ivil Appeal C No 137 of 1991
From the Judgment and Order dated 2021989 of the Allahabad High Court in WP No 3096 of 1980
Yogeshwar Prasad and Ms Shoba Dixit for the Appellants
RB Datar RK Khanna and Surya Kant for the Respondent
The Judgment of the Court was delivered by SINGH J
Leave granted
This appeal is directed against the judgment of the Allahabad High Court Lucknow Bench setting aside the order dated 2391980 terminating the respondent s services
The sole question which falls for consideration in this appeal is whether the order dated 2391980 terminating the respondent s services who was admittedly an ad hoc and temporary employee is vitiated in law
The High Court has held that since juniors to the respondent were retained in service while the respondent s services were terminated the order of termination was discriminatory in nature
It further held that since the order of termination was founded on an adverse entry awarded to the respondent his character roll without giving him any opportunity on the ground that he was not suitable the order cannot be said to be a decision given in good faith
 The High Court further observed Even if any punishment was to be awarded it should have been proportionate to the alleged offence  if any On these findings the High Court held that the order of termination suffered from apparent error of law it accordingly allowed the respondent s writ petition and quashed the order of termination
The factual matrix of the case is in a short compass
The respon 32 dent was appointed on ad hoc basis on 1821977 as an Assistant Auditor under the Local Funds Audit Examinater of the State of Uttar Pradesh for a fixed period ending on 3181977
In December 1977 the respondent was again appointed on ad hoc basis for a period ending on 2821978
Since the regular appointment could not be made in time the respondent s services were extended from time to time
The last extension was granted on 2111980 and the extended period of service was to expire on 2821981
The terms and conditions of respondent s service as contained in the order of appointment stated that the appointment was ad hoc purely temporary for the term fixed in the order and his services were liable to be terminated at any time without assigning any reason
He was awarded an adverse entry in his character roll for the year 1977 78
The entry stated that the respondent s work was poor and he should work hard and take interest in the work
The respondent made representation against the entry but the same was rejected
The respondent and Rajendra Prasad Pandey another Sub Auditor both were deputed to audit the accounts of Raja Raghunbar Dayal Inter College Sitapur for the year 1979 80
While carrying on the Audit the respondent and Rajendra Prasad Pandey both are alleged to have acted in excess of their authority in auditing the Boys Fund Accounts of that College for the year 1978 79 on their own accord without any authority for the same
They issued audit note under their own signatures and also irregularly demanded a high amount of Rs 1325070 as audit fee and collected an amount of RS
2000 as audit fee for which they issued receipts under their own signatures
On receipt of complaint a preliminary inquiry was held that it was found that the allegations against the respondent and Rajendra Prasad Pandey were correct and both of them had acted beyond their authority and collected a sum of Rs 2000 as audit fee for the audit of the Boys Fund Accounts although the Boys Fund of the Institution did not fall within the purview of audit of the Local Funds Audit and no fee was chargeable for the audit of such Fund
After the preliminary inquiry report the respondent was relieved from his duties from Sitapur and directed to join his duties at Allahabad but the respondent proceeded on leave and did not join his duties at Allahabad
Ultimately the respondent s services were terminated by the order dated 3291980 and on the same day by another order service of Rajendra Prasad Pandey were also terminated
Both the aggrieved persons filed writ petitions in the High Court at Lucknow Bench under Article 226 of the Constitution contending that their termination orders were illegal having been passed in violation of Article 311 of the Constitution
The writ petition filed by Rajendra prasad pandey was dismissed but the respondent s writ petition was allowed by a 33 Division Bench of the High Court on the ground as noted earlier
There is no dispute that the respondent was an ad hoc and temporary employees and the terms and conditions of his employment were regulated by the UP Temporary Government Servant Termination of Services0 Rules 1975
The contract of service as contained in the appointment letter also stipulated the terms and conditions of the respondent s employment that his services were liable to be terminated at any time without assigning any reason or compensation
In the counter affidavit filed before the High Court the order of termination was defended on the ground that the respondent s work and conduct were not satisfactory and he was unsuitable for the service therefore his services were terminated
To support that contention the appellant placed reliance on the adverse entry awarded to the respondent in the year 1977 78 and also on the allegations made against him with raged to the audit of the Boys Fund of Raja Raghubar Dayal Inter College
The High Court held that since junior persons to the respondent in service were retained the order of termination was rendered illegal
