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2002 DIGILAW 1572 (ALL)

Parvesh Kumar Gupta v. Life Insurance Corporation Of India Meerut

2002-10-26

G.P.MATHUR, N.K.MEHROTRA

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JUDGMENT : - G.P. Mathur, J. The petitioner Parvesh Kumar Gupta was engaged as an apprentice Development Officer with effect from 6-10-1986 for a period of one year and he was given training in Divisional Office Meerut and in a Rural Branch Office. An appointment order was issued appointing the petitioner as Development Officer on probation for a period of one year and the period of probation was to commence from 1-9-1987. The period of probation was further extended by the order dated 28-12-1988 and fresh targets were fixed which had to be achieved by him during the extended period of probation. The services of the petitioner were terminated on 7-10-1989 as he failed to fulfil the conditions mentioned in his letter of appointment dated 18-8-1987 and subsequent letter dated 28-12-1988. Feeling aggrieved, the petitioner raised an industrial dispute on 13-3-1990 and a case was registered before the Central Government, Industrial Tribunal, Deharadun, which was dismissed on 5-8-1997. He preferred Civil Misc. Writ Petition No. 39360 of 1997 challenging the order of termination which too was dismissed on 24-11- 1997 on the ground of alternative remedy. The petitioner then preferred an appeal on 8-12-1997 which was dismissed by the Zonal Manager, Kanpur on 26-3-1998. Thereafter he filed the present writ petition challenging the order dated 7-10-1989 terminating his service and the appellate order dated 26-3-1998. 2. THE only submission made by the learned Counsel for the petitioner is that the petitioner was appointed on probation for a period of one year on 1-9-1987 and under the rules, the period of probation could be extended for one more year and thus the extended period of probation expired on 1-9-1989 whereafter he acquired the status of a confirmed employee. THE services of the petitioner have been terminated subsequent thereto on 7-10-1989 by passing a simple order of termination which in law was not possible. Learned Counsel has submitted that once the petitioner became a confirmed employee, his services could only be terminated on establishment of some charge after holding a proper departmental enquiry wherein an opportunity of hearing was afforded to him. Neither any show cause notice was given to the petitioner nor he was given any opportunity to defend himself and in these circumstances, the impugned termination order dated 7-10-1989 is clearly illegal. Neither any show cause notice was given to the petitioner nor he was given any opportunity to defend himself and in these circumstances, the impugned termination order dated 7-10-1989 is clearly illegal. Learned Counsel for the respondents has submitted that no order of confirmation was passed in favour of the petitioner and as such he did not acquire the status of a confirmed employees and he continued to remain a probationer. He has further submitted that the mere fact that the extended period of probation expired on 1-9-1989 would not mean that the petitioner had acquired status of a confirmed employee and as such in terms of his appointment order, his services could validly be terminated. Learned Counsel has also submitted that it was not necessary to hold any departmental enquiry and to give any opportunity of hearing to the petitioner and his services have not been terminated on the basis of any misconduct but the same have been terminated in terms of the appointment order and the order by which the period of probation was extended and since it was a termination of service during the period of probation, in law, there was no requirement of giving him any notice. The first question which requires consideration is whether an employee acquires status of a confirmed employee merely on the ground that the period of probation on which he had been appointed has expired. The question was considered by a Full Bench of this Court in Umesh Chand Bhilwar v. State of U. P. and others, 1999 (1) LBESR 195 (All) (FB) : 1999 (1) UPLBEC 27 , where one of us (G. P. Mathur, J.) speaking for majority held as under: (6) Under Service Jurisprudence, it is settled principle that if a person appointed on probation for a specific period is allowed to continue in service after expiry of period of probation, he does not acquire that status of a confirmed employee unless a specific order to that effect is passed. The question has been examined in considerable detail by a Constitution Bench in State of Punjab v. Dharm Singh, AIR 1968 SC 1210 , where after noticing several earlier decisions, it was held as follows in para 3 of the reports: "this Court has consistently held that when a first appointment or promotion is made on probation for a specific period and the employee is allowed to continue in the post after the expiry of the period without any specific order of confirmation he should be deemed to continue in his post as a probationer only, in the absence of any indication to the contrary in the original order of appointment or promotion or the service rules. In such a case, an express order of confirmation is necessary to give the employee a substantive right to the post, and from the mere fact that he is allowed to continue in the post after the expiry of the specified period of probation it is not possible to hold that he should be deemed to have been confirmed. " This has been reiterated in State of Maharashtra