Mahender Mandal v. Govt. of Punjab through General Manager, Punjab Bhawan

10. In Mathew P. Thomas vs. Kerala State CivilSupply Corpn.Ltd. andothers,(2003)3SCC263,the respondent/corporation terminated the services of the appellant who was a probationer, on charges of grave misconduct and repeated dereliction of duty tantamounting to unsatisfactory performance. It was alleged that he had betrayed as a responsible officer of the corporation by accepting the substandard quality goods in collusion with suppliers for undue pecuniary benefits. The termination orders were upheld by the learned Single Judge and affirmed by the Division Bench. While dismissing the appeal,it was held by the Supreme Court that the penalty ofterminating the services ofthe appellant was proposed in terms of clause 2 of the appointment order because his services were found to be unsatisfactory. Though para 4 and 5 ofthe show cause notice contain serious allegations of misconduct but they were not the basis for passing the order oftermination. They even stood deleted as per the directions given by the High Court. That being the position, no prejudice is caused to the appellant to complain that the High Court has exceeded its power of judicial review when such a deletion of para 4&5 from the show cause notice is to the benefit and advantage ofthe appellant. The Supreme Courttook note ofthe fact that an order oftermination simplicitor passed during the period ofprobation LPA 288/2013 Page 12of23 has been generating undying debate. Reference was made to two decisions in DiptiPrakash Banerjee vs.Satyendra Nath Bose National Centre for Basic Sciences, Calcutta & Ors.,(1999) 3 SCC 60 and Pavanendra Narayan Verma vs. Sanjay Gandhi PGI of Medical SciencesandAnr.,(2002)1 SCC 520.

11. In the case of Dipti Prakash Banerjee (supra), after refeiring to various decisions indicated as to when a simple order oftermination is to be treated as "founded" on the allegations of misconduct and when complaints could be only as motive for passing such a simple order of termination. In para 21 of the said judgment the distinction is explained, thus:- "21. If findings were arrived at in an enquiry as to misconduct, behind the back ofthe 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. But ifthe enquiry was not held, nofindings M>ere arrived at and the employer was not inclined to conduct an enquiry but, at the same time, he did not want to continue the employee V against whom there were complaints, it would only be a case ofmotive and the order would not be bad. Similar is the position ifthe employer did not want to enquire into the truth ofthe allegations because ofdelay in regular departmentalproceedings or he was doubtful aboutsecuring adequate evidence. In such a circumstances, the allegations would be a motive and not the foundation and the simple order of termination would be valid."

12. InPavanendra Narayan Verma(supra),it was held:-

LPA 288/2013 Page 13of23 allegations involving moral turpitude or misconduct which (c) culminated in afinding ofguilt. Ifall threefactors are present the termination has been held to bepunitive irrespective oftheform ofthe termination order. Conversely ifany one ofthe threefactors is missing, the termination has been held.

22. The threefactors are distinguishable in thefollowing passage inShamsherSingh v.State ofPunjab(supra)where itwassaid: "Before a probationer is confirmed the authority concerned is under an obligation to consider whether the work of the probationer is satisfactory or whether he is suitablefor thepost. In the absence of any rules governing a probationer in this respectthe authority may come to the conclusion thaton account of inadequacyfor the job or for any temperamental or other objectnot involving moral turpitude the probationer is unsuitable for the job and hence must be discharged. No punishment is involved in this. The authority may in some cases be ofthe view that the conduct ofthe probationer may result in dismissal or removal on an inquiry. But in those cases the authority may not hold an inquiry and may simply discharge the probationer with a view to giving him a chance to make good in other walks oflife without a stigma at the time oftermination of probation. If, on the other hand, the probationer isfaced with an enquiry on charges ofmisconduct or inefficiency or corruption and if his services are terminated without following the provisions ofArticle 311(2)he can claim protection."

