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2024 DIGILAW 1378 (AP)

Sumiran Bansal v. Dredging Corporation Of India Ltd.

2024-09-27

K.MANMADHA RAO

body2024
ORDER : (K. Manmadha Rao, J.) : This Writ Petition is filed under Article 226 of the Constitution of India “to call for the records pertaining to the impugned Office Order No.11/2021, dated 19.03.2021 and Office Order No. 12/2021, dated 22.03.2021 issued by the 2nd respondent as bad, illegal, unfair, arbitrary, an action aken for extraneous reasons in a biased and vindictive manner, amounting to victimising the petitioner with malice, without jurisdiction, amounting to non-application of mind, application of power by the competent authority, violative of principles of natural justice and unconstitutional and consequently direct the respondents to continue the petitioner as CFO and CGM (F) with all consequential benefits including declaration of his probation by issuance of Writ of Mandamus and pass such other and further orders”. 2. Heard Mr.J. Sudheer, learned counsel for the petitioner and Mr. G. Arun Showri, learned Central Government Counsel for the respondents. 3. Learned counsel for the petitioner would contend that the respondent organization appointed the petitioner through examination as Chief Financial Officer (CFO). As per the appointment order dated 12.02.2020, the petitioner would be on probation for a period of one year from the date of reporting to duty. The Special Meeting of Board of Directors dated 26.12.2020 found that the petitioner not up to the mark and that he does not deserve to continue further and in order to take a final decision vide order dated 17.02.2021 directed the Four Men Committee to submit report by 23.02.2021 and immediately through office order dated 19.03.2021 issued by the 2nd respondent, the petitioner was relieved from his duties as Chief Financial Officer with immediate effect, without giving fair opportunity of hearing of the petitioner, which is illegal and arbitrary. Hence, the present writ petition came to be filed in questioning the inaction of the respondents. 4. Per contra, the respondents filed counter affidavit denying all material averments made in the writ affidavit and mainly contended that the respondents have not denied the averments of the petitioner that his confidential reports are ‘Excellent’. The Audit Committee Members have given adverse report against the petitioner. The respondent organization took a decision to discontinue the services of the petitioner on the basis of his poor performance during the employment, but not on the basis of his performance in his previous employment. The Audit Committee Members have given adverse report against the petitioner. The respondent organization took a decision to discontinue the services of the petitioner on the basis of his poor performance during the employment, but not on the basis of his performance in his previous employment. The petitioner was relief of his duties as Chief Financial Officer with effect from 19.03.2021 (FN) vide Office Order No.11/2021, dated 19.03.2021. The petitioner has miserably failed to explain or justify the major issues raised by various independent auditors or could establish any standard accounting standards resulting in major reversal of entries to the accounts as submitted to the Audit Committee on the proposed qualifications in the draft audit report submitted by the statutory auditors. In the case of the petitioner, the petitioner was under probation with effect from 23.03.2020, the respondent corporation is well within its rights to discharge the petitioner from its services without notice and without assigning any reason in terms of Para-2 of the offer of appointment and Rule 2.05(b) of the Service Rules of the Corporation. The petitioner is not a civil servant or a public officer and the respondent is not a government depart or government company. Therefore question of unconstitutionality of the impugned orders does not arise. Hence, requested to dismiss the writ petition. 5. Perused the record. 6. During learned counsel for the petitioner reiterated the contents urged in the writ affidavit and relied on a decision of High Court of Madhya Pradesh in “Brajesh Tiwari v. State of M.P and Others”, Indiankanoon.org/doc/193298640/, wherein learned Single Judge of the Court held as follows:- “16. On the basis of these judgments, the following principles can be culled out:- (i) If a probationer is terminated under the rules of his employment and such termination without anything more would not attract the operation of Article 311 of the Constitution. (ii) The circumstances preceding or attendant on the order of termination examined in each case. (iii) If the order visits the public servant with any evil consequences or casts an aspersion against his character or integrity, it must be considered to be one by way of punishment. (iv) An order of termination of service in unexceptional form preceded by an enquiry launched by the superior authorities only to ascertain whether the public servant should be retained in service, does not attract the operation of Article 311 of the Constitution. (iv) An order of termination of service in unexceptional form preceded by an enquiry launched by the superior authorities only to ascertain whether the public servant should be retained in service, does not attract the operation of Article 311 of the Constitution. (v) If there be a full-scale departmental enquiry, charge sheet is issued, enquiry officer is appointed and then termination order is passed, it will attract the operation of Article 311 of the Constitution. (vi) Form of termination order is not conclusive/ decisive of its true nature and it might merely be a cloak or camouflage for an order founded on misconduct. (vii) It is open to the Court before which termination order is challenged to be behind the form and ascertain the true character of the order. The Court can apply the doctrine of lifting the veil. (viii) If findings were arrived at in an enquiry as to misconduct, behind the back of officer or without a regular enquiry, the simple order of termination is to be treated as “founded” (ix) The factor which impelled the employer to take the action of termination is also important to determine the real nature of the action. 17. The impugned termination order needs to be examined on the anvil of aforesaid principles laid down by the Supreme Court. 