Case: Madhya Pradesh Hasta Shilpa Vikas Nigam Ltd Vs. Devendra Kumar Jain

FAIZAN UDDIN, J. 1. Leave granted.2. The appellant is a Government Company within the meaning of Section617 of the Companies Act which is controlled and owned by the State Government and a subsidiary company of M.P. Laghu Udhyog Nigam Limited which is carrying on business activities of development of handicrafts and handloom products. At the relevant time one Shri K. P. Thakur was the Managing Director of the appellant-company who by an order dated 6-7-89 Annexure-D appointed the respondents No. 1 to 3, namely, Devendra Kumar Jain, Dilip Goel and Promod Mishra as temporary Jr. Manager and by subsequent two orders both dated 8-6-89 (Annexure E/1 and 2) appointed the respondents No. 4 and 5, namely, Mehboob Hussain and Liaquat Mohd. Khilzi as temporary Junior Manages in the appellant-company. Soon after their appointment the appellant-company noticed that the aforesaid appointment of respondents No. 1 to 5 were made by then Managing Director, Shri K. P. Thakur in contravention of the Government Order dated 1-4-89 Annexure-B without the approval of the State Government and therefore, another Managing Director successor of Shri K. P. Thakur by order dated 31.7.89 terminated the services of the respondents No. 1 to 5. The respondents challenged the aforesaid order of termination in the High Court of Madhya Pradesh in Miscellaneous Petition No. 3973/83 which was allowed by judgment dated 1.12.93 whereby the order of termination of the respondents was quashed. It has been directed that the respondents will continue in service till their services till their services are not validly terminated. It is this order which has been challenged in this appeal. 3. The High Court quashed the order of termination of service of respondents mainly on two grounds. Firstly, the High Court took the view that the respondents services were terminated without giving them an opportunity of hearing in consonance with the rules of natural justice and, therefore, the order of termination of service was contrary to law and violative of Article 14 of the Constitution and, secondly, Government approval was not necessary for the appointment as contended by the appellant and that in any case no material was placed to show that the appointment was contrary to the Government instructions. In our considered opinion the High Court fell in serious error in taking in taking the aforesaid view and, therefore, the order of the High Court could not be sustained in law. 4. Admittedly the appointment of the respondents was made purely on temporary basis which is evident from the order of their appointment. The first order dated 6-7-89 Annexure-D by which the respondents No. 1 to 3 were appointed reads as follows : Bhopal : 6.7.89 ORDER "The following persons are appointed to the post of Junior Manager in the Pay Scale of 1290-30-1560-40-2040 from the date of taking over, till further orders temporarily and are posted to the Head-quarters :-1. Shri D. K. Jain2. Shri Pramod Mishra3. Shri Dilip Kumar Goyal2. Employee has to submit Medical Fitness Certificate from Civil Surgeon of the District3. Dearness Allowance and other facilities according to the rules of the Corporation shall be payable.Above appointment are purely temporary and are liable to termination without notice or assigning any reason.By order of Managing DirectorGENERAL MANAGERHastashilp Vikas Nigam Ltd., Bhopal" 6.7.89 The subsequent two orders both dated 8-6-89 with regard to the appointment of respondents No. 4 and 5 are identical one of which is reproduced herein below :- 6.7.89 ORDER "Shri Mohammad Hussain is appointed to the post of Junior Manager in the Pay Scale of Rs. 1290-30-1560-40-2040 from the date of taking over, temporarily and posted at Headquarters.Employees has to obtain Medical Fitness Certificate from Civil Surgeon and submit to office.Dearness Allowance and other facilities according to the rules of the Corporation shall be payable.Above appointment is purely temporary and is liable to termination at any time without notice or assigning a reason.GENERAL MANAGER" * 5. A plain reading of these two orders will go to show that the appointments were made purely on temporary basis and their services were liable to be terminated at any time without notice or assigning any reason. In the case of appointment on temporary basis a servant who is so appointed does not acquire any substantive right to the post, even though the post itself may be permanent and it is an implied term of such appointment that it may be terminable at any time and without notice. A temporary Government servant does not become a permanent Government servant unless he acquires that capacity by force of any rule or he is declared or appointed as a permanent servant. In the present case there is no rule under which the respondents may be deemed to have become permanent by force of such rule nor they were so declared by any subsequent order of the appellant-company to have acquired that status. On the contrary and the respondents all along continued to be temporary and according to the terms of the order of appointment their services could be terminated at any time without any notice or assigning any reasons. In such a case it is not necessary to follow the formalities contemplated by Article 311 of the Constitution. In these facts and circumstances the High Court was not right in holding that the respondents were entitled for being heard before passing the said order of termination of their services and that the order of termination was bad in law on that account.6. As regards the second ground the learned counsel appearing for the appellant contended that the appellant corporation had prepared a project in January 1980 (a copy of which is filed as Annexure-A in this appeal) for the development of handicrafts through Exhibitions and proposed that five officers of junior manages rank and some sales girls/sales-men be appointed in that connection. But when the Government came to know about the said project it disapproved the same by order dated 1.4.89 (Annexure-B) and directed that no appointments shall be made to the said post without obtaining prior approval of the State Government. The learned counsel for the appellant, therefore, contended that the appointment of the respondents was made against the directions of the State Government and while quashing the order of the termination the High Court did not take into consideration the said directions of the State Government. 7. It may be pointed out here that the appellant-Corporation is a Government company fully financed by the State Government would be very much concerned to see that any project which is not economically beneficial for the corporation and which is likely to result in any loss should not be given effect to. The Government, therefore, would be justified in issuing instructions that no appointments of any staff in connection with the said project will be made without the approval of the Board of Directors of M.P. Hasta Shilpa Vikas Nigam Limited and passed the order to that effect which has been field as Annexure-B in this appeal. But is appears that the High Court ignored the said order of the State Government while observing that no material in support of the contention that the Government has issued instructions not to make appointment was produced by the appellant.8. It is noteworthy that Shri K. P. Thakur, the then Managing Director himself was retiring on 31-7-89 and in hot haste he issued the orders of appointment of the respondents on 6-7-89 and 8-6-89 inspite of the instructions of the State Government to the contrary. In these facts and circumstances the impugned order passed by the High Court question the termination of service of the respondents cannot be sustained.

Decision:
1[ds]In our considered opinion the High Court fell in serious error in taking in taking the aforesaid view and, therefore, the order of the High Court could not be sustained inis appears that the High Court ignored the said order of the State Government while observing that no material in support of the contention that the Government has issued instructions not to make appointment was produced by the appellant.8. It is noteworthy that Shri K. P. Thakur, the then Managing Director himself was retiring on 31-7-89 and in hot haste he issued the orders of appointment of the respondents on 6-7-89 and 8-6-89 inspite of the instructions of the State Government to the contrary. In these facts and circumstances the impugned order passed by the High Court question the termination of service of the respondents cannot be sustained.