Case BriefsHigh Courts

Rajasthan High Court: Sanjeev Prakash Sharma, J., dismissed a petition which was filed assailing the action of respondents who had terminated his services on the ground that the Administration was not satisfied with his work and the competent authority had approved the termination order.

The counsel for the petitioner, R.K.Mathur with Aditya Kiran Mathur submitted that petitioner’s services were extended after a one-year contractual period, however; in between by giving him one month’s notice, his services were terminated wrongfully. The counsel submitted that if there were any allegations either enquiry should have been conducted or a show cause notice should at least have been served upon him. By means of second stay application the counsel pointed out that after terminating his services, the respondents had issued an advertisement to fill up the post of Consultant (Legal) and prayed that the post should not be filled up.

The counsel for the respondent, P.C. Sharma submitted that petition would not be maintainable as against the respondent 1-Railways since it was a service matter and the matter should be taken up before Central Administrative Tribunal. He further submitted that respondent 2- Dedicated Freight Corridor Corporation of India Limited (DFCCIL) was a public sector undertaking having its own separate administration set up and there was no relevance of Ministry of Railways which is why same would not fall within the meaning of Article 12 of the Constitution of India and writ petition, therefore, would not lie against the DFCCIL. He further contended that the engagement was for a Post of Consultant (Legal), which was a contractual post and the term was extended up to 30th June, 2020. However, as per terms of conditions of service, the petitioner’s services could be terminated in between by giving one month notice by either side.

The Court relying on the judgment of Pradeep Kumar Biswas v. Indian Institute of Chemical Biology, (2002) 5 SCC 111 found that Union of India, Ministry of Railways had been impleaded as a party only with the purpose to show that the DFCCIL was under the Union of India, Ministry of Railways and Ministry of Railways was controlling body for DFCCIL. It would thus come within the ambit of State within the meaning of Article 12 of the Constitution of India and writ petition would therefore lie. The Court further held that Central Administrative Tribunal did not have jurisdiction to hear such matters as DFCCIL had not been notified under the Central Administrative Tribunals Act, 1985 so as to come within CATs jurisdiction.

The Court while dismissing the petition held that the termination order had been passed strictly in terms of conditions of service of contract. It further explained that engagement of a Consultant (Legal) was purely on contractual basis and subject to satisfaction of the Administration for the services being provided are legal consultancy thus, there should not be any objection, if the concerned employer was not satisfied with the services, to the action of termination it can also be issued during the period of the contract as it is provided under the terms of the contract. [Rajesh Kumar Tiwari v. Union of India, 2020 SCC OnLine Raj 1841, decided on 01-12-2020]


Suchita Shukla, Editorial Assistant has put this story together.

Case BriefsHigh Courts

Bombay High Court: Manish Pitale, J., referred questions of seminal importance for consideration of a larger bench.

One significant question in the present petition is as follows:

Question pertains to Section 5 (3) of the Maharashtra Employees of Private School (Conditions of Service) Regulation Act, 1977 [MEPS Act] and Rule 15 of the Maharashtra Employees of Private School (Conditions of Service) Regulation Rules, 1981 [MEPS Rules].

Controversy

Whether entire sub-rules (1) to (6) of Rule 15 of the MEPS Rules apply to an employee appointed on probation or only sub-rule (6) of Rule 15 of MEPS Rules applies to such an employee appointed on probation, when read with Section 5(3) of the MEPS Act.

M.M. Agnihotri, Petitioners Counsel submitted that only sub-rule (6) of Rule 15 of the MEPS Rules read with Section 5(3) of the MEPS Act would apply to an employee appointed on probation.

Termination of Service

In the present case, the service of respondent 1 was terminated during the period of probation by stating that his service was found to be unsatisfactory during such a period.

Supreme Court in Parshotam Lal Dhingra v. Union of India, AIR 1958 SC 36, held that where a person was appointed on probation, the termination of his service during or at the end of the period of probation will not ordinarily and by itself be a punishment and a person so appointed had no right to continue to hold such post.

Supreme Court in High Court of Judicature, Patna v. Pandey Madan Mohan Prasad, (1997) 10 SCC 409, considered the validity of the termination of service of a Munsif appointed on probation in the context of non- communication of adverse remarks in confidential reports to the employee.

