. One of the features of the concept of equality enshrined in Articles 14 and 16 of the Constitution of India, would be absence of arbitrariness in any State action. If the impugned State action is tainted with arbitrariness on the part of the authority taking it, it has to be struck down as violative of the rule of law enshrined in Articles 14 and 16, more particularly in Article 14 of the Constitution of India. The petitioner's grievance in the present case is that the order at Annexure "O" to the petition terminating her services suffers from the vice of arbitrariness and is therefore hit by Articles 14 and 16 of the Constitution of India.
9. A bare perusal of the termination order at Annexure "O" shows that no reasons have been assigned for terminating the petitioner's service. It has been mentioned therein that her services have been terminated on account of her unsatisfactory work or performance or that her services were no longer required on account of abolition of the post or on expiry of the sanction for such post. By the impugned order at Annexure "O", the petitioner is simply rendered jobless. By a stroke of pen she has been thrown on streets.
10. In this connection a reference deserve to be made to the binding Division Bench ruling of this Court in the case of Anopsinh Jatubha v. V.K. Gupta, Dist. Superintendent of Police, Jamnagar and Ors. reported in 1986 GLH 136 : 1986(2) GLR 753. In that case there were two cases and in both cases two Government employees were just sacked from services by simple orders of termination. No reasons were assigned for termination of their services. The termination orders were sought to be justified on the ground that the performance of the concerned Government employees was not satisfactory; they were not suitable for the jobs. In that context it was held (at page No. 756 of GLR para 3 ):
There is nothing in the termination order that such termination was made on the ground of unsuitability, unsatisfactory conduct or the like. If it is the question of misconduct, the authorities concerned ought to have followed the procedure set up under Article 311(2) or otherwise, they will be condemning a person without being heard. If it is for the purpose of simply terminating the service of a probationer, the order should have stated that he is not suitable to be continued in service.
The aforesaid Division Bench ruling of this Court in Anopsinh Jatubha's case (supra) is certainly binding to me sitting as a single Judge. The impugned order of termination of the petitioner's services at Annexure "O" deserves to be quashed and set aside on this ground alone.
11. The impugned order suffers from the vice of arbitrariness also on account of another circumstances. In this connection a reference deserves to be made to the binding ruling of the Supreme Court in the case of Dr. (Mrs.) Sumati P. Shere v. Union of India and Ors. . In that case a medical practitioner was employed in the Central Government service as an ad hoc employee. Her services were sought to be terminated on the ground of her unsuitability for the job. It appears that no intimation whatsoever was conveyed to her about her unsuitability for the job. Condemning such action on the part of the Government authority, the Supreme Court set aside the order terminating her services. It has been held therein:
If services of an ad hoc employee is to be discontinued on ground of unsuitability it is proper and necessary that he should be told in advance that his work and performance are not upto the mark. In the relationship of master and servant there is a moral obligation to act fairly. An informal, if not formal, give and-take, on the assessment of work of the employee should be there. The employee should be made aware of the defect in his work and deficiency in his performance. Defects or deficiencies, indifference or indiscretion may be with the employee by inadvertence and not by incapacity to work. Timely communication of the assessment of work in such cases may put the employee on the right track. Without any such communication, it would be arbitrary to give a movement order to the employee on the ground of unsuitability. That however would not mean that there should be a regular enquiry in such cases.
The aforesaid dictum of law declared by the Supreme Court in Dr. S.P. Shere's case (supra) is binding to this Court.
12. In the instant case by two orders passed on 22nd March, 1985 at Annexure "H" and on 3rd December, 1985 at Annexure "K", the probationary period of the petitioner came to be extended twice on the ground that her work was not satisfactory. It was not pointed out therein in what manner her work was not satisfactory and it called for improvement. No other memo or communication is found to have been issued to her pointing out deficiencies found in her working. In fact by her letter dated 6th December, 1985 at Annexure "L" to the petition in response to the order of 3rd December, 1985 at Annexure "K" to petition extending her period of probation upto 31st January, 1986 she sought clarifications as to the alleged deficiencies found in her working. The concerned authority observed a saint-like silence thereto. About three weeks thereafter on 27th December, 1985 she made another representation (at Annexure "M") to the petition requesting the authorities to consider her case for release of her due increment. Therein she again requested to point out to her any deficiency in her working so that she can turn out better-performances. The authorities appear to have sat tight over it; no reply whatsoever was given to her. It thus becomes clear that no opportunity was given to her that she could have meet with her deficiencies found by the higher authorities as pointed out by the Supreme Court in its ruling in Dr. S.P. Shere's case (supra). To that, extent, the impugned order at Annexure "O" can be said to be suffering from the vice of arbitrariness and has to be struck down in view of the aforesaid ruling of the Supreme Court in Dr. S.P. Shere's case (supra).