In our opinion the principle of last come first go  is applicable to a case where on account of reduction of work or shrinkage of cadre retrenchment takes place and the services of employees are terminated on a count of retrenchment
In the event of retrenchment the principle of last come first go  is applicable under which senior in service is retained while the junior s services are terminated
But this principle is not applicable to a case where the services of a temporary employee are terminated on the assessment of his work and suitability in accordance with terms and conditions of his service
if out of several temporary employees working in a department a senior is found unsuitable on account of his work and conduct it is open to the competent authority to terminate his services and retain the services of juniors who may be found suitable for the service
Such a procedure does not violate principle of equality enshrined under Articles 14 and 16 of the Constitution
if a junior employees is hard working efficient and honest his services could not be terminated with a view to accommodate the senior employee even though he is found unsuitable for the service
if this principle is not accepted there would be discrimination and the order of the termination of a junior employee would be unreasonable and discriminatory
On the admitted set of facts the order of termination in the instant case could not be rendered illegal or unjustified on the ground of juniors being retained in service
The view taken by the High Court is not sustainable in law
34 The High Court held that the termination of respondent s services on the basis of adverse entry in the character roll was not in good faith and the punishment imposed on him was disproportionate
it is unfortunate that the High Court has not recorded any reasons for this conclusion
The respondent had earned an adverse entry and complaints were made against him with regard to the unauthorised audit of the Boys Fund in an educational institution in respect of which a preliminary inquiry was held and thereupon the competent authority was satisfied that the respondent was not suitable for the service
The adverse entry as well as the preliminary inquiry report with regard to the complaint of unauthorised audit constituted adequate material to enable to competent authority to form the requisite opinion regarding the respondents suitability for service
Under the service jurisprudence a temporary employee has no right to hold the post and his services are liable to be terminated in accordance with the relevant service rules and the terms of contract of service
If on the perusal of the character roll entries or on the basis of preliminary inquiry on the allegations made against an employee the competent authority is satisfied that the employee is not suitable for the service whereupon the services of the temporary employee are terminated no exception can be taken to such an order of termination
A temporary Govt
Servant has no right to hold the post his services are liable to be terminated by giving him one month s notice without assigning any reason either under the terms of the contract providing for such termination or under the relevant statutory rules regulating the terms and conditions of temporary Govt
servants
A temporary Govt
servant can however be dismissed from service by way of punishment
Whenever the competent authority is satisfied that the work and conduct of a temporary servant is not satisfactory of that his continuance in service is not in public interest on account of his unsuitability misconduct or inefficiency it may either terminate his services in accordance with the terms and conditions of the service or the relevant rules or it may decide to take punitive action against the temporary Government servant
if it decides to take punitive action may hold a formal inquiry by framing charges and giving opportunity to the Govt
servant in accordance with the provisions of article 311 of the Constitution
since a temporary Govt
servant is also entitled to the protection of Article 3112 in the same manner as a permanent Govt
servant very often the question arises whether an order of termination is in accordance with the contract of service and relevant rules regulating the temporary employment or it is by way of punishment
It is now sell settled that the form of the order is not conclusive 35 and it is open to the Court to determine the true nature of the order
in Parshotam Lal Dhingra vs Union of India  a Constitution Bench of this Court held that the mere use of expressions like terminate  or discharge  is not conclusive and in spite of the use of such expressions the Court may determine the true nature of the order to ascertain whether the action taken against the Govt
servant is punitive in nature
The Court further held that in determining the true nature of the order the Court should apply two tests namely 1 whether the temporary Govt
servant had a right to the post or the rank or 2 whether he has been visited with evil consequences and if either of the tests is satisfied it must be held that the order of termination of a temporary Govt
servant is by way of punishment
It must be borne in mind that a temporary Govt
servant has no right to hold the post and termination of such a Govt
servant does not visit him with any evil consequences
The evil consequences as held in Parshotam Lal Dhingra s case supra do not include the termination of services of a temporary Govt
servant in accordance with the terms and conditions of service