In Dipti Prakash Banerjee v. Satyendra Nath Bose National Centre for Basic Sciences, Calcutta, (1999) 3 SCC 60, in the context of when an order of termination of service of an employee appointed on probation could be said to be stigmatic, the Supreme Court specifically held that use of words ‘unsatisfactory work and conduct’ in the termination order will not amount to a stigma.

The above-mentioned decisions clearly distinguish the rights that an employee appointed on probation can claim, as compared to a confirmed employee. This is particularly so when the order of termination of service cannot be said to be stigmatic in nature.

Crux of the controversy

While taking action of termination of service under Section 5(3) of the MEPS Act for unsatisfactory work or behaviour of an employee appointed on probation, only sub-rule (6) of Rule 15 of the MEPS Rules applies or all the sub-rules i.e. sub-rules (1) to (6) of Rule 15 of the MEPS Rules apply to such an employee?

In the Supreme Court’s decision in Progressive Education Society v. Rajendra, (2008) 3 SCC 310 Court had an occasion to refer to Section 5(3) of the MEPS Act and Rules 14 and 15 of the MEPS Rules.

In the above-stated decision, the Supreme Court specifically found that the documents upon which the Management was placing reliance were not above suspicion and that the requirement of Rule 15(6) and 14 of the MEPS Rules had not been complied with prior to the invocation of powers under Section 5(3) of the MEPS Act.

In the said case, it has been interpreted that failure to communicate adverse remarks would mean that the work of the probationer was satisfactory.

Analysis

A perusal of the various judgments clearly shows that there are two sets of views on the same material.

There cannot be any doubt about the fact that only sub-rule (6) of Rule 15 of the MEPS Rules refers to “an employee appointed on probation”. This has some significance.

Whether, the position of law laid down by the Supreme Court and this Court in series of judgments as regards the rights of an employee appointed on probation, while challenging a non-stigmatic order of termination of service issued during or on completion of probation, enjoins that only sub-rule (6) of Rule 15 of the MEPS Rules read with Section 5(3) of the MEPS Act would apply to the case of an employee governed by the said Act and Rules, or that entire Rule 15 of the MEPS Rules read with Section 5(3) of the MEPS Act would apply?

Supreme Court has specifically observed that the rights of an employee appointed on probation under the said Act and Rules create a different situation.

In the decision of Progressive Education Society v. Rajendra, (2008) 3 SCC 310, it was stated that although Rules 14 and 15 of the MEPS Rules have been specifically referred to, particular emphasis has been placed by the Supreme Court only on sub-rule (6) of Rule 15 of the MEPS Rules.

While Rules 14 and 15 of the MEPS Rules cannot override Section 5(3) of the MEPS Act, the requirements of sub-rule (6) of Rule 15 of the MEPS Rules would be a factor which the School Management has to take into consideration while exercising power, which it undoubtedly has and is recognized under Section 5(3) of the MEPS Act.

In the case of High Court of Judicature at Patna v. Pandey Madan Mohan Prasad Sinha, (1997) 10 SCC 409 Supreme Court specifically held that non-communication of adverse remarks cannot be a ground to hold that an order simplicitor terminating the service of a probationer stands vitiated.

Bench in view of the above decisions found substance in the contention raised on behalf of the petitioners that only sub-rule(6) of Rule 15 of the MEPS Rule would apply to an employee appointed on probation under the aforesaid Act and Rules and it is the requirement of only the said sub-rule that needs to be satisfied in the context of the action that the Management can take under Section 5(3) of the MEPS Act.

Section 5(3) of the MEPS Act, the Management can terminate the service of an employee appointed on probation not only for unsatisfactory work, but also for unsatisfactory behaviour.

Rule 15 (6) of the MEPS Rules, refers to an employee appointed on probation and it requires the Head only to objectively assess an employee appointed on probation and to maintain a record of such assessment.

This, coupled with the decisions of the Division Bench of this Court and followed by Single Judges of this Court held that only Rule 15 (6) of the MEPS Rules applies to an employee appointed on probation, shows that there is a clear conflict of opinions in this matter.

Hence, the bench held that the above-stated controversy needs to be put to rest by an authoritative pronouncement of a larger bench of this Court.

Court stated that papers be placed before the Chief Justice to consider whether the present writ petition can be more advantageously heard by a Larger Bench of this Court on the following questions:

(i)  Whether only sub-rule (6) of Rule 15 of the MEPS Rules applies to an employee appointed on probation when the Management seeks to take action under Section 5(3) of the MEPS Act or entire Rule 15 from sub-rules (1) to (6) of the MEPS Rules apply to such an employee appointed on probation?

