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1998 DIGILAW 74 (ORI)

SAROJ KUMAR DEHURI v. S. N. CORPORATION LTD.

1998-02-17

R.K.DASH, SUSANTA CHATTERJI

body1998
JUDGMENT : Susanta Chatterji, J. - The writ petitioner challenges the order of his termination from service made by opposite party No. 3, the Managing Director, S.N. Corporation Limited, a joint sector subsidiary unit of the Industrial Development Corporation of Orissa Limited (for short 'IDCOL'), which is a Government of Orissa Undertaking. The Chairman of IDCOL is the ex-officio Chairman of the Corporation. The opposite party-Corporation is directly managed under the control of IDCOL. The Corporation has set up a factory at Dhenkanal which manufactures high tensile fasteners . The petitioner had been appointed in the Corporation as an Accountant by order dated July 9, 1982 of the Managing Director and since the date of his joining the Corporation he had been discharging his duties on successful completion of the period of probation. Subsequently he had been designated as Accountant-B and then as Chief Accountant-C. He had also been placed as Chief Accountant- A. The petitioner was then promoted to the post of Deputy Manager (Accounts) on and from December 1, 1990. 2. It is contended that without assigning any reason, opposite party No. 3 arbitrarily terminated the service of the petitioner with effect from April 16, 1992, as per Annexure-15 to the writ application. It is stated that during his long tenure of service the petitioner had never been called upon to show cause for any laches or default, nor was he even warned or punished for any misconduct during his employment. Rather being satisfied with his performance, the management of the Corporation had promoted the petitioner to various higher posts from time to time. It is placed on record that if the post of Deputy Manager (Accounts) was abolished or the petitioner was found unsuitable, opposite party No. 3 in all fairness would have reverted the petitioner to his lower post or if any misconduct was found then the petitioner could have been proceeded against departmentally. It is submitted that the order of termination of his service was purported to be made as per Clause 5(ii) of the appointment letter of the petitioner as Accountant. The said clause has been quoted in the writ petition which indicates that on confirmation, notwithstanding anything stated in the contract of employment the service of the petitioner was terminable on three months' notice or pay in lieu thereof on either side. The said clause has been quoted in the writ petition which indicates that on confirmation, notwithstanding anything stated in the contract of employment the service of the petitioner was terminable on three months' notice or pay in lieu thereof on either side. Stating all these facts, the petitioner has prayed for the following reliefs : ".....to issue Rule Nisi calling upon the opposite parties to show cause as to why the orders contained hi Annexure-15 shall not be quashed; And why the Clause 5(ii) in the appointment letter (Annexure-1) shall not be declared as against the public policy, contrary to general law of contract and unconstitutional; And why the petitioner shall not be reinstated in service with all consequential service and financial benefits; And if the opposite parties fail to show cause or show insufficient cause the said Rule may please be made absolute; And issue any other appropriate writ(s)/or-der(s)/direction(s) as this Hon'ble Court deems fit and proper." 3. A comprehensive counter-affidavit has been filed by the opposite parties being sworn by the Deputy General Manager (P. & A.) of S.N. Corporation Limited, opposite party No. 1. Preliminary point has been raised that S.N. Corporation is not a State within the meaning of Article 12 of the Constitution of India and not amenable to writ jurisdiction. The impugned order of termination being not punitive in form or essence and being a product of expediency in the organisation's interest and the severance of relationship having been founded strictly upon the contractual terms and being a discharge simpliciter, neither the requirements of natural justice, nor fair play can be invoked for the same. 4. It is highlighted that the shares held by IPICOL were eventually and duly transferred in March, 1989 to IDCOL to facilitate further financing, better administration and growth amongst other reasons. Thereafter, further finances for the said company have been contributed by lead Banks such as UCO Bank, Canara Bank, IDBI and IFCI. The Board of Directors of the company thus primarily represented by IDCOL and Banks and financing institutions has now full control over the affairs of the company. The Government does not have any say in the matter, far from having a deep and pervasive