7. Learned counsel for the petitioner vehemently argued that the respondent Corporation after approval from the Board of Directors designated the petitioner as Chief Finance Officer. If the petitioner was not up the mark, the Board of Directors/ respondent-corporation would not have taken such step in June, 2020. Within few months thereafter finding trivial and baseless issues and finding fault with the petitioner’s approach to the work without any basis, assessment that too in one sided manner issued impugned order against the petitioner is bad and illegal. The respondents never issued any show-cause notice finding fault with the work pattern of the petitioner and no complaint is made against him. Further, there is no enquiry initiated against the petitioner. As per Brajesh Tiwari’s case cited supra, it is clearly held that an order of termination of service in unexceptional form preceded by an enquiry launched by the superior authorities only to ascertain whether the public servant should be retained in service, does not attract the operation of Article 311 of the Constitution. As per Brajesh Tiwari’s case cited supra, it is clearly held that an order of termination of service in unexceptional form preceded by an enquiry launched by the superior authorities only to ascertain whether the public servant should be retained in service, does not attract the operation of Article 311 of the Constitution. If there be a full-scale departmental enquiry, charge sheet is issued, enquiry officer is appointed and then termination order is passed, it will attract the operation of Article 311 of the Constitution. Hence, requested to allow the writ petition. 8. Whereas learned Central Government Counsel for the respondents placed on record the decision of the Hon’ble Apex Court in “Chaitanya Prakash and Another v. H.Omkarappa” : (2010) 2 SCC 623 , wherein it was held as follows:- “19. In Mathew P. Thomas v. Kerala State Civil Supply Corpn. Ltd., (2003) 3 SCC 263 : 2003 SCC (L&S) 262 also the employee concerned was kept on probation for a period of two years. During the course of his employment he was also informed that despite being told to improve his performance time and again there was no such improvement. His shoftfalls were brought to his notice and consequently by order dated 16-1-1997 his services were terminated, wherein also a reference was made to his unsatisfactory service. In the said decision, the Supreme Court has held that on the basis of a long line of decisions it appears that whether an order of termination is simpliciter or punitive has ultimately to be decided having due regard to the facts and circumstances of each case”. 9. Further he relied on decision of Hon’ble Apex Court in “Abjijit Gupta v. S.N.B. National Centra, Basic Sciences and Others” : (2006) 4 SCC 469 , wherein the Division Bench held as follows:- “11. Having observed thus, the Court formulated the judicial test to determine as to on which side of the fence the case lay, in the following words (vide SCc p. 528, para 21): “21. One of the judicially evolved tests to determine whether in substance an order of termination is punitive is to see whether prior to the termination there was (a) a full-scale formal enquiry (b) into allegations involving moral turpitude or misconduct which (c) culminated in a finding of guilt. One of the judicially evolved tests to determine whether in substance an order of termination is punitive is to see whether prior to the termination there was (a) a full-scale formal enquiry (b) into allegations involving moral turpitude or misconduct which (c) culminated in a finding of guilt. If all three factors are present the termination has been held to be punitive irrespective of the forum of termination order. Conversely if any one of the three factors is missing, the termination has been upheld”. 10. In “Pavanendra Narayan Verma v. Sanjay Gandhi PGI of Medical Sciences and Another” : (2002) 1 SCC 520 , wherein the Division Bench of Hon’ble Apex Court held as follows:- “30. As was noted in Dipti Prakash Banerjee v. Satyendra Nath Bose a National Centre for Basic Sciences : (1999) 3 SCC 60 : 1999 SCC (L&S) 596” (SCC p. 73, para 28) “28. At the outset, we may state that in several cases and in particular in State of Orissa v. Ram Narayan Das” : AIR 1961 SC 177 it has been held that use of the word “unsatisfactory work and conduct’ in the termination order will not amount to a stigma”. 11. In the instant case, the Committee noted his unprofessional conduct in the discharge of his duties as CFO during past few months of his association with the company. As per Minutes of special meeting of members of the audit committee held that the unanimous view that emerged at the conclusion of the meeting was that the petitioner had lost the confidence of the audit committee. The Audit committee, keeping in mind their fiduciary responsibilities are of the view that the continuation of the petitioner as CFO would not be in the best interest of function of the respondent and the probation of the petitioner till 22.03.2021 and made recommendations. Subsequently, the 2nd respondent issued impugned order No.11/2021, dated 19.03.2021. 12. In the instant case, no such enquiry has been conducted by the respondents with regard to alleged allegations attributed against the petitioner, without any complaint and none of the authorities have given an opportunity to the petitioner to putforth his case, thereby totally violating the procedure. Suddenly, the Board of Directors convened a meeting and took decision to terminate the petitioner straightaway and issued impugned order is highly illegal and arbitrary. 13. Suddenly, the Board of Directors convened a meeting and took decision to terminate the petitioner straightaway and issued impugned order is highly illegal and arbitrary. 13. It is categorically held in Brajesh Tiwari’s case cited supra that the Courts have repeatedly held that simple termination of probationer is permissible, but if there is some material is gathered and stigma is attached to the probationer while discharging the same is punitive and requires proper enquiry and that one cannot be condemned without enquiry. The said precedent is squarely applicable under the category of stigmatising the petitioner, thereby making it punitive and as there is no enquiry preceding the impugned proceedings, it deserves to be set aside. 14. Learned counsel for the petitioner questioned the action of the respondents in issuing the impugned order against the petitioner abruptly by convened a Special meeting by the Board of Directors, which caused great loss and hardship to the petitioner in the light of facts and circumstances of the case. Therefore, the decisions relied by the respondents is not applicable to this case directly, as no enquiry has been conducted and no complaint is made against the petitioner for the allegations attributed against the petitioner. Further no show-cause notice or memo issued prior to special meeting conducted by the Board of Directors. 15. Having regard to the facts and circumstances of the case and considering the submissions of both the counsel, this Court opined that the action initiated against the petitioner and issued impugned proceedings is declared as illegal and that the same is hereby set aside. 16. Accordingly, this Writ Petition is disposed of, while directing the respondents to conduct an enquiry against the petitioner on the allegations if any after affording ample opportunity of personal hearing of the petitioner with relevant documents and pass appropriate reasoned order in accordance with law, within a period of three (03) months from the date of receipt of a copy of this order. There shall be no order as to costs. As a sequel thereto, miscellaneous petitions, if any, pending shall stand closed.