(ii)  Whether the judgment of the Hon’ble Supreme Court in the case of Progressive Education Society and another v. Rajendra and another (supra) lays down that entire Rule 15 of the MEPS Rules applies to an employee appointed on probation, particularly in the context of power available to the Management under Section 5(3) of the MEPS Act?

(iii)  Whether failure to adhere to requirements of sub-rules (3) and (5) of Rule 15 of the MEPS Rules would ipso facto vitiate an action taken by the Management under Section 5(3) of the MEPS Act, despite the fact that the Management satisfies the requirement of sub-rule (6) of Rule 15 of the MEPS Rules by ensuring that performance of an employee appointed on probation has been objectively assessed by the Head and record of such an assessment has been maintained?

(iv) Whether non-compliance of sub-rule (5) of Rule 15 of the MEPS Rules would vitiate an order of termination of service simplicitor issued by the Management under Section 5(3) of the MEPS Act when the said sub-rule deems that “work of an employee is satisfactory”, while Section 5(3) of the MEPS Act gives power to the Management to terminate the service of an employee appointed on probation not only for “unsatisfactory work”, but also for “unsatisfactory behaviour”?

(v) Whether it would be sufficient compliance on the part of the Management while acting under Section 5(3) of the MEPS Act, if it complies with only sub-rule (6) of Rule 15 of the MEPS Rules by ensuring that the performance of an employee appointed on probation is objectively assessed and the Head maintains a record of such assessment, and principles of natural justice stand satisfied by issuing notices/warnings for unsatisfactory work to such an employee appointed on probation, considering the limited rights available to such an employee as per the law laid down from the case of Parshotam Lal Dhingra v. Union of India (supra) in the year 1958 and onwards? [Gramin Yuvak Vikas Shikshan Mandal, Kinhi Naik v. Shivnarayan Datta Raut, 2020 SCC OnLine Bom 966, decided on 22-09-2020]

Case BriefsHigh Courts

Bombay High Court: A Division Bench of M.S. Karnik and Nitin Jamdar, JJ., addressed the petition filed by ex-MD of ICICI Bank Limited — Chanda Kochhar regarding the challenge towards her termination order.

The present petition was by the Ex- Managing Director of ICICI Bank who was terminated from her service. The same was approved by the Reserve Bank of India (RBI), which has been challenged by the petitioner in the present petition.

Complaints against the petitioner were received,

ICICI, in its meeting held on 29 May 2018, constituted an enquiry by a retired Judge of the Supreme Court of India. In June 2018 the Petitioner informed ICICI that Petitioner would go on leave till the enquiry is completed. By letter dated 3 October 2018, the Petitioner sought early retirement. ICICI, by the communication dated 4 October 2018 accepted the request for early retirement subject to certain conditions. On 27 January 2019, the report of the enquiry was submitted. The report was adverse to the Petitioner. In the meeting held on 30 January 2019, the Board of the ICICI treated the separation of the Petitioner’s service as a Termination for Cause. A communication to that effect was issued to the Petitioner. By further communication dated 1 February 2019, ICICI revoked the retirement benefits of the Petitioner. Correspondence ensued between the parties. The Petitioner called upon the ICICI to restore to the Petitioner the existing and future entitlements, including unpaid amounts, stock options, medical benefits. ICICI refused the request.

Petitioner along with the challenged to her termination order also sought to refrain ICICI from recovering and/or cancelling the benefits granted to her for early retirement.

Preliminary objection of ICICI was that the said bank id not an authority under Article 12 of the Constitution of India and performs no public duty. It is only a private bank having a purely private character. Services of the Petitioner are not governed by any statute, but it is a purely contractual relationship with ICICI.

Thus, the dispute raised by the petitioner was purely private in nature and would not be subject to writ jurisdiction.

RBI did not enter into an employer-employee dispute while the approval of the termination of the petitioner.