13. Following these decisions,it was held as under:- "From a long line ofdecisions it appears to us that whether an order of termination is simplicitor or punitive has ultimately to be decided having due regard to thefacts and circumstances ofeach case. Many a times the distinction between thefoundation and motive in relation to an order oftermination either is thin or overlapping. It may be difficult either to categorize or classify strictly orders oftermination simplicitor falling in one or the other category, based on misconductasfoundation for passing the order of termination simplicitor or on motive on the ground ofunsuitability to continue in service. Iftheform and language ofthe so called order oftermination simplicitor ofaprobationer clearly indicate that it is punitive in nature or/and it is stigmatic there may not be any need to go into the details ofthe background and surrounding circumstances in testing whether the order oftermination is simplicitor or punitive. In cases where the services ofa probationer are terminated LPA 288/2013 Page ^3 byan order ofterminationsimplicitor andthelangmge andform ofit donotshowthateitheritispunitiveorstigmatieonthefiTeJubtL sorneeasestheretjtybea baekgroundandattendingeiZZt^lZ seZTofZTolaT' ''VT' order mtbeZZmZZ t.° ""fi"'«deofthetermination Older may be simplieitor but the realfaee behind it is to get rid of nnces ofaprobationer on the basis ofmisconduct.In such casesft becomesnecessarytotravelbeyondtheorderofterminationsimplicitor tofindoutwhatin realityisthe backgroundandwhatweighedwith the etnployer to terminate dieservices ofaprobationer.In thatpZZcess it also becomes necessary tofind out whether efforts were made to find outthesuitabilityoftheperson tocontinue inservice or he in realityis removedfrom service on thefoundation ofhis misconduct."

12. In the present case, even on earlier occasions when the appellant Jailed to perform his duties properly during probation period he was warned to improve and continued in the service. If he was to be removedfrom service on the allegationsofmisconductatthattime itself the respondents could have removed himfrom service. This is also a circumstance to indicate that his order oftermination was simplicitor. Therefore, having regard to theparticularfacts and circumstances and in view ofwhatisstatedabove we have nogoodreason to disagree with the impugned order."

14. In Governing CouncilofKidwaiMemorialInstitute ofOncology, Bangalore (supra), the order under challenge was order of termination simplicitor, the validity thereof was questioned by the employee on the ground that a penal order had been passed in the garb of termination. Supreme Court observed as under: "If an employee who is on probation or holding an appointment on temporary basis is removedfrom the service with stigma because of some specific charge, then a plea cannot be taken that as his service was temporary or his appointment was on probation, there was no requirement, of holding any enquiry, affording such an employee an opportunity to show that the charge levelled against him is either not true or it is without any basis. But whenever the service ofan employee is terminated during the period ofprobation or while his appointment is LPA 288/2013 Page 15of23 r "J n7^ ' ^"" simplioiter after some prehmmary enqutry it cannot be held thatassome enquiry had bZt made against h,m before the issuance oforder ofthe teLinationlt TnmtZ"""'"^ O""-shargeassuchpenal of,ho ofthe veilforfindingoutthe realnature fthe order shall be applicable only in a case where the Court is satisjiedthatthere isa directnexus between the chargeso levelledand the action taken.Ifthe decision is taken, to terminate the service ofan employee duringtheperiodofprobation,after takinginto consideration the overallperformance andsome action orinaction on thepartofsuch employee then it cannot be said that it amounts to his removalfrom service aspunishment.It need not be said thatthe appointing authority at the Stage ofconfirmation or while examining the question as to whether the service of such employee be terminated during the continuance of the period ofprobation, is entitled to look into any complaint made in respect ofsuch employee while discharging his dutiesfor purpose ofmaking assessment ofthe performance ofsuch employee. Thus in the present case the Governing Council examined different reports in respect of the probationer during period of probation and considered the question as to whether he should be allowed to continue in the service ofthe Institute. The decision was taken by the Governing Council on the total and overall assessment of the performance of the probationer in terms of the condition of the appointment. It cannot therefore be said that the order oftermination amounts to removalfrom service as apunishment."