v. V. R. Soboji Mahraj, AIR 1980 SC 42 ; Dhanji Bhai v. State of Gujarat, AIR 1986 SC 603 and Kedar Nath, Bahal v. State of Punjab, AIR 1972 SC 873 . In Satya Narain Athiya v. High Court of M. P. , AIR 1996 SC 750 , the services of the appellant who had been appointed on probation on 16-2-1980 were terminated on 5-8-1983. The service rule provided appointment on probation for a period of two years which could be extended for a further period not exceeding two years. While considering the question whether the appellant will be deemed to have been confirmed, it was held as follows: ". . . . . It is seen that though there is no order of extension, it must be deemed that he was continued in probation for an extended period of two years. On completion of two years he must not be deemed to be confirmed automatically. There is no order of confirmation. Until the order is passed, he must be deemed to continue on probation. "Therefore, the law is well settled that a probationer does not acquire the status of confirmed employee merely because he has completed the period of probation. On completion of two years he must not be deemed to be confirmed automatically. There is no order of confirmation. Until the order is passed, he must be deemed to continue on probation. "Therefore, the law is well settled that a probationer does not acquire the status of confirmed employee merely because he has completed the period of probation. The function of confirmation is an exercise of judgment by the confirming authority on the over all suitability of the employee for this permanent absorption in service and until that is done he continues to be on probation. An employee does not enjoy any greater right to confirmation if he is allowed to continue beyond the initial period of probation. " 3. THE next question which arises for consideration is whether in the facts and circumstances of the case, the petitioner can be deemed to have been confirmed on account of the fact that the extended period of probation had also expired on 1-9-1989. Clause 1 of Regulation 14 of Section 2 of Life Insurance Corporation of India (Staff) Regulations, 1960 (hereinafter referred to as the Regulations) provides that the persons appointed to posts belonging to Classes I and II shall, on the first appointment in the Corporation's services, be required to be on probation for a period of one year from the date of appointment. Clause 3 of the same Regulation lays down that subject to the provisions of any law for the time being in force, the appointing authority may, at its discretion, dispense with, reduce or extend the probationary period, but in no case shall the total period of probation exceed two years in the case of employees belonging to Classes I and II. It is necessary here to take note of the terms and conditions contained in the appointment order dated 18-8-1987 and the relevant portion thereof are being reproduced below: "with reference to your application for the post of a Development Officer in the Corporation and the subsequent training you had with us as an Appr. Development Officer, we hereby offer you appointment as a Prob. Dev. Officer on the following terms and conditions: xxx xxx xxx xxx xxx 2. Development Officer, we hereby offer you appointment as a Prob. Dev. Officer on the following terms and conditions: xxx xxx xxx xxx xxx 2. Probationary Period You shall be on probation initially for a period twelve months from the date of your joining duties as probationer, but the Corporation may, in its sole discretion, extend your probationary period provided that the total probationary period, shall not exceed 24 months counted from the commencement of the probationary appointment. During the probationary period (which includes extended probationary period, if applicable) your shall be liable to be discharged from service of the Corporation without any notice and without any cause assigned including the extended probationary period. xxx xxx xxx xxx xxx 10. Minimum Business (i) During the probationary period, you shall secure, through the agents recruited at your instance, minimum completed life business of Rs. 35 lacs yielding a first year's scheduled premium income of not less than Rs. 1 lac provided, however, that in case the pay and/or allowance admissible to you under Clause I are increased during the period, the minimum business and the premium income which you should secure shall be increased proportionately. (ii) THE minimum business out or in (i) above shall be spread over not less than 150 lives and shall be secured regularly through a net work of dependable agencies. (iii) At least 12 of the agents appointed on your recommendation during the period should have become active and 10 agents should individually have put in during that period the minimum business required of (L. I. C. of India (Agents) Rules, 1972. (iv) If your probationary period is extended, you shall secure during the extended period such business as may be intimated to you. 11. Confirmation and Increments (i) On your satisfactory completing the period of probation and your observance and compliance with all conditions set out in this letter of appointment you will be confirmed in the services of the Corporation in Class II. Your confirmation will depend inter-alia upon the fulfilment of the minimum business guarantee set in para 10 above and upon your record of post-sales service to the Corporation's policy holders and other functions performed by you in the area allowed to you to the satisfaction of the competent authority. " xxx xxx xxx xxx