Uttam Chand Jain v. State Of Bihar — 1994 DIGILAW 381 (PAT)

Judgment A.K.Ganguly, J. 1. In this writ petition, the challenge initially was directed against the withholding of the increment of pay of the petitioner and also against the treatment meted out to him by respondent No. 1 by not treating him in regular service. Subsequently, when the writ petition was pending, an order dated March 2, 1994 was passed by the respondent No. 5 as Managing Director of the Bihar State Pharmaceutical & Chemical Development Corporation Limited (hereinafter referred to as the B.S.RC.D.C) and Chairman-cum-Managing Director of Bihar Insecticides Limited (hereinafter called B.I.L.) whereby it was alleged that the contract service of the petitioner shall be deemed to have come to an end with effect from the forenoon of January 25, 1994. The said order dated March 2, 1994 virtually amounts to dismissal of the petitioner from service with retrospective effect. The legality of the said order was also challenged in the writ petition by amending it and the said amendment was allowed by this Court by an order dated May 5, 1994, 2. Today before this Court the following questions fall for- consideration : (i) Whether the appointment of the petitioner was made on the basis of contract? (ii) Whether the appointment, even though not made on the basis of a contract, could subsequently be converted into a contractual one by the unilateral action of the employer? (iii) Whether the order dated March 2, 1994 is valid in the eye of law? 3. The facts relating to the appointment of the petitioner, briefly summarised, are as follows:- Pursuant to an advertisement published on October 5, 1985 in the daily Hindustan Times by the Bureau of Public Enterprise (hereinafter called B.P.E.) under the caption Public Appointment, applications were invited from suitable candidates for the post of Works Manager in B.P.E. The said advertisement stipulated that the post shall carry a pay in the scale of Rs. 1900-75-2500 besides which provident fund benefits, medical facilities, C.L.A., House Rent Allowance and other benefits will be available according to the Corporation Rules. In the said advertisement there is no whisper that the appointment will be made on contractual basis. Pursuant to the said advertisement, the petitioner applied enclosing his bio data and he received a letter of interview and was interviewed on February 6, 1986 by the Selection Committee of B.P.E. constituted for the sole purpose. In the said advertisement there is no whisper that the appointment will be made on contractual basis. Pursuant to the said advertisement, the petitioner applied enclosing his bio data and he received a letter of interview and was interviewed on February 6, 1986 by the Selection Committee of B.P.E. constituted for the sole purpose. After conclusion of the interview the Joint Director, B.P.E. by his letter dated January 7, 1986 sent recommendation in favour of the appointment of the petitioner. Thereafter the petitioner was appointed as Works Manager by letter of appointment, dated January 21, 1986. In the said letter of appointment, the petitioner was appointed on the following terms and conditions which are set out below: (i) You will be required to work as Works Manager at the Purnea Unit of Bihar Insecticides Limited. (ii) Besides pay, you will be entitled to D.A. and other allowances as per the Companys rules. (iii) You shall be on probation for a period of 2 (two) years from the date of your joining on the post. During this period your services may be terminated at the discretion of the management on one month s notice or pay in lieu thereof. (iv) You will be governed for all other matters by the Companys rules and regulations framed from time to time. (v) This appointment will be purely on temporary basis. 4. A perusal of the aforesaid terms and conditions will show that there is no whisper of any contractual appointment of the petitioner on the post in question, on the other hand, it was made clear that the petitioner will be appointed on probation for a period of two years from the date of his joining and during the said period of probation, the services of the petitioner may be terminated at the discretion of the management on one months notice or pay in lieu thereof. Thereafter without disclosing any reason, the increment of the petitioner was not released after 1987 despite repeated representation of the petitioner. He was never communicated with any adverse remarks. It may be stated that the first increment which was due on January 25, 1987 was released by letter dated March 2, 1987. In the said letter dated March 2, 1987 releasing increment also there is no whisper of contractual appointment. He was never communicated with any adverse remarks. It may be stated that the first increment which was due on January 25, 1987 was released by letter dated March 2, 1987. In the said letter dated March 2, 1987 releasing increment also there is no whisper of contractual appointment. The petitioner has subsequently come to know that after his appointment letter dated January 21, 1986 was issued, a letter dated March 24, 1986 (Annexure-6) was issued by the Deputy Secretary to the Government of Bihar, Department of Industries, Patna to the Managing Director of respondent No. 3 to the effect that he has been directed to say that the State Government has decided that the appointment of the petitioner will be made on the basis of contract for three years and if the petitioners work is found satisfactory, the period can be extended and if the work will be found un-satisfactory, he may be removed from service even before the period of three years after giving him one months notice. To that letter, a reply was also given by the Managing Director of respondent No. 3 to the effect that there is no provision for approval of the appointment of the petitioner under Articles of Association of B.I.L. as it is there in the Articles of Association of B.S.P.C.D.C. It was also stated by the Managing Director that the selection on the post in question was made by B.P.E. and, therefore, it was requested that a copy of the advertisement may be obtained from the office of the B.P.E. It