CIVIL WRIT PETITION NO.2506 OF 2009 :{ 1 }: IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH DATE OF DECISION: NOVEMBER 04, 2009 Col.(Retd.) Shiv Shakti Mahajan .....Petitioner VERSUS State of Haryana and others ....Respondents CORAM:- HON'BLE MR.JUSTICE RANJIT SINGH 1. Whether Reporters of local papers may be allowed to see the judgement? 2. To be referred to the Reporters or not? 3. Whether the judgment should be reported in the Digest? PRESENT: Mr. Deepak Sibal, Advocate, for the petitioner. Mr. Harish Rathee, Sr.DAG, Haryana, for the State. **** RANJIT SINGH, J. The petitioner, a retired Army Officer, employed on contract as Comptroller Governor's household at Haryana Raj Bhawan, seeks enforcement of his contract, which has been terminated. The petitioner would term this order to be stigmatic and as such, would question the manner in which this contract has been brought to an end without following principles of natural justice. Would there be any requirement to follow principles of natural justice CIVIL WRIT PETITION NO.2506 OF 2009 :{ 2 }: or any other such like procedure if a contract of service is brought to an end in terms of the engagement, thus, would be a question to be determined in this case. Though, the impugned order simply recites that the services of the petitioner are no longer required but still the petitioner would plead before this Court to lift the veil and see if this is a simple order dispensing with the contractual service or a stigmatic one. The facts needed to get the hang of the issue may be noticed in brief. Petitioner claims to have a brilliant academic record and unblemished 28 years service in the Army from where he had honourably retired. The petitioner was appointed on being short listed by General Officer, Commanding-in-Chief Head Quarter Western Command, Chandimandir (for short, “GOC-in-C”), who was projected about the requirement of the post by the Secretary to the Governor, Haryana, through letter dated 3.11.2006. It was also intimated that the post was to be filled on the contract basis from amongst the ex- servicemen. The tenure was to be for a period of three years and was subject to satisfactory performance. Qualifications were also duly intimated. GOC-in-C was requested to recommend the panel of suitable ex-servicemen who fulfilled the requisite qualifications and experience for the post. Names of 10 retired army officers, including the petitioner, were accordingly short listed and sent to the Secretary to Governor, Haryana. After interview, the petitioner was selected and appointed on 8.12.2006. The petitioner accordingly joined the assignment on 13.12.2006. The appointment letter dated 8.12.2006 (Annexure P-4) CIVIL WRIT PETITION NO.2506 OF 2009 :{ 3 }: clearly stipulated that the contract for three years would be subject to satisfactory performance. It was further mentioned in the appointment order that if at any stage, the petitioner wished to resign or his services were no longer required by Raj Bhawan, then one month's notice or one month's salary in lieu thereof would be required to be paid by either party. Another letter (Annexure P-5) was issued on 29.3.2007 in partial modification of appointment order dated 8.12.2006 (Annexure P-4), giving out the terms and conditions of this contractual employment. It was reiterated that service shall be subject to satisfactory performance. The petitioner would make out from this that the condition of hire and fire stood modified upon issuance of Annexure P-5 as was contained in Annexure P-4 and would plead that his appointment thereafter was subject only to satisfactory performance. In other words, the petitioner would plead that condition authorizing cutting short of the contractual appointment was not included in Annexure P-5, which was issued in modification of Annexure P-4. As per the petitioner, he continued to perform the duties with full dedication, honesty and as such, was to work till 12.12.2009. Suddenly, on 6.2.2009, the petitioner was informed that his services are no longer required and his contract has been cut short midway. He has accordingly impugned this order through the present writ petition. Through his reply, Secretary to Governor would press hard his preliminary objection about the maintainability of the writ petition. It is pointed out that the post of Comptroller, Governor's household in the Raj Bhawan is born on the Haryana Civil Services Cadre. Since no HCS Officer was appointed as such, His Excellency CIVIL WRIT PETITION NO.2506 OF 2009 :{ 4 }: the Governor, Haryana, had desired that the post be filled up from amongst the Ex.servicemen on contract basis. Accordingly, after approval from the State Government, request was made to the Army authorities, including GOC-in-C, Head Quarter Western Command, and the petitioner was appointed on contract basis for three years. This contract of service was subject to satisfactory performance. The request of the petitioner to de-link his pension from the scale offered initially vide Annexure P-4 was examined and accordingly contractual appointment at lump-sum pay of Rs.20,000/- per month was fixed in modification of the earlier order on 29.3.2007 (Annexure P-5). Other conditions remained unchanged. It is then pointed out that the basic duty of the petitioner was to ensure all comforts of His Excellency Governor in respect of kitchen, domestic as well as foreign VVIP guests and full text of duties are placed on record as Annexure P-2. On this basis, it is stated that the performance of the petitioner was personally remained under the observations of Governor as he was to work in close proximity with His Excellency. The petitioner, thus, was expected to perform his duties to the entire