The view taken by the Constitution Bench in Dhingra s case has been reiterated and affirmed by the Constitution Bench decisions of this Court in the State or Orrisa and anr
vs Ram Narayan Das   RC Lacy vs The State of Bihar  Ors CA No 59062 decided on 23101963 Champaklal Chimanlal Shah vs The Union of India  Jagdish Mitter vs The Union of India  AG Benjamin vs Union of inia CA No 134166 decided on 13121966 and Shamsher Singh  Anr
vs State of Punjab1975 1 SCR 814 These decisions have been discussed and followed by a three Judge Bench in State of Punjab  Anr
vs Shri Sukh Raj Bahadur  Learned counsel for the respondent urged that the allegations made against the respondent in respect of the audit of Boys Fund of an educational institution were incorrect and he was not given any opportunity of defence during the inquiry which was held ex parte
had he been given the opportunity he would have placed correct facts before the inquiry officer
His services were terminated on allegation of misconduct founded on the basis of an ex parte enquiry report
He further referred to the allegations made against the respondent in the counter affidavit filed before the High Court and urged that these facts demonstrate that the order of termination was in substance an order of termination founded on the allegations of misconduct and the ex parte enquiry report
In order to determine this question it is necessary to consider the nature of the respondent s right to hold the post and to ascertain the nature and purpose of the inquiry held against 36 him
As already observed the respondent being a temporary Govt
servant had no right to hold the post and the competent authority terminated his services by an innocuous order of termination without casting any stigma on him
The termination order does not indict the respondent for any misconduct
The inquiry which was held against the respondent was preliminary in nature to ascertain the respondent s suitablity and continuance in service
There was no element of punitive proceedings as no charges had been framed no inquiry officer was appointed no findings were recorded instead a preliminary inquiry was held and on the report of the preliminary inquiry the competent authority terminated the respondent s services by an innocuous order in accordance with the terms and conditions of his service
Mere fact that prior to the issue of order of termination an inquiry against the repondent in regard to the allegations of unauthorised audit of Boys Fund was held does not change the nature of the order of termination into that of punishment as after the preliminary inquiry the competent authority took no steps to punish the respondent instead it exercised its power to terminate the respondent s services in accordance with the contract of service and the Rules
In State of Orissa  Anr
vs Ram Narain Dass  a Constitution Bench of this court considered the question and indicated the fact of the holding of an inquiry is not decisive of the question
What is decisive is whether the order is by way of punishment in the light of the tests laid down in Purshottam Lal Dhingra s case In Jagdish Mitter s case supra a Constitution Bench of this Court held that every order terminating the services of a temporary public servant does no amount to dismissal or removal from service merely because an inquiry was held before the order of termination was passed
The Court observed that the appropriate authority has power to terminate a temporary public servant either by discharging him under the terms of contract or the relevant rules or by holding departmental disciplinary inquiry and dismissing him from service
Before passing order of termination the competent authority may hold inquiry in fairness to ascertain whether the temporary servant should be continued in service or not
While discussing the nature of preliminary inquiry the Court observed as under There is no element of punitive proceedings in such an enquiry the idea in holding such an enquiry is not the punish the temporary servant but just to decide whether he 37 deserves to be continued in service or not
If as a result of such an enquiry the authority comes to the conclusion that the temporary servant is not suitable to be continued it may pass a simple order of discharge by virtue of the powers conferred on it by the contract or the relevant rule in such a case it would not be open to the temporary servant to invoke the protection of article 311 for the simple reason that the enquiry which ultimately led to his discharge was held only for the purpose of deciding whether the power under the contract or the relevant rule should be exercised and the temporary servant discharged
 In Champaklal chiman lal Shah s case supra the appellant therein was a temporary employee of the Union Government
His services were terminated without assigning any reasons and without affording him opportunity of showing cause
Before passing the order of termination the competent authority had issued a notice to Champaklal Chimanlal Shah calling upon him to explain certain irregularities and to show cause why disciplinary action should not be taken against him
In response to the notice he submitted his explanation thereupon certain preliminary enquiries were held but he was not given opportunity to place his case during the preliminary enquiry
However after the preliminary enquiry to regular departmental enquiry was held instead proceedings for departmental enqiury were dropped and the services of Chimanlal Shah were terminated in accordance with the terms and conditions of service of a temporary Govt
servant