13. There is another factor on record which justifies the petitioner's grievance that she ought not have been considered as on probation in view of the fact that her due annual increment was released on completion of her one year's service. The order releasing her increment was admittedly passed on 4fh December, 1984 at Annexure "G" to the petition. Ordinarily increment is allowed to a probationer only if work of that probationer during the period of probation is found satisfactory. That factor also deserves consideration by the authority for coming to the conclusion whether or not the work of the employee on probation is found satisfactory or not. I am fortified in my view by the binding ruling of the Supreme Court in the case of Ajit Singh and Ors. v. Slate of Punjab and Ors. . There also the concerned employees challenging the action of termination of their services on the ground of unsatisfactory work during the period of probation had earned their due annual increments. It has been held in para 10 at pages 499-500:
This conclusion is buttressed by another circumstances appearing in the record. When each of the petitioners, completed his one year of service, which marked the expiration of the period of probation, an increment was released in his favour. Subject to the specific rule to the contrary, ordinarily no increment is earned during the period of probation. But at any rate, if, an increment can be earned after the expiry of the period of probation, it would depend upon the satisfaction of the appointing authority that the work and conduct of the probatitioner was satisfactory. Further Rule 4.7 of the Punjab Civil Service Rules, Vol. 1 provides that an increment shall ordinarily be drawn as a matter of course, unless it is withheld. An increment may be withheld from a Government employee by a competent authority if his conduct has not been good or his work has not been satisfactory. Now almost all the petitioners completed their one year service by June, 1980. An increment was released in favour of each of them. It is implicit in release of increment that the petitioners has satisfactorily discharged their duty during the probation period, and at any rate the work and conduct was not shown to be unsatisfactory, which permitted an increment to be earned. Assuming, as contended for on behalf of the respondents that period of probation was two years, the fact that on the expiry of one year of service an increment was released, would imply that during the period of one year the work and conduct has not been unsatisfactory. If it was otherwise the release of increment could have been interdicted on the ground that neither the work nor the conduct was satisfactory. The fact that the increment was released would at least permit an inference that there was satisfactory completion of the probation period and that during the probationary period, the work and conduct of each of the petitioner was satisfactory.
Keeping in mind the aforesaid ruling of Supreme Court in Ajit Singh's case (supra), the petitioner could not be said to have remained on probation on release of her due annual increment on completion of her first year's service. She could not have been sacked uncermoniously by the impugned order at Annexure "O" to the petition.
14. It is not possible to accept the submission urged before me by Shri Thacker for respondents Nos. 1 to 3 to the effect that the impugned order of termination of the services of the petitioner cannot be upset for want of reasons in view of the binding Division Bench ruling of this Court in Anopsinh Jatubha's case (supra). Similarly it is not possible for me to accept Shri Thacker's submission to the effect that the petitioner was given the fullest possible opportunity to improve her work by means of the two orders passed on 22nd March, 1985 and 3rd December, 1985 at Annexure "H" and Annexure "K" respectively extending her probationary period. The reason therefore is quite simple. Simply informing her that she should improve her work without giving particulars about deficiencies and shortcomings found in her work would not amount giving to her an opportunity to improve her work. Besides, the concerned authorities of respondent No. 1 observed mysterious silence in response to her letter of 6th December, 1985 at Annexure "L" seeking clarification as to how her working was not found upto the mark.
15. The petitioner has also challenged the action of the respondents in terminating her services on the ground of mala fides. She has made serious imputations against the then Managing Director of respondent No. 1. In the reply affidavit the then Managing Director has refuted such allegations. This would involve questions of fact. As rightly urged before me by Shri Thacker for respondents Nos. 1 to 3, it is not necessary to enter into these questions of fact at this stage. Again, it transpires from the record that these very allegations were pressed into services by the petitioner in her writ petition registered as Special Civil Application No. 2416 of 1984 challenging her transfer from the post of Deputy Manager (Publicity) at Ahmedabad to Gandhinagar as Laison Officer. I am told at the Bar that the said writ petition is pending for final hearing. If I enter into the merits of the allegation as to mala fides levelled against the then Managing Director in this petition, I would incidentally be deciding the fate of Special Civil Application No. 2416 of 1984. It would not be desirable on my part to perform that exercise.
16. Shri Padiwal for the petitioner has also challenged condition No. 1 of the appointment order at Annexure "B" on the ground that it is violative of Articles 14 and 16 of the Constitution of India. As rightly submitted by Shri Thacker for respondents Nos. 1 to 3, it is not necessary to deal with this contention for the simple reason that no specific challenge to the said case has been made in this petition. That case is sought to be made out only in the rejoinder affidavit filed by the petitioner in answer to the reply affidavits made on behalf of the respondents. The respondents did not have an opportunity to meet with the challenge to condition No. 1 in the appointment order without pleading any such case in the petition.
17. In view of my aforesaid discussions, I am of the opinion that the impugned order at Annexure "O" terminating the petitioner's services has to be declared illegal and invalid. She deserves to be reinstated in service with all her back wages as if uninterrupted by the termination order at Annexure "O".
In the result, the petition is accepted. The respondents are directed to reinstate the petitioner in service with full back wages and all service benefits as if her services remained uninterrupted by the impugned order of termination. The respondents are directed to reinstate her in service within four weeks from the date of the receipt of the writ of this Court and to settle her back wages within three months thereafter. Rule is accordingly made absolute with costs.