satisfaction of His Excellency, the Governor. The Governor being not satisfied with the duties performed by the petitioner, had desired that a fresh panel be called from the Army authorities and accordingly the contract of service of the petitioner was discontinued by giving one month's notice on 6.2.2009. It is stated in the reply that service of a contractual employee can always be dispensed with by the competent authority and such an order may not call for any interference from the Court. It is also stated that the writ would not be maintainable to challenge such an order. CIVIL WRIT PETITION NO.2506 OF 2009 :{ 5 }: It is from the stand taken in the reply that the counsel for the petitioner would build his case by terming this order to be a stigmatic order. As per the counsel, the contract of the service of the petitioner has been terminated on the ground that his service was not satisfactory, which would make it stigmatic and hence, such an order could have been made by following principles of natural justice. Learned counsel vigorously pursued this line of submission, despite the fact that impugned order, Annexure P-6, did not make any mention that the service of the petitioner was not satisfactory and so was being dispensed with or terminated. The impugned order only says that “It has been felt that yours services are no longer required as Comptroller Governor's household in Haryana Raj Bhawan”. Can this order be termed as stigmatic in any manner? The services of the petitioner were no longer required and according to the terms and conditions of this contractual employment have been simply dispensed with. The counsel for the petitioner has made labourious efforts to show that the impugned order is stigmatic and in support has referred to number of decisions. Reference is first made to Kumari Shrilekha Vidyarthi etc. etc. Vs. State of U.P., and others, AIR 1991 Supreme Court 537. In this case, Constitutional validity of a circular terminating the appointment of all the government counsel (civil, criminal and revenue) in all the District of the State of U.P. as ordered was under challenge. The question which broadly arose for consideration before the Court was whether the impugned circular was amenable to judicial review and if so, was it liable to be quashed as violative of Article 14 of the Constitution of India, being arbitrary. The observations, thus, were made that the CIVIL WRIT PETITION NO.2506 OF 2009 :{ 6 }: State action in contractual matter would be open to judicial review on the touch stone of Article 14 of the Constitution of India. The Supreme Court in this case was concerned with scope of judicial review in contractual matters. Article 14 has been construed to mean that it does not envisage or permit unfairness or unreasonableness in State action in any sphere of activities. This case would not be of much help to see if the order is stigmatic or is passed in terms of the engagement. Learned counsel has then drawn my attention to A.P.State Fed. Of Coop. Spinning Mills Ltd. And another vs. P.V.Swaminathan, 2001 (2) RSJ 247 to urge that even a termination of contractual employment would be open to judicial review. In this case, the Hon'ble Supreme Court has rather made some observation for the Courts not to interfere in the order of termination of temporary employee, probationer or even a tenure employee while observing that the Court is not debarred from looking into the attendant circumstances:- “The legal position is fairly well settled that an order of termination of a temporary employee or probationer or even of tenure employee, simpliciter without casting any stigma may not be interfered with by court. But the court is not debarred from looking to the attendant circumstances, namely, the circumstances prior to the issuance of order of termination to find out whether the alleged inefficiency really was the motive for the order of termination or formed the foundation for the same order. If the court comes to a conclusion that the order was, in CIVIL WRIT PETITION NO.2506 OF 2009 :{ 7 }: fact, the motive, then obviously the order would not be interfered with, but if the court comes to a conclusion that the so called inefficiency was the real foundation for passing of order of termination, then obviously such an order would be held to be penal in nature and must be interfered with since the appropriate procedure has not been followed.” The Court went on to observe that if an allegation of arbitrariness is made in assailing an order of termination, it will be open for the employer to indicate how and what was the motive of passing the order of termination. It is in that sense, it can be indicated in the counter affidavit that the unsuitability of the person was the reason for which the employer acted in accordance with the terms of employment and it never wanted to punish the employee. In this case Court viewed that the employer appellant had not terminated the services in accordance with the terms of the employment but had done so by imposing penalty. In another case, referred to by the counsel Satyender Singh Rathore Vs. State of Haryana and other, 2003 (2) RSJ 394, a Division Bench of this Court found it as a matter of fact that the employment has been brought to an end on account of misconduct without affording any opportunity to rebut the allegations levelled and hence, the order was set-aside. It is, thus, to be seen if the impugned order is made in terms of the engagement or is stigmatic in any manner. To know if the order is stigmatic, it has to be seen as to what is the foundation of this order. If the reason for which the order CIVIL WRIT PETITION NO.2506 OF 2009 :{ 8 }: is passed was only a motive or inducing factor, then