Section 35(1)(b) of the Act is a regulatory provision only to oversee that the action of the bank does not have an adverse impact on the depositors or the banking system. Scrutinizing the rights of MD as against the employer is not a matter of focus

Analysis

Writs can be issued to the State; an authority; a statutory body; an instrumentality or agency of the State; acompany financed and owned by the State; a private body run substantially on State funding; a private body discharging public duty or positive obligation of public nature; and a person or a body under liability to discharge any function under any statute, to compel it to perform such a statutory function. A private company would normally not be amenable to the writ jurisdiction under Article 226 of the Constitution.

A Writ would not lie to enforce purely private law rights.

Contractual duties are enforceable as matters of private law by ordinary contractual remedies such as damages, injunction, specific performance and declaration. Before issuing any writ, particularly writ of mandamus, the Court has to satisfy that action of such authority, is in the domain of public law as distinguished from private law.

Further, it was observed that, if the private body is discharging a public function and the denial of any right is in connection with public duty imposed on such body, the public law remedy can be enforced.

ICICI Bank is a private bank administered by the Board of Directors and it is not established under any statutory instrument. It also doesn’t receive funds from the government.

Section 35(B)(1) shows that appointment, reappointment and termination of Chairman, Managing Director, will not have effect unless it is with the previous approval of the Reserve Bank

Also noted that, Courts exercise writ jurisdiction when a public law element involved if the services are governed by a statute

Banking companies such as ICICI have the freedom to conduct their affairs; however, Reserve bank ensures that their activities will not affect the economy in general. The supervision by the Reserve Bank is in the realm of larger policy.

Bench stated that

Reserve Bank does not uphold or, adjudicate or decide the rights of the parties inter se, but only focuses on the consequences of the proposed action. The grant of approval by Reserve Bank does not mean that the action of termination is valid in terms of the service dispute. The approval is based on the opinion that no impact on the banking system is discernible.

Thus, in the present case, the service conditions of the petitioner are not governed by any statute. Termination of the petitioner is in the realm of contractual relationships. Since Section 35(1)(B) does not regulated service conditions, approval for termination under it does not adjudicate the rights of the petitioner as an employee.

Hence,

Legal implications of the grant of approval, non-grant of approval or post-facto approval, as the case may be, would be grounds and arguments in the contractual dispute.

Thus merely because the approval under Section 35B(1)(b) is questioned, that cannot infuse a public law element in this dispute, which remains a contractual dispute. For the contractual remedies, the Petitioner will have to approach the appropriate forum and not writ jurisdiction. Preliminary objection upheld on the above perusal. [Chanda Deepak Kochhar v. ICICI Bank Ltd., 2020 SCC OnLine Bom 374, decided on 05-03-2020]

Case BriefsHigh Courts

Madras High Court: M. Duraiswamy, J., while addressing a petition that was filed in pursuance of the impugned order of termination of a Polytechnic Principal based on an enquiry under which certain charges were laid down which included the charge of  “indulging in Homo-Sexual activities” with the polytechnic students.

In the present petition, it has been stated that the petitioner was working as the Principal of Dharmapuri District Co-operative Sugar Mills Polytechnic and was suspended by 1st respondent which was further confirmed by the Appellate Authority.

The petitioner was at first suspended by 1st respondent based on a pending enquiry against him under Section 42 of the Special by-laws. The charges laid down against him were all proved except for charge number 3 and 7. Following is the gist of charges against the petitioner:

  1. Misappropriation of funds by preparing bogus vouchers
  2. Misappropriation of funds by refunding lesser amount to the former students
  3. Misappropriation of scholarship amount by paying lesser scholarship amount
  4. Indulged in Homo-sexual activities with the polytechnic students.
  5. Derogatory remarks writing in filthy language against the teaching staff in the notice board and allowed the students to read.
  6. Arranged to refund the fees without any authority and without following the formalities and incurred loss to the Polytechnic.
  7. Failed to inform the students about their selection to the group/trade who attended the interview
  8. Admitted the students for admission in the management quota those who were not the heir of the cane growers/employees.
  9. Deceived the Govt. and management allowing a student for admission in the administrative quota

High Court, considering the above, stated that

Person with such conduct and character who indulged in homosexual activities with the polytechnic students cannot be allowed to continue in employment, that too, as a Principal of a Polytechnic Institute.

Petitioner had also made derogatory remarks, writing in filthy language against the teaching staff in the notice board and had allowed the students to read, which would establish that the petitioner is unfit to continue as the Principal of the Polytechnic Institute.

