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Aggrieved by the said judgment, the respondent Corporation filed Writ Petition No. 1591 of 1981 and the same was allowed by the High Court on 10.12.97 holding that though an inquiry was conducted by Shri Ram Pal Singh and a report was given against the appellant, the same was conducted "to assess the work" of the appellant as it was decided to dispense with his temporary service in terms of Condition No.3 of the order of appointment, which permitted such termination on payment of one month's salary or after giving one month's notice. That was why a simple order of termination was passed and it did not cause any stigma inasmuch as it did not refer to any disciplinary inquiry. There was "sufficient material" to indicate the unsatisfactory work and conduct of the appellant. The High Court referred to various decisions relied upon by the appellant and said that they did not apply. It however held that the ruling of this Court in State of U.P. vs. Kaushal Kishore Shukla (1991(1) SCC 691) was in point, that whenever, the competent authority was satisfied that the work and conduct of a temporary employee was not satisfactory, it could pass a simple order of termination and such an order could not be treated as one of punishment. The High Court also referred to Triveni Shanker Saxena vs. State of U.P. [1992 Suppl.(1) SCC 524] and State of U.P. vs. Km. Premlata Misra [1994 (4) SCC 189]. The High Court held as follows:

"Masters and servants cannot be permitted to play hide and seek with the law of dismissals and the plain and proper criteria are not to be misdirected by terminological cover-ups or by appeal to psygnic by terminological cover-ups or by appeal to psycnic reason for the order, whether disclosed or undisclosed. The Court will find out from other proceedings or documents connected with the formal order of termination what the true ground for the termination is. If thus scrutinised, the order has a punitive flavour in cause or consequence, it is dismissal. If it falls short of this test, it cannot be called a punishment. To put if slightly differently, a termination effected because the master is satisfied of the misconduct and of the consequent desirability of terminating the service of the delinquent servant, it is a dismissal, even if he had the right in law to terminate with an innocent order under the standing order or otherwise. Whether, in such a case the grounds are recorded in a different proceedings from the formal order does not detract from is nature. Nor the fact that, after being satisfied of the quilt, the master abandons the enquiry and proceeds to terminate. Given an alleged misconduct and a live nexus between it and the termination of service the conclusion is dismissal, even if full benefits as on simple termination, are given and non-inqurious terminology is used.
So far as Triveni Shankar Saxena vs. State of U.P. [1992 Suppl. (1) SCC 524] and State of U.P. vs. Prem Lata Motors, [1994 (4) SCC 189], relied upon by the High Court are concerned, in the former case, the termination order was a simple order which did not cast any stigma and there were several adverse entries in his confidential reports. The termination was as per rules. In the latter case the employee's superiors complained that the employee was not regular in her work, and was in the habit of leaving office during office hours. A simple order of termination appointment. There was no prior inquiry. In both these cases, the termination orders were upheld.

It will be noticed from the above decisions that the termination of the services of a temporary servant or one on probation, on the basis of adverse entries or on the basis of an assessment that his work is not satisfactory will not be punitive inasmuch as the above facts are merely the motive and not the foundation. The reason why they are the motive is that the assessment is not done with the object of finding out any misconduct on the part of the Officer, as stated by Shah, J. (as he then was) in Ram Narayan Das's case. It is done only with a view to decide whether he is to be retained or continued in service. The position is not different even if a preliminary inquiry is held because the purpose of a preliminary inquiry is to find out if there is prima facie evidence or material to initiate a regular departmental inquiry. It has been so decided in Champaklal's case. The purpose of the preliminary inquiry is not to find out misconduct on the part of the Officer and if a termination follows without giving an opportunity, it will not be bad. Even in a case where a regular departmental inquiry is started, a charge memo issued, reply obtained, and an enquiry Officer is appointed - if at that point of time, the inquiry is dropped and a simple notice of termination is passed, thee same will not be punitive because the enquiry Officer has not recorded evidence nor given any findings on the charges. That is what is held in Sukh Raj Bahadur's case and in Benjamin's case. In the latter case, the departmental inquiry was stopped because the employer was not sure of establishing the quilt of the employee. In all these cases the allegations against the employee merely raised a cloud on his conduct and as pointed by Krishna Iyer, J. in Gujrat Steel Tubes case, the employer was entitled to say that he would not continue an employee against whom allegations were made the truth of which the employer was not interested to ascertain. In fact, the employer, by opting to pass a simple order of termination as permitted by the terms of appointment or as permitted by the rules was conferring a benefit on the employee by passing a simple order of termination so that the employee would not suffer from any stigma which would attach to the rest of his career if a dismissal or other punitive order was passed. The above are all examples where the allegations whose truth has not been found, and were merely the motive.