15. Recently, the matter was again considered in Kailash Chand vs. DTC reported in 217(2015)DLT 698 wherein the distinction between the order simplicitor and punitive order has been explained by referring to the catena ofapex Court decisions as under: "26. From the aforesaid decisions, we can safely conclude that the legal position which emerges is that where an inquiry is conducted into an alleged misconductcommitted by the probationer behind his back and a simple order of termination is passed founded' on the report of the inquiry indicting the probationer, the action oftermination ofservices ofprobationer would be tainted. But where nofindings are arrived at LPA 288/2013 Page 23 J any inquiry or no inquiry is held but the employer chooses to discontinue the services ofan employee against whom complaints are received it would be a case ofthe complaints 'motivating' the action oftermination of services of probationer and hence would not be tainted."

16. What can be culled out from the aforesaid decisions is that the test is whether the misconduct or negligence is a mere motive for the order ofthe termination ofseiwice or whether it is the very foundation ofthe order of tenTiination ofservice ofthe temporary employee. Tliree communications spreading over a period ofabout 8 months were issued to the appellant in relation to his services wherein on first occasion, he was found to have left his duty before time causing inconvenience to the guests; on the second occasion, he went on unauthorized leave; on the third occasion, he did not attend to one of the guests properly. The alleged incident involving the procurement ofa girl for one ofthe guests in the guest house for immoral purposes may have only acted as a trigger for the respondentto arrive at its decision to terminate the sen^ices of the respondent while he was on probation. The appellant was not charge sheeted nor any show cause notice was issued to him levelling charges against him and. consequently no inquiry was held in that regard. It appears thatthe appellant soughtto drag issue of his involvement in procuring a girl for a guest in the guest house for immoral purposes before the Labour Court as a foundation for the LPA 288/2013 Page 17of23 V respondent/management to terminate his services. However, the tennination ofthe services ofthe appellant was not,because on an inquiry the appellant was found guilty of his conduct. No inquiiy was held, no findings were recorded and there were no finding that the appellant was guilty of misconduct. Not one but several facets had served as a motive loi terminating the services ofthe appellant. The last incident was not the foundation for the action taken against,the appellant. There were other earlier incidents of unsatisfactory conduct of the appellant. The overall conduct during the probation period was unsatisfactoiy. Keeping m view the same, the management decided to discontinue the services of the appellant while he was still on probation. The same cannot be tenned as punitive or stigmatic. No such siatement is recorded in the termination order.

17. Despite holding in para 29 ofaward that it was not obligatoiy on the part ofthe managementto hold an inquiiy against the workman during the probation period for terminating his services without casting any stigma while passing an order of termination simplicitor and there was no illegality in the order of termination ofthe workman by the management and tliere was no violation of any law by the- management, yet the LPA288/2013 Page 18of23 V Industrial Adjudicator resorted to the concept of piercing the veil which wasnot wan-anted in thefacts and circumstancesofthe presentcase.

18. Learned Single Judge, relying on Section 25F of the Industrial Disputes Act,held that the appellant was serving since 22"''December, 1980 and his services were terminated on 13'''Febmary,1983 and it was not the case ofthe management that the appellant had not been serving ■ continuously or that he had not rendered 240 days ofservice in the year preceding his termination,therefore,retrenchment was held to be illegal. However,keeping in view,the factthat he was only a probationer and had no right to the post till he got confirmed and had served for a little over two years, he was not entitled to reinstatement in service automatically and taking note ofthe shift in the law as observed by the Supreme Court in JagbirSingh (supra),he was awarded compensation ofRs.30,000/-.

19. It is to be noted that there was no plea of retrenchment by either party either before the Labour Court or before the learned Single Judge as it was a case oftermination simplicitor. However,the said finding is, not under challenge in this appeal, therefore, we need not dwell on this aspect ofthe matter.