control. The Board of Directors of the company thus primarily represented by IDCOL and Banks and financing institutions has now full control over the affairs of the company. The Government does not have any say in the matter, far from having a deep and pervasive control. It is stated in the counter affidavit that in fact the petitioner himself is the author of his own misdeed, misuse of his position, sabotaging the trust and confidence reposed on him and he cannot plead ignorance. The following specific material which came to the notice of the management and were considered as detrimental to the interest of the management and absolutely not befitting the position of Deputy Manager (Accounts), the highest post in the Accounts side of the company, justify the impugned action of termination as per the terms of appointment of the petitioner. (i) It is stated that on April 16, 1992 the Chief Security Officer reported to the Managing Director that the petitioner had left his duty spot and came to the factory gate on being called by Sri P.K. Chand, the then Sr.Deputy Manager 1 (Marketing) at about 10.30 a.m. and the petitioner read out a publication in the Prajatantra dated April 16, 1992 in the presence of several workers at the gate which publication made several allegations against the company. A copy of 2 the said report of the Chief Security Officer has been filed as Annexure-A/1 to the counter affidavit of the opposite parties. (ii) The aforesaid publication in Prajatantra filed as Annexure- B/1 to the counter affidavit indicates that the petitioner along with the then Sr.Dy.Manager (Marketing) Sri P.K.Chand, had made a number of serious and blasphemous allegations against the management before the Chief Minister of the State and in particular hurled various accusations against the Managing Director. (iii) Similar allegations against the management at the instance of the petitioner and the said Sri P.K.Chand had also been given for publication in the 'Sun Times' dated April 18, 1982 as per Annexure-C/1 to the counter affidavit. (iv) On April 20, 1992 the Dy. (iii) Similar allegations against the management at the instance of the petitioner and the said Sri P.K.Chand had also been given for publication in the 'Sun Times' dated April 18, 1982 as per Annexure-C/1 to the counter affidavit. (iv) On April 20, 1992 the Dy. General Manager (P.& A.) of the Company reported confidentially to the Managing Director of the company about the petitioner along with Sri P.K.Chand, Sr.Dy.Manager (Marketing) having got published in Prajatantra, Sun Times and Sambad various allegations against the company's management and they had also published on April 10, 1992 An appeal to save S.N.Cor-poration Ltd.' being addressed to the Chief Minister wherein the petitioner had himself signed as the author of the appeal. A copy of the said appeal dated April 10, 1992 is filed as An-nexure-D/1 and the confidential note dated April 20, 1992 of the Dy.General Manager (P. & A.) is filed as Annexure E/1 to the counter affidavit. (v) On April 24, 1992, the Dy. General Manager (P. & A.) as desired by the Managing Director, placed the files of the petitioner as also of Sri P.K.Chand along with the various reports received in respect of the activities of the said two persons. He also reported therein that the petitioner and the other officer took very active part and involvement in the strike and Gherao mads by the workers. A copy of the relevant note sheet dated April 24, \ 992 has been filed as Annexure-F/1 to the counter affidavit. (vi) The publication of April 16, 1992 in Prajatantra as contained in Annexure-B/1 was encountered by a publication made on behalf of the company in the Prajatantra dated April 28, 1992 and the same has been filed as Annexure-G/1 to the counter affidavit. (vii) The situation that had developed due to various sabotaging and fissiparous activities of the petitioner and another officer in collusion with some union members and outsiders was discussed by the senior officers of the Company on May 2, 1992 and concern was expressed by them unanimously, in particular regarding the activities of the petitioner and Sri P.K.Chand, Sr.Dy.Manager (Marketing). The same was placed before the Managing Director of the Company. Copy of the minutes of discussion held on May 2, 1992 is Annexure-H/1 to the counter affidavit. (viii) On May 2, 1992, the Dy. The same was placed before the Managing Director of the Company. Copy of the minutes of discussion held on May 2, 1992 is Annexure-H/1 to the counter affidavit. (viii) On May 2, 1992, the Dy. General Manager (P. & A.) had put up a note before the Managing Director indicating that consensus had been reached by the senior officers of the management about the detrimental activities of the petitioner and Sri Chand and also about certain reports against Sri Chand about his anti-management activities and deep association of the petitioner with Sri Chand. The Managing Director, on perusal of all materials on record and on consideration of the views of the senior officers of the company expressed in the minutes dated May 2, 1992 came to the conclusion that the management could hardly repose confidence on the petitioner as also on Sri Chand, both of whom had been occupying senior positions in the Company. Their activities were considered to be highly prejudicial to the Company's interest. 