was also stated in the letter that it is not desirable to incorporate the conditions relating to contractual appointment as mentioned in the departmental letter No. 4290 dated March 24, 1986 after issuance of the appointment letter. Thereafter two letters have been written, one dated April 5, 1989 and another dated April 10, 1991 by the Managing Director of B.I.L. to the Special Secretary, Department of Industries, Bihar, Patna and the Industrial Development Commissioner, Bihar, Patna respectively stating therein that the petitioner is regularly requesting for increment and, therefore, immediate steps may be taken for the release of the increment along with other connected matters and in letter dated April 10, 1991 it was specifically stated that the services of the petitioner is needed for the Company and as such his services may be extended for three years more on contract basis and a prayer was made to release his due increment as requested. 5. Now it may be also mentioned in this connection that after the petitioner has come before this Court and filed the instant writ petition, an order was passed for his transfer and the petitioner has also challenged the said order by filing amendment petition in the writ petition. Thereafter during the pendency of the writ petition, the aforesaid order of termination of the services of the petitioner was passed which the petitioner seeks to challenge in this writ petition. 6. In this factual background all the above issues are taken up for consideration together for the sake of convenience of disposal. 7. The impugned order of termination of the petitioner was passed on two grounds, namely, (i) that the petitioner was appointed on contractual basis from the date of his joining as Works Manager and (ii) that his performance as Works Manager in B.I.L. Purnea was not satisfactory. Some allegations were made against him. It was also stated in the impugned order that the period of three years expired on January 24, 1989 but he was allowed to continue and the State Government was requested for extending his period of contract formally till January 24, 1994 by letter dated January 17, 1994 of the B.S.P.C.D.C. It is further alleged that the services of the petitioner would be deemed to have ended automatically after January 24, 1994. 8. Learned counsel for the Respondent Corporation has fairly stated before the Court that he is not supporting the part of the impugned order which records certain allegations in respect of the petitioners performance of duty inasmuch as according to him no enquiry had taken place allowing the petitioner to rebut the allegations against him. 8. Learned counsel for the Respondent Corporation has fairly stated before the Court that he is not supporting the part of the impugned order which records certain allegations in respect of the petitioners performance of duty inasmuch as according to him no enquiry had taken place allowing the petitioner to rebut the allegations against him. As such the impugned order in so far as it proceeds on the allegation against the petitioner is held by this Court to be bad even on the submission of the learned counsel for the respondents. In fact, that part of the impugned order cannot be legally sustained as has been fairly conceded by the respondents counsel. 9. Learned counsel for the respondents has submitted that the appointment of the petitioner is bad as it was made by an incompetent authority, namely, respondent No. 4 which is a subsidiary of respondent No. 3. The appointment of the petitioner according to the respondents Counsel should be made by respondent No. 3 and the approval of the State Government must be obtained. In the instant case as the approval of the State Government has not been obtained and the appointment letter has been issued by the Managing Director of subsidiary company, namely, respondent No. 4, the said appointment is illegal. In this connection I have perused the counter-affidavit filed on behalf of respondent Nos. 3 to 5 by Umesh Kumar Sinha in the capacity of both the Chairman-cum-Managing Director of B.I.L. and also as the Managing Director of B.S.P.C.D.C. In that affidavit it has been said that the petitioner was employed for the services of B.I.L. and it is the B.I.L. which is the employer of the writ petitioner and not the B.S.P.C.D.C. The memorandum of Articles of Association of those two Companies have also been filed before the Court. In the memorandum of Articles of Association of B.I.L. There is no requirement of approval of the State Government in respect of the appointment given to the petitioner. Therefore, the argument that the appointment of the petitioner on the ground of the alleged non-approval of the State Government is not valid prima facie, is not tenable. 10. Apart from this from the impugned order it does not appear that the authority concerned has decided to dismiss the petitioner on the ground of non-grant of approval of the State Government to his appointment. 10. Apart from this from the impugned order it does not appear that the authority concerned has decided to dismiss the petitioner on the ground of non-grant of approval of the State Government to his appointment. The impugned order, as noted earlier, rests on completely different grounds. 11. It is well settled that when an order is passed by a public authority, the said order must stand or fall on the grounds recited in it. The said order cannot be subsequently improved upon or supplemented to by fresh reasons in the form of affidavit. This proposition is well settled having been laid down in the case of Commissioner of Police, Bombay V/s. Gordhandas Bhanji reported in AIR 1952 S.C. page 16 and subsequently affirmed by a Constitution Bench judgment of the Supreme Court in the case of Mohinder Singh Gill V/s. The Chief Election Commissioner reported in AIR 1978 SC page 851. In view of the aforesaid reasons, I am unable to sustain the impugned order of termination on a ground which is not disclosed in the order itself. 