it can not be termed as a stigmatic order. The Hon'ble Supreme Court in the case of Radhey Shyam Gupta Vs. U.P. State Agro Industries corporation Ltd. And another, (1999) 2 SCC 21, observed that there are two lines of cases, which deal with the question. In certain cases of temporary servants and probationers, the Court has taken a view that if an exparte enquiry or report is the motive for the termination order, then the termination is not to be called punitive merely because the principles of natural justice have not been followed. The second line of cases are where the Court has held that the facts revealed in enquiry are not the motive but the foundation of the termination of services of the temporary servants or probationers and hence, punitive and, thus, the principles of natural justice would have to be followed. After dealing with all aspects in this regard and after making reference to two lines of cases decided in the field, it is finally observed:- “It will be noticed from the above decisions that the termination of the services of a temporary servant or one on probation, on the basis of adverse entries or on the basis of an assessment that his work is not satisfactory will not be punitive inasmuch as the above facts are merely the motive and not the foundation. The reason why they are the motive is that the assessment is not done with the object of finding out any misconduct on the part of the Officer, as stated by Shah, J. (as he then was) in Ram Narayan Das's case. It is done only with a view to decide whether he is to be retained or continued in CIVIL WRIT PETITION NO.2506 OF 2009 :{ 9 }: service. The position is not different even if a preliminary inquiry is held because the purpose of a preliminary inquiry is to find out if there is prima facie evidence or material to initiate a regular departmental inquiry. It has been so decided in Champaklal's case. The purpose of the preliminary inquiry is not to find out misconduct on the part of the Officer and if a termination follows without giving an opportunity, it will not be bad. Even in a case where a regular departmental inquiry is started, a charge- memo issued, reply obtained, and an enquiry Officer is appointed - if at that point of time, the inquiry is dropped and a simple notice of termination is passed, the same will not be punitive because the enquiry Officer has not recorded evidence nor given any findings on the charges. That is what is held in Sukh Raj Bahadur's case and in Benjamin's case. In the latter case, the departmental inquiry was stopped because the employer was not sure of establishing the guilt of the employee. In all these cases the allegations against the employee merely raised a cloud on his conduct and as pointed by Krishna Iyer, J. in Gujarat Steel Tubes case, the employer was entitled to say that he would not continue an employee against whom allegations were made the truth of which the employer was not interested to ascertain. In fact, the employer, by opting to pass a simple order of termination as permitted by the terms of appointment or as permitted by the rules was conferring a benefit on the employee by CIVIL WRIT PETITION NO.2506 OF 2009 :{ 10 }: passing a simple order of termination so that the employee would not suffer from any stigma which would attach to the rest of his career if a dismissal or other punitive order was passed. The above are all examples where the allegations whose truth has not been found, and were merely the motive.” In Parshotam Lal Dhingra Vs. Union of India, AIR 1958 SC 36, it was held that if misconduct was the motive, the order was not punitive but if it was the foundation, it was punitive. The difficulties or doubts in finding as to what was motive or foundation, though clarified in Samsher Singh Vs. State of Punjab, 1974 (2) SCC 831, were ultimately removed in case of Gujarat Steel tubes Ltd. Vs. Gujarat Steel Tubes Mazdoor Sabha, 1980 (2) SCC 593. In this case, simple order of termination as permitted by the terms of appointment or as permitted by the rules was not held punitive even when the departmental enquiry ordered initially was stopped because the employer was not sure of establishing the guilt of the employee. It is observed that in such cases allegation against the employee merely raise a cloud on his conduct and employer was entitled to say that he would not continue an employee against whom allegations were made, the truth of which the employer was not interested to ascertain. Passing of a simple order of termination in such cases is to confer benefit on the employee so that he does not suffer from any stigma, which would attach to rest of his career if a dismissal or other punitive order was passed. These are such cases where allegations of truth have not been found but these were merely taken as motive to pass the order simpliciter in nature. CIVIL WRIT PETITION NO.2506 OF 2009 :{ 11 }: It can, thus, be observed that the decision to terminate the services of temporary servant or one on probation on the basis of entry or on the basis of assessment that his work is not satisfactory will not be punitive inasmuch as the above facts are merely the motive and not the foundation. To explain how they are motive, it is stated that the assessment is not done with the object finding out any misconduct on the part of the officer.