5. It is stated that in view of all these, the Managing Director concluded in good faith that retention of the petitioner and Sri Chand in the service of the Company would not be in the interest of the Company and accordingly on May 5, 1992 ordered termination of service of the petitioner and Sri Chand and directed the Deputy General Manager (P. & A.) to draft out the termination order for his approval and signature. The note sheet containing the note dated May 2, 1992 of the Dy. General Manager (P.& A.) and the order of the Managing Director dated May 5, 1992 are made Annexure I/1 to the counter affidavit. It is stated that in view of the facts disclosed in the counter affidavit, termination of the service of the petitioner was the result of overall assessment of the activities of the petitioner and consideration of his desirability to continue in employment and the order has been made bona fide. 6. It is also placed on record that termination of the service of the petitioner was simpliciter. It was lawful and not violative of the provisions of the Constitution. 7. We have heard Mr. A.K.Mohapatra for the writ petitioner and Mr.S.B.Nanda for the opposite parties at length. We have gone through the pleadings of the parties. 6. It is also placed on record that termination of the service of the petitioner was simpliciter. It was lawful and not violative of the provisions of the Constitution. 7. We have heard Mr. A.K.Mohapatra for the writ petitioner and Mr.S.B.Nanda for the opposite parties at length. We have gone through the pleadings of the parties. So far as preliminary point raised by the opposite parties is concerned, we find from the materials on record that functioning of the opposite party Corporation is controlled by the State authorities and it is an instrumentality of the State being very much amenable to writ jurisdiction. The stand taken by the opposite parties to avoid adjudication by Writ Court appears to be purposive and mala fide. 8. The next stand taken by the opposite parties to dispense with the service of the petitioner giving stigma is not permissible in law without holding an enquiry into the allegations and giving opportunity of hearing to the petitioner. This is deliberately in violation of the principles of nature justice. 9. The stand taken as to referring the terms of the contract to avoid any enquiry is also contrary to law. Attention of the Court has been drawn to the decisions reported in Central Inland Water Transport Corporation Limited and Another Vs. Brojo Nath Ganguly and Another, and AIR 1990 SC 1033 (Mahavir Auto Stores v. Indian Oil Corporation). It is clearly indicated that employment contract cannot be imposed by taking away the fundamental rights of an employee. The opposite parties cannot avoid compliance with the minimum requirements. The decision referred to in Sudhir Vishnu Panvalkar Vs. Bank of India, has also no application to the present case. 10. Precisely, the opposite party-Corporation being amenable to writ jurisdiction and the petitioner's service having admittedly been terminated without affording any opportunity to him to defend and making serious allegations against the conduct of the petitioner to terminate his job violating the principles of natural justice is not permissible in law. The acts done and/or caused to have been done appear to be thoroughly arbitrary, whimsical, capricious and mala fide. There is no bar and/or impediment to 5 grant relief to the petitioner as the impugned order of termination is bad in law and the same cannot be sustained. 11. The acts done and/or caused to have been done appear to be thoroughly arbitrary, whimsical, capricious and mala fide. There is no bar and/or impediment to 5 grant relief to the petitioner as the impugned order of termination is bad in law and the same cannot be sustained. 11. For the foregoing reasons, we allow the writ application and quash the impugned order of termination of service of the petitioner. The petitioner will be entitled to all consequential financial benefits pursuant to the order of quashing of his termination. We direct that such 5 benefits should be released in favour of the petitioner within two months of issue of writ. We make no order as to costs. R.K. Dash, J. 12. I agree. Final Result : Allowed