20. The only question left for consideration is whether the learned Single Judge fell in en-or in interfering with the award passed by the LPA 288/2013 Page 19of23 Industrial Adjudicator while exercising Jurisdiction under Article 226/227 ofthe Constitution ofIndia. Heavy reliance has been placed by the learned counsel for the appellant on HarjinderSingh(supra).In this case, the Supreme Court did interfere with the order ofthe High Court which awarded compensation to the workman by modifying the award of reinstatement passed by the Labour Court.However,on close scrutiny of facts it transpires that that was a case where a workman was initially employed by Punjab State Warehousing Corporation as work-charge motor mate but after few months he was appointed as v/ork munshi in the regular pay-scale for three months. His service was extended from time to time and later on by one month's notice given by the Managing Director of the Corporation his service was brought to an end on 05.07.1988.The worlonan challenged the implementation ofthe notice in a writ petition and by an interim order the High Court stayed the implementation of that notice but later on the writ petition was withdrawn with liberty to the workman to avail his remedy under the Industrial Disputes Act. After two months,the Managing Director ofthe Corporation issued notice dated 26.11.1992 for retrenchment of the workman along with few others by giving them one month's pay and allowances in lieu ofnotice as per the requirement of Section 25-F(a)of LPA 288/2013 ^ Page 20of23 ■ s\ the Industrial Disputes Act. On the industrial dispute being raised, the Labour Courtfound thatthere was compliance ofSection 25-F butit was found that the termination was violative ofSection 25-G ofthe Industrial Disputes Act and, accordingly. Labour Court passed an award for reinstatement ofthe workman with 50 per cent back wages. The Single Judge ofthat High Court did not approve the award ofreinstatement on the premise that the initial appointment of the workman was not in consonance with the statutory Regulations and Articles 14 and 16 ofthe Constitution and accordingly,substituted the award ofreinstatement with 50 per cent back wages by directing that the workman.shall be paid a sum of Rs.87,582/- by way of compensation. This order of the Single Judge was set a:side by the Supreme Court and order ofthe Labour Court restored by observing that Single Judge was wrong in entertaining an unfounded plea that workman was employed in violation of y\rticles 14 and 16. This judgment was considered in Assit. Engineer, Rajasthan Dev. Corporation and Anr. vy. Gitam Singh,(2013)5 SCC 136 and it was held that Harjinder Singh (supra) turned on its own facts. It was further held that Harjinder Singh does not lay down the proposition that in all cases of wrongful teiTnination, reinstatement must follov/. It was further held: LPA 288/2013 Page 21of23 I A I "26. From the long line of cases indicated above, it can be said without anyfear ofcontradiction that this Court has not held as an absolute proposition that in cases ofwrongful dismissal, the dismissed employee is entitled to reinstatement in all situations. It has always been the view ofthis Coitrtthatthere could be circumstance(s)in a case which may make it inexpedient to order reinstatement. Therefore, the normal rule that dismissed employee is entitled to reinstatement in cases ofwrongful dismissal has been held to be not without exception. Insofar as wrongful termination ofdaily-rated workers is concerned, this Courthaslaiddown thatconsequentialreliefwoulddependon host offactors, namely, manner and method of appointment, nature of employment and length ofservice. Where the length ofengagement as daily wager has not been long, award of reinstatement should not follow and rather compensation should be directed to be paid. A distinction has been drawn between a daily wager and an employee holding the regularpostfor thepurposes ofconsequentialrelief."

21. Deepali Gundu Sarvase (supra) was dealing with the case of wrongful termination of service wherein while ordering reinstatement with continuity of services, back wages were not granted. It was held that since action taken by the management to terminate the appellant's service wasperse illegal, while ordering reinstatement with continuity of service,back wage was the normal rule.

22. Things are entirely different in the instant case. The termination of the appellant was held to be legal by the Industrial Adjudicator,however, it went on "lifting the veil" for arriving at the conclusion that the same was unjustified. However, the facts and circumstances of the case did not warrant lifting the veil. Thus there was an error in the decision making. A wrong principle was applied. While awarding the LPA 288/2013 Page 22of23 J compensation, several factors, inter alia manner and method of appointment,nature ofappointmentand length ofsei-vice are relevant. In a case such as this, where a total length of service rendered by the appellant was shortand he was only on probation,in our considered view since the termination was legal and justified even no compensation was required to be given to him. However, since the management has accepted awarding compensation, we do not see any reason to interfere with the said findings ofthe learned Single Judge.

23. That being so,the appeal being devoid ofmerit,is dismissed. No order as to costs.

SEPTEMBER 23,2016 rs TT A GUP mw SUNIl'A GUPTA JUDGE SANJIV KHANNA JUDGE