12. It may be kept in mind that in the instant case, the petitioners appointment was made on the basis of the advertisement and selection by B.P.E. Bihar, which is virtually a wing of the State Government. After the appointment of a person by B.P.E., Bihar, the State Government cannot take a stand that it has not approved the appointment of the person concerned. Therefore, this ground of alleged non-approval of the petitioners appointment by the State Government is also otherwise un-founded and un-tenable. 13. The other ground on which the petitioners appointment has been cancelled, as disclosed in the impugned order, is that the appointment is on a contractual basis and such contract having come to an end, the said appointment would be deemed to have been terminated. The said stand as taken in the impugned order also is not sustainable in view of the fact that the appointment of the petitioner was made by B.P.E. authority under the caption Public Appointment. Neither the advertisement nor the order of appointment contains any whisper about the appointment being given on contractual basis. On the other hand, it has been stated that the person selected will be governed by the rules of the Corporation and will be appointed on probation for a period of two years. Neither the advertisement nor the order of appointment contains any whisper about the appointment being given on contractual basis. On the other hand, it has been stated that the person selected will be governed by the rules of the Corporation and will be appointed on probation for a period of two years. Appointment on probation has nothing to do with the appointment on contract basis. In fact no contract was either incorporated in the petitioners letter of appointment nor any contractual term was offered to the petitioner nor do I find any contractual term being signed by the petitioner anywhere. Therefore, the respondent authorities cannot unilaterally change the basis of appointment by changing a Public Appointment into one of contract. 14. It is common ground that as instrumentalities of the government both the respondent Nos. 3 and 4 are State within the meaning of Article 12 of the Constitution of India. In the decision of the Supreme Court in the case of Delhi Transport Corporation V/s. D.T.C. Mazdoor Congress reported in (1991-I-LLJ-395), the Constitution Bench by amajority judgment held that the employees of statutory corporation or instrumentality of the State enjoy a statutory status and the principles of contract of master and servant are not applicable. The relevant observation in the majority judgment of the Supreme Court at page 472 is set out below: "An unlawful act is an interference with status. This view was followed in Sirsi Municipality V/s. Cecelia Kom Francis Tellis, (1973-I-LLJ-226), Beg. J. (as he than was) held that the principles applicable to the relation of a Private Master and servant unregulated by statute, could not apply to the cases of a public statutory body exercising powers of punishment fettered or limited by statute and relevant rules of procedure. This Court in a recent decision extended all the benefits of pay scales to all the Central Government Corporate Sector employees. It is, thus, I hold that the employees of the Corporations, statutory authority or instrumentality under Article 12 have statutory status as a member of its employees. 15. From the ratio of the said judgment is made clear that in employment in a public undertaking or public Corporation, the matter is of status and is not one of contract, therefore the respondents cannot, and that too unilaterally, change a public employment into one of contract between a master and servant. 15. From the ratio of the said judgment is made clear that in employment in a public undertaking or public Corporation, the matter is of status and is not one of contract, therefore the respondents cannot, and that too unilaterally, change a public employment into one of contract between a master and servant. Therefore, the stand of the State Government and the respondent Corporation that the petitioners services are contractual is invalid both legally and factually. In that view of the matter, both the limbs on which the impugned order has been passed are not sustainable. 16. In this connection I have noted that the learned counsel for the petitioner has also made certain allegations of mala fide against the author of the impugned order. This Court feels that it is not necessary to go into those allegations inasmuch as in view of the aforesaid discussion, the order is not sustainable otherwise. 17. I, therefore, set aside the impugned order and declare that the petitioner has been validly appointed as the works Manager of the B.I.L. and is entitled to continue as such. It is further made clear that he is entitled to be treated as a regularly appointed employee and he cannot be treated as having been appointed on contractual basis. 18. The respondents authorities are hereby directed to release the annual increment of the petitioner and all other service benefits to which he is entitled to. The petitioner is entitled to an order of re-instatement which is hereby passed in the service of the B.I.L. He is also entitled to get entire back wages and due salary which will be available to him but for the impugned order dated March 2, 1994. I direct the authorities concerned to reinstate the petitioner fortwith and pay his dues of salary and all other emoluments within a period of six weeks from today apart from paying his usual salary and other allowances. 19. It may be also noted in this connection that the period of probation of the petitioner has long expired and the same has not been extended. In that view of the matter, this Court, taking into consideration the decision of the Supreme Court in the case of M.K. Agarwal V/s. Gurgaon Gramin Bank and Ors. 19. It may be also noted in this connection that the period of probation of the petitioner has long expired and the same has not been extended. In that view of the matter, this Court, taking into consideration the decision of the Supreme Court in the case of M.K. Agarwal V/s. Gurgaon Gramin Bank and Ors. reported in AIR 1988 SC page 286, is of the view that the petitioner must be treated to have been impliedly confirmed in his service. 20. This writ petition is, thus, allowed. There will be no order as to cost.