xxx 4. Your confirmation will depend inter-alia upon the fulfilment of the minimum business guarantee set in para 10 above and upon your record of post-sales service to the Corporation's policy holders and other functions performed by you in the area allowed to you to the satisfaction of the competent authority. " xxx xxx xxx xxx xxx 4. IT appears that the appointing authority reviewed the performance of the petitioner and thereafter decided to extend his probationary period from 1-9-1988 to 31-7-1989. This was intimated to him by the communication sent from the Divisional Office on 28-12-1988 and the relevant part is being reproduced below: "ref : Your confirmation The competent authority, on review of your performance for the period from 1-9-1987 to 31-8-1988 has decided to extend your probation from 1-9-1988 to 31-7-1989. Your confirmation termination shall now be considered on the business of your performance during the extended probation period from 1-9- 1988 to 31-7-1989. The target for the extended probationary period has also been modified as under: Lives: 150 Sum Assured: Rs. 40 lacs SFYPT: Rs. 1,10,000/- No. of Newly recruited agents: 15 No. of qualified agents: 10 In case of any hike in your salary, the SFYPT target shall also increase proportionately. " The services of the petitioner were terminated and a communication was sent to him from the Divisional Office on 7-10-1989. The relevant portion thereof is being reproduced below: "reg. : Your termination We have reviewed the performance of your extended probationary period from 1-9-1988 to 31-7-1989 and observe that you have not been able to complete the norms fixed vide your appointment letter dated 18-8-1987 and subsequent letter dated 28-12-1988. Since you have failed to fulfil the conditions as laid down in your appointment letter dated 18-8-1987 and subsequent letter dated 28-12-1988 the competent authority had decided to terminate your services as probationary Dev. Officer with immediate effect. " 5. IT is important to note that the appointment order dated 18-8-1987 issued to the petitioner contained a condition to the effect that on his satisfactory completing the period of probation and his observing compliance with all conditions set out in the letter of appointment, he will be confirmed in the services of the Corporation in Class II. " 5. IT is important to note that the appointment order dated 18-8-1987 issued to the petitioner contained a condition to the effect that on his satisfactory completing the period of probation and his observing compliance with all conditions set out in the letter of appointment, he will be confirmed in the services of the Corporation in Class II. Para 10 of the letter of appointment gave details of the minimum business which the petitioner had to secure through the agents recruited by him during the period of probation. Sub-clause (iv) of para 10 further lays down that if his probationary period is extended, he shall secure during the extended period such business as may be intimated to him. In the communication letter dated 28-12-1988 by which he was informed that the period of probation had been extended from 1-9- 1988 to 31-7-1989 the target for business which the petitioner had to secure during the extended period of probation were also intimated. The order dated 7-10-1989 clearly mentions that the petitioner has not been able to complete the norms fixed in the appointment letter dated 18-8-1987 and subsequent letter dated 28-12-1988. IT was on this account that his services had been terminated. Therefore, the services of the petitioner have been terminated on the ground that he could not secure the prescribed minimum business which was an essential condition for his confirmation in terms of his appointment order. The appointment order clearly shows that the confirmation in service of the petitioner who had been appointed on probation was dependent upon fulfilment of prescribed minimum business during the period of probation. 6. WHEN the Regulations lay down that the persons appointed on posts belonging to Classes I and II shall be initially placed on probation for one year and the appointing authority may in his discretion dispense with, reduce or extend the probationary period but in no case shall the total period of probation exceed two years, it only means that employee's performance regarding his securing prescribed minimum business may be initially observed for a period of one years and this period of observance or test may be extended for a further period of one year but the appointing authority cannot give any further chance to an employee for the observance of his performance regarding securing of the prescribed minimum business beyond the period of two years. The review of the performance has to be confined to a maximum period of two years and if during this period, the employee has failed to achieve the target fixed, no further opportunity can be given and a decision has to be taken whether he should be confirmed in service or his services can be dispensed with. The entire functioning of Life Insurance Corporation of India is business oriented and an employee's performance is to be judged by the nature of the services rendered by him and the business secured by him for the Corporation is the principal factor. The appointment order itself lays emphasis upon the quantum of business, which the petitioner had to secure during the period of probation. By the order dated 28-12-1988, the period of probation was extended from 1-9-1988 to 31-7-1989 which clearly enjoined