(See State of Orissa Vs. Ram Narayan Das, AIR 1961 Supreme Court 177). The assessment is done with a view to decide whether a person is to be retained or is to be dis-continued in service. In Pavanendra Narayan Verma Vs. Sanjay Gandhi PGI of Medical Sciences & Anr., 2002(1) SCC 520, the Hon'ble Supreme Court observed that:- “One of the judicially involved 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 form of the termination order. Conversely, if any one of the three factors is missing, the termination has to be upheld.” In Gujarat Steel Tubes (supra), the Court observed that:- “...... a termination effected because the master is satisfied of the misconduct and of the consequent desirability of terminating the service of the delinquent servant, is a dismissal. If there is suspicion of misconduct CIVIL WRIT PETITION NO.2506 OF 2009 :{ 12 }: the master may say that he does not wish to bother about it and may not go into his guilt but may feel like not keeping a man he is not happy with. He may not like to investigate nor take the risk of continuing a dubious servant. Then it is not dismissal but termination simplicitor, if no injurious record of reasons or punitive pecuniary cut-back on his full terminal benefits is found. For, in fact, misconduct is not then the moving factor in the discharge. In other words, it will be a case of motive if the master, after gathering some prima facie facts, does not really wish to go into their truth but decides merely not to continue a dubious employee. The master does not want to decide or direct a decision about the truth of the allegations. But if he conducts an enquiry only for the purpose of proving the misconduct and the employee is not heard, it is a case where the enquiry is the foundation and the termination will be bad.” In Dalbir Singh Vs. the State of Haryana, 1999 (1) SCT 470, this Court viewed that discharge from service without any misconduct carries no stigma and passing of such order is within the powers conferred on the commandant. In the light of above principles, it is now to be seen if in substance the order, relieving the petitioner in the present case can be termed as punitive in nature or it is a simple order passed without any stigma. Learned counsel for the petitioner would not dispute that the impugned order does not contain any indication of stigma. He, however, would term this order to be stigmatic from the stand taken CIVIL WRIT PETITION NO.2506 OF 2009 :{ 13 }: by the respondents in the reply. The said stand of the respondents has been noticed in detail above. The reading of the same even in the best possible manner, as the counsel for the petitioner, would suggested, would not give an indication that this order has been passed by way of punishment. Impugned order is an order through which simply the contractual services of the petitioner have been dispensed with before the expiry of the contractual period. Such an order may be open to judicial review, though it is a contractual one and would call for interference only if it is found that the same is suffering from any arbitrariness or unreasonableness or unfairness. There is no reason either pleaded in the writ petition or is seen from the pleading which would indicate that while dispensing with the contractual service of the petitioner, the respondents have shown any arbitrariness. The terms and conditions of the petitioner clearly stipulated in a very fair manner and had left discretion with the authorities as well as with the petitioner to seek an end of this contractual employment by serving one month's notice on either side or one month's salary in lieu thereof. The submission by the petitioner that these terms of hire and fire as contained in Annexure P-4 stood modified by Annexure P-5 can not be accepted. Annexure P-5 would seem to modify those conditions which have been provided for in Annexure P-5 but in no manner it can take away something which is given in Annexure P-4 but is not modified by Annexure P-5. The reasoning expressed in the reply that the terms and conditions in regard to the payment was required to be changed on a representation made by the petitioner can clearly be discerned from reading of Annexures P-4 and P-5. Earlier the petitioner had CIVIL WRIT PETITION NO.2506 OF 2009 :{ 14 }: been placed in a pay scale plus special pay and usual allowances but vide Annexure P-5, he was given lump-sum pay of Rs.20,000/- besides providing some other conditions regarding rent free accommodation, telephone facilities and reimbursement of electricity etc. There was no mention in regard to the condition of dispensing with the service and also in regard to the satisfactory performance and as such, this plea of the counsel for the petitioner that the part of this condition contained in Annexure P-4 relating to hire and fire was modified, certainly is not made out and, thus, can not be accepted. Otherwise also, the contract for service could hardly be enforced and what at the most would be available to the petitioner would be to seek compensation in case it is noticed that the contract of service has been wrongly or illegally terminated. There is no indication that this contract has been brought to an end because of any hidden reason which would make it punitive or stigmatic. As held by the Hon'ble Supreme Court in A.P.State Federation's case (supra), termination of a temporary employee or a probationer or even of a tenure employee, simpliciter without casting any stigma may not be interfered with by the Court. Reference may be made to Satish Chandra Anand Vs. The Union of India, AIR 1953 Sup. Court 250. It is observed as under:- “There was no compulsion on the petitioner to enter into the contract he did. He was as free under the law as any other person to accept or to reject the offer which was made to him. Having accepted, he still has open to him all the rights and remedies available to other persons CIVIL WRIT PETITION NO.2506 OF 2009 :{ 15 }: similarly situated to enforce any rights under his contract which have been denied to him, assuming there are any, and to pursue in the ordinary Courts