Bench relied on the case of Avinash Nagra v. Navodaya Vidyalaya Samiti, (1997) 2 SCC 534, wherein it was held that,

“…it is necessary to consider the need for education and the place of the teacher.”

“The citizen, as a duty, should renounce practices derogatory to the dignity of women; value and preserve the rich heritage of our composite culture; protect and improve the natural environment including forests, lakes, rivers and wild life, and to have compass in for living creatures.”

“…the teacher was placed on the pedestal below the parents. The State has taken care of service conditions of the teacher and he owed dual fundamental duties to himself and to the society.”

“quality, competence and character of the teacher are, most significant for the efficiency of the education system as pillar of built democratic institutions and to sustain them in their later years of life”

In the above-cited case, the Court stated the following with respect to “Enquiry”:

“Enquiry is not a panacea but a nail on the coffin. It is self-inspection and correction that is supreme.”

 Thus, in the present petition, the Court in view of the above stated that the order of termination of the Principal is proper and no error or irregularity with the same is to be found. [D. Ganesan v. Dharmapuri District Coop. Sugar Mills Polytechnic, 2019 SCC OnLine Mad 9942, decided on 11-11-2019]

Case BriefsHigh Courts

Rajasthan High Court: The Bench of Inderjeet Singh, J., allowed a writ petition made for reinstating the petitioners with continuity of service on the ground that the termination order was illegal.

The Court solely relied on the case of Pragati v. State of Rajasthan, SBCWP No. 234/2019 which had similar facts, wherein, the petitioners were working on the post of Sweeper having been appointed after being selected through lottery system. Their services were terminated without giving them any notice on the ground that they were appointed on the post of different category. The advertisement did not bifurcate posts between SC/ST candidates and there is no procedure to identify as to who were appointed against SC post and who were appointed against ST post. It was established that fault had occurred at the level of the Municipal Corporation, but as far as the posts were concerned, they were lying with the corporation. It was argued that the work of Sweeper is common and there is no such identifiable mark to recognize whether an individual Sweeper was appointed against SC/ST post. In absence of any candidate of ST Category, the appointments for the post of Sweeper could not have been left vacant. It was argued that for the fault of the respondents, petitioners could not be deprived of their right to continue in employment. Further, principles of natural justice were also not followed and no opportunity of hearing was provided to the petitioners

The Court, accordingly, held the order to be illegal and unjustified and the same was quashed and set aside with directions to the respondents to reinstate the petitioner with continuity of service. [Barkha Devi v. State Of Rajasthan, 2019 SCC OnLine Raj 274, Order dated 01-03-2019]

Case BriefsHigh Courts

Allahabad High Court: A Single-Judge Bench comprising of Hon’ble Siddharth, J. quashed the impugned termination order against the petitioner.

As per the facts of the case, the petitioner was alleged to have defalcated a sum of Rs. 26, 40,937.93 and based on the preliminary enquiry, he was found guilty of the stated charge. Two subsequent FIRs under Sections 3 and 7 of the Essential Commodities Act and under Section 419 IPC were filed against the petitioner. The petitioner was subsequently suspended from service.

Respondents have filed that the petitioner embezzled a huge amount for which he was asked for an explanation. Further, the petitioner was sent a notice in regard to no explanation from his side. An enquiry report based on the records found the petitioner guilty of defalcation of more than Rs. 26 lakhs. The petitioner was issued a letter in which it was stated that his services are governed by Model Service Regulations for the employees of U.P Consumer Cooperative Store. Petitioner was also granted personal hearing and the disciplinary proceedings were conducted in accordance with the rules.

Further, it has been argued that the petitioner was not afforded any opportunity of defending his case which was in violation of Regulation 77(i)(a) of the Regulations under which he was governed. Secondly, before passing of the termination order approval from the board of directors was not taken which was a violation of Regulation 76(b) of the above-stated regulations. Thirdly, he was not granted personal hearing and finally the impugned termination order was passed.

Upon perusal of Regulation 77 it was found that the entire disciplinary enquiry was against the said regulation and also against the principles of natural justice. Therefore, it was held by the Court that, the disciplinary proceedings against the petitioner were absolutely illegal and against the express provisions of Regulation 77 and further no material was brought on record regarding the status of criminal cases. The impugned termination order against the petitioner was quashed. [Dhodha Singh v. State of U.P, 2018 SCC OnLine All 448, delivered on 24-04-2018]