i.e. confirmation/termination shall now be considered on the basis of his performance during the extended probation period from 1-9-1988 to 31-7-1989 and for this period the target for securing business was also set out. This clearly shows that the confirmation of employee in the Corporation is clearly dependent upon securing a prescribed business within a fixed period and in absence of meeting the business target, he cannot be confirmed. Section 2 of Life Insurance Corporation of India (Staff) Regulations, 1960 which deals with probation cannot be interpreted in abstract. The Regulations have to be interpreted in the light of the appointment order which contains a specific condition regarding fulfilment of prescribed amount of business within the period of probation. The quantum of business was clearly specified both in the initial appointment order dated 18-8-1987 and in the subsequent order dated 28-12-1989 by which the period of probation was extended. The service of a Development Officer in Life Insurance Corporation of India is different from a normal service inasmuch as here the business target can be fixed with precision. In the appointment order, the target was life business of Rs. 35 lacs yielding Ist year Schedule Premium Income of Rs. 1 lac. Similarly in the extended period, the target was insuring 150 lives with sum assured of Rs. 40 lacs and SFYT of Rs. 1,10,000. In the appointment order, the target was life business of Rs. 35 lacs yielding Ist year Schedule Premium Income of Rs. 1 lac. Similarly in the extended period, the target was insuring 150 lives with sum assured of Rs. 40 lacs and SFYT of Rs. 1,10,000. Clearly securing the aforesaid target within the first year of service and in the extended period of probation was an essential condition for getting confirmation in service and the petitioner having failed to achieve the same, he cannot claim that he became a confirmed employee merely because the order of termination of service was passed on 7-10-1989 which was subsequent to extended period of probation which expired on 31-7-1989. The terms and conditions of the appointment order and also the order extending the period of probation clearly show that emphasis is on efficiency and performance and these factors cannot be ignored in interpreting the Regulations. 7. SRI Arjun Singhal learned Counsel for the petitioner has placed reliance on Chief General Manager, State Bank of India v. Bijoy Kumar Misra, 2000 (3) LBESR 764 (SC) : (1997) 7 SCC 550 , in support of his submission that the extended period of probation having expired, the petitioner would be deemed to be a confirmed employee and his services could not be terminated without affording him an opportunity of hearing. We do not think that the ratio of the said case can have any application here. The question relating to deemed confirmation of probationer after expiry of period of probation has been considered thread bare in High Court of M. P. v. Satya Narain Jawahar, 2001 (7) SCC 16. The Court after examining all the earlier decisions on the subject has referred to three types of cases. The present case is akin to third category regarding which it has been said as follows: "the last line of cases is where, though under the rules a maximum period of probation is prescribed, but the same requires a specific act on the part of the employer by issuing an order of confirmation and of passing a test for the purposes of confirmation. In such cases, even if the maximum period of probation has expired and neither an order of confirmation has been passed nor has the person concerned passed the requisite test, he cannot be deemed to have been confirmed merely because the said period has expired. " 8. In such cases, even if the maximum period of probation has expired and neither an order of confirmation has been passed nor has the person concerned passed the requisite test, he cannot be deemed to have been confirmed merely because the said period has expired. " 8. HERE there is no requirement of passing a test for the purpose of confirmation but the requirement is to achieve the prescribed business quota within the period of probation. If the business quota has not been achieved, there cannot be a deemed confirmation merely because the period has expired as both are essential requirements. When by the order dated 28-12-1988 the period of probation of the petitioner was extended from 1- 9-1988 to 31-7-1989, it is obvious that he could fulfil the requirement of securing prescribed business up to twenty-four hours of 31-7-1989. The authorities can review his business performance only after expiry of 31-7-1989 and not before that. The collection of necessary data is bound to take time and therefore, the review of his performance inevitably has to take place sometime after 31-7-1989. It is humanly impossible to review the performance right at twenty-four hours on 31-7-1989 and to pass a termination order at that very moment. Such an exercise can only be done at a later stage. It is, therefore, not possible to hold that the moment extended period of probation was over, the petitioner acquired the status of a confirmed employee and his services could not be terminated by passing a simple order of termination treating him to be a probationer. We are, therefore, of the opinion that the authorities were perfectly justified in passing the impugned termination order and the same does not suffer from any illegality. 9. FOR the reasons mentioned above, there is no merit in this writ petition which is hereby dismissed. Petition dismissed.