The termination order was assailed on the ground that the order of termination was in substance an order of punishment
the Constitution Bench held that the order of termination was not an order of punishment and the appellant was not entitled to the protection of Article 3112 of the Constitution
The Court emphasised that when a preliminary enquiry is held against a temporary Govt
employee it must not be confused with the regular departmental inquiry which usually follows the preliminary inquiry after the government decides to frame charges and to get a departmental enquiry made with a view to inflict one of the three major punishments on the Govt
servant
So far as the preliminary enquiry is concerned there is no question of it being governed by Article 3112 of the Constitution as it is made for the purpose of collection of facts to enable to the competent authority to decide whether punitive action should be taken or action should be taken in terms and under the contract of service or the rules applicable to a temporary government servant
A Govt
servant has no right to insist for affording him opportunity during such enquiry and such an 38 ex parte enquiry is not initiated in law in view of the purpose and object of preliminary enquiry
On an elaborate discussion the Court observed as under In short a preliminary enquiry is for the purpose of collection of facts in regard to the conduct and work of a government servant in which he may not be associated so that the authority concerned may decide whether or not to subject the servant concerned to the enquiry necessary under article 311 for inflicting one of the three major punishments mentioned therein
Such a preliminary enquiry may even be held ex parte for it is merely for the satisfaction of government though usually for the sake of fairness explanation is taken from the servant concerned even at such an enquiry
But at that stage he has no right to be heard for the enquiry is merely for the satisfaction of the Government and it is only when the government decides to hold a regular departmental enquiry for the purposes of inflicting one of the three major punishments that the government servant gets the protection of article 311 and all the rights that protection implies as already indicated above
There must therefore be no confusion between the two enquiries and it is only when the government proceeds to hold a departmental enquiry for the purpose of inflicting on the government servant one of the three major punishments
indicated in article 311 that the government servant is entitled to the protection of that Article
That is why this Court emphasised in Parshotam Lal Dhingra s case supra and in Shyamlal vs The State of Uttar pradesh  that the motive or the inducing factor which influences the government to take action under the terms of the contract of employment or the specific service rule is irrelevant
 The above principles were reiterated by another Constitution Bench of this Court in RC Lacy s case supra dealing with the case of reversion of a permanent Govt
servant officiating on a higher post
The Bench observed that the Government might find it necessary to terminate the services of a temporary employee if it is not satisfied with the conduct or work of an employee and the same reasoning applies to a public servant who is reverted from a higher post to his substantive lower post if the higher post was held in a temporary nature
Before terminating the services of a temporary servant or reverting the person 39 officiating in a higher post to his substantive post the Govt
may hold a preliminary enquiry to form the requisite satisfaction for the continuance of the officiating govt
servant
Such an inquiry does not change the nature of the order of the termination or reversion
In AG Benjamin s case supra the appellant was temporarily employed as a Store Officer in the Central Tractor Organisation his services were terminated under the Central Civil Service Temporary Service Rules 1949 by granting him one month s salary in lieu of notice
Benjamin contended that the order of termination was in fact an order of punishment which had been passed without affording him the protection under Article 3112 of the Constitution
In that case before the issue of termination order a notice had been issued to Benjamin for showing cause as to why disciplinary action should not be taken on the allegations made against him in respect of which the charges had been framed and an enquiry officer had been appointed
After the charges were framed and the explanation of Benjamin was obtained the Chairman of the Central Tractor Organisation submitted a note to the Government that the departmental proceedings may take much longer time and he was not sure that after going through all the formalities of departmental enquiry Benjamin will be dealt in the way he deserved therefore he suggest that action should be taken under Rule 5 of the Central Civil Service Temporary Service Rules 1949 for terminating his services by giving him one month s salary in lieu of notice as he was a temporary Govt
servant
The Minister concerned accepted the recommendations whereupon order of termination was issued terminating the services of Benjamin
While assailing the order of termination it was seriously contended before this Court that in view of the charges being framed and the enquiry officer having been appointed the order of termination in substance was an order of punishment and the recourse to the temporary service rules had been taken only to circumvent article 311 of the Constitution
The Constitution Bench repelled the contention and held that the preliminary enquiry held against the Govt
servant must not be taken to mean that the Govt had taken decision to inflict major punishment on Benjamin
The Court held that no temporary Govt
servant is entitled to opportunity in the preliminary inquiry as there is no element of punitive proceedings in such an inquiry the idea in holding such an inquiry is not to punish the temporary government servant but just to decide whether he deserves to be continued in service or not
 Further the Constitution Bench held that even if formal departmental inquiry is initiated against the temporary Govt
servant it is open to the competent authority to drop further proceedings in the departmental enquiry 40 against the temporary govt
servant and to have recourse to Rules applicable to a temporary Govt
servant for terminating his services
The Court observed as under If therefore the authority decides for some reason to drop the formal departmental enquiry even though it had been initiated against the temporary govt
servant it is still open to the authority to make an order of discharge simpliciter in terms of the contract of service or the relevant statutory rule
In such cases the order of termination of services of the temporary govt
servant which in form and in substance is no more than his discharge affected under the terms of contract or the relevant rule cannot in law be regarded as his dismissal because the appointing authority was actuated by the motive that the said servant did not deserve to be continued in service for some alleged inefficiency or misconduct
 We have referred to the above decision in detail to dispel any doubt about the correct position of low
It is erroneous to hold that where a preliminary enquiry into allegations against a temporary govt
servant is held or where a disciplinary enquiry is held but dropped or abandoned before the issue of order of termination such order is necessarily punitive in nature
Learned counsel for the respondent placed reliance on the decisions of this Court in Nepal Singh vs State of UP  Ors  and Ishwar Chand Jain vs High Court of Punjab  Haryana  Anr  in support of his contention that the termination order is punitive in nature
In Nepal Singh s case a disciplinary inquiry was instituted against Nepal Singh who was a temporary sub Inspector of Police on the charge of having contracted a second marriage during the life time of his first wife without prior permission of the Government in violating of Rule 29 of the UP Government Servants  Conduct Rules 1956
Before any finding could be rendered the inquiry was dropped for want of territorial jurisdiction of the concerned Superintendent of Police and thereafter his services were terminated in accordance with the rules applicable to the temporary Government servants by giving him one month s pay in lieu of notice
nepal Singh unsuccessfully challenged the order of termination before the High Court but his appeal was allowed by a three Judge Bench of this Court
This Court quashed the order of termination on three grounds
Firstlyit held that the order of termination was arbitrary violative of 41 Articles 14 and 16 of the Constitution as power of termination had not been exercised honestly in good faith for valid considerations
Secondly the grounds mentioned in the report of the superintendent of Police on the basis of which the services of the Sub Inspector had been terminated were mere allegations and there was no definite material for terminating his services
Thirdly the Court held that since the inquiry against Nepal Singh on the charges had been dropped for want of jurisdiction and since no attempt was made to institute a proper inquiry instead his services were terminated on the allegation of misconduct the order of termination was violative of Article 3112 of the Constitution
The Court further held that the termination order had been passed to circumvent the constitutional provision of article 3112 of the Constitution
The facts and circumstances in Nepal Singh s case were quite different than those in the instant case
However Nepal Singh s case is no authority for the proposition that the services of an ad hoc and temporary employee cannot be terminated even if the competent authority on an assessment of the work and the conduct of the employee finds him unsuitable for the service
The Court s observations in Nepal Singh s case that since the enquiry against nepal Singh on certain charges was dropped and his services were terminated under the rules applicable to the temporary govt
servant with a view to circumvent the protection of Art 3112 of the Constitution and as such the order of termination was illegal must be confined to the facts of that case
It appears that he decisions in the case of Champaklal supra and RC Lacy supra and the principles laid down therein were not brought to the notice of the Bench
Had those decisions been placed before the Court the finding that the termination order had been passed to circumvent the provision of article 3112 merely because departmental inquiry was dropped and the termination order had been passed may not have been made
The decision of Nepal Singh s case in this regard is per incurium
In Ishwar Chand Jain s case the order of termination of Probationary Judicial Officer was set aside by this Court on the ground that no relevant material had been taken into consideration in assessing the satisfactory nature of the work and conduct of the Officer on probation
The Court held that some of the material which had been taken into account in adjudging the Judicial Officer s work and conduct as unsatisfactory was not relevant
The decision has no relevance to the instant case
We are therefore of the opinion that neither of the two cases relied upon by the respondent lend any support to his case
On the other hand our view is fully supported by the decision of three Judge Bench of this Court in RK Misra vs UP State Handloom Corporation In the instant case the repondent was a temporary Government servant and there was adverse report regarding his work which was reflected in the adverse remarks made for the year 1977 78
The competent authority held a preliminary inquiry in the allegations of improper conduct in carrying out unauthorised audit of Boys Fund of an educational institution On result of the preliminary enquiry no charges were framed against the respondent no officer was appointed for holding the departmental inquiry instead the competent authority chose to terminate the respondent s services in exercise of its power under the terms of contract as well as under the relevant rules applicable to a temporary Govt
servant
It never intended to dismiss the respondent from service
Holding of preliminary inquiry does not affect the nature of the termination order
The allegations made against the respondent contained in the counter affidavit by way of a defence filed on behalf of the appellants also do not change the nature and character of the order of termination
The High Court failed to consider the question in proper perspective and it interfered with the order of termination in a casual manner
We accordingly allow the appeal and set aside the order of the High Court and dismiss the respondent s Writ Petition
There will be no order as to costs
YLal Appeal allowed


Summary:
The appellant was appointed an Sub Inspector food  Supplies by respondent No 2 on 1341975 on ad hoc basis against service man quota the post being purely temporary liable to be terminated without notice and without assigning any reasons or on arrival of a regular candidate
The appellant continued in service on that post till November 17 1980 when his services were terminated
Prior to the termination of his services he was placed under suspension on April 15 1980 in view of the criminal proceedings under Section 420 IPC pending against him and before the culmination of criminal proceedings his services were terminated by order dated November 17 1980 as aforesaid
Criminal case against the appellant was decided on October 21 1981 wherein he was acquitted of the charge
The appellant on receiving the order of termination of his services filed Civil Suit 453 of 1981 in the court of Senior Sub Judge narnaul praying for a declaration that the orders of suspension as also termination were illegal wrong arbitrary and without jurisdiction and that the appellant was entitled to reinstatement and regularisation of his service under the Government notification dated 111980 issued by the Chief Secretary to the Government of Haryana authorising regularisation of such ad hoc employees who held the Class III posts for a minimum period of two years
According to the appellant his case was covered by the said notification and as such he was entitled to all the benefits of service
The Senior Sub Judge held that as the appellant was acquitted of the offence the authorities should have revoked the suspension order and have paid the pay for the period for which the appellant remained under suspension and thus allowed to the appellant all the benefits
An appeal was taken by the respondents to the Addl
District Judge who affirmed the order of the trial court holding that no enquiry was conducted before termination of the service of the appellant
Against the order of the Addl
District Judge the respondents preferred an appeal 74 before the High Court and the High Court allowed the appeal holding that the appellant was not entitled to be regularised automatically unless he fulfilled all the conditions given in the notification
It was also held that the case of the appellant was considered for regularisation by the Department but the same was not found suitable the services of the appellant were terminated in accordance with the terms of his appointment
The appellant has filed this appeal against that order in this court after obtaining special leave
Allowing the appeal this Court HELD The order of suspension made by the respondent No 2 is admittedly on the sole ground that criminal proceeding was pending against the appellant
The order of termination had been made illegally during the pendency of the order of suspension and also during the pendency of the criminal proceeding which ultimately ended with the acquittal of the appellant
The settle position in law is that the appellant who was suspended on the ground of pendency of criminal proceeding against him on being acquitted of the criminal charge is entitled to be reinstated in service
His acquittal from the criminal charge does not debar the disciplinary authorities to initiate disciplinary proceedings and after giving an opportunity of hearing to the appellant pass an order of termination on the basis of the terms and conditions of the order of his appointment
78C E As the appellant whose name was sent through Employment Exchange and who was appointed and has completed two years service on 31121979 he is entitled to be considered for regularisation in the post of Sub Inspector Food and Supplies
78E Smt
Rajinder Kaur vs State of Punjab and Anr
   Anoop Jaiswal vs Government of India   Hardeep Singh vs State of Haryana and Ors1987 4 SLR 576 referred to